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CWA # 1262, 31 March 2024
Global Politics Explainer
Comprehensive Economic and Trade Agreement: The French Senate votes against Canada. Why?

  Rosemary Kurian

On 21 March, the French Senate voted against the ratification of the EU-Canada free trade agreement known as CETA by an overwhelming majority of 211 votes to 44. CETA was already passed narrowly in the National Assembly, the lower house of the parliament in 2019. 

Why did the Senate in France vote against it?
The Comprehensive Economic and Trade Agreement (CETA) between EU and Canada, returned to public discourse before elections in the European Parliament and in France. The agreement has been provisionally in force for the last seven years since the EU’s approval. It aims to reduce custom duties in product circulation and reduce non-tariff barriers through the elimination of protectionist measures and enforcing convergence of product standards. It also aims to incorporate a special tribunal to encourage companies on both sides of the Atlantic. 

While the government was reluctant to introduce the text to the Sénat after a narrow victory in the Assembly, it failed to take into consideration the Communist senators who used their right of initiative to initiate voting procedures in the Sénat. The text failed after a left and right-wing coalition took charge. 

The EU has been signing free trade agreements with multiple partners as a symbol of its willingness to open its markets and enhance both cooperation and competition. European farmers are discontent with the same; there were multiple protests against unfair competition and varying standards of product in addition to unequal laws governing the agriculture and the environment. Farmers have been lobbying governments to prevent agreements like CETA that are in favour of the Canadian market, which has been expressed through the Senate’s vote. 

Are there countries opposing the CETA?
As of March 2024, 17 countries have ratified CETA in their legislatures. The status of the vote is pending in Belgium, Bulgaria, Greece, Hungary, Italy, Poland and Slovenia. In the initial years of the treaty’s conception, the European Commission considered the treaty’s competence in the EU to be solely determined by the EU. In 2016, the treaty was, however, contested to include a ratification procedure to be required from the national governments within the EU, too. Therefore, while the treaty is provisionally applied between the EU and Canada, the former cannot give its assent to the treaty unless it receives approval from all 27 national governments. 

In Ireland, the Supreme Court ruled the CETA ratification as unconstitutional in November 2022. However, the government insisted that it would ensure the treaty’s “ratification in full”, according to Leo Varadkar, Ireland’s then trade minister, and therefore, the status remains pending. After the French Sénat ruled against CETA, the government could take the treaty for a vote again to the National Assembly, which is risky as failure to vote in favour could kill the treaty. It therefore, remains pending after the first round of rejection. 
In Cyprus, the parliament in 2020 voted against CETA with a 37-18 vote, making it the first country in the EU to reject the trade deal. Cyprus stated that they were concerned about considerations for labour rights in the agreement and expressed anger over adequate legal protection for their national delicacy– the halloumi cheese.

Why is it controversial within the EU?
Since it was finalised in 2014, CETA has met with opposing views on the impact of its implementation. Its supporters point to the economic benefits that the agreement would bring to countries in the EU, and its opponents highlight the risks the deal poses to existing European laws and standards on agriculture, health and the environment. Those in favour argue that CETA can boost trade on both sides of the Atlantic and enable European companies to access more markets and create jobs, stating that there has been a significant increase in trade since the deal was provisionally implemented. 

A study by the Veblen Institute termed the growth numbers in trade as majorly an effect of inflation, and therefore, the numbers were unreliable. Cattle farmers have opposed CETA since its inception for fear of unfair competition from their Canadian counterparts. However, very few Canadian meat producers have exported to the European market, with 1.4 million tonnes of beef exported in 2023, a mere two per cent of the permissible limit. European exporters of beef have benefitted by increasing exports to Canada from two million to 14 million tonnes in seven years. 

A major concern for Europe is the lack of a “mirror clause” that requires Canadian exporters to mirror European product standards in terms of health and environment. The seriousness of Canadian veterinary controls in terms of feeding beef certain animal meat or administration of antibiotics fails to meet the standards set for European producers. Further, a rise in trade could increase greenhouse gas emissions against the promises made by EU countries, especially since the deal lacks any strong climate commitments. Once the treaty is fully implemented, an arbitration system under the CETA, called the Investment Court System (ICS), will be employed with a special jurisdiction for aggrieved Canadian companies who are discontent with the rules set by their EU host state and vice versa. European lawmakers fear that such a tribunal could be used by Canadian businesses to challenge European health and environmental legislation in their favour, especially given its ambiguity in the area. While the EU is working on reforming the ambiguity in the mechanism, states fear it would interfere with the neutrality and freedom of their legislation. 

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