EU, North American Officials Push Trade Deals Ahead of Key Meeting

22 September 2016

Trade officials from the EU, Canada, and the United States have been pushing two major international accords over the past week, aiming to make a compelling case in time for a key meeting of European trade ministers beginning later today.

The informal meeting of the EU’s Foreign Affairs Council (Trade) will kick off during the evening of 22 September, concluding the following afternoon. Being held at the Bratislava Castle under the Slovak Presidency, the meeting is being watched closely for any new indications of the political dynamic among EU member states – along with what this may mean in practice for advancing the bloc’s trade agenda.

Specifically, trade ministers from the EU’s 28 member states will discuss the prospects for the Transatlantic Trade and Investment Partnership (TTIP); the EU-Canada Comprehensive Economic and Trade Agreement (CETA); and the modernisation of the EU’s trade defence instruments (TDIs).

The two-day gathering will also feature a debate among ministers about the expiry of those provisions of China’s WTO accession terms involving how anti-dumping probes of Chinese producers are conducted, according to a draft programme for the meeting.

The talks come amid a growing international debate at both public and political levels about the merits and pitfalls of globalisation, including as it relates to trade deals – which has in turn raised questions over how well trade policy delivers expected public benefits.

Meanwhile, public protests were held earlier this week across various European cities – including in Germany and Belgium – to make their concerns known about both CETA and TTIP, with media reports placing the number of participants well in the thousands.

Malmström, Freeland make case for CETA

One of the key items on the docket will be the future of the bilateral EU-Canada trade pact. Negotiations for the CETA began in 2009 and were concluded in 2014, with some additional changes made in early 2016 to the investor protections part of the agreement. (See Bridges Weekly, 3 March 2016)

While proponents argue that the pact is progressive and could yield significant benefits in growth and jobs, the final outcome has struggled to gain traction with parts of the European public. The political landscape for ratifying the deal ultimately led to the European Commission announcing in July that it would be submitting CETA as a “mixed agreement” for approval, while aiming to implement it on a provisional basis upon receiving Council approval.

A “mixed agreement” means that the accord addresses subjects that fall under national-level competence, and not solely under the EU’s competence. While the European Commission said at the time that its legal opinion was that the deal is not “mixed,” it would still be submitting it as such in recognition of the political dynamic. (See Bridges Weekly, 7 July 2016)

As a mixed agreement, full implementation of the CETA will not just need the approval of the Council and European Parliament, but also at the national level within the EU.

This past Sunday, EU Trade Commissioner Cecilia Malmström and Canadian Minister of International Trade Chrystia Freeland released a statement pledging to answer the questions raised so far, along with reiterating that the CETA is so progressive that it will “raise the standard” of trade agreements.

“We understand that some concerns remain that need to be clarified. Where formal clarifications are needed to allay concerns we are committed to providing these, including confirming our shared views on the delivery of public services, labour rights, and environmental protection,” said the two trade officials.

They argued, however, that the bilateral trade pact is by far “the most forward-looking free trade agreement” that either side has ever reached, calling for the accord to be evaluated based on its actual contents and benefits.

Whether these high-level overtures will be sufficient to allow for both sides to complete the signing process during an EU-Canada summit next month remains to be seen. Even so, building support at both the broader EU level as well as at the national and sub-national levels is widely expected to be an uphill battle.

Ahead of the Bratislava talks, Malmström has visited a series of European cities, making the case both for CETA along with touting the potential benefits in advancing the EU’s wider trade agenda.

She also warned against conflating CETA and TTIP, urging Belgian parliamentarians this week to remember that “Canada is not the United States. Just because they are next to each other on a map does not make them the same.”

Calling upon lawmakers to review the deal based on its own merits, she pledged that the CETA will yield clear market access gains in goods, services, and public procurement; will be progressive and transparent, including in its protection of public services and its affirmation of the right to regulate in the public interest; and includes landmark advances in how to address the legal claims of foreign investors.

“I believe that this is an excellent agreement that has real potential to break new ground for EU trade policy, both in terms of economic opportunity and in terms of integrating European values into trade agreements,” said Malmström.

TTIP: Next round confirmed

Malmström also met with her American counterpart, US Trade Representative Michael Froman, on 15 September in order to discuss the state of play in the TTIP talks.

Those negotiations, now in their fourth year, are also facing difficulty in both winning over broader public support, along with resolving substantive issues in the negotiations, such as the levels of market access each side is willing to provide in goods, services, and public procurement. (See Bridges Weekly, 7 September 2016 and 21 July 2016)

Following their meeting in Brussels, the two trade chiefs characterised their discussions as being positive and forward-looking.

“We had a good meeting where we reviewed the substantial progress being made and discussed next steps for moving forward,” they said in a joint statement. The two trade officials also confirmed that the next TTIP negotiating round will be held during the first full week of October in New York.

Separately, however, the EU trade chief told the Belgian Parliament on Tuesday that how much progress can be achieved in the few months remaining before US President Barack Obama leaves office will depend largely on the level of concessions that Washington is willing to make.

“Progress will depend on whether the US is able to work with us on our priorities. The EU does not believe in signing just any agreement. We want a good agreement for the EU and for us all,” she said.

Malmström also suggested that the EU’s goal is to “make as much progress as possible with the outgoing US Administration.” The remarks seemed to reaffirm an earlier comment the EU trade chief made to German newspaper Bild on Saturday, which appeared to suggest that European negotiators are no longer expecting the talks to conclude during Obama’s term – despite earlier hopes to the contrary.

ICTSD reporting; “‘TTIP threatens our way of life,’ say Berlin protesters,” DEUTSCHE WELLE, 20 September 2016; “Thousands protest in Brussels against US, Canada trade deal,” EURACTIV, 20 September 2016; “EU Trade Commissioner Cecilia Malmström: The TTIP negotiations are transparent,” BILD, 17 September 2016.

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