Montag, 28. Juli 2014

Deal or no deal? An update on the now troubled CETA negotiations. By Morgan Breitkreutz

Update, July 28th 2014: 

CETA has now gone from signed in principle to complete rejection. According to reports from the Süddeutsche Zeitung, the German government will not consent to the deal as currently structured due to concerns regarding Investor Protection clauses. Clauses such as the Investor State Dispute Settlement have long been at the forefront of negotiations over CETA and its much more discussed American counterpart TTIP, and such a rejection could lead to the downfall of both agreements in a worst case scenario. 

Speaking on the matter, an EU official confirmed that if the deal with Canada were to collapse, “then the one with the United States is also dead”.  When questioned about the report, German Deputy Economy Minister Stefan Kapferer stated, "The German government does not view as necessary stipulations on investor protection, including on arbitration cases between investors and the state with states that guarantee a resilient legal system and sufficient legal protection from independent national courts.”

Investor protection was always going to be a sticking point in these negotiations, as outlined here in the original CETA-TTIP comparison on this blog. For TTIP, which has already had to deal with much more scrutiny than CETA ever did, this news comes hand in hand with murmurs of discontent over the inclusion of a joint energy deal. When CETA was agreed to, the hope for TTIP was that there was real evidence such a clause could be accepted by the EU bloc; hopes that have now faded considerably. CETA may now be gone, and with it TTIP and the hope for a revitalized free trade zone across the Atlantic.

Original Update, June 17th 2014: 

On May 30th the Comprehensive Economic Trade Agreement between Canada and the European Union was presented on this blog in comparison to potential TTIP arrangements for what it was: an inevitability that had been agreed to in principle by both parties in a glitzy ceremony in October of 2013 that to onlookers had a "mission accomplished feel" to it. Since that time, however, the finalizing of CETA's fine print has stalled.

While the extent of the issues now preventing finalization has not been revealed, it appears that a disagreement over the protection of intellectual rights in the pharmaceutical sector has been a point of emphasis. Despite optimistic reports still being emitted from the parties involved, with the Canadian Prime Minister’s Office stating the leaders “were pleased that the process to finalize the text, further to the agreement in principle announced last October, remains on track”, the timing of these complications is less than ideal at best.

There are several political factors providing an impetus for both parties to complete CETA sooner rather than later. The recent European elections has altered the political landscape in the European Union and while Harper has built a good rapport with José Manuel Barroso, if the deal is in limbo long enough for a new President of the European Commission to take the helm problems could be exacerbated. Even after a potential finalization of the deal, it would take at least a few years to be put into practice, mostly due to European Union ratification procedures in regards to its many member countries; many of which have growing factions of more EU sceptic conservative politicians that could prove difficult to win over. Dane Rowlands, director of the Norman Paterson School of International Affairs at Ottawa’s Carleton University, is among those who believes that this part of the process could become very difficult as “It will be difficult for them to sell economic liberalization to their voters at the moment[.] The tradition is that when economic times are tough you look inward, you don’t open up.”

Secondly, as covered in Open Europe Berlin’s previous CETA pieces, CETA is seen as a template for TTIP and so as the TTIP negotiations begin to take the forefront it would be prudent to both finish the smaller deal first and also show that the blueprint can be made a reality.

Lastly for Canada, Stephen Harper, who has embarked on an ambitious free trade project around the globe in recent years such as this new deal with South Korea, cannot afford the political embarrassment that would come from the collapse of what was to be the crowning achievement of his global trade portfolio. The looming 2015 federal elections in Canada no doubt have an impact on this and with a growing threat from a resurgent Liberal Party under Justin Trudeau, son of popular ex-Prime Minister Pierre Trudeau, Harper has plenty of interest in a quick and clean conclusion to CETA so that he can present it as a massive success to voters.

To have been so close only to fall apart now would be a massive disappointment, and with all the political capital invested in a quick conclusion from all sides it is hard to imagine the wrinkles in CETA being worked out. The lesson here though: with international agreements of this magnitude, it’s not over until it’s over. 

Morgan Breitkreutz studiert Politik und Deutsch an der Universität Alberta (Kanada) und ist Praktikant bei Open Europe Berlin. 

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