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Comprehensive economic and trade agreement between the european union and canada

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This article is an update on negotiation of the free trade agreement between Canada and the European Union as of June 29th 2015

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Comprehensive economic and trade agreement between the european union and canada

  1. 1. Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA) By Ronald Bannon MBA, C.Adm., FCMC June 29th 2015 (Free translation by the author authorized by the Editor of Le Monde Économique available on the web at www.monde-economique.ch) In this new series of articles on management and international trade, I will address various topics related to management and foreign trade based on my vision as a private expert working from Canada as a Certified Management Consultant (CMC). As my first subject, I have chosen to address the thorny issue of CETA signed between the European Union and Canada. This treaty was signed October 18, 2013 by the President of the European Union, José Manuel Barroso, and the Prime Minister of Canada, Mr. Stephen Harper. This agreement, however, must be ratified by the twenty-eight (28) EU member. This is a historic achievement for Canada and for the EU as it will bring down all tariff barriers and allow the free flow of goods, people and capital, which will circulate freely between the two political entities and geographical. For Canada, the EU is an even bigger market than the United States because the total population will exceed five hundred (500) million compared to three hundred and thirty (330) million for the US. Clearly, this opening would allow Canadian companies to boost foreign trade with the EU without constraints and expecting benefits that will have a huge impact on the overall Canadian economy. For the Prime Minister of Canada, Mr. Harper, he is currently playing his political career in the endless waiting for ratification. For the EU, Canada is a small country with less than thirty-five (35 million) people, but for EU enterprises, it represents a stepping stone to the lucrative United States market. The final text of the agreement includes provisions on the recognition of the State's rights on investors and on the adoption of a regulation in the public interest that satisfy the EU Commissioner allowing the Canadian Minister of International Trade to believe that the negotiations have ended since no changes were required by the representatives of Europeans. Despite this recent statement, irritants persist and hinder the final ratification of the agreement that is now makes the envy of the United States. The American giant has also begun negotiations for a similar agreement with the EU. But one particular irritant remade continually surface in the same negotiations with the US is the settlement mechanism and disputes between investors and the State members called Investor-state dispute settlement or ISDS that allows a court action by investors if they feel mistreated by any States of the Union. Germany is not comfortable with this arrangement which sees a threat to its sovereignty. Chancellor Angela Merkel is currently coaxing by the Prime Minister of Canada, to obtain their support on behalf of Germany, the latter playing a dominant economic role in the EU with almost forty percent (40%) of all European exports. On the side of France, the Canadian meat exports should be free of any trace of antibiotics and growth hormones to meet their standards. Canadian producers have committed to deliver meats that meet the requirements of France. By press release, France has also indicated that on 29 June 2015, it will not sign the Treaty if there are no changes to Article 33 of the Treaty ISDS mechanism, citing Australia, which was
  2. 2. been sued by the American tobacco company Philips Morris and Germany, sued by the Swedish electricity supplier Vattenfall. For France, this clause of the agreement is unacceptable and created an unbalance in favor of large enterprises to the disadvantage of public interest (see article in the Journal Le Devoir dated the same day entitled "La France ne signera pas sans modifications"). On this side of the Atlantic, the Canadian Association of Milk Producers and the Union des Producteurs Agricoles du Quebec (UPAQ) anticipate a major economic impact on small producers, especially for those who make cheese on an artisanal basis. They will be threatened if not eventually force out of business with the large incoming quantities of dairy products from Europe. A business withdrawal mechanism with financial compensation provided for in the agreement to allow a balance of forces, given the current production capacity of the players involved in this transaction. Warning to readers: please do not be confused with CETA and TAFTA: The TAFTA (Trans- Atlantic Free Trade Agreement) is the agreement that the EU is currently negotiating with the United States of America. For more information on CETA, I invite you to visit the website of the Ministry of Foreign Affairs, Trade and Development Canada at the following address: http://international.gc.ca/trade- agreements-accords-commerciaux/agr-acc/ceta-aecg/understanding-comprendre/overview- apercu.aspx?lang=eng Next article: The role of the Management Consultant in the context of globalization ChronicalChronicalChronicalChronical « Management et commerce international »« Management et commerce international »« Management et commerce international »« Management et commerce international » By Ronald Bannon MBA, C.Adm.By Ronald Bannon MBA, C.Adm.By Ronald Bannon MBA, C.Adm.By Ronald Bannon MBA, C.Adm., FCMC, FCMC, FCMC, FCMC (Ronald.Bannon@asselinbannon.com) Asselin BannonAsselin BannonAsselin BannonAsselin Bannon Strategic Management ConsultantsStrategic Management ConsultantsStrategic Management ConsultantsStrategic Management Consultants QueQueQueQuebec, Canadabec, Canadabec, Canadabec, Canada

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