Canada welcomes move towards trade deal ratification

Published: Friday, 08 July 2016

After months of legal arguments, a European Commission ruling means CETA, a deal which will scrap duties on industrial minerals traded between the EU and Canada, can finally move towards ratification.

By Keith Nuthall, Kitty So, Poorna Rodrigo

The Canadian government has welcomed a European Commission (EC) ruling that should see the European Union (EU) Comprehensive Economic and Trade Agreement (CETA) finally on its way to ratification. 

After months of legal arguments, Brussels has agreed that CETA is a mixed agreement, including trade and non-trade regulatory aspects; meaning that for it to come into force permanently, all 28 EU member state parliaments will need to ratify its terms, as well as the European Parliament and the EU Council of Ministers.

However, the EC has argued that with the two EU legislative bodies’ approval and the approval of the Canadian parliament, the agreement could be applied provisionally, which could now happen in early 2017.

The deal, which was negotiated in 2014, will scrap duties for good on industrial minerals traded between the EU and Canada as well as mining machinery, while removing trade red tape hindering commerce.

This could aid, for instance, Canadian shipments of potash, a key export – the country produced 11.35m tonnes in 2015, generating Canadian dollar (C$) 6.6bn ($5bn*) in receipts. It also produced 1.63m tonnes gypsum, earning producers C$21.1m ($16.2m); 2.09m tonnes quartz, worth C$98.9m ($76m); 14.72m tonnes salt worth C$803m ($617.5m); and 5.21m tonnes elemental sulphur, worth C$390m ($300m).

Danica Vaillancourt, a spokesperson for Natural Resources Canada, a federal government ministry, told IM that the Canadian government looked forward to signing the deal in October and for it to be ratified early next year, predicting that "the vast majority of CETA will be provisionally applied once the Council of the EU and the European Parliament approve the agreement."

This would cover tariff and quota abolition, services commitments, intellectual property rights and government procurement obligations.

"While Canada’s industrial minerals industry is, in general, regionally oriented, with mined minerals consumed domestically, CETA does means more growth," she predicted.

Jessica Draker, communications director for the Mining Association of Canada, also welcomed the move. She said: "Access to important markets is a key component of the Canadian mining industry’s competitiveness. CETA is one example of a trade deal that would benefit our industry through the elimination of tariffs on mineral and metal products, and enhanced regulatory cooperation and labour mobility provisions."

One reason legal arguments have held up ratification is that some EU member states are uneasy about investor protections written into the agreement, which could see companies compensated for government decisions that damage their interests. German campaigners have in particular objected to these provisions, demanding that national parliaments have their say.

The EC is backing this element of the deal however, noting in a statement that "CETA introduces a new investment court system and enhanced rules on investment protection [that] guarantees the right of EU governments to regulate in the interest of their citizens, while still encouraging foreign investors by protecting their investments". It argued that the new system also "makes the resolution of investment disputes fairer and more transparent".

The UK government has said that it will ratify the deal, regardless of the 23 June Brexit referendum vote, although it would not automatically apply to Britain should it quit the EU.


*Conversions made July 2016

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