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As relations with the Trump administration remain fraught and uncertain, trade ministers from Canada and the European Union are set to sign on to a series of improvements to their bilateral trade agreement.
Maroš Šefčovič, the European Union commissioner for trade and economic security, will join International Trade Minister Maninder Sidhu in Toronto on Thursday for a ceremony marking several specific enhancements to the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).
Later, the two ministers are expected to make remarks at a joint event hosted by the Toronto Region Board of Trade at the Economic Club of Canada.
CETA was signed in 2016 and everything but its investment chapter took effect provisionally in 2017. Even though some EU member countries have yet to ratify the treaty in their respective legislatures, the two partners agreed to implement the deal’s economic benefits, such as its tariff cuts, without waiting for its complete ratification.
CETA’s current text was negotiated between 2009 and 2016, and requires modernization to address emerging issues in this rapidly evolving sector. Negotiations will officially launch Thursday to add a digital trade agreement to the existing treaty.
Other recently approved enhancements include:
- A mutual recognition agreement for architects, something the Carney government hopes will open up access to Europe’s $1.1-trillion construction market to Canadian professionals.
- Expanded protocols for the manufacturing of pharmaceutical ingredients, which the two countries hope will reduce duplicative inspections and costs for that sector.
- Revisions to strengthen CETA’s investment protections for small and medium-sized businesses.
The ministers will also sign off on supplemental rules to resolve investment disputes, including new interpretative language.
CETA’s dispute resolution provisions triggered legal proceedings that dragged on for years in Europe. Its proposed investor court system sparked fears that a member country’s sovereignty could be undermined if foreign corporations could sue an individual government over laws or regulations that harm their business operations.
A jurisdictional dispute ensued over whether the European Commission, on behalf of the trading bloc, or all member countries individually, needed to agree to be bound by this parallel system of legal arbitration under CETA.
After extensive talks at a special joint committee, concerns over the investment chapter now appear to be resolved. CETA’s revised investment court system, however, will only come into effect when every member country completes its ratification.
It’s unclear how many additional years this might take. Ten countries have yet to ratify CETA: Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia.
