Walkom: The loose thread that could unravel Canada-EU trade deal

The Canadian government has suffered another setback in its elusive search for a trade and investment deal with the European Union. The EU’s top court has confirmed that in at least one controversial area, such deals must be approved by all 28 of the organization’s member states.

Since some EU members, such as Belgium, require the consent of regional as well as national legislatures, this confirms Ottawa’s worst fears: the Comprehensive Economic and Trade Agreement between Canada and the EU must be OK’d by no fewer than 38 separate European parliaments before it comes into full effect.

Tuesday’s ruling by the Court of Justice of the European Union was ostensibly about a 2013 free trade deal between Singapore and the EU. But it sets a precedent for similar yet far more important pacts, including CETA.

In effect, the court ruled that any deal allowing foreign investors to challenge national governments, such as the proposed investment court system within CETA, must be unanimously approved by all EU states.

The investment court system, sometimes called the investor-state dispute mechanism, would allow foreign companies to challenge domestic laws that threaten their profitability. It has long been a flash point in Europe.

Pointing to Canada’s sorry experience with a similar system under the North American Free Trade Agreement, critics argue – correctly – that it lets foreign investors override democratically elected legislatures.

In an effort to appease these critics, the EU agreed last year to treat CETA as “mixed” pact that requires approval from individual member states as well as pan-national European institutions.

Tuesday’s court of justice ruling cements that political decision in law.

Last year, Canada and the EU also agreed to rewrite the investor-state dispute resolution system to make it sound more judicial. That wasn’t enough to mollify the critics, so they then agreed to postpone what they had by then named the investment court system and press ahead with the rest.

In Canada, a bill to implement CETA has passed both houses of Parliament and awaits royal assent.

In Europe, the deal has been ratified by the European Parliament. That was a victory of sorts. Last fall, it narrowly escaped being scuppered by the Walloon region of Belgium.

Still, for something that has been so tentative, CETA is bragged about endlessly. Its passage has been re-announced countless times on both sides of the Atlantic.

Stephen Harper’s Tories boasted about it when they were in power. Now Justin Trudeau’s Liberals do the same, lauding it as an exemplar of the modern trade and investment treaty.

The government says CETA showcases how open Canada is to the world – by which it means how unlike Donald Trump.

Here at home, few dwell any more on CETA’s negatives, such as the rise in drug prices its intellectual policy provisions will encourage.

Nor is there much fretting any more about procurement policies in CETA that will prevent municipalities from favouring local business.

In most Canadian media, CETA is treated as a good thing – a kind of feisty Perils-of-Pauline heroine who manages to escape in the nick of time from assorted Walloons, Trump fanciers and other populist villains.

But it remains very much an incomplete arrangement. Gus Van Harten, an Osgoode Hall trade expert and law professor, says the court ruling confirms that CETA’s investor-state dispute system won’t be finalized any time soon.

“By implication,” he wrote in an email Tuesday, “it has been hasty for the federal government to be pushing approval of CETA in full in Parliament on Canada’s behalf.”

Van Harten calls the as-yet-unimplemented investor court system a major loose end.

He’s right. It is one that could ultimately unravel the entire provisional agreement.

Thomas Walkom is a national affairs writer.

Just Posted

Influenza claims two more in Central Alberta

Since flu season began four months ago 16 have died in Central Alberta

Relatives of murdered family critical of killers’ sentences

Open letter to sentencing judge criticizes ruling allowing killers to apply for parole in 25 years

City rolling out Green Carts

Green Carts used for organics, such as yard waste, food scraps and pet waste

Updated: Red Deer gets WHL Bantam Draft and Awards Banquet

WHL will holds its draft and awards ceremony in Red Deer for next three years

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Supporters of Tina Fontaine’s family march in Winnipeg to support her family

WINNIPEG — Hundreds marched through the streets of Winnipeg on Friday in… Continue reading

Alberta judge cleared in case where sex assault victim was shackled and jailed

EDMONTON — An Alberta judge has been cleared of misconduct in the… Continue reading

Ottawa vows legislation allowing firms to settle corporate corruption

OTTAWA — The Canadian government is vowing to introduce legislation for corporate… Continue reading

‘Lost Tapes’ series examines Malcolm X through rare footage

ALBUQUERQUE, N.M. — Malcolm X was reviled and adored during his lifetime… Continue reading

Woe, Canada: Germany ousts Canada 4-3

GANGNEUNG, Korea, Republic Of — Germany has knocked Canada out of the… Continue reading

Twenty years later, figure skating’s most famous backflip remains amazing (and illegal)

Figure skating involves spins, jumps, twizzles and a whole host of other… Continue reading

You don’t need to chop like a TV chef to get the job done

Standing in line at the emergency room, makeshift bandage around my finger,… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month