EU Leaves Trade Deal Approval to Members

The European Commission shifted its stance today on the EU–Canada Comprehensive Economic and Trade Agreement (CETA) and will now seek the approval of national parliaments. This sudden change in policy highlights that Europe’s fragmentation and the EU’s recognition of divisions between member states are leading to the empowerment of national governments.

CETA is the first agreement the EU has negotiated with another country that deals with more than just free trade, as the EU and Canada have also discussed establishing bilateral investment facilities. From a political perspective, it was the first time that the EU proved united on a common goal that had to do with foreign affairs, as the Commission represented the member states in negotiations. This is similar to the role the Commission plays in the Transatlantic Trade and Investment Partnership (TTIP) negotiations with the U.S. The TTIP is supposed to create the largest and most important global free trade and investment area.

CETA negotiations started in 2009 and the member states were represented by the Commission, which recently proposed the European Council ratify the deal. The Commission’s statement released today said, “Following a decision by the Council, it will be possible to provisionally apply CETA. However, its full entering into force will be subject to the conclusion by the EU, through a Council decision with the consent of the European Parliament, and by all Member States through the relevant national ratification procedures.”

This comes after the president of the European Commission said just before last week’s EU summit that the deal would not need to go through national ratification procedures, triggering objections from the member states, notably France and Germany. The Commission wanted the agreement to enter into force through the simple ratification procedure in an effort to both raise the bloc’s credibility and avoid a long process and potential vetoes. The fact that CETA needs national approval proves once more that the power in dealing with strategic matters belongs with national decision-makers, not Brussels.
 
It is also not the first time that France and Germany have both shown open opposition towards the Commission’s handling of CETA. Germany and France jointly asked the Commission to modify the investor-state dispute settlement (ISDS) clause included in the treaty in January 2015, just after the negotiations had nearly ended. Their call came after Brussels received negative responses to including the clause in the TTIP agreement during public consultations.
 
The ISDS clause would move the jurisdiction for a case between a foreign investor and a host country from national courts to international arbiters. At the time, France and Germany were concerned about giving up too much control to the EU, calling for a lighter version of the ISDS clause. In a surprise move, Canada agreed to the EU demands in February, closing the negotiations. This not only paved the way for CETA’s approval but also increased the level of optimism about the TTIP.

Both CETA and TTIP have been supported by the U.K., which already has substantial trade and investment links with Canada and the U.S. The uncertainty following Brexit has also included the question of CETA. Moreover, the vote for Brexit underlined the gap between the political leadership and the people. The the referendum refocused the political class on the electorate’s needs, obliging state representatives to be more cautious when accepting decisions made in Brussels. The founding members’ foreign ministers recently agreed that there are “different levels of ambition amongst Member States when it comes to the project of European integration,” marking the first time EU fragmentation was acknowledged publicly. This is only the natural next step that proves that Brussels’ power is diluting and the nation-states of Europe are taking back their authority.