Canada-Europe Trade Deal – Where To Now?

By | October 19, 2013

Now that we have an agreement in principle for the CETA, announced with great fanfare on 18 October 2013, but no actual agreement, the question is: what are the next steps?

Here is a primer on how it will work.

FIRST, we DO need to have the actual text, a process that will take several months. As far as we know, all of the elements of the agreement have been agreed to by the Canadian and EU negotiators and accepted at the political levels on both sides. That includes the premiers of the Canadian provinces and the heads of government of the 27 EU member states.

That political agreement now has to be turned into treaty language, however. While the negotiators have produced compromise wording, lawyers have to review these and make the wording consistent throughout.

Once the treaty text is legally “scrubbed”, as they say, and there is a final document, it will be SIGNED on behalf of Canada and the European Union. But signature of a treaty isn’t enough. The signing just indicates that each side is now willing to be legally bound under international law.

The SECOND STEP after signature is RATIFICATION. It’s the act of ratification that brings the treaty into force under international law. It’s ratification that will create a legally binding contract between Canada and the EU – the contract being the CETA.

Under Canadian constitutional law, ratification is an executive act, meaning that under the Royal Prerogative, the Governor in Council – i.e., the Harper cabinet – can pass an order in council that allows Canada to ratify the CETA as signed. Ratification involves each side exchanging a so-called “instrument of ratification” with the other. Once instruments of ratification are exchanged, the treaty becomes binding between under international law.

BUT – before we get to ratification, the government of Canada and the European Commission have to ensure that all necessary INTERNAL steps have been taken to make sure that they can live up to the terms of the agreement. This step is called treaty implementation So, the CETA will not be ratified until this is done.

For Canada to be in a position to implement the terms of the CETA, federal as well as provincial legislation will have to be passed. For example, Canada will have to amend the Customs Tariff to provide for lower rates of duty for European goods. The Patent Act will have to be amended to give extent protection to EU patent holders. And a myriad of other things. SD, implementing legislation will be presented to the House to make these necessary changes.

It’s not clear whether the government will actually table the CETA itself for debate and adoption by Parliament. That step is not strictly necessary under our constitution. That being said, it is likely that as part of the CETA implementation bill, the government will table the treaty and seek parliamentary approval. That means that there will be a debate in the House on the CETA at some point. With a Conservative majority, the result is a foregone conclusion.

Similarly, provincial governments will table legislation so that the CETA can be implemented in those areas under provincial jurisdiction. Changes may be required, for example, to ensure that EU bidders have access to provincial procurement projects.

THIRD, after all these internal legislative and regulatory changes are made to allow Canada to implement the CETA, Canada will then be in a position to ratify the agreement. The same with the EU. These internal measures will take some time to put into effect. We are probably looking at a two-year period, perhaps more.

FOURTH, will be formal ratification, as explained, through an exchange of ratification instruments between the two parties.

FINALLY, after that, there will be a PHASE-IN period, so that full implementation of the CETA, even after ratification, will not occur immediately. In other words,there will not be a flood of European cheese at the grocery stores or the arrival of European cars in auto showrooms for some time to come.

So, sit back and relax.