CETA provisionally applied, but no longer the “gold standard”
Today, September 21, the trade agreement between the EU and Canada, CETA, entered into force provisionally. What does that mean? Practically all tariffs on import and export with Canada drop to 0%, which is great news for the small percentage of European SMEs that trade with Canada. The investment protection-part (called ICS) is one of the few elements that has not yet entered into force. This will only happen when all national and regional parliaments approve CETA and its final entry into force.
Whether this will ever happen is the question. Investment protection no longer appears in new EU trade agreements after the European Court released its opinion about a trade agreement with Singapore in May of this year that parliamentary consent at the national and regional was required for approving such high level of investor protection. CETA, which includes similar investment-protection as the Singapore trade agreement, did not appear to be the model or “gold standard for EU trade agreements” as it was referred to after all. The EU wants to ensure investor-protection elsewhere though, as European Commission President Juncker floated the idea of a multilateral ISDS court in his State of the EU speech earlier this month. Meanwhile, Poland has threatened to block CETA because of ICS and Belgium has submitted CETA to the European Court to ask for an opinion on the compatibility of ICS with other European regulations. ICS has been the major obstacle for SME entrepreneurs throughout Europe, according to this Motivaction survey. Also, the sustainability and social chapters are not specific enough to be enforceable, and all entrepreneurs will suffer from the expected decline of the entrepreneurial climate in which they operate.
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