Canada-EU Trade Deal Ratified By European Union; Now Needs Approval By All Member States' National Parliaments
from the comes-complete-with-$1-per-person-annual-saving dept
As Techdirt reported last November, while TPP and TAFTA/TTIP appear to be dead, the trade deal between Canada and the European Union (CETA) has been slowly working its way through the system. Today, the European Parliament approved the deal, which means that the European Union has completed the formal ratification process. However, for certain aspects of the agreement, notably the corporate sovereignty chapter, further approval is now needed by the national parliaments of all the EU’s member states — which means another 30+ votes that must all go in CETA’s favor. That’s by no means certain, as resistance has been mounting in a few countries. One of them is Belgium, where the Walloon region won important additional rights that may still be invoked.
As we wrote last year, CETA’s economic effects are likely to be tiny — the official estimate is just 0.08% extra GDP in total for the EU — or even negative. The very limited economic impact is confirmed in the official press release from the European Commission, where the only quantified benefit singled out is the following:
CETA creates new opportunities for EU companies. It will save EU businesses over €500 million a year currently paid in tariffs on goods that are exported to Canada. Almost 99% of these savings start from day one.
To put that saving in context, it’s worth remembering that the EU population is roughly 500 million, so the only financial benefit that the European Commission mentions works out at around $1 per person per year. Since the European Commission would doubtless have trumpeted bigger benefits if there had been any, It’s fairly safe to assume that this is pretty much all it could find. As for the highly-controversial matter of corporate sovereignty, aka investor-state dispute settlement, here’s what the press release says:
The current form of investor-state dispute settlement (ISDS) that exists in many bilateral trade agreements negotiated by EU governments has been replaced with a new and improved Investment Court System. The new mechanism will be transparent and not based on ad hoc tribunals.
What it doesn’t mention is that the “new and improved” system hasn’t been fully worked out yet, and so any claimed advantages are purely theoretical at this stage. In a rather desperate attempt to justify a trade deal that has so few benefits, the Commission adds the following:
There is clear proof that free trade agreements spur European growth and jobs. As an example, EU exports to South Korea have increased by more than 55% since the EU-Korea trade deal entered into force in 2011. Exports of certain agricultural products increased by 70%, and EU car sales in South Korea tripled over this five-year period.
What the European Commission fails to say is that the EU trade deal with South Korea does not have any form of ISDS. If it offers “clear proof” of anything it is that successful trade deals have no need of a corporate sovereignty chapter, whether the old-style ISDS, or the “new and improved” lipstick-on-a-pig Investment Court System found in CETA.