Q&A: What is the CETA deal?

Bitter divisions within Government have brought the EU-Canada free trade deal back into the headlines. But what is it, and why is it so controversial?
Q&A: What is the CETA deal?

The free trade deal has sparked internal division within the Green Party. Picture: Gareth Chaney/Collins

What is CETA?

CETA is a free trade deal between the EU and Canada, called the Comprehensive Economic and Trade Agreement. It was negotiated between 2009 and 2014 and signed in 2016. Much of it has been “provisionally applied” since 2017, removing custom checks and taxes on trade, and giving mutual recognition to qualifications for professions like architects and engineers. But for the full treaty and all its provisions to come into force, the parliament of each member state of the EU has to ratify it.

Why is it in the news now?

Minister for Transport and the Minister for the Environment, Climate and Communications Eamon Ryan TD says CETA is a 'bad deal'. Picture: Gareth Chaney/Collins
Minister for Transport and the Minister for the Environment, Climate and Communications Eamon Ryan TD says CETA is a 'bad deal'. Picture: Gareth Chaney/Collins

Out of the blue last Friday, a Government motion to ratify CETA appeared on the Dáil schedule for this week. This caused consternation among civil society groups who have expressed concerns about the impact of CETA on consumer, environmental and labour standards, and no little disquiet in the ranks of the Green Party. The Green Party has an official policy against CETA and CETA is not mentioned by name in the Programme for Government. Many would have expected it to be the subject of inter-party negotiations before any move to ratify it.

Why are people up in arms?

The part of CETA that is most contested and concerning is the provision for settling disputes between international companies and national governments. That may sound innocuous but in practice it is a mechanism for a multinational companies to sue a state for damages if a government introduces new laws or policies that the company thinks will reduce its future profits.

You can see why environmentalists are concerned given all the changes we need to make to reduce climate pollution, many of which big oil and gas companies object to. Imagine if tobacco had been able to sue Ireland when we introduced the smoking ban.

And this is not an abstract fear, there are plenty of worrying examples from other trade treaties. For example, in 2013 Lone Pine Resources filed a CA$250-million (€161 million) damages claim under the North American Free Trade Agreement (NAFTA) against Canada over Quebec’s moratorium on fracking.

These 'investor courts' are run by corporate lawyers and have not been models of transparency and accountability, to put it mildly. And US multinationals with offices in Canada may also gain the right to sue Ireland under CETA.

Moreover, the worry is the existence of this investor court system will have a 'chilling effect' on governments who won’t even try to take the actions we need to drastically reduce climate pollution for fear of being sued.

That’s why in 2017 a broad civil society coalition came together to oppose CETA, with groups ranging from Friends of the Earth and the Environmental Pillar to the Congress of Trade Unions to Comhlámh to the Irish Cattle and Sheepfarmers’ Association. Prominent in the photos at the launch briefing the groups held was one Eamon Ryan TD, who called CETA a 'bad deal'.

What are Minister Ryan and the Government saying now?

The Government is saying that the leaders of Fine Gael, Fianna Fáil and the Green Party met on Monday night and 'reiterated' their support for ratifying CETA. This was striking as none of us had heard Minister Ryan express his support for it in the first place! Green party sources pointed out that while CETA was not mentioned by name in the Programme for Government, it does say they will “support new and existing EU trade deals”. Other party members say they would not have voted for it if it meant supporting CETA.

Minister Ryan went on RTÉ’s Morning Ireland to say he had changed his mind about CETA and that he would be urging his party colleagues to vote for ratification. He wasn’t asked when he had changed his mind and why he hadn’t said so in public before now. He said he was reassured about the investor court system because the European Court of Justice (ECJ) had ruled it was compatible with EU law. And also CETA now refers to the Paris Agreement so couldn’t be used to strike down actions governments take to implement Paris.

And the critics' response?

Friends of the Earth Europe’s response is that just because the ECJ has ruled the investor court system is legal doesn’t mean it’s fair. A parallel system of corporate courts give VIP rights to big business to challenge our social, environmental and health standards. It allows for massive claims from business, paid by the taxpayer, and could still strongly discourage governments from taking the necessary steps to achieve energy transformation, for example.

And the mention of the Paris Agreement is not a legal guarantee. The tribunal in any given case will decide the relevance of Paris to its decision.

What happens next?

Under pressure from campaigners from across civil society, and from members of his own party, Minister Ryan persuaded the Government to postpone the vote, but only until January.

I just don’t understand the rush. Half the members of the EU haven’t ratified CETA yet, including France, Italy, the Netherlands and Germany, where it is stalled in a constitutional court case.

Don’t forget, most of CETA is already being applied. The provisions that make trade easier and allow people work in Canada are already in operation. Ratification is primarily about the investor court system.

Why not refer CETA to an Oireachtas Committee for 'pre-ratification scrutiny' before the Dáil votes, like we do with legislation? It's even more important on an international treaty as it's a one-time vote, the Dáil can't change its mind later.

That would allow the really important issues at stake to be considered properly, with input from the civil society organisations Mr Ryan supported in 2017, as well as those who advocate ratification, such as Chambers of Commerce Ireland. What’s a few months before a decision that will last for decades?

  • Oisín Coghlan is Director of Friends of the Earth Ireland.

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