Friday, October 21, 2016

The AACC, a treaty under very high tension –

The free trade agreement between the european Union and Canada (the”Canada-EU Trade Agreement” or CETA), the negotiations for which were concluded in 2014, could well kill off this Friday, in the face of the blocking of the belgian region of wallonia (3.5 million inhabitants). How did we get here? Explanations through 6 questions.

What are the Walloons?

Despite heavy pressures, the Parliaments of wallonia and the French Community, whose endorsement is necessary for the belgian federal government can support the text at the european level, refused last week to delegate full powers to the belgian federal government for the signing of the agreement. Why? The members call in particular for better safeguards on social and environmental standards as well as on the protection of the agriculture community.

What would be the impact of a veto in belgium?

The treaty enshrines in particular the elimination of customs duties, liberalization of the access to public procurement, the creation of mechanisms for regulatory cooperation and dispute settlement system. To enter into force, the CETA must win the unanimous vote of the 28 member States, at the Council of the european Union. The european Commission has left to the Belgians until Friday to attempt to reach a compromise.

If Belgium manages to find a consensus or decides to vote in spite of everything in favor of the agreement –price dune major political crisis – the treaty may be ratified on the 27th. The european Commission then hopes to pass the AACC in the hands of the european Parliament before the end of the year. This would pave the way for a provisional application is part of the treaty (the pane on the protection of investments would be excluded according to our sources) the time that it is adopted by all the national Parliaments.

But the situation seems to be, for the time being, not to go in this direction. The european Commission has proposed to the elected walloon concessions by means of a statement that would be added in the annex of the treaty with Canada, particularly on agricultural issues. Safeguards is judged to be still insufficient Friday, according to the minister-president of Wallonia, Paul Magnette, and in particular on the mode of settlement of disputes.

In the case of a veto belgian, “the ceremony of ratification of the treaty, planned during the EU-Canada summit on the 27th of October next, will be cancelled and the signing postponed,” says a source close to the european Commission.

other member States reluctant to ratify the treaty?

The majority of the States is in favour of the AACC. The treaty raises, however, a reluctance, as in Austria, where the chancellor’s Christian Kern himself has publicly expressed its reservations. In Germany, the constitutional Court has been seized by more than 125,000 citizens and NGOS, holding the treaty unconstitutional. “The Court has finally allowed the government to vote the AACC but in posing his conditions, in particular that of being able to withdraw Germany from the agreement if certain of its provisions, currently under review, would be inappropriate,” explains Mathilde Dupré, in charge of the campaign, MORE (Movement for responsibility in Trade Agreements) to the Institute Veblen, an association committed on issues of economic reforms.

other States, such as Bulgaria and Romania, have tried them to condition their vote to the application of an exemption of visas for their nationals wishing to travel to Canada. Requirements that should be granted.

What is the position of France?

Unlike the TTIP, France firmly supports the AACC, which represents the words of Matthias Fekl, secretary of State for foreign Trade, “the anti-TAFTA” (the draft treaty of free trade -this time with the United States) by excellence, particularly as a result of concessions obtained from Ottawa on the recognition of more than 140 protected geographical indications (out of a total of approximately 1300 in the EU) and the liberalization of access to canadian public markets. Two subjects on which Washington is currently not ready to compromise.

A position that does not have unanimous support in the French political class. On the 21st of September last a letter signed by a hundred members of the French parliament of the left has been sent to François Hollande, to seek to reject the provisional application of the whole or a part of the treaty, such as the would like to the Commission. “This agreement, which will have economic impacts that are direct, shall not pass to the top of the head of the citizens. Before entering into force, it must first be sifted through the collective intelligence. This will again help to discredit a little more Europe,” says one of the signatories, Suzanne Tallard, mp PS of Charente-Maritime.

Why the AACC concerned about that?

The opponents of the treaty to denounce, first, the large opacity in which were conducted the discussions since 2009 and concluded in 2014. The consolidated version of the text of 1,600 pages has been, it is published at the end of February 2016, after a phase of legal review of the agreement. Many NGOS are also concerned about the negative impact that could have this treaty of free trade on employment, the protection of european agriculture or the environment. This is particularly the case of the Hulot Foundation, which also calls to suspend the process, “the time to verify the compatibility of the treaty, in particular with the commitments undertaken in the framework of the Paris agreement”, mentions Denis Neighbor, spokesperson of the Fondation Nicolas Hulot. The creation of the mechanism of regulatory cooperation is also very criticized. Tomorrow, for the whole development of this new standard, the european institutions should refer the matter to Ottawa and request its opinion. That would make this raised the threat of interference on the development of public policy, according to NGOS.

Another point of tension major, the creation of a system of settlement of disputes between States and companies who, for example, could allow multinational companies to attack some of the regulations or decisions by public authorities (e.g. by awarding contracts, grants, subsidies of some industries, adoption of new standards…). “On paper, this is not necessarily a bad idea to create a tribunal where an independent judge will be able to resolve this type of conflict. The problem is that it runs the risk of further weakening of the States that currently attempt to regulate globalization and to resume the hand on certain multinational companies from a tax point of view, social…” said Sylvie Matelly, deputy director of IRIS (Institute of international and strategic relations). So, according to some organizations, the AACC represents a true “Trojan horse of the TTIP”. The risk, according to some: that the american multinationals go through their can adian subsidiaries to take advantage of the provisions of the AACC.

What are the stakes for the EU?

Still, the european Commission, as the vast majority of the 28 member States remain strongly attached to this ratification, which would, inter alia, to earn a time advance on the prescription of the standards of the future in the face of other world powers, starting with China.

For its advocates, the AACC presents many opportunities for growth and jobs in these markets, respectively, with 500 million consumers to the european Union, and $ 35 million for Canada, and which represent approximately 25% of global GDP. “This is one of our first business partners. Rather, we are surplus in our trade with him. From a purely economic point of view and commercial, the european Union has any interest in establishing this agreement, writes Sylvie Matelly (IRIS). The liberalization of trade will certainly be destructive for some components but can also be beneficial to the consumers through the lower prices that will generate increased competition. Especially as we are already in a situation of free trade to very high levels. Therefore, you have the choice between trying to disrupt an agreement at all costs, or attempt to develop one that was the most balanced as possible.”

A failure of the AACC may strongly destabilize the other ongoing trade negotiations, with the Japanese, the Mexicans, or the Vietnamese, in particular. “I’m afraid that the AACC could be our last free trade agreement,” said Thursday the president of the Council of Europe Donald Tusk arrive at the european summit of 28 in Brussels. The coup de grace for a european Union that is already greatly weakened by the Brexit?


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