As the free trade agreement Ceta has officially entered into force, removing a considerable amount of trade tariffs between the EU and Canada, maple syrup from Canada could soon become cheaper in European supermarkets, and so might the fine wines of Ontario.
While it is still unclear whether consumers will get to feel the positive effects of trade tariff reduction, that is if companies will pass on the cost advantages to them, it is hardly questioned that businesses will profit by exporting and investing more. Savings from tariff reductions are to amount to some 590 million euros for European companies, which mainly export machines, vehicles and chemicals to Canada, according to estimates by the EU Commission.
And yet, no champagne corks have been popped yet in Brussels or Berlin, as the controversial agreement entered into force. Fears of criticism and continued opposition have EU governments and proponents of the agreement walking on eggshells in order not to provoke further quarrels and ratification delays.
Only parts of the agreement immediately in force
Ratification, after all, is still pending in most EU member states. So far, only the parts of the agreement which are subject to EU jurisdiction have taken effect.
Other aspects, such as the question of arbitration courts and whether they should be allowed to rule on investor suits against member countries, need to be ratified by national parliaments – a requirement confirmed by a decision of the German Constitutional Court. Controversial debate in the German Bundestag and Bundesrat is therefore guaranteed, and it is not at all impossible that parts of Ceta will be scrapped based on the resistance of individual member states.
Critics argue that environmental standards will be lowered and farmers businesses could be ruined under Ceta provisions. According to a study from the Tufts University in Boston, the changes induced by Ceta might cause employment loss of up to 200,000 across the EU. Environmentalists add that the trade increase might pose a threat to climate change goals, and that genetically modified food could enter the European market.
Nonetheless, the Commission points out, that food and environmental provisions valid in the EU will not be touched by the agreement, thereby guaranteeing an upholding of EU restrictions on growth hormones in beef or genetically modified organisms. “Importation of Canadian products into the EU will continue to be subject to the same restrictions as before”, clarifies Brussels.
Genetically modified fish in Canada
Canada has, however, allowed the production and sale of a genetically modified type of salmon that does not require specific labeling, as it is claimed to identical to non-modified salmon. In this case, importers would not violate the specific provisions, even though importation of said products into the EU is prohibited.
The controversially debated “chlorine chicken”, which was mostly heard of in the context of the potential EU-US free trade agreement TTIP, has no chance of making it to the European supermarkets any time soon. On an equally positive note, mutual protection standards have been agreed, which will grand European geographically protected brands such as Champagne or Chianti equal legal safeguards in Canada. Most industrial products will see a tariff reduction to zero, and deregulation is also envisaged for various service sectors, such as finance, telecommunications or transport.