EU and Canada Sign CETA but Obstacles Remain to Full Ratification

November 9, 2016 | Andrew Hentz

We have previously blogged here on the Comprehensive Economic and Trade Agreement (“CETA”), and the uncertainty cast upon the Agreement when the Belgian region of Wallonia announced that it would not ratify. Wallonia’s political leadership had expressed concerns about the effect of CETA on the region’s farmers and whether the investor-state dispute settlement (“ISDS”) system would inhibit the ability of national governments to enact labour and environmental legislation and regulation.

The Belgian government reached an agreement with Wallonia on October 27, 2016 which allowed Belgium’s parliament to support CETA, provided certain conditions are met as outlined in what is being termed the Belgian declaration.

In a ceremony held in Brussels on October 30, 2016, Canada and EU signed the Agreement. Once approved by European Parliament and ratified by the various member-states, the Agreement will move towards full implementation.

However, it is expected that this process could take additional years and is still subject to the risk that Belgium is ultimately unable to ratify the Agreement. Furthermore, there is a growing campaign in the Netherlands to hold a referendum on CETA. Should the campaign obtain sufficient signatures in favour of holding a referendum, and the Dutch reject the Agreement in a vote garnering the requisite amount of voter turnout, the Dutch parliament would be obliged to withdrawal its support of the Agreement.

While the signing ceremony was a significant step, there remains a significant amount of uncertainty with respect to the implementation of CETA.

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