EU-Canada CETA Agreement Hits Hurdle

by Ulrika Lomas, Tax-News.com, Brussels

14 June 2011

The European Parliament has recently passed a resolution on European Union (EU)-Canada trade relations, supporting the aims of the Comprehensive Economic and Trade Agreement (CETA), while at the same time underscoring its underlying concerns, pertaining notably to asbestos mining, seal hunting and the oil sands.

In support of the agreement, the resolution of June 8 states that: “The private sectors in both the EU and Canada have shown strong support for an ambitious and comprehensive economic agreement and believe that advancing a closer EU-Canada economic partnership would send a powerful pro-growth signal to investors and business within the EU and Canada as well as internationally.”

It adds: “There is a general consensus that the EU-Canada economic relationship has not yet reached its full potential and that an EU-Canada free trade agreement can strongly contribute to developing and realizing this by improving trade and investment flows while removing tariffs, tariff peaks and unjustified non-tariff barriers and supporting closer cooperation particularly in the fields of regulatory cooperation, labour mobility and recognition of qualifications”.

It notes that: “The ongoing negotiations on a Comprehensive Economic and Trade Agreement (CETA) aim at a very advanced agreement, exceeding in its level of ambition any trade and economic agreement negotiated either by the EU or by Canada to date, that could reinforce the already strong bilateral trade and investment relationship even further”.

However, the resolution also expresses its concern about the continued mining of asbestos in Canada and its grave impact on workers' health, recalling that the EU has banned all use, extraction and processing of asbestos and manufacture of asbestos products, and calling on Canada to take similar action in order to improve public health.

It reiterates its concern about the impact of the extraction of oil sand on the global environment due to the high level of carbon dioxide emissions during its production process and the threat it poses to local biodiversity, and encourages both parties to resolve any disagreements amicably and without endangering the CETA negotiations.

It takes note of the recent legal developments regarding the EU's ban on seal products, in particular Canada's request to the World Trade Organization (WTO) for the establishment of a formal dispute resolution panel; and urges the Commission to remain firm on the EU's stance regarding the ban on seal products, expressing its strong hope that Canada will withdraw the WTO challenge, which runs counter to positive trade relations, prior to the need for ratification of the CETA agreement by the European Parliament.

The EU and Canada have declared that significant progress has been made in the CETA negotiations, with the aim of achieving an agreement by the end of 2011.

Further CETA negotiations are due to take place in Brussels in July.

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