On October 30, during the 16th European Union–Canada Summit held in Brussels, the two negotiating partners signed the Comprehensive Economic and Trade Agreement (CETA), after seven years of negotiations. European Commission President Jean-Claude Juncker hailed it as “the best trade agreement the European Commission has ever negotiated” and added that it will set global standards for other trade agreements.
Canadian and EU leaders have also signed a Joint Interpretative Instrument in which they recognize “the right to regulate in the public interest” as a fundamental value. The instrument characterizes CETA as “an important and radical change in investment rules and dispute resolution” and as the basis for a Multilateral Investment Court, which Canada and the European Union have committed to “work expeditiously” to create.
The signing of the agreement had been thrown into doubt just a few weeks before. On October 18, the sub-national parliament of the Belgian region of Wallonia voted not to give powers to the Belgian federal government to sign CETA. The signing ceremony that had been scheduled for October 27 was cancelled as a result. On the same day, Belgian political leaders reached an agreement to support CETA.
In the agreement, Wallonia is reported to have obtained assurances that CETA would not harm local farmers, that states’ participation in the Investment Court System (ICS) mechanism would depend on specific approval by individual EU member states, and that Belgium would ask the Court of Justice of the European Union (CJEU) for an advisory opinion on the compatibility of the ICS mechanism with EU law.
Ratification by the European Parliament will be required for CETA to apply provisionally to the European Union. However, reportedly due to the Wallonia deal, ICS will be left out of the scope of provisional application. Accordingly, ICS will only be implemented after ratification by individual EU member states. In the meantime, Canadian and EU officials will elaborate on the details of the system, including the selection of judges, access to ICS by smaller businesses and the appellate mechanism.