Last week, the European Commission led by the Trade Commissioner Cecilia Malmström proposed the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada as a so-called mixed agreement that needs to be ratified by all member states’ parliaments. That decision was a hard blow to the EU’s trade policy and will undermine the credibility of the EU to negotiate and strike trade deals for a long time to come. The decision was not taken for legal reasons – the Commission actually believes that the agreement falls within EU competence in its entirety. Instead, they took the decision to please insecure national politicians who cannot stand for their trade policy and rather want to shovel the problem away to national parliaments.
But there was a glimmer of hope in the Commission’s announcement – provisional application, i.e. that the agreement can enter into force as soon as member states in Council and the European Parliament have signed off the deal. Now it seems the Council could close that door as well. If they close that door – the EU could simply stop negotiating trade agreements as a union as all credibility vis-à-vis our partners would be gone.
Today, the Slovak presidency of the Council presented its programme on trade for the coming six months to the Parliament’s committee for international trade. The Slovak minister for the economy Peter Ziga said that concluding CETA would be of highest political priority for the presidency. That is good. But at the same time, he said that he did not know if the Council would agree on provisional application and that there would definitely be no provisional application of the investment chapter. The truth is that not provisionally applying CETA altogether would certainly kill the deal. Political priority must mean provisional application because everything else means throwing the deal down the drain.
If CETA is not provisionally applied, any national or even regional parliament in some cases, could say no to the deal and kill it. The opponents of CETA hail the decision to propose the accord as a mixed agreement as a democratic victory but that represents a false picture of democracy. Trade has for a long time been an exclusive competence of the EU and investment agreements became an EU competence through the Lisbon treaty. National parliaments have given the right to their elected governments in Council and the directly elected European Parliament to take the democratic responsibility and decide on these matters. Therefore, the Council and the European Parliament should approve the deal, no one else. That form of scrutiny is perfectly in order. After all, we do not let city councils decide on every change in school policies despite all cities being affected by school policy.
The presidency ruled out provisional application of the investment chapter. Here they did the same fundamental error as the Commission did. They skipped the legal analysis, disregarded the Lisbon treaty and bowed to political whims. The Lisbon treaty is very clear: EU has the competence to conclude investment treaties. Excluding investments from provisional application makes no sense whatsoever. In fact, what the Council could be doing is to chop CETA into pieces after the deal is done and send the parts they do not like to a slow death. But that is not the way to treat a trade partner as Canada – they agreed to the deal as a whole, not just the things that some EU members states do not want to backtrack on.
Full provisional application is the only way to save CETA after the Commission’s negligent decision last week. That is in fact what the Commission has proposed and now Council must follow suit. The decision to propose CETA as a mixed agreement was a bad political choice. But chopping up CETA, also for purely political reasons, will only make things worse. It would not only create uncertainty if a deal goes through as such. It would cast doubt on the contents of the deal to Canada or to other trade partners. In a time when Europe needs an ambitious trade policy more than ever, we must avoid sending these signals – CETA as a whole must be provisionally applied as soon as possible.