Canada and EU Move Closer to Ratifying Trade Pact; EU Hopes Deal Will Affect TTIP Terms

By Justin Kirschner

After negotiations that have spanned two Canadian governments, Canada and the European Union this week announced they overcame a major hurdle and moved one step closer to inking what Canadian Trade Minister Chrystia Freeland called a "gold-platted" trade deal. Formally known as the Comprehensive Economic and Trade Agreement (CETA), the deal’s latest draft resolved the thorny issue of how and when companies can directly sue governments. To assuage EU worries that ad-hoc arbitration panels would settle disputes, well, arbitrarily, and thus give multinationals a legal backdoor around government regulations, CETA will create a permanent investor-state tribunal that comes with a built-in appeal process and consists of members appointed by both sides. Hovering in the background of this part of the EU-Canada deal is the skeptical eye of the United States. The EU and the US are in the middle of negotiating their own bilateral trade deal, TTIP, and a major sticking point of those talks is investor-state dispute resolution. The U.S. has steadfastly opposed a permanent tribunal like the one Canada and the EU have agreed to create, while the EU hopes that CETA will serve as a template TTIP will ultimately duplicate.

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