The French Senate rejects CETA. What’s next?
On March 21, 2024, a significant development unfolded in the French Senate regarding the EU-Canada Comprehensive Economic and Trade Agreement (CETA). The Senate opted to reject CETA, prompting a return of the agreement to the National Assembly for further consideration. This move is noteworthy because the National Assembly had initially approved the treaty back in 2019. However, the political landscape within the assembly has undergone substantial changes since then, raising questions about whether it will maintain its initial stance or opt for rejection this time around.
Understanding CETA's Nature and Its Ratification Process
CETA is classified as a mixed agreement. This classification signifies that the agreement not only involves Canada and the European Union (EU) but also necessitates ratification by all EU Member States. For CETA to be fully operational, it mandates unanimous ratification from all parties involved. Although the agreement has been provisionally applied since late 2016, this status does not encompass certain contentious aspects, such as the agreement’s the investor-state dispute settlement provisions. The provisional application is governed by the Vienna Convention on the Law of Treaties, which allows any party to withdraw its intent to ratify, thereby ending the provisional status.
Implications of France's Potential Rejection of CETA
France's potential refusal to ratify CETA could have profound implications for the agreement's viability. Since the provisional application of CETA was an EU decision, a formal notification from an EU Member State, like France, expressing its refusal to ratify, could jeopardize the agreement's future. This scenario would compel the EU to reconsider the provisional application of CETA, potentially leading to its cessation. Such a development is anchored in the understanding —confirmed by the Council in a statement published in the Official Journal — that if ratification fails due to constitutional court rulings or the completion of constitutional processes within a Member State, provisional application must be terminated as per established EU procedures.
The Complex Dynamics of National Parliament Ratification
The rejection of CETA by a national parliament, such as France's National Assembly, would exemplify a definitive failure to ratify the agreement following constitutional processes. It's crucial to note that the vast majority of CETA's provisions fall under the EU's exclusive competence, with only a minimal portion requiring the involvement of national parliaments due to shared competence. Despite this, the agreement requires holistic approval or rejection by national parliaments, which determines its fate.
The Prospect of CETA 2.0
The future of CETA, particularly in the wake of potential rejection by the French National Assembly, remains uncertain. Political dynamics within France suggest a leaning towards rejection. However, this does not necessarily spell the end for EU-Canada trade agreements. The EU Treaties provide pathways for renegotiating such agreements, exemplified by the EU's broad trade competence as affirmed in the Court of Justice's opinion regarding the EU-Singapore trade agreement. This opens the door for a CETA 2.0, which could bypass the need for ratification by Member States' national parliaments, focusing solely on areas of EU exclusive competence.
While some may view this approach as undemocratic, it aligns with the division of competences outlined in the Treaties, where the EU possesses democratic legitimacy for issues within its exclusive competence. A potential CETA 2.0 would likely exclude the investor-state dispute settlement mechanism, drawing parallels with the EU-Japan trade agreement, and would emphasize trade and sustainability, including labor rights protections and environmental protections such as anti-illegal logging measures.
Such a version of CETA would represent a progressive trade agreement, eliminating avenues for multinational corporations to seek damages from governments over investment-impacting policies. This outcome, while different from the original CETA, could offer a viable and less controversial path forward for EU-Canada economic relations.
