We are entering a new era for global trade. Faced with unfettered globalisation on the one hand and Trump-style protectionism on the other, modern trade agreements like CETA can help set progressive global rules.
Canada is an important trading partner of the European Union, and within the EU Canada's highest volume of trade is with the UK.
The Comprehensive Economic and Trade Agreement (CETA) is a fantastic deal in terms of the access European firms will get to Canadian markets. CETA will eliminate virtually all tariffs, and for the first time Canada has opened up its government contracts at the province and city levels. Both will create more opportunities for British businesses to export even more goods and services to Canada.
This deal will also mean a reduction in time-consuming paperwork for our exporters. Scotch Whisky, for example, which already accounts for 20% of UK exports to Canada and supports 40,000 jobs across the UK, will benefit from fewer local legal restrictions and the removal of other non-tariff barriers. The Scotch Whisky Association has therefore called CETA “an important deal for UK distillers”. As a growing market for quality Scottish products, I hope increased trade with Canada can help protect and create jobs in Scotland, particularly for small and medium-sized enterprises.
CETA also foresees a sustainable development chapter, which commits both partners to increasing environmental protections, reaffirming obligations to labour rights and establishing a platform for NGOs, trade unions and civil society to monitor the application of the agreement. The inclusion of an ambitious and meaningful trade and sustainable development chapter has been a key demand of the Socialist and Democrat (S&D) Group in the European Parliament, where Labour MEPs sit. We have also extracted cast-iron commitments from the European Commission that they will continue to improve the enforceability of this chapter, so that infringements could be sanctioned.
We have also managed to secure a fundamental reform to how investment protection will work in the future. Following our clear rejection of the old-style Investor-State-Dispute-Settlement (ISDS), the European Commission was forced to go back and change the text of the agreement in an unprecedented move. The new proposal provides open and transparent proceedings in a permanent tribunal with well-qualified public judges, who must adhere to a strict code of conduct and be vetted by the European Parliament. The ultimate objective is to create a multilateral court for settling disputes and work is already underway with other partners.
Aside from these novelties, in the course of the past few months we have also obtained strong guarantees on issues where there had been some doubt and concerns had rightly been raised by citizens. The Canadian government and the EU Council, which represents EU governments, recognised our concerns and have produced what is called a ‘joint interpretive instrument’ to go alongside the text of the agreement itself. This legally binding document clarifies the most crucial aspects of the agreement. You can read the whole text of the instrument here.
Amongst other things, it guarantees:
- that public services are protected from privatisation and nothing would stop a government in the future re-nationalising a public service previously brought into the commercial sector (eg. parts of the NHS);
- that labour rights are protected and there should be no relaxing of labour laws in order to encourage trade and investment;
- governments’ ‘right to regulate’ in the public interest;
- that no foreign investor will be treated more favourably than a domestic investor;
- that our health, security and environmental protection standards and regulations will be preserved and that any regulatory cooperation will be voluntary and not compulsory.
In many ways the centre-left group in the parliament has been a victim of its own successes with CETA. Looking back at our unprecedented achievements, some believe that we could and should try to push for even more. Although I have some sympathy with this position, I am convinced that now is the time ratify this deal. CETA is the most progressive trade deal ever negotiated and we should celebrate our successes.
Furthermore, political events across the Atlantic demand that the EU takes a lead now on trade issues. Between unfettered free markets on the one hand and Trump-style protectionism on the other, CETA offers a forward-looking solution to the problems and opportunities that arise from globalisation. It will be a further measure of how progressive this deal is when we are able to compare it with the first drafts of the forthcoming (we are told) UK-US trade deal. In searching for a quick deal, my fear is that Theresa May and the Brexiteers will force through a shallow text with the Trump administration, with little mention of the workers’ rights and environment provisions that we have worked so hard for in CETA. The EU-Canada deal will provide the alternative model that progressive British forces can hold up as an example when holding the Tory government’s trade policy to account.
Citizens have raised concerns throughout the process and the European social democrats have responded quickly and effectively, securing unprecedented changes to the final text and solid guarantees on issues that are important to Labour voters. The Canadians share most of our dearest values and CETA should be seen as a way of strengthening our bilateral relationship on a progressive basis, whilst providing important economic opportunities for Scotland.
It is for these reasons that on Tuesday 24 January I voted to give parliamentary consent for CETA. The trade committee voted by a large majority in favour of the agreement, which will now come before the plenary session of the European Parliament in Strasbourg.