With CETA, the EU and Canada pledge to ensure that economic growth, social issues and environmental protection go hand in hand.
CETA takes the best of existing practice, such as BIT’s and TTIP and builds on that experience.
CETA is a complex and broad trade agreement and its purpose is to liberalise the economic relations between the EU and Canada in all economic sectors, from trade in goods and services to public procurement and investment.
Its text has been finalised, published and is open for ratification by EU national parliaments. The European Parliament voted in favour of CETA on 15 February 2017.
The EU Commission recently labelled it as the “latest generation of competitiveness-driven Free Trade Agreements (FTA) whose purpose is inspired by the objective of unleashing the economic potential of the world's important growth markets to EU trade and investment”.
CETA takes the best of existing practice, such as BIT’s and TTIP and builds on that experience.
CETA will create predictable conditions for both EU and Canadian investors
Removes 99 percent of customs duties
make it easier for European firms to invest in Canada
help Europe's creative industries, innovators and artists
support people's rights at work and the environment.
benefit small and medium-sized EU enterprises
CETA provides for increased transparency, a more clear-cut relation between International Court System in its Chapter 8, which provides for an appeal mechanism and, a more transparent and fair procedure between other domestic or international dispute settlement. It further provides for higher standards for the appointment of arbitrators and establishes a Joint agreement on Trade and Environment and Trade and Sustainable Development.
Main developments that it introduces can be summarised in 5 points.
1. Preliminary non-confrontational dispute settlement procedures
The parties attempt to settle the dispute through amicable settlement, mediation or consultations. This normally helps disputing parties to negotiate more freely, and should also favour the achievement of creative solutions in its Article X.21
- Prior mandatory non-confrontational procedures are the rule rather than the exception.
🡪Hence, vexatious litigation reduced.
2. CETA requires its parties to comply with the minimum standards set out in the 1998 International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work and its Follow-up.
3. It imposes transparency of arbitration
Previously, investment arbitration has often been regarded as secret and non-transparent. Such perception has increased in recent times and ignited the debate surrounding the TTIP, which represents a unique development.
However, unlike the TTIP,
🡪CETA incorporates the UNCITRAL (plus) Rules on Transparency in Treaty-based Investor-State Arbitration, with a few additions towards increased transparency.
Article X.33 CETA: (a) expands the categories of documents subject to publication.
4. Appellate mechanism and appointment of arbitrators
CETA seems to build on the American experience whereby it sets a high-quality standard for arbitrators.
Article X.25(5). It states that arbitrators ‘shall have expertise or experience in public international law, in particular international investment law and international trade agreements’.
5. Damages
Article X.36 affirms that the damages awarded should represent ‘the fair market value of the property at the time of expropriation’
Which is said to be best practice available when it comes to the determination of compensation due because of an illegal taking.
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