Trade and sustainable development chapters in CETA

Briefing 20-01-2017

The EU-Canada Comprehensive Economic and Trade Agreement (CETA), signed in October 2016, is currently at the ratification stage. This agreement, concluded between like-minded trade partners, represents the new generation of EU free trade agreements (FTAs), and contains chapters covering sustainable development. The inclusion by the EU of sustainable development chapters in FTAs concluded with its partners plays a role in ensuring that trade and investment liberalisation does not lead to a deterioration in environmental and labour conditions. In keeping with this trade policy practice, developed over the years, trade-related sustainability provisions, including labour and environmental considerations, are grouped in three chapters (Chapters 22 to 24) within CETA. CETA has only partially exceeded the dialogue-only approach contained in earlier EU trade agreements and has maintained the exclusion of trade and sustainable development (TSD) chapters from the scope of the state-to-state dispute settlement (SSDS) procedure. It also maintains an ad hoc two-stage dispute resolution mechanism already found in the EU-South Korea FTA. However, this mechanism does not include sanctions and focuses on mutually agreed solutions to problems. This choice by the EU is due to the still strongly cooperative nature of the TSD chapters. On CETA please refer also to the 'International Agreements in Progress' briefing on the Comprehensive Economic and Trade Agreement with Canada by Wilhelm Schöllmann.