Brussels, 27/06/2016 (Agence Europe) - Following the British referendum vote for the UK to leave the EU, the assurances of the Canadian government on Friday 24 June as to Ottawa's commitment to the EU-Canada free trade agreement (CETA) - which is due to be signed and ratified by the end of 2016 in order to enter into force provisionally in early 2017 - have not stopped doubts among certain Canadian observers as to the sustainability of the agreement.
“The UK and the EU are important strategic partners for Canada with whom we enjoy deep historical ties and common values. We will continue to build relations with both parties as they forge a new relationship”, Canada's Prime Minister Justin Trudeau said the day after the British referendum. His trade ministers, Chrystia Freeland, reaffirmed Canada's commitment to the CETA, saying she had spoken to European Commissioner for Trade Cecilia Malmström on Friday morning about the CETA and strengthening bilateral trade links.
The finishing touches to the legal scrubbing of the text of the agreement that was finalised on 29 February, and the agreement concluded between the two parties on its investment protection chapter (see EUROPE 11501), paved the way for the process of signing and ratifying this agreement that was concluded in September 2014 (see EUROPE 11164). The Commission is due to make a formal proposal to the Council by the end of June for the CETA to be signed (there are hopes for this at a summit in October) - a proposal that will then be sent to the European Parliament for ratification with a view to provisional implementation of the agreement at the start of 2017.
In the short-term, the result of the British referendum will not be of consequence for continuing the signature and ratification process of the CETA, with the UK remaining a member of the EU until both parties have agreed on the modalities for the UK's exit. “Everything should be carried out as planned”, a source at the Commission told EUROPE on Monday 27 June.
In the meantime, the vote for Brexit means the CETA loses one of its biggest supporters in British Prime Minister David Cameron, who was an important ally for Canada at the negotiations. The UK had therefore helped remove the last remaining obstacles in the negotiations, reassuring France and Germany about the investor-state dispute settlement (ISDS) mechanism.
Canadian experts doubt the sustainability of the CETA in the longer term, with some judging it unlikely that it will ever be ratified, Canadian media report. Before the British referendum, Canada's High Commissioner to the UK, Gordon Campbell, had said he thought a victory for Brexit could damage the CETA because the EU would then be overloaded with the UK exit negotiations.
Even if the EU is able to finalise its agreement with Canada, the British vote for Brexit raises certain questions about the sustainability of the bloc in itself and consequently on the CETA, says Fen Hampson from the Centre for International Governance Innovation, believing the CETA is “probably dead”.
In the view of Christopher Sands from Johns Hopkins School of Advanced International Studies, the Brexit vote could be the beginning of a cascade of bad news for Canadian trade. Sands wonders if the 27 remaining EU member states will believe that Canadian trade has sufficient value for them to go ahead with the CETA, and he wonders how long Canada will need to patch up a bilateral CETA-inspired agreement with the UK. (Original version in French by Emmanuel Hagry)