What changed

PA_NonLeg

Follow up to the European Parliament non-legislative resolution on the implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA)

SUGGESTIONS

Rapporteur: Javier MORENO SÁNCHEZ (S&D / ES)

The Committee on Agriculture and Rural Development calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

Reference numbers: 2023/2001 (INI) / A9-0400/2023 / P9_TA (2024)0026

A. whereas the EU-Canada Comprehensive Economic and Trade Agreement (CETA) is one of the most inclusive and sustainable trade deals ever signed;

Date of adoption of the resolution: 17 January 2024

1. Notes with satisfaction the considerable increase in bilateral trade in food and agricultural products between the EU and Canada and the 26 % increase in exports of EU agricultural products to Canada since the start of the provisional application of CETA;

Competent Parliamentary Committee: Committee on International Trade (INTA)

2. Highlights the importance of recognising the system of geographical indications (GIs) as a key component of the agreement; underlines the need for further effective enforcement of GI protection for EU rights holders in Canada;

Brief analysis/assessment of the resolution and requests made in it:

3. Acknowledges that the 18 % increase in EU exports of wine, spirits and beer to Canada in 2021 was a positive development for EU producers; stresses that further work is needed to ensure that discriminatory measures restricting market access for wines and spirits, mainly at the provincial level, are eliminated in Canada;

In its resolution, the Parliament takes stock of the implementation and impact of the Comprehensive Economic and Trade Agreement (CETA) following six years of provisional application. The Parliament resolution is very positive in its assessment of CETA. The Parliament emphasises CETA’s contribution to further strengthening close relations, bilateral trade in goods and services, as well as supply chain resilience between the European Union (EU) and Canada notably in the current geopolitical context and Canada’s strong role as a partner and ally on Ukraine and its future reconstruction. Further, the Parliament welcomes the EU-Canada Strategic Partnership on Critical Raw Materials within the framework of CETA as fully in line with the European Economic Security Strategy.

4. Notes with concern that the existing Canadian tariff rate quota (TRQ) management system is undermining the competitiveness of EU dairy producers; urges the Commission to keep up its efforts with the Canadian authorities to increase the transparency of how the operation of its TRQ system is monitored;

Beyond mere economic gains, the Parliament notes that under CETA, new jobs and business opportunities have been created, on both sides. In this regard, the Parliament also receives favourably the progress on the Mutual Recognition Agreement (MRA) for professional qualifications of architects. The Parliament welcomes the actions undertaken to support small and medium-sized enterprises (SMEs), such as the launch of the Access2Markets platform, which have contributed to the fact that more SMEs are benefitting from CETA. The Parliament emphasises that efforts must continue to allow SMEs to engage in trade and investment under CETA, including through facilitation of their internationalisation and suggests for the future the creation of a dedicated CETA chapter on SMEs.

5. Welcomes the series of joint initiatives within the framework of the EU-Canada dialogue on sustainability, environmental stewardship and climate action in agriculture; stresses the importance of increased sharing of best practices in the fields of agricultural productivity, carbon sequestration, soil health and protection of natural environments and invites the Commission to pursue these exchanges in the future.

In relation to trade and sustainable development (TSD), the Parliament welcomes CETA’s climate and environmental provisions which are in accordance with the European Green Deal, as well as the EU-Canada Green Alliance as a key enabler for the green transition. Further, the Parliament underlines the importance of dispute settlement under the TSD chapter and underlines the potential of modernising the chapter once CETA is fully ratified.

Concerning trade and gender, the Parliament welcomes the adoption of a recommendation and action plan under CETA. In addition, the Parliament requests that the Commission publishes more easily accessible, gender-disaggregated data on CETA.

The Parliament notes favourably efforts undertaken to actively involve a wide variety of stakeholders, including indigenous peoples’ representatives, in CETA implementation and monitoring through the Domestic Advisory Groups (DAGs) and the Civil Society Forum. However, the Parliament deems it necessary to identify further concrete measures to promote involvement of social and solidarity economy actors, as well as small-scale farmers and consumers on both sides of the Atlantic.

As regards sanitary and phytosanitary (SPS) matters, the Parliament welcomes the introduction of harmonised EU export certificates for the export of fresh poultry from authorised Member States and calls for progress on similar certificates for processed meat and sheep or goat meat, and traceability systems for meat products. Also, the Parliament underlines the importance that CETA applies the principle of regionalisation as regards livestock production.

In its cooperation with Canadian authorities, the Parliament further calls on the Commission to pay particular attention to the implementation of certain provisions, notably (1) equivalence of and safeguards for animal welfare standards, (2) a transparent and flexible tariff rate quota (TRQ) management system, (3) geographical indications (GIs) protection for EU rights holders in Canada, (4) the precautionary principle, and (5) access to public procurement.

Overall, the Parliament finds CETA to have had a positive impact since its provisional application and calls on the ten EU Member States that have not yet ratified CETA to ratify the agreement as quickly as possible.

Response to the requests and overview of the actions taken, or intended to be taken, by the Commission:

The Commission welcomes the resolution of the Parliament on the implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) and particularly the clear support for CETA. In the current geopolitical and geoeconomic context, CETA has proven itself to be a central pillar of the EU-Canada partnership, based on shared interests and a commitment to rules-based trade, bringing benefits beyond pure economic gains.

The Commission agrees with the Parliament that CETA, since its provisional application, has provided an exceptional platform to work together on a broad range of trade- and investment-related matters, including notably on trade and sustainable development, supporting the EU’s and Canada’s respective transition paths to green, digital and just economies, built on shared interests and mutual respect for human rights and labour and environmental standards.

The Commission concurs with the Parliament that the predictability provided by CETA has fostered economic growth, the exchange of goods, the provision of services, participation in public procurement, the attractiveness of investment, quality employment, the creation of more and better paid jobs, and improved working conditions and living standards. The Commission agrees with the Parliament that CETA keeps delivering concrete and positive results – defying all initial fears and criticism.

The Commission has started the process of conducting an ex-post evaluation of CETA with a view to presenting its results in 2025. The evaluation will analyse economic, social and environmental aspects of the provisionally applied parts of the agreement and will provide important insights into its functioning as well as areas of potential future improvement.

The Commission fully concurs with the Parliament’s emphasis on ensuring that SMEs can fully benefit from the agreement which is something that has been a priority for the implementation work under CETA and is notably at the centre of the SME Recommendation adopted by the CETA Joint Committee in 2018. The overall number of EU exporters to Canada has increased with more than 2 500 additional European SMEs between 2016 and 2019. This increase is twice as high than the growth rate for the rest of the world. In terms of concrete actions, the Commission would like to underline that the Access2Markets tool with its parts on goods, rules of origin, services and procurement is fully operational for CETA. SMEs are constantly trained on the different tools and the Commission continues to raise awareness of CETA among stakeholders on both sides of the Atlantic. In September 2021 the Commission organised a round table event with SMEs on CETA. The Commission also would like to underline that it will ensure special focus in the ex-post evaluation on SMEs and the benefits CETA provides to them. The Commission also points out that the SME recommendation from 2018 mirrors the SME chapters of New Zealand and Chile namely to ensure a publicly accessible website with user friendly content and an SMEs Contact Point (paragraph 10, 22 and 24).

At the CETA Joint Committee on 9 February 2024, the EU and Canada announced the conclusion at the technical level of negotiations for supplemental rules to facilitate the access of SMEs to CETA’s investment dispute resolution system, the Investment Court System. These rules would start to apply following full entry into force of CETA after completed ratification.

As regards CETA’s contributions to facilitating mobility of professionals, the European Commission would like to recall that Free Trade Agreements and CETA in this case do not deal with labour mobility but rather with the movement of professionals. In this respect, the EU and Canada have concluded negotiations and are preparing the adoption of an agreement on the mutual recognition of professional qualifications of architects. This agreement will be the first of its kind for the EU and under CETA and will further demonstrate that CETA delivers tangible benefits for professionals and small businesses, as it will facilitate the process of seeking recognition for professional qualifications across the EU and Canada. Furthermore, the Commission cooperates actively with Canada to ensure full implementation of the CETA provisions on temporary movement of professionals (mode 4). Coordination is made through the “contact points” set up via CETA Article 10.5 to implement the transparency obligations on procedures applicable to mode 4 suppliers. This constructive cooperation can be demonstrated through the regular updates made to the EU Immigration Portal, which is the main for providing transparency to third-country service providers, including those from Canada (paragraph 7).

The Commission concurs with the Parliament as regards the importance of EU-Canada cooperation in relation to critical raw materials. The signing in July 2021 of the EU-Canada Strategic Partnership on Critical Raw Materials in addition to the existing Dialogue on raw materials under the framework of CETA, is contributing to even more closely integrating EU-Canada raw material value chains and fostering respective investments (paragraphs 8 and 9).

The Commission emphasises the contribution CETA can make to strengthening trade and sustainable development, respect for human and labour rights and to protect the climate (paragraph 1). Notably, implementation of CETA’s Trade and Sustainable Development chapter caters for new sustainability challenges which ensure that CETA continues delivering, including for SMEs. At the last TSD Committee in April 2023, the EU and Canada identified new joint activities and new areas of engagement were triggered by the views from the civil society. Experts committed to share information and best practices on environmental priorities, sharing experience and cooperating in promoting high labour standard in third countries, and cooperating to bundle efforts vis-à-vis shared future FTA partners. The EU and Canada are also exploring ways to integrate elements from the EU Trade and Sustainable Development review Communication into the work under this chapter as appropriate (paragraph 29).

As regards trade and gender, the Commission welcomes the Parliament’s strong stance on gender equality and women’s economic empowerment (paragraph 25). The Trade and Gender Recommendation adopted by the CETA Joint Committee acknowledges the importance of incorporating a gender perspective in economic and trade issues under CETA to ensure that economic growth benefits everyone. The work plan adopted under the Recommendation foresees applying a gender lens to all CETA committee work and foresees numerous targeted activities to support women’s participation in trade between the EU and Canada. This has already resulted in a roundtable for women active in EU-Canada trade, and a workshop on gender-responsive standards and future events.

The Commission agrees with the importance of having gender disaggregated data collected. Eurostat is already working on ways of integrating this into its data collection efforts. The European Commission’s ex-post evaluation will examine qualitatively and to the extent possible quantitatively the effects of the implementation of CETA on gender equality.

As regards the precautionary principle, the Commission would like to underline the fact that EU law protects the EU governments’ right to act to protect human, animal or plant health, or the environment, in the face of a perceived risk, even when scientific analysis is not conclusive. EU law enshrines this principle. CETA refers specifically and clearly to the right to regulate and to the principles underlying the regulatory regime of each party (paragraph 26).

As regards sanitary and phytosanitary (SPS) matters, the Commission assures the Parliament that EU’s sanitary, phytosanitary, and veterinary standards remain unchanged for the implementation of CETA as with all other EU trade agreements while ensuring the continuation of adequate controls on these standards (paragraph 4).

As recalled by the Parliament, the Commission continues to work with Canada to harmonise health certificates for EU exports of different products. In turn, Canada has committed to finalise the process for the harmonisation of exports of EU processed meat products by June 2024 (paragraph 13). The Commission has discussed with Canada that harmonised certificates for exports of EU sheep and goat meat and EU casings should follow soon after. At the same time, the Commission continues to insist with Canada to speed up the work regarding the pending market access applications of EU Member States, both for exports of EU animal and plant products (paragraph 14).

On the regionalisation principle, the Commission is aware and continues to follow the matter closely with Canada. Regarding regionalisation recognition, the Commission has been successful concerning Asian longhorn beetle and Citrus longhorn beetle, where now Canada recognises 21 EU countries being free of these diseases. The Commission continues to discuss this matter with Canada and any other specific problem related to market access applications of fruits and vegetables and on the recognition of pest free areas. This work has resulted in some new market access openings for EU fruits being obtained in recent years (paragraph 14).

Concerning animal welfare standards, the Commission agrees with the Parliament on the need to facilitate ongoing cooperation with the Canadian authorities (paragraph 15). The EU has always been at the forefront of the development of a robust and science-based legislative model on animal welfare. Such a model has also been disseminated on an international scale, including through cooperation with Canada under CETA.

At present, the EU requires equivalent measures to EU provisions on welfare at slaughter for the import of animal products into the Union. There are also some equivalent provisions required in the case of welfare during transport when live animals are imported into the Union. The Commission will continue to actively promote animal welfare internationally at bilateral and multilateral front and to conduct initiatives to cooperate and increase awareness among third countries.

The Commission supports the views of the Parliament on the importance of respect for sustainable agricultural production, reciprocity and maintaining high standards, in particular sanitary, phytosanitary and veterinary standards, as well as of adequate controls and monitoring mutual compliance with those standards in the implementation of EU trade agreements, including CETA (paragraph 4). Following the 2021 EU-Canada Summit, both parties launched a dialogue on sustainability, environmental stewardship, and climate action in agriculture. Concluded in December 2023, the dialogue featured joint events to facilitate the exchange of ideas and best practices on several topics, such as soil health, greenhouse gas reduction in livestock, organic farming, better use of fertilisers and sustainable crop protection.

The Commission continuously exchanges with Canada on effective administrative enforcement of GIs, including on establishment of a list of users of grandfathered names. The Commission has notably reiterated its concern with the outcome of GI-related labelling complaints that were submitted to the Canadian Food Inspection Agency (CFIA). Given CFIA’s limited mandate for administrative enforcement of GIs, Canada developed a webpage to inform stakeholders of CETA GI obligations and enforcement in the Canadian market and carried out outreach in the provinces. The Commission will explore further how Canada’s legal system to protect GI names is actually used by EU GI holders.

There has been notable progress recently at provincial level towards resolution of issues with protection of Protected Designation of Origin (PDO) Champagne: eliminating the issue of “méthode champenois” in Quebec as well as a positive proposal to eliminate the reference to PDO Champagne in the federal compositional standards for cider.

The Commission is working with Canada to finalise the decision to include additional oenological practices as well as 22 EU wine names and one EU spirit drink name in the Annex of the 2003 Wines and Spirits Agreement (paragraph 19).

The Commission supports the Parliament’s call for the report on the operation of the cheese TRQ to be finalised as soon as possible, noting that it had first called for a mid-term review in 2019 and that the promised comprehensive TRQ review has been postponed on several occasions, without a definitive end date in view.

With regards to the UK, the Commission has noted that, as part of the UK-Canada Trade Continuity Agreement, some specific agreements on TRQ use expired on 1 January 2024 and will continue monitoring the situation in order to avoid any potential negative effects for EU operators (paragraph 32).

The Commission takes good note of the European Parliament’s references to issues that should be taken into account if CETA were to be amended or modified in the future (including references to the TSD chapter, the issue of outermost regions, an SME chapter) but stresses that the priority remains for now to ensure that CETA can enter into force in its entirety following finalisation of all national ratification procedures.

Finally, the Commission shares the Parliament’s view of the importance of the ongoing ratification process. The ratification procedures in EU Member States remain complex. The European Commission continues to support Member States in their efforts as appropriate and necessary and would like to underline the importance of showcasing the concrete benefits CETA is delivering since provisional application to feed into any debates on CETA.