On 21 March 2024, the French Senate (French Parliament’s higher chamber) rejected the bill of the French government proposing to approve the EU-Canada Comprehensive Trade Agreement (CETA).
For several years, the European Commission and the Canadian government negotiated a comprehensive free trade agreement, including new types of provisions on investment. It was the first ever ambitious free-trade agreement that the EU concluded with a G7 country (Japan and the UK were concluded later).
The CETA is a so-called “mixed agreement”, which contains provisions failing under the scope of both the exclusive competence of the EU and shared competence with the Member States.
Following the approval of the European Parliament, the CETA provisionally entered into force on 21 September 2017, with the exception of the investment protection mechanism, the investment market access for portfolio investment and the investment court system. To enter info full force, the CETA requires the approval of all EU Member States.
France decided to ratify the CETA via the parliamentary route. In 2019, the National Assembly (French Parliament’s lower chamber) had voted in favour of the ratification, but the government had not yet added the ratification of the CETA to the parliamentary agenda of the Senate, which is a necessary step for it to be approved by the French state.
The rejection of the CETA by the Senate intervenes in the context of the current farming crisis in France and Europe. On this, the Committee of Foreign Affairs of the Senate noted:
- The fundamental differences between the French/ European and Canadian farming models: the CETA would place French farmers in a competitive disadvantage compared to Canadian ones;
- The risk of an increase of import of Canadian meat under quota, along with the concern that the EU may remove the ban on the use of peracetic acids to disinfect carcass; and
- The absence of a mirroring clause, which would have imposed on Canadian farmers the same regulatory constraints as the European farmers have to face.
The next step is a new vote by the National Assembly, which will have the final word on the ratification, and can override the Senate vote. The difference with 2019 is that the government, in favour of the CETA, no longer has the majority in the National Assembly and will have to rely on other opposition political parties to pass the text.
A rejection by France means that CETA could no longer apply in the EU, even if all the other EU Member States give their consent on the agreement. This would have dramatic consequences for traders, for example, the loss of preferential tariff treatment upon importation. The EU and Canada would have to consider the negotiation of a new treaty, possibly by limiting the scope of any future free-trade agreement to what would fall under the EU’s exclusive competency (namely, access to the EU market so far as concerns goods and services, protection of direct foreign investments, intellectual property rights, the fight against anti-competitive activity, sustainable development – in line with the European Court of Justice’s opinion in the context of the free-trade agreement negotiated between the EU and Singapore (2/15 on the area of EU exclusive competence on free-trade agreement and not covering non-direct foreign investment and dispute settlement between investors and States).
