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Canada-EU Comprehensive Economic and Trade Agreement (CETA) - Frequently Asked Questions

1. What is CETA

  • The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) is a modern and progressive agreement that will reinforce the strong linkages between Canada and the EU. CETA will create vast new opportunities across Canada and the EU, opening new markets for our exporters and forging closer links between our economies.
  • CETA encompasses the full range of factors that now shape trade in the global economy: liberalization in the trade of goods and services, investment protection, comprehensive and balanced protection for intellectual property, access to procurement opportunities at all levels of government, cooperation on regulations and product standards, support for sustainable development, the list goes on.
  • CETA is a modern and progressive agreement that will encourage free and fair trade while respecting the shared values of Canada and the EU.

2. Why is CETA important?

  • CETA reflects Canada and the EU's shared commitment to generate growth on both sides of the Atlantic through increased trade and investment.
  • CETA underscores our shared commitment to advancing a progressive approach to international trade by protecting the right to regulate, maintaining high labour and environmental standards, and making investment dispute resolution procedures independent, impartial and transparent.

3. Will CETA affect environmental and labour standards in Canada and the EU?

  • There are no provisions in the sustainable development, environment or labour chapters in CETA that will require a Party to lower its standards.
  • On the contrary, the Environment Chapter explicitly requires each Party to strive to continue to improve its laws and policies and its levels of environmental protection.
  • Both the EU and Canada maintain high labour protection standards and the Labour chapter provides assurances these protections will not be lowered in order to encourage trade.
  • Under CETA, Canada and the EU have committed to respect and promote internationally-recognized labour rights and principles.

4. Will CETA affect food standards in Canada and the EU?

  • Both Canada and the EU maintain high standards for food safety, and our consumers demand that the food they consume is safe and meets those high standards.
  • Nothing in CETA will require Canada or the EU to lower their food standards, or to change their existing regulatory frameworks for genetically modified organisms.

5. Does CETA protect a government's right to regulate?

  • Yes. This right is clearly stated in the preamble of the Agreement.
  • The CETA Investment Chapter also reaffirms a government's right to regulate for legitimate policy objectives; for example for the protection of safety, health or the environment.
  • The core investment obligations of CETA – national treatment, most-favoured nation treatment, fair and equitable treatment and the protection against expropriation – have been carefully drafted to ensure Canada and the EU preserve their right to regulate in the public interest.
  • Notwithstanding CETA's provisions, EU investors in Canada, and Canadian investors in the EU, must abide by the laws and regulations of the host country.

6. Can companies use the investment dispute resolution mechanism to challenge any regulatory measure?

  • No. It is important to dispel misconceptions regarding CETA's investment dispute resolution mechanisms. CETA does not:
    • prevent governments from regulating in the public interest;
    • require that investors be compensated simply because a governmental measure has affected their expectations, including those regarding profits;
    • allow a tribunal to request that a government change its laws, regulations, or policies.
  • However, CETA does:
    • Allow a tribunal to dismiss frivolous claims to ensure the process is not abused.

7. Can a non-Canadian company launch a claim against the EU or an EU Member State using CETA's investment dispute resolution mechanism?

  • No. An enterprise of a third state cannot benefit from CETA's investment dispute resolution provisions simply by the fact that it has activities in Canada.
  • CETA's investment provisions offer protection to Canadian enterprises which (1) are established in Canada, (2) have substantive business activities in Canada, and (3) are making an investment in the EU that directly relates to their activities in Canada.
  • As such, an enterprises that is established in Canada, owned or controlled by persons from a third state, and lacking substantial business activities in Canada (e.g. letter-box companies), would not be recognized as an investor for the purposes of CETA's investment chapter.

8. What are the guarantees that arbitrators of the investment dispute resolution mechanism will be independent?

  • Under CETA, a permanent Tribunal constituted of fifteen members appointed by Canada and the EU is established, and a dispute is heard by a division of the Tribunal comprising three randomly selected members.
  • This is a change from the general practice whereby the investor launching the dispute participates in the selection of arbitrators.
  • A provision was added to prohibit members of the tribunal from acting as counsel or as a party-appointed expert or a witness chosen by a party in any other international investment dispute.
  • CETA's strict ethical rules will ensure the independence and impartiality of the members of the tribunal.

9. Will CETA lead to the privatization of public services?

  • CETA provides guarantees that governments remain entirely free to manage public services as they see fit to best serve their citizens.
  • CETA has exceptions for publicly delivered services, such as health, education and other social services that allow governments to retain broad policy making authority.
  • Canada has a long history of public and universal health care and Canadians expect to fully preserve their access to comprehensive, universal and publically administered health care services.

10. Are CETA and TTIP linked?

  • No. CETA is not linked in any way to the Transatlantic Trade Investment Partnership that is being negotiated between the United States and the European Union.
  • CETA negotiations are concluded and the text is publicly available.

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