Article 8 - CETA as the EU’s First Third-Generation Trade Agreement: Does It Act Like One?

Abstract

The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) has been hailed as the trend-setter for third-generation trade agreements, which focus predominantly on beyond-the-border impediments to international trade (e.g., rules and regulations) than at-the-border barriers (e.g., tariffs). CETA formed the basis for subsequent EU trade agreements, which are a key element of the EU’s trade policy. It also provided inspiration for third-generation trade agreements outside the EU. The big question for trade policy, in the EU and beyond, is whether third-generation trade agreements achieve their intended objectives with respect to beyond-the-border obstacles to trade. In other words, are they effective instruments in liberalizing international trade? After all, facilitating trade through regulatory and administrative cooperation is much more difficult than eliminating or lowering tariffs on imported goods. Having been in force (provisionally) for five years, CETA offers the best case to study the effectiveness of third-generation trade agreements.

EU trade dynamics and the European model in the context of new globalization patterns and global governance

“…objectives, it is not clear to what extent the European model -central to the EU's identity -is thereby being upheld, not least in light of the complexity of issues involved that would need to be contemplated in trade talks (Bongardt and Torres, 2017). The experience with the CETA, the EU's showcase new generation trade agreement, has underscored the complexity of issue areas and the difficulties associated with ratification of mixed agreements (Bongardt and Torres, 2018;Forum, 2018;Coutinho, 2022;Leblond and Viju-Miljusevic, 2022).…”

What have we learned and how is EU trade policy to cope with new challenges?

“…The Commission has adopted this approach already in the recently concluded EU-Chile agreement and proposed it for the politically contentious Mercosur and Mexico agreements (Blot, 2022). Moreover, judging by the case of CETA, the EU is undertaking some efforts to address (avoid) possible contestation a priori, notably by increasing transparency and making new generation free trade agreements more progressive in terms of objectives (Leblond and Viju-Miljusevic, 2022). As bilateral agreements receive greater scrutiny (Blot), the reaction to or contestation of other EU free trade agreements will be informative as to the EU's capacity to pursue a trade agenda that is supported by European society and member states and regions.…”

“…In the end, the issue is to what extent systems competition via deep trade agreements could come to undercut those areas which are key components of the EU model and whether competence distribution in the EU (when involving member states and/or regions) provides a sufficient safeguard in the case of divergent preferences. What Rodrik (2011 and 2014) refers as the delicate balance in globalization poses an even larger challenge for the EU, as its own delicate internal balance could be potentially upset by new generation free trade agreements 10 Fifth, with EU free trade agreements being a chief embodiment of EU trade policy, what can be said about the implementation of EU objectives in or through trade? On the one hand, EU trade policy has moved away from normative free trade and multilateralism, embracing (more openly) a more active trade policy and pushing for EU objectives.…”