The Schubert commission’s report on the CETA, clear findings on verified concerns
Schubert Commission, September 2017
September 11, 2017
Following a campaign promise made by Emmanuel Macron, a nine-expert commission chaired by Mrs. Katheline Schubert was given the task on July 5, 2017 “to shed an objective, scientific and quantitative light on the impact of the CETA on the environment, climate and health in case of an implementation of all the agreement’s provisions”. Prepared in record time to be handed to the French Government on September 8, the report deserves to be read carefully, as it provides a sharp analysis of the challenges and concerns determined by the various stakeholders working on the issue1.
The first three chapters present the various legitimate questions on the concept of the so-called “new generation” free trade agreement and the organizations established for this motive, including the body to settle disputes in investing nations––the Investment Court System (ICS) or the Regulatory Cooperation Forum (RCF). As a matter of fact, this agreement wants to be seen as a new type of agreement as it “integrates not only the elimination of customs duties, but most of all a reduction of regulatory barriers to trade of goods and services, as well as an agreement on investment.” Above all, this agreement would be “alive [since] it does not freeze the commitments from contacting parties”, but, on the contrary, allows the progressive harmonization of standards.
The fourth and last chapter provides a risk analysis by covering the health implications (Section 1), the environmental impacts of agriculture (Section 2), the challenges linked to climate change (Section 3) and services (Section 4). Agriculture is therefore often referred to.
What can we learn?
Perhaps trying to be reassuring, the Commission’s rapporteurs indicate that the 2,300 pages of the agreement often mention the principles to prevent any levelling down of the health, social and environmental standards: “the ability of nations to regulate in the environmental and health fields is maintained on principle” and “states cannot be held responsible of detrimental economic consequences that could be generated by a public good measure whose legitimacy is indisputable”. Conversely, it is noted that for the most part, “the CETA does not impose any additional commitment to contracting parties” and that “the burden of proof shifts to the contracting party that issued the measure protecting the environment or health]”.
The case-by-case assessment of the body to settle investing nations’ disputes might be crucial to differentiate between what deals with “protectionist manipulation of environmental and health policies on one side, and the risk that private interests question existing public regulations and block their enhancement.” In the end, the rapporteurs emphasize that “the CETA agreement does not give a priority to concerns linked to environmental and health preservation”, and propose adding another agreement to this agreement to initiate a “climate veto”, since “climate is the major absentee in the agreement.” Some are trying to explain such “oversight” by the fact that the negotiations were held prior to the Paris Agreement reached by the COP21, i.e. the 21st Conference of the Parties since the Rio Earth Summit in 1992.
A half-empty or half-full glass?
As it is often the case, this type of report brings out ambivalent feelings. On one side, one might think that the political pressure from NGOs and agricultural trade organizations––such as Interbev that is very involved in the discussions––fuels a positive realization of the limitations of free trade. In fact, we are seeing a significant shift of focus away from the still prevailing rhetoric that preaches the “theory of mutual support”, whereby international trade development must be the primary consideration since one assumes the principle that “increasing revenues linked to boosting international trade would give wealthy societies the possibility to demand stricter environmental standards.2
On the other side, if we consider the meat sector, it is hard to see how the European approach on health issues will resist to those currently implemented in Canada or elsewhere. In Europe, health control focuses on all stages of the food chain, whereas the North-American concept favors the decontamination treatment at a given production stage. As the first one is quite costlier for the whole sector, it will be easy within Europe to argue on this differential to push back our standards, since the key regulatory competition to be feared is the one existing between member-states.
Is agriculture still an exchange currency for other sectors?
Looking at the sole chapter devoted to allowances on agriculture, it clearly seems that the European Union is losing. The EU will grant import quotas for beef and pork meat. As far as dairy products are concerned, quotas are granted by the Canadians for European cheese imports, however the EU will eliminate all customs duties on dairy products as soon as the agreement is implemented.
Considered by an “offensive” topic by the Europeans, we may have more surprises in store since the report’s last page indicates that Canada decided to allocate 50% of import cheese licenses to local producers, which “might lead to under-using of the quota obtained by the European Union” and the fact that “Canadian authorities have announced a 5% increase in milk production quotas as of July 1.” The future will tell if the Europeans were not overconfident when we know that through quotas and the collective marketing by producers (the well-known joint ventures), Canadian dairy farmers have the means to rely on adequate compensation for fresh products sold locally, and thus be competitive over processed products, especially regarding exports.
And finally, what did our DG Trade negotiators get when faced with such allowances in agriculture? We are told about investment opportunities and access to Canadian public markets… when we know that Canada is rather a country favoring direct investment abroad, and that it is already possible to create (or acquire) a Canadian law subsidiary to have access to public markets. European agriculture might serve as an exchange currency to assist the DG Trade in forging ahead in bilateralism, which helps it to compete for space and not make a clear-sighted assessment of the current failure of multilateralism based on 1995. In doing so, Europe continues to be marginalized among nations undergoing fundamental change, and is exposed to the risk of further fueling factors that may lead to its own implosion.
2 Voir les travaux de Maxime Combes à ce sujet