CETA, an Innovative Agreement with Many Unsettled Trajectories

Abstract

Can trade agreements integrate innovations and progressive dispositions? In this era of fast changes linked to globalization and technological changes which fuel discontent, this question has emerged in the literature and in the negotiation processes of many recent agreements. In the first section of this article, we will introduce the structural changes that are beneath the surface of recent trade agreements using a typology of trade agreements enabling comparative analysis. In the second section, we will discuss some of the most important innovations of the Comprehensive Economic and Trade Agreement (CETA) negotiated by Canada and the European Union. In the third section, we will see that part of the innovative nature of CETA, its evolutionary nature, brings many unsettled trajectories. In the fourth section, we will discuss how CETA is further unsettled in its trajectory because it puts into relation two distinctive integration models highlighted in our typology, one developed in Europe and the other in North America and, furthermore, because of the more general context that also puts into play Asia and China as emerging shapers of economic trade agreements.

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

“…As international trade has embraced several structural changes since the 1990s, trade agreements had to expand their focus (Leblond and Viju-Miljusevic, 2019;Rioux et al, 2020). The first key development was the growth of trade in services, which has expanded more swiftly than trade in goods since the 1990s to become the most active component of world trade (WTO, 2015).…”

“…The first key development was the growth of trade in services, which has expanded more swiftly than trade in goods since the 1990s to become the most active component of world trade (WTO, 2015). The second significant development is the emergence of global value chains (GVCs), which led to intermediate goods and services being traded globally (Leblond and Viju-Miljusevic, 2019;Rioux et al, 2020). GVCs are a result of multinational firms establishing subsidiaries and dividing up their manufacturing processes and activities across the world.…”

“…GVCs are a result of multinational firms establishing subsidiaries and dividing up their manufacturing processes and activities across the world. Against this background, second-generation trade agreements were shaped by the North American Free Trade Agreement (NAFTA), which adopted a decentralized, market-led model based on national laws and a contractual approach (Rioux, 2022;Rioux et al, 2020;Rioux et al, 2015). It entered into force in 1994.…”

“…The NAFTA was the first trade agreement signed by two developed countries with a developing/emerging country. As a consequence, it incorporated a social clause (Rioux et al, 2020). Broadly, the agreement sought to remove barriers to trade in goods and services as well as the movement of capital across the three North American economies.…”

“…With the development of the Internet, electronic commerce and new information and communications technologies such as electronic data interchange, enterprise resource planning software, radio-frequency identification, artificial intelligence, the world economy has become even more interconnected and interdependent. Consequently, international trade agreements have evolved and adapted to these changes (Leblond and Viju-Miljusevic, 2019;Rioux et al, 2020). Third-generation trade agreements not only aim to reduce and eliminate conventional tariff and non-tariff barriers, but include so-called "WTOplus"provisions (i.e., not covered by WTO agreements): e.g., competition policy, data protection, environmental laws, investment, labour market conditions and human rights (González et al, 2017;liwiska, 2019).…”