Justin Trudeau thinks an EU-Canada accord could make or break free trade deals. Is he right?

Canada's chief partner on trade, the US, is turning toward a bilateral-style approach to trade deals. Trudeau wants Europe to prove a multi-country approach is still alive.

Justin Trudeau thinks there’s life for big free trade deals after Donald Trump and Brexit. And he wants European leaders to help prove it.

A long-stalled accord between Canada and the European Union – the Comprehensive Economic and Trade Accord, or CETA – was approved by the European Parliament and Canada’s House of Commons this week, leaving the Canadian Senate and Europe’s national governments as the final hurdles.

And on a visit to the Parliament on Wednesday, the Canadian prime minister framed the fate of the deal in dramatic terms: public anxieties about free trade, he told the Parliament, could only be overcome if “trade is inclusive, so that everyone benefits.”

“If we are successful, CETA will become the blueprint for all ambitious, future trade deals. If we are not, this could very well be one of the last,” he said, according to the Canadian Broadcasting Corporation.

Such rhetoric underscores questions about what trade accords might look like in an anti-globalization age. But opposition to the deal from the left in both Canada and Europe might suggest that Mr. Trudeau’s vision of a stark choice ahead for trade may be simpler than the reality.

Newly minted by liberals as the West’s standard-bearer for liberal democracy, Trudeau is posing a challenge to European leaders, says Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins’ School of Advanced International Studies: prove it can pass multi-country trade deals.

“I think for those middle[-sized] agreements which became really popular in the '70s and '80s, Trudeau may be right,” he tells The Christian Science Monitor.

“The big concern for Canada is getting CETA ratified before Britain leaves,” he adds. “They do more trade with Britain than with anyone else in Europe.” And if Britain and Europe ratify the deal before they separate, it would give Canada an edge over the United States. 

CETA would dismantle nearly all of the existing tariffs on incoming goods between EU and Canada. But the main opposition to it is driven less by worries about the fate of national industries than from environmentalists and labor groups, who decry special tribunals for investors, known as Investor-State Dispute Settlements, that allow them to sue nations for introducing new laws that affect business. Those tribunals, they say, give corporate leaders an exclusive legal recourse – and have a chilling effect on efforts to protect workers and the environment.

“These deals are a primary expression of corporate capture of our policy making,” says Gus Van Harten, a law professor at York University in Toronto who has studied ISDS. “The deals are negotiated behind closed doors – who has access? Government trade officials and a bunch of corporate lobbyists and lawyers.”

The inclusion of ISDS, united with concerns about national agricultural interests, came close to downing CETA last year, when Belgium’s socialist-led region of Wallonia held out until the national government promised closer assessments prior to ratification.

But there are “absolutely” alternatives that would satisfy many objectors from the left, adds Dr. Van Harten, such as deals that eschew such tribunals and build in what they see as enforceable labor and environmental standards.

“Or – this’ll sound wild – why not a global minimum wage built into trade agreements, so if you want to take advantage of market access, you have to respect the right of collective bargaining, for example?” he says. 

“But if you want a different model, you’re going to have to change the way big companies are privileged access to policy-making.”