European parliament backs free trade deal with Canada

EU lawmakers have backed the Comprehensive Economic and Trade Agreement (CETA) by 408-254 votes despite crowds of protesters contesting the deal outside.

CETA aims to boost goods and services trade and investment flows.

The European Parliament’s approval on Wednesday following a three-hour debate means parts of the deal, such as tariff reduction, will come into force eight years after negotiations began.

"By adopting CETA, we chose openness and growth and high standards over protectionism and stagnation. Canada is a country with whom we share common values and an ally we can rely on. Together we can build bridges, instead of a wall, for the prosperity of our citizens. CETA will be a lighthouse for future trade deals all over the world", Parliament’s rapporteur for the CETA agreement Artis Pabriks said after the vote.

However other, more controversial aspects of the deal, such as the investor court system, will require ratification by EU member states which could take years.

CETA has been the focus of demonstrations in Europe led by trade unions and protest groups that say it will lead to a race to the bottom in labour and environmental standards and allow multinational corporations to dictate public policy.

The chief point of contention is the deal's system to protect foreign investors, which critics say can lead to cases such as Philip Morris's challenge, albeit unsuccessful, of plain tobacco packaging in Australia.

Supporters say the right to regulate is enshrined in the treaty and CETA has replaced closed arbitration panels with transparent and independent courts to settle disputes.

Full implementation of CETA, including investment, will only ensue after clearance by more than three dozen national and regional parliaments. Opposition in the Belgian region of Wallonia threatened to kill the deal last year, until an addendum was added addressing concerns over the rights of farmers and governments.

For Canada the deal is important to reduce its reliance on the neighbouring United States as an export market. For the EU, it is a first trade pact with a G7 country and a success at a time when the bloc's credibility has taken a beating from Britain's vote last June to leave the bloc.

The future of the global trade system has also been thrown into question by the election of US President Donald Trump - who has withdrawn from the Trans-Pacific Partnership (TPP) and wants to renegotiate the North American Free Trade Agreement (Nafta).