The Comprehensive Economic and Trade Agreement (CETA), a trade agreement between the European Union and Canada, was voted down by the French Senate on March 21st. This trade deal was proposed in 2014 and accepted by a vast majority of European leaders in 2017. This time around, however, only 17 of 27 member states accepted its continuation due to political reasons like those taking place in France. The French senate has voted against the trade agreement, which means the French adhesion to this bill would rely on the French National Assembly, which has the political opposition necessary to vote down the bill.

To understand the European turn-away from this trade agreement, the contents of the bill themselves need to be laid out along with the criticism stemming from political opposition and environmental groups. An article that gives a brief overview of the key considerations of the trade document is “All you need to know about CETA, the controversial EU-Canada trade agreement” published in Le Monde. The bill removes previous barriers to trade such as tariffs and other regulations on foreign commerce. The bill also establishes special tribunes that gives companies the ability to challenge government regulation related to their commercial activity, a stipulation that is among the most controversial in this trade agreement. The challenge to regulation could lead lack of any measures to make Canadian products align with European food and safety guidelines, specifically regarding the use of GMOs, hormones and antibiotics with livestock. There are also concerns from European agriculture groups around the opening up of these markets. However, it seems that Canadian producers are not as interested in the European markets as Europeans are interested in the Canadian markets. For example, European beef producers have increased their exports to Canada from 2 million to 14 million tonnes.

From this perspective, CETA, so far, seems like a mixed bag of economic gain for certain producers but a weakening of government regulation through parallel legal systems which could be leveraged by companies to effect the laws and regulations put in place by elected officials. So far Belgium, Germany, and Ireland have challenged the legality of CETA as either incompatibility with their constitutions or incompatible with E.U law. 

This controversy over CETA stems primarily from the farmer protests, which were triggered by the E.U. allowing Ukrainian grain to enter European markets, and environmental policies taxing diesel fuel necessary for farming equipment. Right now Europeans are skeptical about free trade because they think that the burden is placed largely on them. The opponents of the deal point out that these agreements include countries that have weaker labor and environmental regulations than the E.U., forming a seemingly unfair adventages over the producers in the E.U. Opponents of the CETA believe that the E.U. and its constituent countries are a perpetual disadvantage even with a country like Canada. This explains why the French Senate voted against this bill. Across the political spectrum, there is skepticism against free trade.

To understand the disgruntlement felt by Europeans, we need to understand the history of a common buzzword, neoliberalism. The broad definition of neoliberalism is an economic ideology that values free markets and the least amount of government regulation possible to remove unnecessary obstacles from individual economic actors. A popular concept used by the proponents of free market ideas is the “invisible hand,” or the self-regulating nature of free markets. In theory, markets don’t need any regulation at all, or very little, to efficiently meet the demands of consumers. The E.U. has embraced economic policy-making along these lines and has been criticized for being both undemocratic and for forcing harmful economic policies on its member states. A release titled “Austerity Policies Have Made European Citizens €3000 A Year Worse-Off,” published by the New Economic Foundation, cited a study that argues against economic regulations. Similarly, Finance Watch, a European non-governmental organization that conducts research and advocacy on financial regulation, concluded that if the E.U. had not enforced austerity measures after the 2008 financial crisis, the following would have occurred:

1. The average EU citizen would be €2891 better off.
2. Governments would have invested €533 billion more in infrastructure, including domestic and renewable energy resources, which would have protected European families from dramatic energy price rises.
3. Governments would be spending an extra €1000 per person on social sectors like education, health and social care.

These are numbers that explain why people are increasingly against CETA and free trade in general, even though certain European industries have benefited from its implementation. If people see a negative economic trend in their countries, they will lose faith in the institutions creating policy because they recognize the same style of policy-making, which characterises the E.U.’s economic agenda. Not only does the economic principle need to change for the betterment of individual livelihoods, but also to avoid political backlash. These are the factors that could lead to anti-establishment political parties gaining parliamentary or electoral majorities who want to withdraw their nations from international institutions. Due to pressing issues facing Europe such as Russia, climate change, energy crisis, and much more, there is a dire need for a unified European leadership to combat these issues. The E.U. also needs to be more consistent in its policy-making. A good example of this is how the E.U. will not ban private air travel (private jets) while planning to phase out fuel subsidies that benefit farmers. Agriculture is arguably the most important economic activity to the security of any nation while private jets are a convenience for the super wealthy. This contradiction does not inspire confidence when the cost of mitigating climate change is placed on the most essential activities to spare the most frivolous. If the E.U. wants to reverse these outcomes, it needs to focus less on free trade and competition. Instead, it should develop a more socially sustainable model of industry. This would mean giving member states more autonomy to organise their economy and use financial systems and public spending to develop industry and fund social services.