Latvia becomes 1st EU country to sign on to Canada's trade deal

The journey toward full ratification of Canada's trade deal with the European Union will be long and complicated, but an early step was taken Thursday as Latvia's parliament voted in favour.

"We were visionary when we started a decade ago and now this is the right deal at the right time," said International Trade Minister Franois-Philippe Champagne during a press conference in the capital city of Riga.

"In an age of rising protectionism and anti-trade rhetoric in the world, it sets a new gold standard for progressive trade that works for everyone," Latvia's public broadcaster quoted Canada's minister assaying, echoing the message Prime Minister Justin Trudeau took to Europe last week after the European Parliament approved the Comprehensive Economic and Trade Agreement.

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Champagne praised Latvia for ratifying quickly.

Of the 28 member countries currently in the European Union, 27 are required to hold ratification votes in one or more national legislatures.

Latvia isthe first, with legislators votingby a margin of 71-5 in favour, with one abstention.

The public broadcaster also reportedthat Latvian Foreign Minister Edgars Rinkevics said that besides CETA, Canada's decision to send troops to lead a multinational battalion of NATO forces in Latvia proved that Latvia represented a secure environment for businesses to thrive.

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Prime Minister Maris KucinskissaidCETA brought "only pluses, no minuses."

The Canada-EUStrategic Partnership Agreement, which covers a range of non-trade matters including security, also passed.

European Parliament ratified last week

Thegoods and services traded between Canada and Latvia in 2015 were worth approximately $83 million, according to data from theLatvian Investment and Development Agency reported by local media.

On Thursday, Global Affairs Canada said on Twitter that bilateral trade in 2016 totalledalmost $216 million.

While Latvia is far from Canada's largest European trading partner, one of CETA's objectives is opening up new markets in placesCanada has not been a big player.

The European Parliament ratified CETA last Wednesday, with roughly 58 per cent voting in favour.

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Legal and jurisdictional issues may delay, if not threaten, full implementation of the deal.

Over 90 per cent of CETA may be provisionally applied once legal and regulatory changes have been made to bring both partners into compliance.

On Canada's side, this includes the Senate passing animplementation bill, C-30, as well as measuresat the provincial level.

Last week the EU suggested this could happenas early as April 1. Both sides must confirm their readiness in an exchange of diplomatic notes before an effectivedate is set.

Provisional application will bring into effect the parts of the deal most relevant to Canadian businesses and consumers, including: immediate elimination ofover 98 per cent of tariffs, access to previously limited markets for both goods and services (including government contracts), easierlabour mobility and recognition of professional credentials.

Court decisions ahead

The fullagreement will not applyuntil all member states ratify. Some countries requirea vote in more than one legislature, and in at least one country, Belgium, regional governments will vote too.

Up to 14 EU countries may hold referendums on CETA.

While the European Commission was mandatedto negotiate CETAon members states' behalf, a few areasranging from criminal justice to maritime transport to investmentprotection fallunder the jurisdiction of individual countries.

Several countries have brought or may yet bring casesbefore the European Court of Justice concerning the EU's jurisdiction over aspects of the wide-ranging deal.

Legal wrangling is likely to delay ratification in several places, including France, Belgium and Germany.

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One disputeconcerns what happens if one country fails to ratify would most measurescontinue to apply provisionally indefinitely, or would one 'no' vote undo the entire thing, including what'salready applied?

Opponents say they'll continue to protest and pressure legislators to vote no.

Canada and the EU are still working out difficulties with CETA'scontentious investor court system, which allowscompanies to sue for compensationwhengovernment actions harmbusiness interests.Additional changes remainpossible.

Thedispute resolution clauses are among those excluded from provisional application.

The broad scope of CETA the legal text is over 1,600 pages, plus additional declarationsnegotiated last fallto secureitsapprovalled the EU into uncharted territory. Jurisdictional arguments could continue for several years.