Domestic Policy Space and the Settlement of Trade Disputes under the EU-Canada Comprehensive Economic and Trade Agreement

This paper aims to examine the most significant CETA provisions on trade regulation which allow the Parties to protect their public interests and seeks to analyse their relationship with the WTO covered agreements and the issues concerning the settlement of any dispute that may arise. It concludes that CETA provides the Parties with extraordinary legal tools to pursue their public policy interests. However, on the one hand, the effectiveness of these tools will largely depend on the interpretation they receive; on the other hand, conflicts of jurisdiction between the WTO’s and the CETA’s dispute settlement mechanisms (DSMs) over disputes concerning the legitimacy of trade restrictions aimed at protecting domestic public interests should not be ignored. Expectations about the final decision could lead a complaining party to choose the DSM it perceives to be more advantageous, a form of forum shopping. The more closely CETA panels will follow WTO interpretations, the lower the risk of diverging and incompatible rulings will become.