Global Tax 50 2017: Cecilia Malmström

Cecilia Malmström is a new entry this year

During her time as the European Commissioner for Trade, Cecilia Malmström has presided over the EU's side of the Comprehensive Economic and Trade Agreement (CETA) with Canada. This kind of free trade agreement stands out as a reminder of what globalisation was like before the protectionist era of US President Donald Trump and Brexit.

CETA constitutes Canada's biggest bilateral trade initiative since the North American Free Trade Agreement (NAFTA) came into force in 1994. The agreement removes duties on 98% of the goods traded between Canada and the EU. Not only does this ease market access for businesses on both sides of the Atlantic, EU companies will save almost $700 million a year thanks to virtually eliminating tariffs on exports to Canada.

"Things are about to change for our exporters," Cecilia Malmström said at the time. "The provisional entry into force allows EU companies and citizens to start reaping the benefits of this agreement right away. This is a positive signal for the global economy, with the potential to boost economic growth and create jobs."

Malmström has put great effort into getting agreement on the CETA after a total of seven years of negotiation.

"CETA is a modern and progressive agreement, underlining our commitment to free and fair trade based on values," Malmström said. "It helps us shape globalisation and the rules that govern global commerce. Moreover, CETA underlines our strong commitment to sustainable development and protects the ability of our governments to regulate in the public interest."

According to the European Commission, the EU exports €53 billion ($63 billion) of goods and services to Canada every year. This trade is linked to 865,000 EU jobs and Canadian companies employ 221,000 workers in EU countries. The expectation is that the new agreement will see trade expand by 20% thanks to the elimination of tariffs.

Given its scope, CETA was no less controversial than NAFTA in some quarters. A common criticism is that these free trade agreements ultimately drive down standards and eliminate barriers for big business, while the little guy loses out.

CETA was particularly controversial in Belgium, where the regional Walloon Parliament opposed the deal on the grounds that it allowed multinationals to sue national governments. In response, the Belgian government called upon the Court of Justice of the European Union (CJEU) to rule on whether the agreement's dispute resolution system was compatible with EU law.

This temporarily stalled the deal in its final stages. After a great deal of haggling, CETA was eventually approved by all 28 EU member states on October 30 2016 and went on to pass through the European Parliament the following February. CETA came into provisional force on September 21 2017 pending ratification by EU member states.

The CJEU ruled that the dispute resolution system of CETA does affect the power of European courts, however, the compatibility of the system with EU law could not be determined by this case alone. But it did later rule that the deal cannot just be ratified by the EU alone and that national parliaments must have a say in the matter.

As a result, CETA has already been ratified by six countries and the process will continue into 2018. Even with the delays, there is more certainty about this agreement than what is happening in many other places in the world.