Tuesday, 27 January 2015

Paris and Berlin call for review of EU-Canada trade deal

Paris and Berlin call for review of EU-Canada trade deal

Paris and Berlin call for review of EU-Canada trade deal


The Canadian parliament in Ottawa. [Vince Alongi/Flickr]
negotiations between the EU and Canada concluded in October 2013, but
France and Germany now want to make changes to the CETA agreement’s
investor-state dispute settlement (ISDS) clause. EurActiv France reports

While the free trade agreement between the EU and the US is still
under negotiation, the deal between the EU and Canada is, at least in
theory, all but wrapped up.

But French and German ministers now want to review the content of the
Canadian agreement, in order to remove any potential difficulties from
its dispute settlement mechanism, the ISDS clause. The clause is
designed to protect investments by allowing recourse to arbitration
tribunals in the case of conflicts between private companies and states.

The French Secretary of State for Foreign Trade, Matthias Fekl,
travelled to Berlin on 21 January to discuss the issue with the German
Minister for the Economy Sigmar Gabriel, and the State Secretary at the
German Federal Ministry for Economic Affairs Matthias Machnig.

Joint declaration

In a joint declaration,
the ministers of the EU’s two largest economies asked the European
Commission, which steers trade negotiations on behalf of the 28 EU
member states, to examine "all the options for modifying" the
ISDS clause in the agreement with Canada.

This request from Paris and Berlin comes after the Commission
published the results of a public consultation over the inclusion of the
ISDS in the EU-US trade deal currently under negotiation, the
Transatlantic Trade and Investment Partnership (TTIP). An overwhelming
majority of the 150,000 responses opposed the mechanism. 

Yannick Jadot, the TTIP spokesman for the Green Party in the European
Parliament, said the declaration did not go far enough. "The member
states need to understand that the European citizens do not just want
the arbitration clause to be adjusted, but for the whole mechanism to be
abolished," he said.

If French and German opposition to the arbitration clause is nothing
new, France and Germany are breaking new ground in asking for the
negotiations with Canada to be reopened.

A source in the French Ministry of Foreign Affairs welcomed the
development. He said, "What is important is that the Germans are for the
first time accepting the link between the arbitration clauses in CETA
and TTIP".

>> Read: Germany threatens to reject EU-Canada free trade deal

Negotiations on the Comprehensive Economic and Trade Agreement
(CETA) between the EU and Canada began in May 2009. They were
concluded in October 2013. The ratification will begin in the first
semester of 2015.

This next hurdle may prove difficult for the CETA agreement. Yannick
Jadot said, "The Commission considers the negotiations to be finished,
but the member states could very well say they are not satisfied".

Though it comes at a later stage in the process, the debate over
arbitration in CETA is closely linked to that of TTIP. If the principle
of arbitration tribunals is accepted in one agreement, it sets a

>> Read: France and Germany to form united front against ISDS

"The big American countries all have Canadian branches. If we install
the arbitration mechanism in one large, developed country, it will
become the standard," Yannick Jadot warned.

>> Read: ISDS decision delayed to end of TTIP talks

Canadians against change

For the Canadians, the dispute settlement clause appears
non-negotiable. "Canada and the EU have negotiated an ambitious,
balanced and beneficial agreement for both parties, which includes the
ISDS, and we will continue our efforts to implement CETA as soon as
possible," a Canadian government spokesperson told EurActiv.

The European Commission has yet to respond to the French and German
calls for renegotiation, but any backpedalling over CETA could weaken
their negotiating position for TTIP.

Opposition to CETA in the European Parliament is strong, and
the majority needed to ratify it is by no means guaranteed. Earlier this
month, Matthias Fekl said, "The majority in France and Germany is not
in favour of ratifying the arbitration clause in CETA as it stands".

The current objective is to come up with proposals to reform the
arbitration clause and reopen the debate during the first semester of
  • 2015: EU-Canada free trade agreement expected to be ratified across the 28 EU member states
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