Friday

10th Jul 2020

EU top court backs Canada trade deal in ruling

  • Wallonia's then leader, Paul Magnette, here pictured on an anti-CETA poster, triggered the question put to the EU top court (Photo: Campact)

The EU-Canada free-trade agreement's rules on protecting investors in case of a dispute with states do not breach EU law, the EU's top court ruled on Tuesday (30 April).

The judges of the European Court of Justice (ECJ) said in their ruling that the mechanism to resolve disputes between investors and states, which critics say unfairly favour multinationals, is in line with EU law.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The binding ruling of the Luxembourg-based ECJ means a sigh of relief for supporters of the deal.

It also means, the court backed the system agreed by Canada and the EUon protecting the rights of foreign investors, for situations where investors from either side claim they have been unfairly treated.

The judges said that the tribunals set up by the agreement cannot have the power to interpret or to apply EU law, other than those in the deal, in a way that could hinder the power of EU institutions.

The court also said the deal contains provisions which deprive the tribunals of questioning the choices of states when those states curb an investor's rights due to the protection of public order, public safety, food safety, the protection of public morals, consumer protection, protection of fundamental rights and human life and health.

The court said that while the deal offers remedy for foreign investors, their situation "is not comparable to that of investors of member states who invest within the EU".

The free trade deal was seven years in the making when in 2016 Belgium's Wallonia refused to give its blessing to the agreement due to concerns over the dispute settlement, and environmental standards.

In the end, Belgium struck a deal - attaching clarifications to the trade agreement, and taking the court system to the European Court of Justice to check if it was now in line with EU law.

A negative ruling could have derailed the use of such tribunal systems, which the EU had used in other trade negotiations.

The Canada deal entered into force on a provisional basis in September 2017, and full implementation requires the ratification of all EU national parliaments, and some regional assemblies, like in Belgium.

Belgium's foreign minister Didier Reynders welcomed Tuesday's court's ruling.

"With its opinion, the court dismisses the remaining legal concerns," he said in a statement, pointing out that due to the Canada trade deal Belgium's exports to Canada grew strongly in the first year, with an average increase of more than 30 percent compared to a European average of 6 percent.

Reynders said the court system is the first step towards establishing a multilateral court system that "will eventually become the competent legal forum for resolving the investor-state disputes".

The EU commission has been pushing since 2015 for the establishment of a permanent body to decide on investment disputes, to move away from the ad hoc arbitration.

The commission's ambitions have now been given a boost by the court's ruling.

Both the EU-Canada deal and the EU-Vietnam free trade agreement foresee setting up a permanent multilateral mechanism.

The EU has been working to convince Japan on setting up of an investment court system, but Japan favours the old-style investor-state dispute settlement (ISDS) system.

MEPs approve Canada trade deal amid protest

Amid protests in front of the European Parliament's Strasbourg building and after heated debate among MEPs, the landmark trade deal with Canada was approved with a comfortable majority.

Hogan sets out trade plans at commissioner grilling

Phil Hogan, the current agriculture commissioner, told MEPs the EU needs to defend itself in trade disputes but will try to work together with the US, if Washington is a willing partner.

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

EU plans tougher checks on foreign takeovers

The EU and its member countries are worried that foreign powers, such as China and its state-owned companies will take advantage of the economic downturn and buy up European firms

News in Brief

  1. Rushdie, Fukuyama, Rowling warn against 'intolerance'
  2. Clashes in Belgrade after new lockdown measures
  3. US passes milestone of 3m coronavirus infections
  4. France wary of any future lockdowns
  5. Lithuania bans Kremlin-linked Russia Today programmes
  6. UK nominates Liam Fox for WTO top job
  7. Italy supports Spain's Calviño for Eurogroup job
  8. France and Germany warn Israel on annexation 'consequences'

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. Five ideas to reshape 'Conference on Future of Europe'
  2. EU boosts pledges to relocate minors from Greece
  3. Hydrogen strategy criticised for relying on fossil fuel gas
  4. Merkel urges EU unity to hold off economic fallout and populism
  5. The opportunistic peace
  6. EU mulls new system to check illegal pushbacks of migrants
  7. EU forecasts deeper recession, amid recovery funds row
  8. Revealed: fossil-fuel lobbying behind EU hydrogen strategy

Join EUobserver

Support quality EU news

Join us