Saturday

22nd Feb 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 join 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.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

EU leaders struggling to break budget deadlock

Cuts to innovation, space, neighbourhood and other programme-spending push down the latest budget proposal on the table of EU leaders. Rebates could stay on, to win the support of the net-payers for a deal.

News in Brief

  1. Bulgarian PM investigated over 'money laundering'
  2. Greenpeace breaks into French nuclear plant
  3. Germany increases police presence after shootings
  4. NGO: US and EU 'watering-down' tax reform prior to G20
  5. Iran: parliamentary elections, conservatives likely to win
  6. Belgian CEOs raise alarm on political crisis
  7. Germans voice anger on rise of far-right terrorism
  8. EU leaders' budget summit drags on overnight

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  2. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  3. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  4. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  5. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  6. Nordic Council of MinistersNordic Climate Action Weeks in December

Latest News

  1. No breakthrough at EU budget summit
  2. EU leaders struggling to break budget deadlock
  3. German ex-commissioner Oettinger lands Orban job
  4. How big is Germany's far-right problem?
  5. Plastic and carbon proposals to help plug Brexit budget gap
  6. Sassoli repeats EU budget rejection warning
  7. Why Miroslav Lajčák is the wrong choice for EU envoy
  8. Unhappy EU leaders begin budget haggle

Join EUobserver

Support quality EU news

Join us