Sunday

17th Feb 2019

EU-Canada pact faces German opposition over investor clauses

  • SPD leader Gabriel has made investor protection provisions a 'red line' in EU trade deals. (Photo: Valentina Pop)

Provisions allowing companies to sue governments to protect their investments must be taken out of an EU-Canada trade agreement (Ceta), German chancellor Angela Merkel's coalition partners have said.

Speaking in the Bundestag on Thursday (25 September), Sigmar Gabriel, who leads the centre-left SPD, noted that "the chapter regarding investment protection is not approvable," adding that "the last word hasn't been spoken yet".

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"We've achieved a lot. It's a good deal and it would be wrong to block it. But we must try to negotiate some adjustments".

European Commission president Jose Manuel Barroso and Canadian prime minister Stephen Harper will conclude the four-year negotiation process of the treaty at an EU-Canada summit in Ottawa on Friday. The trade treaty will then be published and submitted to the European and Canadian parliaments.

But any celebrations are likely to be muted now that the agreement, which is widely seen as a trial run for the ongoing trade talks with the US, faces a number of obstacles before it is ratified.

The mechanism, known as investor state dispute settlement (ISDS), allows companies to take legal action against governments if their decisions risk undermining their investments.

Critics of ISDS claim that investor claims can prevent governments from passing legislation in fields such as environmental and social protection, enabling corporations to claim potentially unlimited damages in "arbitration panels" if their profits are adversely affected by new regulations.

However, in an interview with the Frankfurter Allgemeine Zeitung, trade commissioner Karel de Gucht ruled out the possibility of re-opening talks, arguing that "If we re-open negotiations on Ceta, the deal will be dead."

De Gucht, who is set to be replaced by Sweden's Cecilia Malmstrom as the EU's trade chief, also condemned criticism of ISDS as a "populistic, emotional debate and one which has been fanned by the Internet," adding that "the investment protection in Ceta is the most modern and most transparent ever,"

At the weekend, the SPD party congress agreed to support the continuation of negotiations with the US on a transatlantic trade and investment partnership (TTIP), but also conditioned their support for TTIP on investor protection clauses being left out.

Both Gabriel and economic affairs minister Brigitte Zypries say that foreign investors already have sufficient legal protection in national courts, while French trade minister Nicole Bricq has also stated her opposition to ISDS being included in an agreement.

Both Ceta and, in time, TTIP will have to be backed by the European Parliament and, possibly, national parliaments if the agreements are to come into force.

Ceta faces an uncertain path when it comes before MEPs in the coming months. Deputies from the centre-left Socialist and Democrat group and the Liberals have indicated that ISDS would have to be left out in order for them to support Ceta, while the Green and far-left GUE factions have already come out against the treaty.

"My group would find it much easier to put its weight behind Ceta if ISDS was removed from the text," said Socialist group trade spokesman David Martin at the parliament's session in Strasbourg earlier this month.

In a statement on Thursday, the European trades union congress (ETUC) said that it would not support Ceta if ISDS remained part of the agreement. The ETUC also called on officials to include a list of sectors that would not be liberalised by the agreement and for Canada to sign up to the International Labour Organisation Conventions.

Sluggish procedure against Hungary back on table

EU probes into Hungary and Poland on rule of law and democracy are back on the agenda of EU affairs ministers - but with little guidance from the Romanian presidency, without a clear idea where the procedures are headed.

Opinion

Could Finnish presidency fix labour-chain abuse?

There can be no more excuses for business. They will be held for responsible for their failure to take action to prevent the risk of human and labour rights through their supply chains.

News in Brief

  1. Spain's Sanchez calls snap election on 28 April
  2. 15,000 Belgian school kids march against climate change
  3. May suffers fresh Brexit defeat in parliament
  4. Warning for British banks over Brexit staff relocation
  5. Former Italian PM wants Merkel for top EU post
  6. Antisemitic incidents up 10% in Germany
  7. Italy's asylum rejection rate at record high
  8. Hungary will not claim EU funds for fraudulent project

Agenda

Brexit and trip to Egypt for Arab League This WEEK

Brexit talks will continue in Brussels, as UK PM Theresa May's government is trying to find a way out of the political impasse at home. Murdered Saudi journalist Jamal Khashoggi's fiancee will speak at the European Parliament next week.

Saudis paying College of Europe to lobby MEPs

The Bruges-based College of Europe is setting up private meetings with the EU institutions for seven ambassadors plus seven high-level officials from the Kingdom of Saudi Arabia.

Stakeholders' Highlights

  1. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  2. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  3. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  4. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  5. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  6. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  7. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  8. Nordic Council of MinistersSeminar on disability and user involvement
  9. Nordic Council of MinistersInternational appetite for Nordic food policies
  10. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  11. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  12. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”

Latest News

  1. Sluggish procedure against Hungary back on table
  2. Could Finnish presidency fix labour-chain abuse?
  3. Brexit and trip to Egypt for Arab League This WEEK
  4. Belgian spy scandal puts EU and Nato at risk
  5. EU Parliament demands Saudi lobby transparency
  6. Saudi Arabia, but not Russia, on EU 'dirty money' list
  7. EU agrees draft copyright reform, riling tech giants
  8. Rutte warns EU to embrace 'Realpolitik' foreign policy

Stakeholders' Highlights

  1. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  2. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  3. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  4. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  5. Nordic Council of MinistersThe Nordic gender effect goes international
  6. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  7. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  8. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  9. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  10. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  11. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  12. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All

Join EUobserver

Support quality EU news

Join us