Group 38@Sophia EU and Canada set out trade agreement

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The Canada-EU trade pact could boost trade by $20bn a year

The European Commission and Canada have unveiled the details of a new trade liberalisation agreement.

Under the deal almost all customs tariffs will be eliminated and markets for services will be opened up.

But the agreement still needs approval from the EU parliament and faces particular opposition from Germany.

Critics say the deal restricts the power of democratic governments in relation to big business.

Business benefits

It’s not just maple syrup. Traded products, in both directions, range from machinery, chemicals and transport equipment to services such as insurance and communications.

The European Commission has said the deal would boost bilateral tradeby 23%. And a A joint EU-Canadian study has put the combined annual economic gains at about 20bn euros although those figures were published six years ago.

However a provision included in the deal to bolster the rights of foreign investors, known as Investor State Dispute Settlement (ISDS) could still prevent the deal being approved.

Campaigners say it gives big business too much power in relation to democratically elected governments wishing to introduce new policies.

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Analysis: economics correspondent, Andrew Walker

One thing could still derail the deal.

The Germans don’t like the proposal that’s included for a new system of tribunals, under what’s knows as ISDS. If foreign investors feel they’ve been mistreated they can turn to these tribunals and even in some cases apply for compensation.

ISDS has actually been around for years. But recently campaigners have begun to argue that it is undemocratic because of the constraints it puts on elected governments.

For example the tobacco company Philip Morris is taking legal action against Australia over its plain packaging laws – there has been no ruling yet on this case.

Other cases have involved regulation of energy prices, disputes over patents and alleged wrongful criminal prosecution.

The German economy minister Sigmar Gabriel has said he would reject the Canada deal if the ISDS elements remain.

That has cast new doubt on whether the deal will ever come into force and it suggests an uphill struggle for other trade negotiations still being hammered out behind the scenes.

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Campaigners have called the ISDS “a powerful corporate weapon to delay, weaken and kill regulation.”

Nick Dearden, director for the World Development Movement says of the EU Canada deal: “If it is agreed, it will undermine the power of democratically elected governments to make decisions in the public interest”.

Supporters of ISDS say it provides foreign investors with protection against discriminatory treatment and that means they are more likely to take the plunge and invest.

The EU’s top trade official, Commissioner Karel de Gucht rejects the complaints against ISDS, although he has acknowledged concerns about some agreements.

He told the European Parliament: “On investment, the agreement establishes a system that sets a new standard for investor-to-state dispute settlement procedures”. He said the deal with Canada “directly addresses all the concerns that have emerged so far”.

The controversy about ISDS led the European Commission to launch apublic consultation earlier this year about its inclusion in trade liberalisation negotiations with the US.

Team #8 BCISM @Sophia German opposition clouds Friday’s ceremonies for Canada-EU trade pact

Just hours before Canada and the European Union released the long-awaited final text of a free trade pact, German officials visiting Ottawa delivered a blunt and unwelcome message: The deal must be changed.

In an exclusive interview with The Globe and Mail in Ottawa, senior German official Uwe Beckmeyer said sections of the deal allowing private companies to sue governments – known as investor-state provisions – must be changed before Germany will support the Comprehensive Economic and Trade Agreement (CETA).

Mr. Beckmeyer, who is Parliamentary State Secretary for Germany’s Ministry of Economics and Energy, confirmed the position after meeting with Canadian Trade Minister Ed Fast on Thursday.

Germany’s position puts a cloud over what was supposed to be a feel-good announcement Friday, as Mr. Harper hosts the President of the European Council, Herman Van Rompuy and the European Commission President Jose Manuel Barroso for an event the EU says will “celebrate the successful end of negotiations” for CETA.

The final text of CETA was released publicly for the first time Friday.

But the terms of Mr. Rompuy and Mr. Barroso are about to expire. Mr. Beckmeyer said he expects the new EU leaders will be more in line with the view that further changes are possible.

“I think they’ll be seeing things along the same lines,” he said.

Even with a final text, several steps remain before CETA can be considered final. The Canadian Parliament must vote to ratify the agreement and so must the European Parliament.

There is debate within the European Union as to whether the deal must also be approved by each EU member state. Mr. Beckmeyer is among those who believes it should.

Germany’s last-minute stand could have serious consequences for the talks, given that the EU Trade Commissioner warned this week that reopening CETA at this stage would mean the deal is effectively “dead.”

Mr. Beckmeyer disagrees. “I think that’s fundamentally wrong,” he said in reference to the stark comments Commissioner Karel de Gucht made to a German newspaper. Critics of investor-state clauses argue they can prevent governments from enacting laws in such areas as environmental protection that are opposed by industry. Mr. Beckmeyer said CETA must not tie the hands of the German government to set policy.

“We believe it must remain possible for national governments to act, to enact legislation in [the] future, and the agreement cannot undermine that,” he said. “We cannot just be forced to accept that, thrust down our throat.”

Mr. Beckmeyer said Canadian officials seem open to the possibility of further changes, but Canadian government sources strongly rejected that view, insisting that negotiations are over. One government source indicated that German Chancellor Angela Merkel had never raised objections over investor-state provisions with Prime Minister Stephen Harper.

Some observers see internal German and European Union politics at play. Germany has a coalition government and Ms. Merkel is leader of the Christian Democratic Union party. Mr. Beckmeyer’s comments are in line with similar remarks made earlier this week by German Economy Minister Sigmar Gabriel, the country’s vice-chancellor and also head of the Social Democratic Party. Mr. Beckmeyer and Mr. Gabriel are from the same political party.

Kurt Hubner, a professor with the University of British Columbia’s Institute for European Studies who has monitored the negotiations closely, said the concern from German officials could be aimed at appeasing domestic critics and taking a harder line in the EU’s trade talks with the United States.

“We need to understand that Germany is a trading nation. There’s a big openness for trade. CETA in this regard is not endangered a bit,” he said. “They have to play to this domestic audience in some way.”

A spokesperson for Mr. Fast, Canada’s Trade Minister, defended the inclusion of investor-state provisions in CETA.

“Investment protections have long been a core element of trade policy in Canada and Europe, and will encourage job-creating investment and economic growth on both sides of the Atlantic,” Shannon Gutoskie said in an e-mail. “That’s why the negotiators from the EU were given a mandate by their Member States to ensure Investor-State Dispute provisions were included in CETA.”

Sources :

German opposition clouds Friday’s ceremonies for Canada-EU trade pact

http://www.theglobeandmail.com/news/politics/germany-demands-changes-to-canada-eu-free-trade-pact/article20798559/