OTTAWA - A day before Prime Minister Stephen Harper meets with senior European Union officials to laud the completion of five years of free-trade negotiations, Germany has thrown the fate of the long-sought Canada-EU deal into doubt.
Reports from Europe say Germany, a key member of the EU, is signalling it won’t approve the landmark trade pact because of objections to the investor-protection measures included in the Comprehensive Economic and Trade Agreement (CETA).
Germany’s objection is a potential major setback to CETA, which Harper and European Commission President Jose Manuel Barroso lauded as a nearly completed last October in a highly-publicized ceremony in Brussels.
According to accounts Thursday, German Economy Minister Sigmar Gabriel told parliamentarians that more work needs to be done on CETA and Germany wants to see the controversial investor-state dispute settlement (ISDS) measures removed from the Canada-EU pact.
ISDS clauses give corporations the right to sue governments before a special tribunal if the company considers its operations have been put at a disadvantage by discriminatory regulations by a host government. The business community says these are necessary protections for investors but critics say they give multinationals too much clout and can jeopardize governments’ ability to pass laws in the public interest.
Opposition to the investor protection measures in CETA has erupted dramatically in Europe in the past year.
“Sigmar Gabriel apparently pulled the emergency brake in Brussels, and prevented the completion of the CETA deal,” Christoph Bautz, CEO of Campact, a public interest campaigning platform, wrote on his blog, according to Deutsche Welle, Germany’s international broadcaster.
Germany favours CETA but has serious concerns about ISDS, European officials in Canada say. They point out that Canada has in effect been side-swiped by the EU’s recently-launched free-trade negotiations with the United States. Concerns about investor-protection measures in an EU-U.S. pact have sparked doubts about the inclusion of ISDS clauses in CETA, which stands as a template for the talks between Brussels and the Americans.
But EU Trade Commissioner Karel De Gucht said CETA will unravel if it is renegotiated to alter its ISDS clauses.
“If we reopen negotiations on CETA, the deal will be dead,” De Gucht told a Germany newspaper Thursday.
The blow-up over CETA comes just before Harper is to meet Friday in Ottawa with Barroso and Herman Van Rompuy, president of the European Council. According to the EU, the leaders were planning Friday to celebrate the completion last month of five years of negotiations on the free-trade agreement.
Doubts about the fate of CETA, which faces a two-year ratification process, had already surfaced because of the controversy in Europe over investor protections. But Germany’s objections on the eve of the Canada-EU summit in Ottawa will fuel more speculation about the hurdles CETA still faces.