In October last year, Stephen Harper, Canada’s prime minister, flew to Brussels to
sign a trade-and-investment deal in principle between Canada and the
EU. On September 26th, the two sides announced the close of
negotiations. But despite the back-slapping there may still be work to
be done. Sigmar Gabriel, Germany’s economy minister, objected
strenuously this week to a clause in the deal that would allow companies
to sue governments if they felt their rights had been infringed.
The
clause is common in bilateral investment deals and initially attracted
little attention in the Canada-EU negotiations. But it has become a
flashpoint in another set of trade negotiations, between the EU and the
United States. The European Parliament, a range of environmental and
civil-society groups, and certain German politicians oppose it because
they feel it gives multinational firms too much power in their dealings
with government.
During a debate in Germany’s Bundestag about the
two sets of EU talks, Mr Gabriel said “it’s completely clear we reject
these investment-protection agreements” and that the debate was not over
yet. In Ottawa, Jose Manuel Barroso, president of the European
Commission, questioned whether Mr Gabriel was speaking for the German
government, saying that all official communications he had received from
Germany were “absolutely in favor of this agreement”.
The text
of the trade deal must go through a legal review and translation before
being presented to the Canadian and European parliaments for
ratification. Reopening it now would kill the agreement, according to
Karel De Gucht, the European trade commissioner.
It would also be a
blow to Mr Harper. The deal goes well beyond the traditional fare of
lower tariffs and higher farm quotas. It also makes it easier for
companies in both areas to compete for large government contracts,
closes gaps in intellectual-property rules, and allows for mutual
recognition of some professional certifications.
Note EU-Digest: any
clause in the deal that would allow companies
to sue governments if they felt their rights had been infringed must
not be accepted by the EU parliament in any way, shape or form.
Read more: The Canada-EU trade deal: Signed, not sealed | The Economist