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Germany and France Seeking to Modify Investor Protections in Canada-EU Trade Deal  

Posted January 28, 2015

Although negotiations on the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada were formally concluded last year, the deal still faces a highly uncertain ratification process that could take up to two years and, depending on the outcome of a pending ruling from the EU Court of Justice, may require not just the approval of the European Parliament but that of all 28 EU member states as well.

Perhaps further complicating matters, the online news journal EurActiv reported yesterday that France and Germany appear to be having second thoughts about the trade deal’s controversial investor-state dispute settlement (ISDS) clause. Concerned about the course of current talks with the U.S. regarding the Transatlantic Trade and Investment Partnership (TTIP), officials met in Berlin last week to re-examine the Canadian trade agreement.

“In a joint declaration, the ministers of the EU’s two largest economies asked the European Commission, which steers trade negotiations on behalf of the 28 EU member states, to examine ‘all the options for modifying’ the ISDS clause in the agreement with Canada,” EurActiv reported.

The request seems to have been prompted by the recently published results of a public consultation over the inclusion of the ISDS in the EU-US trade deal currently under negotiation. The public response, which was overwhelmingly negative, “opened a new stage to discuss improvements to the ISDS,” the ministers stated.  

The official Canadian reaction to the call for renegotiation of the ISDS provision was, at least for the time being, to steadfastly ignore it completely. “Canada and the EU have negotiated an ambitious, balanced and beneficial agreement for both parties, which includes the ISDS, and we will continue our efforts to implement CETA as soon as possible,” a government spokesperson told Euractiv.

It remains to be seen whether the Harper government’s unwillingness to countenance any renegotiation of the deal’s ISDS clause will remain a tenable one as the ratification process advances in a political environment increasingly hostile to the concept of investor protections.

In Britain, mounting concerns over ISDS in the proposed EU-US trade deal are reported to be leading to a major rift in David Cameron’s Coalition government. Liberal Democrat Vince Cable, the Business Secretary, yesterday called for special protections to be written in to stop multinationals overriding the will of governments and for an explicit statement that the National Health Service (NHS) be exempt from any deal.