Press release on the leaked CETA interpretation declaration

Berlin, 21 September 2023: With a “Declaration of Interpretation”, the CETA contracting parties want to dispel the ongoing criticism of the investment protection chapter in the European-Canadian Free Trade Agreement. PowerShift and the Umweltinstitut München today published the consolidated text of this Explanation of interpretation and a detailed analysis published. They criticise both the non-transparent procedure surrounding the drafting of the document and its lack of effectiveness. In particular, the organisations criticise the fact that, according to legal opinions, the declaration has no binding effect on the text of the contract and is therefore de facto worthless.

“It is worrying that the text of the interpretative statement has changed significantly once again following the agreement of the Traffic Light Coalition on CETA. In the midst of the climate crisis, almost all concrete agreements on climate protection were cancelled. Corporate lawsuits also continue to exist and allow companies to sue states on the basis of climate protection laws. This is not what a sustainable climate policy looks like!”, says PowerShift trade expert Alessa Hartmann.

"An additional declaration cannot turn an outdated and climate-damaging agreement into a modern instrument of trade policy. It has only interpretative value and cannot change the text of the contract. Nevertheless, this paper was used to justify the ratification of CETA by the German Bundestag. The fact that MEPs have agreed to a free trade agreement on the basis of a document which they could not yet have known and which subsequently turns out to be completely ineffective is a real scandal”, explains Ludwig Essig, trade expert at the Environmental Institute.

Following a legal language check, the Council of the European Union is expected to adopt the interpretative statement by the end of November 2023. It is unclear whether this requires unanimity or a qualified majority of Member States. The declaration would then be decided by the Joint Committee: either by written procedure, which would be faster, or by a formal decision of the Committee at the meeting in the first quarter of 2024. PowerShift and the Environmental Institute are calling for a halt to the ratification of CETA. In addition, all agreements with corporate complainants must be terminated and European trade policy must be aligned with clear environmental and social guidelines in order to meet the challenges of the 21st century.

Background: The trade agreement CETA (Comprehensive Economic and Trade Agreement) It was signed in 2016 between the European Union and Canada. Among other things, it contains agreements to reduce tariffs and simplify market access, but also to protect particularly controversial investments, the so-called corporate complaints. In December 2022, the German Bundestag decided to ratify the agreement, citing an additional declaration on investment protection, which was intended to clarify particularly controversial issues, such as investment protection standards and the lack of agreements on climate protection. This additional declaration had not yet been submitted to the members of the Bundestag at the time of ratification.

environmental and consumer protection organisations such as Powershift and the Environmental Institute Criticize:

• Non-binding interpretation: This interpretative statement merely serves as an interpretative aid for judges at arbitration tribunals. It has no binding or even amending effect on the text of the contract itself. This conclusion was reached by several legal investigations prior to ratification.
• Lack of participation: Although the interpretative declaration on investment protection had been announced as a prerequisite for the second and third readings of the ratification law, the vote in the Bundestag took place even before the negotiations on the paper with Canada had properly begun. More than half a year later, the interpretation was finalized. The members of the Bundestag thus agreed to an agreement under conditions they did not know and could not influence.
• Intransparency: Civil society organisations were not even given 24 hours to attend the hearing before the first reading. In contrast to industry representatives, they were also not invited to the Expert:innen Hearing. The interpretative declaration was negotiated in secret and is withheld from the public.
• Corporate lawsuits continue to exist: The possibility for corporations to sue states for progressive laws to protect the climate and consumers for damages continues to exist. Also with reference to indirect expropriation and the Fair and equitable treatment. This text does not remedy the situation.
• Climate change mitigation deleted: Almost all references to climate policy and more concrete agreements on climate protection have been removed from the draft interpretative declaration.

Press contacts:

Ludwig vinegar
Department of Trade Policy
Environmental Institute Munich e.V.
Tel.: 0176 546 752 53
le@umweltinstitut.org

Alessa Hartmann
International Trade and Investment Policy Officer
PowerShift e.V.
Tel: 0177 3013 153
alessa.hartmann@power-shift.de

Links:

- Analysis