Articles and Opinions, Trade and Investment Policy

Opinion: CETA Ratification Act

Container ship on the open sea

Statement on the draft of the Federal Ministry for Economic Affairs and Climate Protection (BMWK) for a CETA ratification law

Preliminary remark:

A participation of associations with a feedback period of less than 23 hours does not allow for a comprehensive and detailed opinion and is absolutely insufficient to carry out a serious participation procedure. Rather, the question arises as to whether there is a serious interest in receiving feedback from the Ministry.

 

PowerShift e.V. proposes not to adopt the planned ratification law and not to ratify CETA. These are our main considerations:

  1. CETA has been largely provisionally applied since September 2017. All provisions on tariff reductions and market access rules have already entered into force and full ratification is therefore unnecessary to achieve these objectives.
  2. With full ratification, however, the CETA rules on investment protection will enter into force. Foreign investors will receive special complaints before an international arbitral tribunal and could, for example, sue Germany for high compensation amounts if consistent climate protection measures are adopted. In the past, it has been shown that even the threat of lawsuits can lead to the weakening of planned regulatory projects. In addition, CETA does not contain any obligation to make full use of national legal remedies before bringing an action before arbitral tribunals. Not only Canadian corporations, but also US corporations with relevant subsidiaries in Canada, for example, would be entitled to sue. Such special rights for corporations are not only unnecessary, especially in an agreement with a developed constitutional state such as Canada, but also a threat to environmental, climate and consumer protection.
  3. The Federal Government’s plan to achieve a ‘binding interpretation’ of the CETA text and thereby limit the ‘abusive application’ of investment protection does not alter the dangerous nature of the instrument either. Firstly, it remains completely unclear what exactly the Federal Government understands by ‘abusive application’ and how this can be distinguished in detail from the application actually envisaged; secondly, it is highly questionable whether such an interpretation would come about and be legally secure; thirdly, the draft law presents this project merely as a vague declaration of intent by the Federal Government, in no way as a mandatory precondition for the ratification of the agreement.
  4. The Federal Government's projects relating to climate protection and sustainability are also non-binding. While the draft law identifies the quantitative expansion of trade relations as the primary goal of the CETA ratification, there is no target for sustainable and climate-compatible trade. CETA itself does not contain any concrete and enforceable commitments on climate protection.
  5. Of course, there are alternatives to the full ratification of the CETA agreement. The Federal Government could reject the ratification or postpone it indefinitely and allow the provisional application to continue. Since, in addition to Germany, eleven other EU member states have not yet ratified CETA, there is no need to hurry anyway. The German government could also campaign for renegotiations in order to set really new and good standards for trade agreements, especially with a partner like Canada, which are consistently geared to the needs of climate protection and sustainability.

 

Contact for questions:

Anne Bundschuh, Policy Officer for Trade and Investment Policy at PowerShift e.V., Greifswalder Str. 4, 10405 Berlin, Germany, Telephone: 030 278 756 32, e-mail: anne.bundschuh@power-shift.de

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