Statement on the draft of the Federal Ministry for Economic Affairs and Climate Protection (BMWK) for a CETA ratification law
Preliminary remark:
An association participation 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:
- CETA has been applied to a large extent provisionally since September 2017. All provisions on tariff reductions and market access rules have already entered into force and full ratification is therefore unnecessary in order to achieve these objectives.
- On the other hand, with the full ratification, the CETA rules on investment protection come into force. Foreign investors thus receive special rights of action before an international arbitration court and could, for example, sue Germany for high compensation sums if consistent climate protection measures are decided. In the past, it has been shown that the threat of lawsuits can already lead to the weakening of planned regulatory projects. Furthermore, CETA does not contain any obligation to exhaust national legal remedies before referring the matter to arbitration tribunals. Not only Canadian corporations would be entitled to bring proceedings, but also, for example, US corporations with relevant subsidiaries in Canada. Such special rights for corporations are not only unnecessary, especially in an agreement with a developed rule of law such as Canada, but also a threat to environmental, climate and consumer protection.
- Nor does the Federal Government’s intention to achieve a ‘binding interpretation’ of the CETA text, thereby limiting the ‘misapplication’ of investment protection, change the dangerousness of the instrument. First, it remains completely unclear what exactly the Federal Government understands by ‘abusive application’ and how this can be distinguished in detail from the actual intended application; secondly, it is highly questionable whether such an interpretation is possible and would be legally certain; thirdly, the draft law merely presents this project as a vague declaration of intent by the Federal Government, and in no way as a mandatory precondition for the ratification of the agreement.
- The Federal Government's projects with regard to climate protection and sustainability are equally non-binding. While the draft law mentions the quantitative expansion of trade relations as the ultimate goal of the CETA ratification, there is no target for sustainable and climate-friendly trade. CETA itself does not contain any concrete and enforceable commitments to climate protection.
- Of course, there are alternatives to the full ratification of the CETA agreement. The Federal Government could refuse 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 rush anyway. The German government could also advocate 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 further questions:
Anne Bundschuh, Trade and Investment Policy Officer at PowerShift e.V., Greifswalder Str. 4, 10405 Berlin, Germany, telephone: 030 278 756 32, e-mail: anne.bundschuh@power-shift.de
Background information on CETA
