Brussels, 28/07/2014 (Agence Europe) - Germany is reported to be opposed to the initialling of the comprehensive economic and trade agreement (CETA) as it stands between the EU and Canada, on which a political agreement in principle was reached in October 2013, the German press indicated this weekend. The CETA, which is seen as a dry run for the TTIP agreement with the United States, has raised concerns in Berlin, due to its chapter on investment protection and investor/state dispute settlement (ISDS).
The pressure is mounting, as the 28 member states of the EU are set to receive the text of the CETA this week for review, ahead of its initialling in September, upstream of an EU-Canada bilateral summit to be held in Ottawa on 25 September: a German diplomatic source, quoted in the 27 July edition of the daily newspaper Süddeutsche Zeitung, warned that Berlin cannot sign the agreement concluded with Canada as it stands. The chapter on legal protection for investors, particularly North American businesses investing in EU states, is “problematic”, according to the newspaper.
This is nothing particularly earth-shattering, as Germany has also been expressing reservations over the last few months on the inclusion of an ISDS mechanism in similar talks with the United States (see EUROPE 11040). “The free-trade agreement with Canada is a test for the transatlantic treaty. If the CETA is rejected, it will also be game over with the United States”, said a senior Commission official, quoted by the Süddeutsche Zeitung (our translation). The question of investment protection and the inclusion of an ISDS clause in the TTIP has been enormously controversial and this prompted the Commission to carry out a public consultation, the results of which it is now analysing (see EUROPE 11122).
For its part, the Canadian government has not made much of rumours that Germany will reject the CETA in its current form. “Canada's work with its EU partners to complete the legal text of our agreement in principle is continuing. Excellent progress has been made”, commented the spokesperson to the Canadian Trade Minister, Ed Fast. “Investor protection has been part of the trade policy of both Canada and the EU for many years”, she added.
Agricultural import quotas - resolved. Over the last few weeks, the resolution of the outstanding technical questions, particularly the management of import quotas for sensitive agricultural products (beef and cheese) has paved the way for the signature and ratification process. For quotas for agricultural products, the EU and Canada have opted for import licences granted at regular intervals, rather than “first-come, first-served”.
Gradually over five years, the EU will open up annual zero duty quotas to Canada for 50,000 tonnes of non-hormone beef (35,000 tonnes of fresh meat and 15,000 tonnes of frozen beef, including the existing quota of 4,162 tonnes granted under the WTO ruling on the hormone dispute), 3,000 tonnes of bison meat and 75,000 tonnes of pork, as well as 8,000 tonnes of sweetcorn. In exchange, Canada will open up to the EU, also over a period of five years, a quota of 18,500 tonnes of cheese (16,800 tonnes of quality cheese and 1,700 tonnes of industrial cheese, on top of the existing WTO quota of 13,400 tonnes, which has been increased by 800 tonnes).
Hailed as a first step towards the creation of a transatlantic free market, the CETA is expected to increase bilateral trade by 23%, worth nearly €26 billion, including a €12 billion increase in the EU's GDP. (EH)