Does Angela Merkel Want To Renegotiate The Corporate Sovereignty Chapter In EU-Canada Trade Agreement?

from the that-would-be-big dept

Techdirt hasn’t written much recently about the trade agreement between the EU and Canada, generally known as CETA. That’s because it is “finished” — at least, in theory. It is now undergoing what is known as the “legal scrub” to prepare it for the final ratification on both sides. One story we did write concerned questions about the agreement’s compatibility with EU law, largely because of the corporate sovereignty provisions in CETA. Things have been fairly quiet since then, which makes the following story in the Canadian edition of Huffington Post, on a related aspect, particularly intriguing:

German chancellor Angela Merkel will be in Ottawa for a visit on Monday, but she may not be bringing the news [Canadian Prime Minister] Stephen Harper wants to hear when it comes to the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

That’s because the German government wants to reopen CETA and amend the investor-state dispute settlement [ISDS] mechanism.

No source is given for that claim, but the following explanation is offered:

Merkel likely does not have an ideological problem with bestowing corporations with the hammer of the investor-state provision, but the political reality is that her Christian Democrats have 311 seats in the Bundestag and need the support of the 193 Social Democrats in that legislature to maintain her ‘grand coalition’ government. Her minister of economy is a Social Democrat and that party is very clear in its opposition to investor-state. Last year, that party’s convention passed a resolution against investor-state.

In other words, Merkel needs to keep her Social Democrat coalition partners happy if CETA and TTIP are to pass in the national vote that will be held at some point. That impacts CETA, because last month the same Social Democrat Minister of the Economy and Energy made a joint declaration with his French counterpart in which they said they wished to examine “all the options for changing” the ISDS chapter in CETA (original in French). The Huffington Post article also notes that what happens with CETA has big implications for TAFTA/TTIP:

Beyond the challenge of coalition politics for Merkel, she also needs to contend with an electorate that may not have paid too much attention to a ‘free trade’ agreement with Canada, but is very attentive — and critical — of the European Union’s current negotiations with the United States on another ‘free trade’ deal called the Transatlantic Trade and Investment Partnership (TTIP). If Merkel agrees to a corporate rights provision in CETA, voters in Germany know that the same powers would be extended to U.S. corporations too.

If Merkel is indeed beginning to worry about the huge backlash in Germany against TTIP thanks to the corporate sovereignty provision it contains — the main bone of contention for many people — she knows that she must also deal with it in CETA, too. That would make a request to open up the ISDS section at least plausible, even if it would be pretty dramatic at this late stage, especially given statements by the Canadian Prime Minister that CETA’s ISDS is non-negotiable. However, Harper has a general election coming up in October this year, and might prefer to accept CETA without corporate sovereignty rather than risk losing the political prize of a trade agreement with Europe altogether by refusing to renegotiate on this critical point.

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Comments on “Does Angela Merkel Want To Renegotiate The Corporate Sovereignty Chapter In EU-Canada Trade Agreement?”

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Anonymous Coward says:

i hope she does ‘re-examine’ this! it’s going to be a disaster, particularly for poorer countries. how will they even be able to defend themselves? when any ‘dispute’ will be heard and settled by a ‘Tribunal’, not a court of law, the outcome will all be the same, in favor of whatever business is involved. this is going to basically mean us living on a planet that will be nothing short of a giant corporation! although attempts to do this have failed in the past, this is the closest those concerned have ever come to achieving it. makes me wonder if the whole ‘financial crisis’ was done intentionally to get this aim implemented!

That One Guy (profile) says:

Re: Re:

No, I imagine the pitch was more along the lines of “Hey, these company representatives are offering some extremely lucrative ‘retirement’ packages, and all you have to do is pass a few laws in their favor while you’re in office. I don’t know about the rest of you, but I am so jumping on this offer.”

Also, when the government gets sued, the politicians aren’t the ones paying, so why would they care if their actions lead to more lawsuits, it’s not affecting their bank accounts.

Vincent Clement (profile) says:

The Government of Ontario is planning changes to how the quasi-monopoly known as The Beer Store operates in the province in response to a secret deal between The Beer Store and the LCBO, the government-owned retailer and wholesale or spirits, liquor and wine.

The Beer Store is owned by MolsonCoors, Anheuser-Busch InBev and Sapparo, so essentially it is a foreign-owned company that is tasked with selling beer (sadly, we can’t buy beer in a corner store or grocery store).

Feeling under pressure, The Beer Store is threatening to sue the Government of Ontario using the investor-state dispute settlement mechanism in NAFTA.

To summarize, a foreign-owned company with a government-granted monopoly wants to use a free trade agreement to maintain that monopoly (or at least get a bunch of money). We have jumped the shark in the free trade world.

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