Ceta Agreement with Canada: Trade in Transition

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From: Hannes Koch

Ever Alot, the largest container ship in the world: The government wants to launch new trade agreements. © dpa

The Bundestag could decide on the controversial Ceta agreement between the EU and Canada. The government of the traffic lights thus solves a problem that has remained unsolved for years.

German cars to Canada, Canadian machines to Germany – such transactions should become easier in the future. Because this Thursday, the Bundestag will probably decide on the trade agreement between the European Union and the North American country. The government of the traffic lights thus solves a problem that has remained unsolved for years.

Why is trade policy important?

Foreign trade accounts for about a third of German economic output. A third of the prosperity here – jobs, wages, taxes, pensions – has something to do with imports and exports. In this regard, it is advantageous that foreign trade is good. Trade agreements with other countries contribute to this.

Why is international trade controversial?

Religious aid organizations such as Misereor and Brot für die Welt, trade unions such as the DGB or environmental organizations such as BUND often criticize that corporate interests are given too much priority. On the other hand, the rights of employees, residents, environmental and climate protection are violated. For example, trade deals can make it easier to import soybeans from South America to Europe, causing small Brazilian farmers to lose land as larger farms expand. In recent years, these and similar arguments have contributed to the fact that a planned agreement with the United States has not seen the light of day and that the treaty that had already been negotiated with Canada (Ceta) has not been only partially implemented.

What is the situation with the Canada Accord?

He is signed for six years. Since the part under the sole jurisdiction of the EU has entered into force, many border tariffs and import regulations have been abolished. Trade between the EU and Canada has increased slightly, but remains at a low level of a few percent of economic output. However, several states, including Germany, have not yet approved certain chapters of the treaty. It should happen this Thursday.

What was the argument about?

The EU-Canada agreement contains rules to protect German companies’ investments in Canada and vice versa. If, for example, a Canadian company believes that its rights have been violated, it can sue the German state for damages – and not just in the ordinary courts, but also in specially appointed arbitration tribunals. From there, critics drew the accusation of being a special legal system for corporations that easily won billions of euros for the state. SPD politicians have also seen it that way, which is why the grand coalition has not pushed the issue off the table in recent years.

What is the solution now?

The traffic light government consisting of the SPD, Greens and FDP has launched an additional “interpretative declaration”, which all EU members have meanwhile accepted. A key point: Canadian investors should not be able to sue new EU laws, for example to protect the climate, even if their profits fall due to the new regulations. Such a situation should not be considered an “indirect expropriation” – the declaration reinterprets the relevant passages of the trade agreement. State Secretary for Economic Affairs Franziska Brantner (Greens) therefore claims that such investor lawsuits are now ruled out.

What do the critics think?

The organization critical of globalization Attac, the Paritätische Gesamtverband and other groups explain, among other things, that the final text of the declaration is not yet known and that Canada has not yet approved it. The Bundestag will buy a pig in a poke if it votes this Thursday.

And after?

The SPD, the Greens and the FDP have agreed to target or conclude new trade agreements. These include the Mercosur agreement with Brazil, and the agreements with Mexico and Chile. The coalition also wants to revive the failed agreement with the United States. There should be new international arbitration tribunals, but corporate lawsuits against laws such as climate protection or labor rights should be excluded.

Tristan Lowe

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