However, the agreement within the traffic light depends crucially on an addition to the agreement on investment protection. According to Handelsblatt information, this is exactly what is causing complications – between Berlin and Brussels of all places.
Ceta has been in force provisionally since 2017. In order to fully implement the agreement, however, the national parliaments must ratify it. The grand coalition and initially the SPD, Greens and FDP failed because of this. No compromise was in sight in the talks between the traffic light ministries. So they handed the issue over to their factions, with success.
It took ten days, including various night negotiations, before the responsible parliamentary group deputies were able to come to an agreement. Ceta is ratified, as SPD and FDP wanted. However, the controversial points on investment protection are restricted to such an extent by additional declarations that the Greens can also go along with them. The agreement was groundbreaking for the trade policy agenda of the traffic light as well as for the other eleven EU countries that have not yet ratified the agreement because they had been waiting for the German decision.
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But these statements are now creating new problems. The EU Commission apparently thinks that, due to pressure from the left wing of the Greens, these are so far-reaching that they go beyond the actual text of the Ceta agreement, according to people familiar with the topic. If that is actually the case, the agreement would have to be renegotiated and ratified again by all EU states. Even by those who have already ratified.
From German government circles, on the other hand, it can be heard that the proposed declarations are not a legal problem. Some see the EU Commission’s rejection as politically motivated.
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Specifically, the conflict is about the chapter on investment protection. One passage allows companies to take legal action in the event of “indirect expropriation”, i.e. if political decisions lead to losses in business. In the past, such regulations were used by energy companies, for example, to successfully sue the state for damages because of the coal phase-out.
The Chancellor in conversation with the Canadian Prime Minister.
(Photo: AP)
As part of the Ceta compromise, the Greens had therefore insisted on limiting the options for lawsuits in the event of “indirect expropriation” as far as possible so as not to make climate protection measures more difficult. Regulating this directly in the Ceta Treaty would have involved years of negotiations.
Supplementary declarations usually change not the contract, they only restrict the possible interpretations – clarifications that are explicitly provided from Berlin’s point of view. It would then hardly be possible for companies to take this legal action.
The explanations do not have to be decided by all member states, but only between the EU Commission and Canada. A meeting of the “joint committee” of the Commission and Canada is planned for the autumn. Only as soon as the declarations have been made there will the traffic light ratify Ceta.
In view of the blockade by the EU Commission because of the proposals that went too far However, the danger is growing in Berlin that ratification will not take place after all. The parliamentary group leader of the Greens, Katharina Dröge, spoke of a “clear red line” should the additional declarations not come about. “If the intended changes do not exist, we cannot agree to ratification,” Dröge told Handelsblatt.
If the intended changes are not in place, we cannot agree to ratification, Green parliamentary group leader Katharina Dröge
Franziska Brantner (Greens), Parliamentary State Secretary in the Federal Ministry of Economics, made it clear that there was no alternative to the interpretation statements. The party wanted with these “Make it clear within the framework of the existing contract that this agreement enables our common goal of climate protection and prevents the improper use of the instrument of investment protection,” Brantner told the Handelsblatt.
Informal talks between the Federal Ministry of Economics and the EU Commission have been going on for a few weeks so that the traffic light can actually implement its specific wishes. The aim is to work out a joint proposal for the declarations and to approach the Canadians with it.
Dissent between Berlin and Brussels
Both sides believe that the problem can be solved in principle, it is said. Green party leader Dröge is also confident. But how exactly an agreement can look like is unclear. Representatives of the Federal Ministry of Economics want to meet again this week with the Commission to explore possible solutions.
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If, contrary to expectations, there is no permanent solution and the Ceta ratification in Germany has to be postponed again indefinitely, that would be an affront to Canada. The North American country has been waiting for Germany to move for years.
While Prime Minister Justin Trudeau struck a conciliatory note on Ceta during Chancellor Scholz’s visit, senior Canadian cabinet ministers such as International Trade Minister Mary Ng are stepping up the pressure. “Each country has to go through its own ratification process, but Canada encourages all European countries to fully ratify Ceta to provide our businesses with certainty and predictability,” she told Handelsblatt.
In view of the uncertainty caused by the Ukraine war, this is more important than ever. Industry Minister François-Philippe Champagne hopes that Ceta will send a global signal. Champagne told Handelsblatt: “If you don’t want to trade with Canada, who will?”
More: Oh, how beautiful Canada is – an economic policy analysis