[Ip-health] FT: Germany drops opposition to EU trade deal with Canada

Thiru Balasubramaniam thiru at keionline.org
Fri Nov 28 05:29:47 PST 2014


November 27, 2014 6:28 pm
Germany drops opposition to EU trade deal with Canada

Jeevan Vasagar in Berlin and Shawn Donnan in London

Germany has dropped its opposition to an EU trade deal with Canada despite
continuing concerns over the inclusion of controversial investor protection

The move marks a significant change of position by Berlin and will be
welcomed by advocates of the far bigger Transatlantic Trade and Investment
Partnership (TTIP) being negotiated between the EU and US.

Berlin says it remains opposed to allowing investor-state dispute settlement
into any new EU trade agreements. The clauses allow foreign companies to
seek compensation before international arbitration panels for government
actions that hurt their investments.Sigmar Gabriel, the German economy
minister, told the Bundestag on Thursday that he accepted it would not be
possible to drop the controversial clauses from the Canadian agreement, the
EU’s biggest trade deal to date and regarded as a test case for the TTIP.

Critics fear they undermine the ability of governments to regulate on
environmental protection, consumer safety and other matters of public

But the European Commission and the business communities on both sides of
the Atlantic argue that including such clauses in the Canadian agreement as
well as the TTIP is vital to attracting foreign investment. They also argue
that the Canadian agreement is an attempt to modernise investor protection
regimes and close loopholes in the system.

Germany’s status as the largest economy in Europe has made its position
awkward for the progress of trade negotiations with Canada and the US.
Cecilia Malmström, the new EU trade commissioner, and other trade officials
in Brussels have sought in recent weeks to convince Berlin not to block the
Canadian deal and that investor protections ought to have a place in a deal
with the US.

Mr Gabriel told the Bundestag that blocking the agreement with Canada
because of concerns over the investor protection clauses would come at too
high a cost.

“If the rest of Europe wants this agreement, then Germany will agree too.
There’s no other option,” he said.

Opting out of EU trade agreements would be a “disaster” for a country that
depended on exports, he said, accusing critics of “navel-gazing”.

“Our children will curse us,” he told the lower house of the German

The announcement provoked a sharp reaction from within Mr Gabriel’s Social
Democratic Party (SPD), which made a formal decision at its convention
earlier this year to oppose investor protection clauses.

Carsten Sieling, spokesman for the left wing of the party, said: “I assume
that Sigmar Gabriel will apply himself with full vigour to the position
that was agreed on at the party’s convention.”

Tanja Alemany, a spokeswoman for the German economy ministry, said Germany
did not believe special arbitration was necessary between states with
reliable jurisdictions.

She said that while Germany accepted there would be investor protection
clauses in the Canadian agreement, it still felt “there are a number of
points where improvements can be made”

At her confirmation hearing in September, Ms Malmström warned that removing
investor-protection provisions would jeopardise the entire agreement with
the US which EU officials hope to finalise by the end of 2015.

There is widespread hostility in Germany to TTIP, which critics fear will
compromise European standards on issues such as food and cosmetics.
Opposition to TTIP has also been strengthened by anger over whistleblower
Edward Snowden's revelations over the extent of US snooping on Germans
including Chancellor Angela Merkel.

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