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Win! Germany set to reject CETA over investor-state provision

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There is some extraordinarily good news this week!

Reuters reports, "Germany is to reject a multibillion-dollar free trade deal between the European Union and Canada which is widely seen as a template for a bigger agreement with the United States, a leading German paper reported on Saturday. Citing diplomats in Brussels, the Sueddeutsche Zeitung reported that Berlin objects to clauses outlining the legal protection offered to firms investing in the 28-member bloc. Critics say they could allow investors to stop or reverse laws."

Within an hour of the news breaking Saturday morning, Council of Canadians chairperson Maude Barlow tweeted, "Huge breakthrough!!! Germany to reject CETA and TTIP! Rejecting the power given to corporations in these deals!!!"

The rejection by Germany is a very significant development because, "All 28 members of the EU have to sign the agreement for it to take effect." It is also notable that Germany is Europe's largest economy. As Barlow comments, "If Germany says it's not on, it's not on."

The Council of Canadians has made a number of trips to Germany and the European Parliament -- beginning in July 2010 -- to raise concerns about CETA and investor-state. We outlined some of the potential investor-state challenges Europe could face here.

The Reuters report also notes, "The German government could not sign the agreement with Canada 'as it has been negotiated now,- the paper reported, quoting German diplomats in Brussels. 'The free trade treaty with Canada is a test for the agreement with the United States,- said one senior official at the Commission in Brussels, according to the paper. If the deal with Canada is rejected 'then the one with the United States is also dead,- added the official."

"Asked about the report, a spokesman for Germany's Economy Ministry referred to correspondence which outlined Germany's concerns about investor protection in talks with both countries. 'The German government does not view as necessary stipulations on investor protection, including on arbitration cases between investors and the state with states that guarantee a resilient legal system and sufficient legal protection from independent national courts', Deputy Economy Minister Stefan Kapferer wrote in response to an inquiry from a Greens legislator. In the letter, dated June 26, Kapferer took a similar position on investor protection in the still-to-be-agreed Transatlantic Trade and Investment Partnership (TTIP) agreement with the United States."

There were signals this was coming. In March, Zeit Online reported on comments by the German Secretary of State in the Ministry of Economy Brigitte Zypries. She said, "From the perspective of the federal government, the U.S. investors from the EU offer sufficient legal protection in their national courts... The federal government has critically examined from the beginning, whether such a provision in the negotiations to be included on a free trade agreement.... We are currently in the consultation process and are committed to ensuring that the arbitration proceedings are not included in the contract."

France is likely to back Germany on this. In February, Agence Europe reported, "France believes that a state to state dispute settlement mechanism is enough under the transatlantic trade and investment partnership... France 'is not in favour' of including in the agreement [TTIP] a settlement mechanism for disputes between the investor and state, as [French minister for trade Nicole] Bricq believes that a state to state dispute mechanism 'is enough.'"

Barlow notes, "Democracy won today when Germany rejected investor state in CETA and TTIP. Corporations should not set global trade rules."

The Sueddeutsche Zeitung news article can be read (in German) here.

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