Hungary says it won't ratify CETA because of ISDS provision

Brent Patterson
6 years ago

Istvan MikolaThe Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has encountered another roadblock in its ratification by EU member states.

The Hungarian-language news service BruxInfo reports, "[The Hungarian Secretary of State for Foreign Affairs and Foreign Trade] István Mikola says there is a political consensus that the Hungarian parliament for the time being won't ratify the Canada-EU agreement (which has not yet reached this stage of the process anyway) because it cannot accept the investor-state mechanism included in the agreement."

The original text reads, "Mikola István szerint Magyarországon is politikai konszenzus alakult ki arról, hogy a parlament egyelőre nem ratifikálja az EU-kanadai megállapodást (ebbe a fázisba még nem jutott el egyébként a folyamat), mert nem tudja elfogadni a benne lévő vitarendezési mechanizmust."

The article focuses more on the United States-EU Transatlantic Trade and Investment Partnership (TTIP) which Mikola confirms the Hungarian government will not support because of the investor-state dispute settlement provision. And it notes that Mikola says Hungary is among roughly 6-7 Member States that are opposed to the dispute resolution mechanism in TTIP.

It is expected that the legal scrubbing and translation of CETA could be completed by this December (this news report says eight months from now) and that ratification votes in EU member state legislatures could begin as early as January 2016 (pending a decision by the European Court of Justice related to the mixed nature of the agreement, which is expected in November).

Other EU countries have also expressed opposition to CETA and ISDS:

Germany
In September 2014, Economy Minister Sigmar Gabriel stated, "It is completely clear that we reject these investment protection agreements. ...I am certain that the debate is not over by a long shot." And in March 2014, Secretary of State for the Ministry of Economy Brigitte Zypries said, "From the perspective of the federal government, the US investors from the EU offer sufficient legal protection in their national courts. We are committed to ensuring that the arbitration proceedings are not included in [TTIP]." Both Gabriel and Zypries are Social Democratic Party ministers in Chancellor Angela Merkel's coalition government.

France
In February 2015, the Senate voted in favour of a resolution calling for the abandonment of ISDS in CETA if substantial changes cannot be negotiated. This followed a November 2014 vote in which the National Assembly adopted a resolution that states it "opposes any mechanism for arbitration of disputes between states and investors and therefore requests the substantial revision of Chapters 10 and 33 on the protection of investments." Chapter 10 is CETA's investment chapter, which includes the investor-state dispute settlement mechanism, while Chapter 33 outlines CETA's dispute resolution process. That same month, the Senate also adopted a resolution stating, "it would be better to abandon the section on investment protection in the global agreement negotiated with Canada" in favour of a state-to-state dispute resolution process.

Austria
In September 2014, the National Council (one of the two houses of the Austrian parliament) passed a resolution introduced by the SPÖ (Social Democratic Party) and the ÖVP (Austrian People's Party) stating that CETA negotiations need to be continued even after the 'signing' summit that month in Ottawa, that there is no need for an investor-state clause in CETA, and that CETA is a mixed agreement and therefore the ratification process must involve all national parliaments. The Greens and the Neos (the New Austria Party) also oppose the investor-state dispute settlement provision in CETA.

Greece
In December 2013, Syriza MP Thanassis Petrakos stated that, "A Syriza-led government will veto the agreement [CETA]." While this statement was made prior to Syriza forming government in January 2015, the Deputy Minister for Administrative Reform George Katrougalos has also stated, "I can assure you that a Parliament where Syriza holds the majority will never ratify the [TTIP] deal. And this will be a big gift not only to the Greek people but to all the European people."

Belgium
RTL reports that the Socialist Party (the second largest party in the Belgian Chamber of Representatives) is also opposed to ISDS. They have introduced a motion in the Walloon parliament calling for a suspension of TTIP talks if ISDS is not excluded from the deal. The president of the party, Elio Di Rupo, says, "This mechanism is similar to a real privatization of justice. Specifically, with this mechanism, a US company could sue a European country that increases its minimum wage, saying that it affects its profits! Unacceptable." Di Rupo was the prime minister of the country between December 2011 and October 2014.

In terms of Mikola's comment that 6-7 EU member states are opposed to the ISDS provision in TTIP. It has been reported that Denmark, the Netherlands, Sweden and Luxembourg may support some aspects of French proposals to amend the ISDS provision. It is also believed that Belgium and Italy are concerned about the ISDS provision in CETA.

For more on the Council of Canadians campaign to defeat CETA, please click here.

Photo: István Mikola