EU Trade Insights reports, "The European Parliament’s Socialist and Democrats Group (S&D) threatened on March 4 to vote down the ratification of the EU-Canada trade pact if no substantial improvements are made to the existing chapter on investment protection."
S&D MEP Bernd Lange, who chairs the international trade committee in the European Parliament, says, "Without substantial changes to the text, we will not ratify CETA. ...If the European Commission does not want to risk the failure of CETA and TTIP, it should take action and must take our group’s position into account. Otherwise there will be no majority for these agreements in the European Parliament."
Lange adds, "The initiative put forward by six social-democrat trade ministers in relation to CETA is a step in the right direction and should be taken up by the trade Council." He is referring to a 4-page position paper recently put forward by social democratic party leaders in France, Germany, the Netherlands, Denmark, Sweden and Luxembourg.
That paper calls for six revisions to the investor-state provision in CETA:
- We call for the clarification of “fair and equitable treatment” and “legitimate expectations” of investors: an investor cannot expect that laws will remain unchanged and that changes in profit margins, including significant ones due to government measures, cannot in themselves constitute a breach of protection standards.
- We support the creation of a new mechanism with a permanent secretariat. A Trade and Investment Court, whose task is to judge on investment protection cases, could constitute this new mechanism.
- We support the introduction of an appeal mechanism, which has the potential to rectify some of the legitimate concerns that arbitral tribunals are facing.
- The choice of arbitrators should be limited to fixed pools of highly qualified arbitrators appointed by the EU, Canada and EU Member States, as far as possible qualified professional judges and academics, while seeking to secure specialist legal expertise.
- Abusive litigation by investors shall be tackled: frivolous claims should clearly be deterred through reinforcing the principle of “loser pays” where a claim is dismissed as frivolous and for example by the possibility of penalties.
- Investment protection shall not allow for national court decisions to be challenged by arbitral mechanisms. ...We therefore strongly favour to introduce a clause making it mandatory to choose between arbitration and local remedies.
The position taken by the Socialist and Democrats group (and the six Europeans countries wanting amendments to CETA) could set a collision course with the Harper government in Canada. That's because the Harper government says the negotiations for CETA were completed in October 2013 and that the investor-state provision in it is non-negotiable. Harper may have taken this position given the concerns expressed expressed by former European Trade Commissioner Karel de Gucht who commented, "If the negotiations are reopened, the deal is dead."
The Group of the Progressive Alliance of Socialists and Democrats in the European Parliament is the second largest grouping in the European Parliament with 191 seats. Their vote against CETA -- along with the Confederal Group of the European United Left-Nordic Green Left (52 seats), Group of the Greens/European Free Alliance (50 seats) and the Europe of freedom and direct democracy Group (with 48 seats) -- would mean a near majority of 341 votes in the 751-member European Parliament. With just 35 of the 52 "non-attached" members also voting against the deal, CETA would be defeated.
It is also expected that CETA will have to be voted on in all 28 national legislatures within the European Union. The Syriza government in Greece has already indicated that it does not support CETA.
Majority of MEPs may oppose Canada-EU 'trade' deal (August 2014 blog)
Merkel's political imperatives spell trouble for CETA (February 2015 blog by Maude Barlow)
Paris and Berlin to form united front against ISDS in 'free trade' deal (January 2015 blog)