Opponents criticize agreements like Ceta as a “Trojan horse” that could erode environmental standards. Archive photo: dpa
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By Daniel Brewer
Karlsruhe/Heidelberg. The Ceta agreement between the EU and Canada can remain in force for the time being. The Federal Constitutional Court has dismissed complaints from around 200,000 citizens and the left-wing faction: the EU has not exceeded its competences with the provisional application. (Az. 2 BvE 3/16 and others), according to the court. It also dismissed lawsuits against the final conclusion of Ceta or a German approval law because both are still pending.
What is Ceta about? The “Comprehensive Economic and Trade Agreement” was concluded in 2016. It regulates a variety of issues to reduce tariffs and other trade barriers between the EU and Canada. It came into force provisionally in 2017 – but only those parts that fall within the EU’s area of responsibility. The Federal Constitutional Court had previously imposed conditions in an expedited procedure: Germany should have a right of veto and, in case of doubt, be able to terminate the agreement. Ceta has not yet been ratified: this is pending in twelve EU countries, including Germany.
What is the problem? Arbitration courts are a criticism of free trade agreements. The fear: Foreign investors could take action if a state tightened its environmental regulations. Second point: Ceta provides for a “joint committee” of both sides, which can decide on certain changes. For example, it can be a question of which goods fall under the protection of intellectual property or which medical devices are standard-compliant. Because not every EU state is represented, important decisions could be imposed and democracy undermined – so the fear.
Why are parts still in effect? The EU has taken precautions. Their representatives in the committee can only vote if there is prior agreement in the European Council. This means that every government has de facto a right of veto.
What is the verdict now? In principle, that it can stay with this regulation – for the time of the provisional application.
And beyond? That is unclear. The court does raise doubts that the Joint Committee would be constitutional without this structure. The Heidelberg constitutional lawyer Bernd Grzeszick, who represented the Federal Council in the hearing, would have hoped for more from the verdict. “Unfortunately, there are no instructions on what the Bundestag has to do for permanent application,” he says. “After five years, nothing is said about the fundamental construction sites. I’m a bit disappointed there.” There were also no clear statements on the limits of competence between the EU and the individual states.
Friedemann Kainer, Professor of European Economic Law at the University of Mannheim, sees things differently. “It’s obvious,” he says. “That means you have to do something.” For example, democratic legitimacy could be revoked by the EU Parliament or the principle of consensus in the Council could be retained. “It would be altogether wise to do so.” However, Kainer notes that such committees are common in many international treaties, including the Brexit Agreement. “It’s about a compromise between the principle of democracy and the functionality of international relations.”
What about arbitral tribunals? The verdict does not affect them directly because a Ceta court still exists. However, Grzeszick emphasizes, a rethink has already taken place here: The EU is now aiming for a fixed arbitration board for all trade agreements, which would have to disclose its decisions. Canada would have to follow suit first. But, says Grzeszick: “I can’t imagine that an old-style court will still be enforced.”
What do the plaintiffs say about the verdict? Despite the defeat, they are quite satisfied. “The court ensures that decisions by the CETA committees must be democratically tied back to the federal government and the Bundestag,” explains Roman Huber from the Mehr Demokratie eV association for the “No to Ceta” alliance. This is a consequence of the lawsuit. The alliance retains it plans to move back to Karlsruhe once the German approval law has been passed. Michael Sadtler from the Heidelberg Alliance for Fair World Trade emphasizes: “If the Bundestag were to ratify the full CETA, the next constitutional lawsuit has good prospects.” The judgment gives “even more Reasons” to tackle German ratification.
What’s next? This is now a question of politics. In the coalition agreement, the SPD, Greens and FDP agreed to wait for the verdict. According to the election program, the Greens do not want to ratify Ceta “in its current version”. However, the coalition partner FDP is demanding exactly this – and the opposition CDU wants to have it debated in the Bundestag on Friday.
What does the ruling mean for other agreements? That’s hard to predict. A new start, for example on a TTIP treaty with the USA, would raise the same questions as with Ceta. But, according to Grzeszick: “In Canada, the regulatory culture is much closer to the European one than in the USA. The lowering of standards was never the case with Ceta. That can be different in the USA.”
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