France may block EU-Canada trade deal over ISDS

Canada's Nutella: Maple syrup. [Alpha/Flickr]

Opposition to investor protection measures in the Comprehensive Economic and Trade Agreement, signed by Canada and the European Union in 2013, have put the deal’s future in doubt. EURACTIV France reports

Matthias Fekl, France’s Secretary of State for Foreign Trade, said on Monday (29 June) that the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada is unlikely to be ratified in France unless significant changes are made to its investor-state dispute settlement mechanism (ISDS).

“Obviously, if we make proposals and they are not taken into account, there will be no majority in the French parliament to ratify this treaty,” Matthias Fekl told the Quebec newspaper Le Devoir.

The European Union and Canada signed the free-trade deal at the end of 2013, but it must be ratified by the EU’s member states before coming into force in 2018.

France and other European countries have expressed concern over the risk that the private arbitration tribunals foreseen under ISDS would allow multinationals to challenge the policies of democratically elected governments.

The French minister said that in order for France to accept the agreement, the clause on investment protection would have to be rewritten.

>>Read: Paris and Berlin call for review of EU-Canada trade deal

“Arbitration was designed to protect businesses from arbitrary decisions, expropriations and patent theft,” Fekl said. But for him, “these mechanisms are used by large multinational companies to attack states, not over arbitrary decisions, but their public policy choices”.

He added that “it is unacceptable that a state can be condemned by a private court for its democratic and sovereign choice of public policy”.

Paris has proposed a revision of the system that would give states the right to “interpret” any ambiguities as they saw fit.

France has also called for the establishment of an “international and multilateral” dispute settlement court for all free trade deals.

If accepted, these changes would also apply to the transatlantic trade and investment partnership (TTIP) deal currently under negotiation between the United States and the European Union.

>>Read: MEPs unimpressed with Commission’s ISDS proposal

Matthias Fekl stressed that he hoped to see this modified system “applied to all the EU’s future trade deals”. 

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