German Report Says EU-Canada Trade Deal to Fail

This article was last updated on April 16, 2022

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A local German newspaper reported on Saturday that Germany is most likely going to reject a multi-billion free trade deal agreement being negotiated between the European Union and Canada, i.e. widely seen as a template for a bigger agreement with the United States. Quoting unnamed diplomats in Brussels, the Sueddeutsche Zeitung mentioned that Berlin particularly dislikes the clauses entailing legal protection offered to firms investing in the 28-member bloc. Critics say they could allow investors to stop or reverse laws.

Citing German diplomats in Brussels, it was stressed that the German government cannot sign the agreement with Canada “as it has been negotiated now.” It was highlighted that clauses under scrutiny in the Canada deal were similar to those in the U.S. agreement, i.e. simultaneously being negotiation. The paper reported a senior official at the Commission in Brussels saying that “the free trade treaty with Canada is a test for the agreement with the United States.” The official added that if deal with Canada is rejected “then the one with the United States is also dead. “

Upon inquiry about the report in the paper, spokesperson for Germany’s Economy Ministry referred to correspondence which outlined Germany’s concerns about investor protection in talks with both countries. Deputy Economy Minister, Stefan Kapferer, stated that “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.”

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