CETA

Hundreds of thousands people in Europe are demonstrating against TTIP and CETA. Whilst Donald Trump terminated the TTIP negotiations for the time being, the ratification of CETA has stalled because of two court rulings: The ECJ's “Singapore ruling” demands the ratification of trade agreements by national Parliaments, if a chapter on investment protection is included in the agreement. This is the case with CETA. The ECJ’s “Achmea ruling” establishes that the - from the AK’s point of view - extremely problematic provisions on arbitration courts, as included in the Bilateral Investment Treaty (BIT) between EU Member States, are not compatible with EU law. As these are in contradiction to the “Autonomy of EU Law“. According to the ECJ, due to this assessment, no court outside this system would be authorized to interpret EU Law. As here too effects on the Investor-state dispute settlement (ISDS) of trade agreement with countries outside the EU are to be expected, Belgium has asked the Court of Justice of the European Union for an expert opinion to review the compatibility of CETA with EU Law. As long as this opinion is not available, neither Germany, the Netherlands nor Austria will ratify the agreement. However, CETA (apart from the arbitration system) has been preliminarily applied for a year and for an indefinite period. It is little surprising that with regard to the implementation of the agreement, the Commission gives a positive summary. Apart from that it welcomes the integration of the civil society by establishing a so-called “Civil Society Forum”. There and in related sub-groups, representatives of the Canadian government and the European Commission meet once a year with representatives of the civil society. The objective of these meetings for the Commission would be to take views and issues of the civil society on trade policy seriously and to take them to the Committees of the Commission. However, participants of the first civil society meeting on the Sustainability Chapter lament that constituting on the Canadian side had not sufficiently advanced and that no funding of the Canadian and European Domestic Advisory Group (DAG) had been made available to generate successful work. They also commented that a discussion with the Canadian government and the European Commission cannot take place on equal terms as long as these send representatives to the meetings, who only scratched the surface of the matter.

JEFTA

The negotiations on the JEFTA trade agreement between Japan and the EU have been conducted by the European Commission behind closed doors since 2013 and not on the radar of the broad public. JEFTA is the largest trade agreement ever signed by the EU, as combined both states are responsible for a third of the global gross domestic product. On 17 July 2018, Japan’s Prime Minister Shinzo Abe and EU Commission President Jean-Claude Juncker signed the agreement. In addition to the signature of the Commission President, a vote by the European Parliament (EP) in December 2018 is also required. However, the EP can only vote for or against the trade agreement – renegotiating is not an option. At the vote in the advisory Committee on the Environment on 10 October 2018, supporters prevailed over the critics and came out in favour of finalising the agreement. Since the negotiating texts have become known, countless NGOs and associations have seriously criticised JEFTA. The AK objects among other to the use of “negative lists”, as this means that all public services sectors, which are not explicitly recorded as reservation on a list, are automatically released for liberalisation. This includes among other the water industry. Hence, the German Association of Energy and Water Industries (BEDW) have taken a stance against the agreement. The special article on “Rights and obligations relating to water “, as enshrined in CETA, is not part of JEFTA. As a result, the privatisation of public goods has been granted more ground. Apart from that, MEP Klaus Buchner (Greens) criticises that “the financial rules in the agreement are a disaster. Sectors were subjected to liberalisation, which had resulted in the last financial crisis”. Karoline Graswander-Hainz (S&D) demands the implementation of a Sustainability Chapter with sanctioning enforcement mechanisms, as without these, violations of the Paris Agreement enshrined in the agreement would not entail any consequences. However, things have moved with regard to the lack of ratification of two of the eight Core Labour Standards of the International Labour Organisation (ILO). Currently, Japan has not signed Convention No. 111 concerning Discrimination in Respect of Employment and Occupation, and No. 105 concerning the Abolition of Forced Labour – both fundamental human and labour law minimum standards. Meanwhile, the Japanese government has arranged a first meeting with the relevant agencies in October to rectify the omission. However, from the point of view of the AK this is not sufficient. In fact, apart from the ILO Core Conventions, it is necessary to implement the CLS+ (“Core Labour Standards Plus”) to guarantee safety and health protection at the workplace, as well as living wages and humane working times. There is little to report on the extremely problematic Investment Court System (ICS), as JEFTA is a so-called “Split-Agreement”, which is a result of the “Singapore Ruling” mentioned above. For that reason, only those sectors of the trade agreement are negotiated at EU level, which come under “EU only competence” and which therefore do not have to be ratified by the Parliaments of the Member States. In contrast, the Investment Court System (ICS) with Japan must be confirmed the individual Parliaments and is therefore negotiated in camera in a separate agreement. Agreement on this issue has not been reached.

WTO

In September 2018, the European Commission presented a Concept Paper on reforming the World Trade Organisation WTO. The smouldering trade conflict with the USA and the (punitive) tariffs imposed on China and the EU resulting from it as well as the blocking of the Appeals Chamber are only a few reasons for the strong wish for a speedy reform. The Commission therefore proposes an improvement of the dispute settlement process to enable the smooth cooperation between Appeals Chamber and WTO members. Apart from that, it would like to implement monitoring measures including sanctions, which are to ensure transparency also in respect of implementing multilateral agreements in trade policy. Initial talks are already being held with the USA, Japan and China.

Further information:

AK & ÖGB submit positions on trade agreement with Japan and Singapore to EP Trade Committee

AK EUROPA: EU-Japan Trade Agreement: hearing and criticism in the European Parliament’s Trade Committee

AK EUROPA: CETA and the future of European Free Trade Agreement

AK EUROPA: Integrating conditional labour standards in trade agreements at last!

AK Position Paper: April 2010 AK Position Paper EU-Canada Free Trade Agreement (CETA) 

Sustainability Chapter MD 20b

AK EUROPA: Reorganisation of the WTO