CETA Agreement signed
EU and Canada: Following long negotiations, the trade partners have signed a comprehensive trade and investment protection agreement.
Despite criticism from various parties, completion of CETA was considered to be a relatively foregone conclusion. However, shortly before the finish line, the “little brother” of TTIP had to fight off some resistance.
In Germany, several urgent appeals against the signing and provisional application of CETA were filed with the Federal Constitutional Court; however, these were not successful. Nevertheless, the Federal Constitutional Court indicated that the option for Germany to withdraw from CETA, even after it had been completed, must be possible. Shortly before the planned EU-Canada Summit, the Belgian region of Wallonia blocked approval of the agreement. Only after a number of issues were clarified, including issues related to agriculture, was the way cleared for CETA to be signed on 30 October 2016.
The EU and Canada have already started discussing important trade relations. The trading partners hope that the CETA free trade agreement will form a new basis for economic relations. The aim is to boost economic growth and increase the trade of goods and services by eliminating trade restrictions such as restricted access to public contracts, as well as to open up service markets.
The German Social Insurance has been monitoring for some time the negotiations conducted by the EU in finalising various free trade agreements. It is not yet possible to assess the extent to which the German social insurance system will be impacted by the regulations set out in CETA.
Without a doubt, the treaty contains various clauses to protect statutory social insurance and the medical and social benefits financed or provided by it. For example, “social insurance in its funding function” should be exempted from efforts to liberalise by an appropriate formulation. This should also be self-evident, at least from the European side, given that each country within the EU can decide for itself how it structures its social security system. However, there are further clauses and reservations where the trade partners have used vague or undefined legal terms in order to provide a large scope for interpretation when being applied in the future. This results in grey zones which lead to legal uncertainty; for example, it is still unclear whether services that are purely financed through member contributions fall under the term “public funding”. Therefore, only in practice can it be seen whether the EU and the Member States have been precise enough in defining their reservations regarding the protection of certain areas.
The European Parliament must now approve CETA so that it can provisionally come into force for areas which undisputedly fall within the competence of the EU. In order for CETA to fully enter into force, it must be ratified by all Member States and in 14 regional parliaments.