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German court rejects bid to block Canada-EU trade deal

Failure to agree to deal would be bad sign, Trudeau says


Berlin/Ottawa | Reuters –– Germany’s Constitutional Court cleared the government on Thursday to approve a free trade accord between the European Union and Canada under defined conditions, boosting the agreement’s chances of passing an EU vote next week.

However, Canadian Prime Minister Justin Trudeau made clear he was losing patience with the EU over the pact, which both sides say could boost bilateral trade by 20 per cent.

The court in Karlsruhe rejected emergency appeals by activists to prevent Berlin from endorsing the Comprehensive Economic and Trade Agreement (CETA) before it has been ratified by national parliaments.

Economy Minister Sigmar Gabriel, who has championed the pact as Europe’s best chance to shape the changing rules of global trade, said the ruling paved the way towards ratification.

“I am very pleased that we have made a first big step, because if Europe were not able to deal with Canada, this would send a difficult signal in the world,” he said.

EU trade ministers are due to vote on the accord next week and Brussels and Ottawa then hope to sign it on Oct. 27.

But its final approval is far from certain, as the ministers have signalled they want unanimous support from the 28 member states to allow it to enter force.

Trudeau, in by far his most outspoken criticism of the EU, said on Thursday CETA was a turning point for the bloc.

“If we find in a week or two that Europe is incapable of signing a progressive trade deal with a country like Canada, then who does Europe think it can do business with in the years to come?” he said in forceful remarks to reporters in Ottawa.

“If Europe doesn’t manage to sign this deal it will be a very clear message – not just to Europeans but to the entire world — that Europe is choosing a path that is perhaps not very productive… That would be really sad,” he added.

The parliament of the French-speaking community in Belgium backed a motion on Wednesday to prevent the country signing up to CETA. Belgium’s federal government favours the pact, but needs the support of the country’s regions and linguistic communities to give its formal approval.

Opponents argue CETA is undemocratic and will undermine workers’ rights and worsen standards for consumers.

Slovenia’s government, whose position had been uncertain, said on Thursday that it backed CETA, while a final decision would be made by parliament in coming weeks.

Austria’s chancellor, who has expressed strong objections, said his decision on whether to back the deal would depend to a large extent on the German court’s ruling. Earlier on Thursday he struck a conciliatory tone, saying many of his concerns had been addressed in an additional declaration.

Widely seen as a possible blueprint for the Transatlantic Trade and Investment Partnership (TTIP), a bigger trade deal the EU has been negotiating with the United States, CETA aims to eliminate tariffs on 98 per cent of goods immediately.

CETA also encompasses regulatory co-operation, shipping, sustainable development and access to government tenders.

In its ruling, Germany’s highest court said Berlin must ensure that only parts of CETA within the competence of the European Union, such as the removal of tariffs, should be allowed to apply provisionally — meaning before it is ratified by EU member states.

This means that a system of investor protection also envisaged in the accord, which opponents say will hand too much power to multinationals, may come into force only after ratification by national parliaments.

Reporting for Reuters by Caroline Copley in Berlin and David Ljunggren in Ottawa. Additional reporting for Reuters by Philip Blenkinsop in Brussels and Marja Novak in Ljubljana.

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