The ECJ sees no problems with the CETA trade pact between the EU and Canada. The disputed arbitration tribunals to settle disputes between investors and states are compatible with EU law, the judges said.
The agreement, called CETA, has mobilized a great deal of protest: more than 60,000 people have appealed to the German Federal Constitutional Court alone because they considered the treaty between the EU and Canada to be highly undemocratic. Most important point of criticism: The creation of an additional international court – a court against which investors can sue, demand large amounts of compensation and thus upset local laws. The critics feared a no longer controllable parallel justice. For example, a national government could not impose stricter rules on environmental protection, as it always had to fear being sued by a Canadian company before the CETA court for lost profits.
CETA so far only provisional
The Federal Constitutional Court allowed Germany’s accession to CETA in 2016, but the section on the new courts had to be left out. Accordingly, although the agreement has been provisionally applied since 2017, the case with the special court and the special right of action for the companies has not yet been implemented.
There was also a lot of resistance in Belgium to the treaty with Canada, especially because of these special courts. The country therefore contacted the EU Supreme Court, the ECJ in Luxembourg, to determine whether these new CETA courts were compatible with European law at all.
ECJ considers CETA courts to be harmless
But the European judges do not consider the contract dangerous. They have taken a closer look at the agreement and come to the conclusion that if a special court is set up for complaints by Canadian companies against European environmental rules, then they can not question the level of protection in Europe. This is described in the CETA contract. If the EU has democratically set a certain level, such as food safety or consumer protection, the specific CETA courts would not have the right to challenge those decisions. This applies to many areas, including the protection of life, public morality, health and safety and fundamental rights.
The judges will then be very specific: even if the European Commission would impose a fine, the CETA court should not just cancel it. That would only be possible if the fine was not in order under European law.
Following this decision by the highest EU judges on European law, the German constitutional judges must now decide on CETA in the main point. You will definitely study the vote of European colleagues. For the agreement to become fully effective at some point, all EU Member States still have to ratify it.
