German opposition clouds Friday’s ceremonies for Canada-EU trade pact

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Just hours before Canada and the European Union released the long-awaited final text of a free trade pact, German officials visiting Ottawa delivered a blunt and unwelcome message: The deal must be changed.

In an exclusive interview with The Globe and Mail in Ottawa, senior German official Uwe Beckmeyer said sections of the deal allowing private companies to sue governments – known as investor-state provisions – must be changed before Germany will support the Comprehensive Economic and Trade Agreement (CETA).

Mr. Beckmeyer, who is Parliamentary State Secretary for Germany's Ministry of Economics and Energy, confirmed the position after meeting with Canadian Trade Minister Ed Fast on Thursday.

Germany's position puts a cloud over what was supposed to be a feel-good announcement Friday, as Mr. Harper hosts the President of the European Council, Herman Van Rompuy and the European Commission President Jose Manuel Barroso for an event the EU says will "celebrate the successful end of negotiations" for CETA.

The final text of CETA was released publicly for the first time Friday.

But the terms of Mr. Rompuy and Mr. Barroso are about to expire. Mr. Beckmeyer said he expects the new EU leaders will be more in line with the view that further changes are possible.

"I think they'll be seeing things along the same lines," he said.

Even with a final text, several steps remain before CETA can be considered final. The Canadian Parliament must vote to ratify the agreement and so must the European Parliament.

There is debate within the European Union as to whether the deal must also be approved by each EU member state. Mr. Beckmeyer is among those who believes it should.

Germany's last-minute stand could have serious consequences for the talks, given that the EU Trade Commissioner warned this week that reopening CETA at this stage would mean the deal is effectively "dead."

Mr. Beckmeyer disagrees. "I think that's fundamentally wrong," he said in reference to the stark comments Commissioner Karel de Gucht made to a German newspaper. Critics of investor-state clauses argue they can prevent governments from enacting laws in such areas as environmental protection that are opposed by industry. Mr. Beckmeyer said CETA must not tie the hands of the German government to set policy.

"We believe it must remain possible for national governments to act, to enact legislation in [the] future, and the agreement cannot undermine that," he said. "We cannot just be forced to accept that, thrust down our throat."

Mr. Beckmeyer said Canadian officials seem open to the possibility of further changes, but Canadian government sources strongly rejected that view, insisting that negotiations are over. One government source indicated that German Chancellor Angela Merkel had never raised objections over investor-state provisions with Prime Minister Stephen Harper.

Some observers see internal German and European Union politics at play. Germany has a coalition government and Ms. Merkel is leader of the Christian Democratic Union party. Mr. Beckmeyer's comments are in line with similar remarks made earlier this week by German Economy Minister Sigmar Gabriel, the country's vice-chancellor and also head of the Social Democratic Party. Mr. Beckmeyer and Mr. Gabriel are from the same political party.

Kurt Hubner, a professor with the University of British Columbia's Institute for European Studies who has monitored the negotiations closely, said the concern from German officials could be aimed at appeasing domestic critics and taking a harder line in the EU's trade talks with the United States.

"We need to understand that Germany is a trading nation. There's a big openness for trade. CETA in this regard is not endangered a bit," he said. "They have to play to this domestic audience in some way."

A spokesperson for Mr. Fast, Canada's Trade Minister, defended the inclusion of investor-state provisions in CETA.

"Investment protections have long been a core element of trade policy in Canada and Europe, and will encourage job-creating investment and economic growth on both sides of the Atlantic," Shannon Gutoskie said in an e-mail. "That's why the negotiators from the EU were given a mandate by their Member States to ensure Investor-State Dispute provisions were included in CETA."