Skip to main content

The euro sign landmark is seen at the headquarters of the European Central Bank in Frankfurt, Germany in 2013.September 2, 2013.Kai Pfaffenbach/Reuters

Stephen Harper's efforts to clinch a massive trade pact with the European Union have got caught up in growing public anxiety among Germans over what rights U.S. investors would get in a similar deal – the latest bump in the road for the Prime Minister's long-sought agreement.

Berlin's concerns most recently came to light on Saturday when a Munich newspaper quoted unnamed German officials saying they could not sign the Canada-EU deal in its current form. At issue, the Sueddeutsche Zeitung reported, are rights granted to foreign investors to challenge Berlin policy makers' decisions, with the final say going to an independent arbitration panel rather than German courts.

Nine months have elapsed since Mr. Harper and European Union officials held a mission-accomplished press event to herald a tentative deal, but what were supposed to be merely followup technical discussions have dragged on longer than expected.

Germany's ambassador to Canada said he does not believe investor rights will be a deal-breaker.

"This is a very important but small part of a very comprehensive agreement which will benefit both sides. So this will certainly not bring the process to a halt," Werner Wnendt said in an interview.

But, the envoy added, the Sueddeutsche Zeitung article reflects concerns in Germany that need to be taken seriously. "It reflects a debate that is ongoing," he said.

The real worry for Germans is a separate trade agreement the EU is negotiating with the United States.

Investor protection rules proposed in the Canada-EU deal are expected to form the template for what the Europeans grant the Americans.

German public debate has linked concern about giving U.S. investors the same rights negotiated in the Canadian deal.

"People now understand there has been an agreement already negotiated with Canada that has this clause," Mr. Wnendt explained. "So simply to say it's fine with Canada but it's probably not so fine with the United States would be very difficult."

Mr. Wnendt's comments suggest Germany wants 11th-hour changes to help allay fears that investor protections will be used to undermine European laws.

He said he has been led to believe Canada-EU investor protection rules are still being negotiated between Ottawa and the European Commission.

"That is still one of the chapters where still some talks are ongoing, as far as I understand it … So we will see. That is really something the commission now needs to deal with."

The ambassador said he does not know if Ottawa and the EU need to rewrite the deal to handle Germany's investor-rights concerns.

"If there is anything that should be added to what has been negotiated, that will probably be done in an appropriate manner."

Germany raised concerns about investor rights in the Canada-EU free trade deal at a meeting of European trade officials in Brussels last week, the Wall Street Journal reported on Monday. The newspaper said it is unclear whether negotiators will modify the text.

German public-interest groups have mounted a campaign warning investor protections contained in the Canadian and U.S. agreements could be used to prevent tougher environmental laws in Europe.

Those fears appear overblown. A summary of the Canada-EU negotiations released last October said the agreement includes a provision that "non-discriminatory, good faith measures" to protect health, safety and the environment could not be successfully challenged by investors.

Your Globe

Build your personal news feed

Follow the author of this article:

Check Following for new articles