The EU’s top court has confirmed that in at least one controversial area, such deals must be approved by all 28 of the organization’s member states.
Since some EU members, such as Belgium, require the consent of regional as well as national legislatures, this confirms Ottawa’s worst fears: the Comprehensive Economic and Trade Agreement between Canada and the EU must be OK’d by no fewer than 38 separate European parliaments before it comes into full effect.
Tuesday’s ruling by the Court of Justice of the European Union was ostensibly about a 2013 free trade deal between Singapore and the EU. But it sets a precedent for similar yet far more important pacts, including CETA.
In effect, the court ruled that any deal allowing foreign investors to challenge national governments, such as the proposed investment court system within CETA, must be unanimously approved by all EU states.
The investment court system, sometimes called the investor-state dispute mechanism, would allow foreign companies to challenge domestic laws that threaten their profitability. It has long been a flash point in Europe.
Pointing to Canada’s sorry experience with a similar system under the North American Free Trade Agreement, critics argue – correctly – that it lets foreign investors override democratically elected legislatures.