Council legal service takes stance on provisional application of CETA
Vieuws | 13 September 2016
Council legal service takes stance on provisional application of CETA
By Joanna Sopinska
As the member states are struggling to agree which parts of the Comprehensive Economic and Trade Agreement (CETA) should enter into force provisionally pending ratification in Canada and the EU, the Council legal service has come up with its own assessment. It suggests sizeable ‘carve-outs’ in the area of investment protection and financial services but gives a free hand to the member states to decide whether to provisionally apply certain provisions on sustainable development, labour and environment.
The non-paper dated 8 September and seen by EU Trade Insights argues that only parts of the most controversial chapter (n° eight) on investment protection “shall be provisionally applied, and only insofar foreign direct investment is concerned.”
This category covers articles 8.1 to 8.4 in their entirety (definitions and scope, scope, relation to other chapters, and market access); articles 8.5, 8.6 and 8.7 but to the extent that their “application is limited to establishment, conduct, operation or management of investments;” article 8.8 (senior management and board of directors); article 8.13 (transfers); article 8.15 (reservations and exemptions) with the exception of 8.15(3); article 8.16 (denial of benefits).
The non-paper suggests that certain provisions from chapter thirteen (financial services), concerning portfolio investments should be excluded from provisional application “to reflect the carve-outs of chapter eight.“ This category includes article 13.2.3; article 13.3 (national treatment) article 13.4 (most-favoured nation treatment); article 13.9 (performance requirements); and article 13.21 (investment disputes in financial services).
In addition, the Council legal service came to the conclusion that provisional application should not cover article 20.12 of the intellectual property chapter, concerning criminal procedures to be applied in case of the unauthorised copying of a cinematographic work and article 28.7(7) concerning taxation.
Finally, it gave member states a free hand to decide whether to provisionally apply certain provisions concerning sustainable development (chapter twenty-two), labour (chapter twenty-three), and environment (chapter twenty-four), for which either no competence exists, or it is not exclusive. “It is a matter of policy choice as to whether to limit the provisional application of these provisions to areas of exclusive competence,” the non-paper reads. This category includes: article 22.1(3), 22.3(3); articles 23.2 to 23.7; and 24.4(4), 24.5(2), 24.6; and 24.10 to 24.12. According to sources, Germany has been pushing for carve-outs in some of these areas.
The Slovakian Presidency is to table later this week a revised version of its draft proposal dated 20 July on provisional application of CETA (see article), reflecting the opinion presented in the non-paper and the proposals made by the member states’ trade representatives at the Trade Policy Committee meeting on 9 September. Further technical discussions have been scheduled for 14 September (attachés meeting) and 16 September (Trade Policy Committee, full members).
