The European Union completed legal checks on a free-trade agreement with Canada after scaling back protection for foreign investors in a bid to win over skeptics in Europe.
The European Commission, the EU’s executive arm in Brussels, altered provisions on so-called Investor-State Dispute Settlement during the review of the accord struck with the Canadian government in 2014. The ISDS measures foresee an Investment Court System in which publicly appointed judges rather than arbitrators would hear cases and an appeal tribunal would be established.
The EU-Canada accord becomes the first planned free-trade agreement to include the new ISDS provisions, which are meant to ensure European governments’ ability to regulate in the public interest. Unveiled in September by European Trade Commissioner Cecilia Malmstroem, the ISDS measures are also being inserted into a draft EU-Vietnam trade pact reached last year and will be a model for the treatment of foreign investors in a planned commercial deal between the 28-nation bloc and the U.S.
The EU-Canada agreement, which could take effect later this year, would end 98 percent of tariffs on goods traded from the outset and 99 percent after seven years. Each side would dismantle all industrial tariffs and more than 90 percent of agricultural duties. Markets for services and public procurement would also be opened under the pact, the EU’s first with a fellow member of the Group of Seven leading industrialized nations.
In Europe, the agreement still needs the approval of the EU’s national governments and the European Parliament. EU-Canada trade in goods was worth 59.1 billion euros ($64.4 billion) in 2014, while services commerce totaled 27.2 billion euros, according to the commission.