Status: 12/01/2022 3:14 p.m
It took more than five years for the Bundestag to approve the free trade agreement between the EU and Canada. The CETA agreement has been in force provisionally since 2017. The economy speaks of a step that is overdue.
After years of hesitation, Germany has ratified the EU’s CETA free trade agreement with Canada. 559 MPs voted in favor of the corresponding law in the Bundestag. 110 MPs voted against.
The German economy reacted with relief and described the agreement as a step that was overdue. “It must now give the EU new impetus in trade policy. Germany and the EU need open markets, especially in times of increasing protectionism,” said Siegfried Russwurm, President of the BDI industry association.
First step on the way to free trade
The automobile association VDA made a similar statement. “We must expand and intensify our cooperation with other countries,” says VDA President Hildegard Müller. More investment and trade agreements as well as more energy and raw material partnerships are needed. The chemical association VCI named the Mercosur countries Argentina, Brazil, Paraguay and Uruguay as well as Australia, Southeast Asia, India, Africa and the USA as possible examples. “CETA should only be a first step towards free trade.”
However, CETA can only come into force once all 27 EU member states have given the green light. Many countries are still missing. Both sides concluded negotiations on the agreement in 2016. It has been provisionally applied since September 2017. This means that 98 percent of all goods traded between the EU and Canada are no longer subject to customs duties. Canada itself has already completed ratification.
Increase in exports to Canada
According to the DIHK industry association, CETA saves around 500 million euros in customs duties for European companies each year. “Thanks to the agreement, exports to Canada have increased by more than a quarter in the last five years,” said BGA President Dirk Jandura. “Even in 2020, despite the corona pandemic, there was growth of over 15 percent. CETA has particularly helped small and medium-sized companies to export to Canada and establish themselves there.”
FDP faction leader Christian Dürr spoke of an important step. “We need more free trade with the democracies of this world.”
The leader of the Green parliamentary group, Katharina Dröge, defended her MPs’ approval. The party had long spoken out against CETA. Dröge said that together with the EU and Canada, it was possible to reform investment protection standards that were prone to abuse. Abusive lawsuits against climate protection and sustainability would be history.
criticism from environmental activists
Activists and social organizations had already made critical comments beforehand. The agreement would create special rights for foreign investors and put corporate profits ahead of climate and environmental needs. Greenpeace trade expert Lis Cunha said: “The agreement protects fossil companies instead of the climate.”
In future trade agreements, the traffic light coalition would like to anchor sustainability standards – such as climate requirements and minimum work requirements. The politicians recently made this clear in a position paper. Critics fear that this will make negotiations with many countries more difficult. Nevertheless, the SPD, Greens and FDP want to work to ratify the Mercosur agreement with the South American states of Argentina, Brazil, Paraguay and Uruguay.
A speedy conclusion to the negotiations with Chile and Mexico is also being sought. Trade relations between the EU and the USA, which are currently being overshadowed by huge subsidies for companies manufacturing in the USA, are also to be deepened.