LUXEMBOURG (Reuters) – The EU-Canada free trade deal’s provisions on investor protection are in line with EU law, a senior court adviser said on Tuesday in a recommendation to the European Court of Justice (ECJ) about terms seen by critics as favouring multinationals.
The view of Advocate General Yves Bot, if backed by the court, would be a major relief for proponents of the Comprehensive Economic and Trade Agreement (CETA), which came into force on a provisional basis in September 2017.
The court is not bound by the opinions of advocate generals, but they tend to follow them in most cases. The 24 judges would normally give their verdict within two to four months.
Investor protection, and in particular a system of tribunals to settle disputes between foreign investors and states, became a focal point of protests against CETA when EU countries were deciding whether to back it in 2016.
The Belgian region of Wallonia threatened to block it, but Belgium persuaded it not to do so in return for certain concessions – including a request for the European Court of Justice to give its view.
Full implementation of CETA in any case requires the approval by all 28 EU member countries and, for Belgium, also regional parliaments.
Critics of the deal said that its provisions on investor protection give too much power to multinationals, letting them sue public authorities in special courts and effectively allowing them to dictate public policy.
Belgium asked the court whether the section in the CETA text about investment dispute settlement was compatible with EU law. Critics said the special courts undermined the supremacy of the ECJ and the right of access to an independent judiciary and also only allowed foreign investors to bring cases.
Advocate General Bot said that CETA did not affect the ECJ’s role as the ultimate arbiter of EU law and that dispute settlement tribunals could grant compensation, but not order the annulment of measures deemed contrary to the agreement.
He added that CETA did not infringe the principle of equal treatment and that dispute settlement tribunals had procedural safeguards.
(Reporting by Philip Blenkinsop, Editing by William Maclean)