EU, Canada sign delayed trade deal

Yahoo – AFP, Danny Kemp, October 30, 2016

(L-R) European Council President Donald Tusk, Canadian Prime Minister
 Justin Trudeau and European Commission President Jean-Claude Juncker during
 the EU-Canada summit meeting at the EU headquarters in Brussels on October 30,
2016 (AFP Photo/John Thys)

Brussels (AFP) - The EU and Canada finally signed a landmark free trade deal seven years in the making on Sunday, after overcoming last-minute resistance from a small Belgian region that nearly torpedoed the entire agreement.

Canadian Prime Minister Justin Trudeau flew to Brussels for a ceremony that had been pushed back from Thursday after Wallonia with its population of 3.6 million initially vetoed a pact affecting more than 500 million people.

But in a sign of the fierce passions aroused by the giant Comprehensive Economic and Trade Agreement (CETA), protesters burst through riot police lines and hurled red paint at the EU's headquarters.

"That I be here today or three days ago is not going to make a huge difference in the grand scheme of the real impact it's going to have for this good deal to move forward," Trudeau said after signing the pact with leaders of the EU institutions.

Cheers and applause erupted as they inked a long-anticipated deal that will remove 99 percent of customs duties between the two sides, linking the single EU market of 28 nations with the world's 10th largest economy.

'Disintegration of West'

The leaders hailed the pact as good news after the Belgian drama, which sparked dire warnings for the EU's credibility as it wrestles with Britain's shock vote to leave, a huge migration crisis and the threat of a resurgent Russia.

The signing was also further delayed when Trudeau's plane from Canada suffered "mechanical issues" and had to turn back for repairs.

"Patience is a tree whose root is bitter, but its fruit is very sweet," EU President Donald Tusk said. "Today's decisions demonstrate that the disintegration of the Western community does not need to become a lasting trend."

European Commission chief Jean-Claude Juncker meanwhile said the deal was an "international standard that will have to be followed by others" -- not least an even bigger agreement that the EU is negotiating with the United States.

But the fate of the Canada-EU deal -- so close to the finish line after seven gruelling years of negotiations -- had been hanging by a thread until just days ago because of Belgium.

French-speaking Wallonia had for two weeks resisted huge pressure to back the deal until it won concessions for regional farming interests and guarantees that international investors will not be able to force governments to change laws.

Following marathon talks led by Belgian Prime Minister Charles Michel, the Walloons finally agreed on Thursday evening, and a day later, Trudeau agreed to fly in for the delayed signing.

The pact required all EU member states to endorse it and in some cases such as Belgium's for regional governments to agree too, giving tiny Wallonia an effective veto.

Minister-President of Belgium's Walloon Region Paul Magnette leaves the stage

 after a speech about the EU-Canada Comprehensive Economic Trade Agreement 

(CETA) (AFP Photo/Bruno Fahy)

'Trojan horse'

Concerns in the declining industrialised region in Belgium's south reflect wider worries in Europe about globalisation, as well as fears among activists that such deals erode consumer, social and environmental protections.

On Sunday, around 100 protesters banged drums and shouted slogans outside the European Council building while Belgian riot police backed by water cannon looked on, AFP reporters said.

The glass front doors of the building were also daubed with red paint after some protesters briefly managed to break through police lines, with a number of them arrested.

The activists also see CETA as a Trojan horse for the even larger -- and more controversial -- deal between the EU and the United States.

Negotiations for that deal, known as the Transatlantic Trade and Investment Partnership (TTIP), have however stalled in recent weeks, and the goal of approving it by the end of President Barack Obama's term in office now having been abandoned.

The troubles with the Canadian deal have meanwhile been seen as a possible harbinger of things to come for Britain as it tries to negotiate a new trade pact with the EU after it leaves the bloc -- most likely in 2019.

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Deutsche Welle, 23 Sep 2019

One might say that German Economic Affairs Minister Sigmar Gabriel was almost passionate: "CETA puts people up front, and not just the economic success of a few."

The treaty could in fact become the standard for other trade agreements. It is the first treaty to create reasonable rules for globalization, the German politician said; thus it could serve as an example of how global trade can be shaped.

Casting doubt aside

At dinner Thursday, European ministers and their Canadian counterpart Chrystia Freeland agreed to remove all doubt from the treaty's final text. Both sides want to nail down sticking points - such as securing workers' rights, guarantees for the independence of arbitration courts and ensuring that there is no pressure to privatize public services - in a legally binding supplemental statement.

Gabriel defended CETA in Bratislava

With the statement, they seek to dispel the doubts expressed by various social democratic parties in the EU, such as in Belgian Wallonia and in Austria. "Now [Austrian Chancellor Christian] Kern will have to see how he can get himself out of this one," joked the country's economic minister, Reinhold Mitterlehner, in Bratislava.

Mitterlehner is a member of the Austrian People's Party, the chancellor's conservative coalition partner. Sigmar Gabriel, who had to make positive assurances to his own Social Democratic Party (SPD), is now coming out strongly in support of the treaty.

The timetable is set

A number of hurdles still have to be cleared before the treaty can go into effect. Trade ministers hope to formally adopt the CETA on October 18, and it is to be signed by all member states at the EU-Canada summit at the end of the month. After that it will have to be ratified by 28 national parliaments, a process that can take time.

Nonetheless, those portions of the agreement that fall under European purview could go into effect as early as the beginning of next year. That is when the European Parliament intends to vote on the treaty.

The chairman of the European Parliament Committee on International Trade, Bernd Lange of Germany, believes there is a solid majority in favor of the agreement, saying there was a "good treaty on the horizon." Lange said the next step will be a dialogue with society at large, as well as with national parliaments, in order to discuss the details of the agreement.

Bratislava was no stranger to the TTIP and CETA opposition movement

Above all, tariff rules and actual trade provisions could go into effect temporarily. Agreements on the courts of arbitration, intellectual property and several more items will be contingent upon approval by national parliaments. In general, Lange, a Social Democrat, says that CETA is a progressive, cooperative agreement. In Bratislava, much talk was made of the fact that the Canadians had been very patient with problems within the EU over the course of the seven-year-long negotiations.

TTIP is (almost) dead

"CETA and TTIP are two fundamentally different pairs of shoes," said Lange, who is the official rapporteur for the TTIP. Negotiations with the US will bring no results in the foreseeable future, he added, as Washington has refused to make many concessions to the EU.

In any case, one will have to wait until the US elections are over: "If Trump wins, TTIP will die instantly; if Clinton wins, one will have to wait and see what her stance is toward Europe," said the EU lawmaker.

Lange is for putting negotiations on the "night stand," while others want it "put on ice." Austria, France and a number of smaller countries are calling for them to be scrapped altogether. "TTIP has become a metaphor for the hegemony of big corporations," said Austrian Economics Minister Mitterlehner.

He thinks that it would be wrong to simply give the agreement a new name: "Rebranding is not enough. We have to redefine the rules of the game, the goals and the transparency."

However, a large number of member states are in agreement with the European Commission: They want to continue negotiations in order to at least hang on to the few successes that talks have brought thus far. One thing, however, is certain: An agreement will not be reached with the Obama administration. Heads of government will discuss the life and death of TTIP at the EU summit in mid-October. Negotiations are thought to be as good as dead, yet so far, no one seems willing to issue a death certificate.

Apple hit with record EU tax bill

Yahoo – AFP, Danny Kemp, August 30, 2016

The European Union has ordered Apple to pay a record 13 billion euros in
back taxes in Ireland (AFP Photo/Philippe Huguen)

Brussels (AFP) - The EU ordered tech giant Apple on Tuesday to pay a record 13 billion euros in back taxes in Ireland, a move Washington warned could damage hugely important transatlantic economic ties.

Brussels said Apple, the world's most valuable company, avoided virtually all tax on its business in the bloc by illegal arrangements with Dublin which gave the company an unfair advantage over competitors.

Apple and the Irish government immediately said they would appeal against the European Commission ruling, with the iPhone maker warning it could cost European jobs.

The White House meanwhile cautioned against "unilateral" measures by the EU.

The company's shares lost some of their shine after the ruling, down 0.7 percent in early afternoon trading, making for a more than 3 percent loss over the past two weeks ahead of the highly anticipated ruling.

"This decision sends a clear message. Member states cannot give unfair tax benefits to selected companies, no matter if European or foreign, large or small," EU Competition Commissioner Margrethe Vestager said.

"The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years," she added.

Ireland has attracted multinationals over many years by offering extremely favourable sweetheart tax deals to generate much-needed jobs and investment.

But after a three-year investigation Brussels said the arrangement with Apple broke EU laws on state aid.

The findings come amid growing tensions between Washington and Brussels over a series of EU anti-trust investigations targeting other giant US companies such as Google, Amazon, McDonald's, Starbucks and Fiat Chrysler.

The European Commission launched an inquiry three years ago into tax breaks

that Ireland offered iPhone-maker Apple (AFP Photo/Siska Gremmelprez)

'Devastating blow'

Apple has had a base in the southern city of Cork since 1980 and employs nearly 6,000 people in Ireland, through which it routes its international sales totalling billions.

Apple chief Tim Cook said he was "confident" the EU ruling would be overturned, adding that the Silicon Valley giant was the biggest taxpayer in Ireland, the United States and the world.

"The most profound and harmful effect of this ruling will be on investment and job creation in Europe," he said.

Cook also warned that the ruling was a "devastating blow to the sovereignty of EU member states over their own tax matters", echoing the concerns of Dublin over the decision.

Ireland's Finance Minister Michael Noonan described the ruling as "bizarre" and "an exercise in politics by the Competition Commission".

Dublin, which suffered from harsh austerity measures after it was bailed out during the eurozone debt crisis, has vigorously defended its low tax rates as a way of boosting the economy.

"If you look at the small print on an Apple iPhone, it says designed in California and manufactured in China and that means any profits that accrued didn't accrue in Ireland and so I can't see why the tax liability is in Ireland," he said.

But Vestager said Apple's Irish operation was a sham -- Apple's "so-called head office in Ireland only existed on paper. It had no employees, no premises and no real activities."

Apple paid an effective corporate tax rate of just 0.005 per cent on its European profits in 2014 -- equivalent to just 50 euros for every million, Vestager said.

The Apple tax bill dwarfs the previous EU record for a state aid case -- 1.3 billion euros for the Nurburgring race track in Germany.

While the 13-billion-euro ($14.5-billion) sum itself is unlikely to trouble Apple with its massive $600 billion of market capitalisation and $234 billion in revenue last year, the political ramifications are huge.

US anger

Washington has made increasingly angry comments over the case in recent weeks, and on Tuesday it echoed Apple's warnings that the tax bill could hurt the European economy.

"We are concerned about a unilateral approach," said White House spokesman Josh Earnest, adding that the move "threatens to undermine progress that we have made collaboratively with the Europeans to make the international taxation system fair."

The US Treasury said the ruling "could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU."

The Apple decision may also complicate struggling EU-US talks on what would be the world's biggest free trade deal, meant to be completed before US President Barack Obama steps down in January.

French President Francois Hollande on Tuesday said he doubted agreement could be reached by then.

Tax avoidance has moved sharply up the political agenda since EU governments adopted tough austerity policies to balance the public finances, driving public resentment that the rich paid relatively little tax.

The issue was highlighted close to home by the LuxLeaks scandal which revealed that European Commission President Jean-Claude Juncker's native Luxembourg gave companies huge tax breaks while he was prime minister.

In October Brussels ordered US coffee giant Starbucks and Italian automaker Fiat to each repay up to 30 million euros ($34 million) in back taxes to the Netherlands and Luxembourg respectively.

#UPDATE Apple ordered to pay record 13 billion-euro Irish tax bill https://t.co/ycty2yXNoz pic.twitter.com/uxyGZ01qPt

— AFP news agency (@AFP) August 30, 2016

Leaked papers allege US pressuring EU over TTIP free trade deal

German media say secret documents reveal the US has pressured the EU to approve a transatlantic free trade deal. The reports say Washington may block easier car exports if the EU doesn't open up its agricultural market.

Deutsche Welle, 2 May 2016

German media say 240 pages of text from secret transatlantic free trade talks obtained by Greenpeace show that the US is pressuring the EU.

Washington was blocking European car exports into the US to force the 508-million-population EU to buy more environmentally risky US farm produce, claimed the "Süddeutsche Zeitung" (SZ) newspaper and two German public television channels.

Greenpeace said it would publish the material later on Monday, contrary to strict secrecy maintained by US and EU negotiating teams during three years of talks on the proposed Transatlantic Trade and Investment Partnership (TTIP).

The TTIP is unpopular in Germany. On the eve of US President Barack Obama's visit to a major Hanover trade exhibition last week, tens of thousands of opponents demonstrated.

Documents seem authentic

The German news agency DPA said persons close to the talks had confirmed the authenticity of the documents. Accessibility so far has been strictly limited.

By blocking an easing of car exports into the US, Washington wanted the EU to replace its precautionary consumer safety principle with the liberal US approach of permitting foodstuffs until risks are proven, said the media outlets, including the ARD network's channels NDR and WDR.

The EU's principle that goods must first be certified as safe has often been cited by the EU to constrain imports of American gene-manipulated and hormone-treated produce.

TTIP opponents rallied as Obama headed to Hannover

Public arbitration panels blocked

The German outlets said the documents disclosed by Greenpeace also showed that the US was blocking an EU demand that arbitration panels to handle corporate lawsuits be public not private as sought by Washington.

Greenpeace trade expert Jürgen Knirsch said what had so far trickled out of the talks had "sounded like a nightmare."

"Now we know that this could very much become reality," said Knirsch.

The head of Germany's consumer advisory bureaus Klaus Müller told the SZ that the texts confirmed "pretty much all of our fears in terms of what the US-Americans want to achieve on the food produce market through TTIP."

Merkel and Obama called for 'urgency' on TTIP

Urgency sought by Obama, Merkel

Visiting Hanover last week, US President Barack Obama together with German Chancellor Angela Merkel called for urgency at the TTIP negotiations.

Obama said he hoped it would the talks would be concluded in 2017, beyond the next US presidential election due in November this year.

Last Friday in New York, the lead US and EU negotiators - US Trade Representative Daniel Mullaney and the European Commission's Ignacio Garcia Bercera - said they hoped to reach a deal before Obama leaves office in January.

ipj/jr (dpa, AFP, Reuters)

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Lack of transparency is being criticized: TTIP negotiations have been taking 

place behind closed doors

German frustration builds over TTIP secrecy from US

German parliamentarians are demanding access to documents that contain the US position on transatlantic trade negotiations. TTIP supporters in the US argue that Washington shouldn't lay all of its cards on the table.

Deutsche Welle, 31 Oct 2015

In Germany, the documents are only available in the US embassy in Berlin. Known as "consolidated texts," they can contain the positions of both Brussels and Washington on key aspects of the Transatlantic Trade and Investment Partnership (TTIP).

Access to the embassy reading room has been limited to 139 German government officials cleared by the Ministry for Economic Affairs. National parliamentarians do not have access under the current process, according to the US embassy's German-language website.

The German parliament is chafing under the restrictions. Even Chancellor Angela Merkel's center-right Christian Democrats, who support strong trans-Atlantic relations and generally favor a trade agreement with the US, have grown critical. Norbert Lammert, president of the Bundestag, warned this week that parliament would not approve an agreement if it wasn't given greater oversight during the negotiations.

"I see no chance that the Bundestag would ratify a trade agreement between the EU and the USA without involvement in how it came together or any say regarding alternatives," Lammert said.

According to Daniel Hamilton, the executive director of the Center for Transatlantic Relations at Johns Hopkins University, Washington is concerned that providing greater access to the draft documents will result in leaks that could undermine the negotiations before a text is finalized.

"The real answer here is that in the end TTIP will be a mixed agreement in EU jargon, which means all member-state parliaments plus the European parliament will have to approve it," Hamilton told DW.

"So 29 different parliaments will have to approve this," he said. "They will have full access to everything obviously once they get that far, but they're not that far."

'Disenchantment with the EU'

The US position has softened somewhat. Until May, the consolidated texts weren't available in the EU member states at all. There was a reading room at the US mission in Brussels where cleared officials could view the draft documents.

Under pressure from the member states, Brussels negotiated with Washington to make the documents more accessible. The two sides agreed to set up reading rooms in US embassies throughout the EU. The current arrangement is based on the practice in Washington, where select officials are given clearance to read draft trade documents in secured rooms.

"There's been a lot more transparency than we've had in the past," Joseph Quinlan, an expert on trans-Atlantic economic relations and chief market strategist at US Trust, told DW. "You can't show the world your cards and not expect the people you're negotiating with across the table not to know what your cards are. There's a fine line there."

Many believe the process is still too opaque. According to the daily Tagesspiegel, those officials who have been cleared can only access the reading room two at time, twice a week, for two hours each session. And they can only use a pencil, pen and paper to take limited notes, the daily says.

Some organizations have taken matters into their own hands. Wikileaks has offered a 100,000-euro ($110,090) reward for TTIP documents. There have been repeated Internet leaks to the investigative journalism platform Correctiv.org, based in Germany.

Wikileaks also wants access
to the documents

In response, the European Commission temporarily allowed access only to the Brussels reading room over the summer, refusing to forward the consolidated texts to the national capitals. German Vice Chancellor Sigmar Gabriel - a cautious supporter of TTIP - criticized the move, calling it a "very regrettable step backward."

"There's disenchantment with the EU and the Commission broadly across Europe, and TTIP becomes an area in which they vent those frustrations," Hamilton said.

Strong German opposition

Limiting access to the consolidated texts may be fueling the anti-TTIP fire. In October, more than 150,000 people protested against the proposed trade agreement in Berlin, the largest demonstrations in Germany since the run-up to the Iraq war in 2003. According to a 2014 Eurobarometer poll, 39 percent of Germans support TTIP while 41 percent are against.

"There's a general sense in Germany that German standards are world class and that American standards simply aren't and that it's all about the American Übermacht coming over and steam rolling the European way of life," Hamilton said. "Without much substance behind that, it's kind of a gut feeling."

The opposition is more pronounced in Germany. In the other major EU states, clear public majorities support the trade deal - 65 percent in the UK, 50 percent in France, 58 percent in Italy, and 73 percent in Poland. But as the EU's largest economy and most populous country, the success or failure of TTIP will likely be decided in Germany.

"I don't think the [German] government nor the members of parliament who are pro TTIP have been very well organized," Hamilton said. "They have not tried to articulate the case why you want TTIP. The business community has been passive."

"Those criticizing have been well organized," Hamilton said. "They have a pan-European organizational structure and they are active. They have simply taken the initiative away from the proponents."

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.

Dutch MPs call for national laws to have priority over TTIP trade treaty

DutchNews.nl, March 31, 2015

The Dutch parliament on Tuesday overwhelmingly voted in favour of a motion stating a new trade treaty between the US and Europe should not disadvantage the Dutch legal system and Dutch democracy. 

The TTIP is a new free trade agreement which supporters say will boost prosperity on both sides of the Atlantic. However, its detractors claim Europe will lose control over product safety and workers rights and that it will give big business free play to challenge government policies. 

One section of the treaty allows a company to make a legal claims against a country if it considers its interests are being damaged. This could include being refused permission to sell products or being forced to comply with environmental legislation. 

The Dutch cabinet supports the TTIP in principle but trade minister Lilian Ploumen is trying to ensure it is amended in places, broadcaster Nos reports. The motion states that the Dutch values ‘such as human dignity, freedom, democracy, equal rights and the protection of the environment and human rights must remain guaranteed’. 

The TTIP may not include any ‘dispute settlements which are detrimental to our national legal system and our democratic decision-making process’, the motion said. 

The motion was supported by parties from across the political spectrum, except the ruling VVD.

Rutte and Chinese president Xi Jinping. Photo: flikr.com/

minister-president

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