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January 31, 2019

Full coming into force of Canada-EU trade agreement takes a step forward

The final ratification of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) by all EU countries has taken a step forward following a decision this week by the Advocate General at the European Court of Justice, Yves Bot.

Some EU members are contesting aspects of the deal regarding investor protections. Belgium requested the European Court of Justice's opinion concerning the compatibility of the mechanism for the settlement of disputes (ISDS) with EU law.

Under CETA the parties would create a Tribunal and an Appellate Tribunal to deal with conflicts between governments and investors. The aim is thus to establish an 'Investment Court System' (ICS).

In essence, Belgium brought the case to court expressing doubts as to the effects of such a mechanism on the exclusive jurisdiction of the European Court over the definitive interpretation of EU law.

According to Advocate General Bot's ruling this week, the mechanism for the settlement of disputes between investors and States provided for by the free trade agreement is compatible with EU law.

The agreement does not adversely affect the autonomy of EU law and does not affect the principle that the Court of Justice has exclusive jurisdiction over the definitive interpretation of EU law. The Advocate General considers that the safeguards surrounding the establishment of the dispute settlement mechanism are sufficient.

The Advocate General opinion is not the definitive ruling of the court, but the EU judges follow the criteria of their advocate generals in more than two-thirds of cases.


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