Together with its decision on the ratification of the trade agreement with Canada, the German Cabinet today approved the German government's new trade policy agenda.

Dr Franziska Brantner, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action, said:

"The agenda approved by the Cabinet today launches the reform of our trade policy. Germany will now finally be able to champion a fair European trade policy. In other words, trade sanctions can be imposed or trade benefits withdrawn in the event of non-compliance with the Paris Agreement on Climate Change, the Biodiversity Agreement or the ILO Core Labour Standards. At first glance, compliance with these agreements seems to be something we should be able to take for granted but unfortunately it is not. Until now, no one has looked behind the scenes and specifically asked individual countries about whether their economic growth has met sustainability criteria or whether it has been achieved without violating core labour rights. We now want to help these countries to establish a solid economic foundation that accommodates climate protection requirements and paves the way for the green transformation. It goes without saying that trade should always be mutually beneficial. However, when entering into a trade agreement, we are now inquiring about what precisely that benefit consists in and who will profit from it now and in the future. Based on this information, we formulate our trade policy objectives and the agreements we seek to conclude. Also, we are not opposed to investment protection. But we are opposed to unconditional protection of profit expectations, which leads to lock-in effects and hampers development. Specifically, we want to ensure that, in future, investment protection rules focus on protection against direct expropriation and discrimination. As a next step, we seek to ensure that these principles become the benchmark for trade policy throughout the EU.”

With today's decision in the Federal Cabinet on the trade policy agenda and the CETA ratification law, the Federal Government is quickly and swiftly implementing the agreement reached by the SPD, FDP and Green party parliamentary groups on 23 June 2022. This clears the way for referral of the CETA ratification bill to the Bundestag.

The negotiations for a free trade agreement with Canada were concluded with the EU, its Member States and Canada signing CETA on 10 October 2016. CETA has been provisionally applied since September 2017. However, it cannot fully enter into force until all EU Member States have ratified it. The economies of the European Union and Canada are already closely interconnected thanks to diverse investment and trade links. There is massive potential for expanding and further developing economic relations with Canada. Stepping up trade and investment is vital to make supply chains more resilient, gain greater access to critical raw materials and facilitate investment in green technologies.

In addition to this important decision on CETA, the Cabinet also approved the trade policy agenda today. With this new trade policy agenda, the Federal Government commits itself to ensuring that future trade agreements are linked to compliance with fundamental international treaties and agreements such as the ILO core labour standards, the Paris Agreement on Climate Protection and the Convention on Biological Diversity. In the event of non-compliance, these cases will be negotiated by means of dialogue and mediation structures and ultimately be punished by trade restrictions.

In the future, inter-institutional agreements are to be used as a tool to ensure better democratic participation when it comes to implementing free trade agreements.

On this basis, the Federal Government will seek to achieve ratification of the trade agreement with the Mercosur states.

The draft law is available here.

The key issues paper can be found here.