The Fetishization of Trade Policy

It seems that the Greek government loves conflicts and disagreement. This time I am not talking about the sagging negotiations between the Brussels Institutions and Athens about ‘reforms’ in exchange for money. This time it is about the statement from Greece not to ratify the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada if the agreement will not explicitly protect the product name ‘Feta’, and thus not allow Canadian producers of this type of Greek cheese to print Feta on their labels. The agreement in its current version foresees that Canadian producers who made this type of cheese before 2013 still have the right to name its product Feta and that any new producers is banned from this naming. The Syria-led government does not like this regulation at all and wants to protect the name Feta forever, and thus the threat not to ratify CETA. This Greek policy stance can become problem if CETA would be characterized – as it will probably happen – as a mixed agreement. Such an agreement needs besides a European Parliament ratification also the ratification of national parliaments. This gives Greece bargaining power and more so veto power.

If this sounds like a small issue that can easily be resolved, then listen to Austrian Chancellor Faymann who made clear that he sees the investor-state-dispute settlement (ISDS) mechanism with private courts as totally not acceptable. He made this comment in regards to the ongoing TTIP-negotiations with the US but given that CETA exactly entails this mechanism one wonders what the Austrian stance means for CETA. If logics would hold in politics, then Austria would join Greece, only for different reasons. ISDS is a contagious issue anyways. EU Trade minister now circulates a plan to go for a public international investment court. Depending from details this could be seen as progress as such a court would move arbitration from the dark into light. Still, the question is why it needs special courts to address conflicts between investors and states that could easily be solved within existing legal systems. At this point, chances are slim that the US would be willing and ready to move away from established practices, not least as this form of arbitration is a easy money making machinery for a small group of lawyers. Again, the question is why the EU and national European governments would sign off an agreement like CETA that cements a mechanism the same governments oppose?

It seems to me that ISDS is an issue that can easily be dealt with, if both sides have enough political will and capital to move away from previous practices. Solving the Feta issue may be more difficult but then the problem may go away anyway if Greece eventually would leave the EU, for totally different reasons, though.