October 10, 2016 / 3:17 PM / in a year

Austria says German court ruling key to decision on EU-Canada trade deal

Austrian Chancellor Christian Kern addresses the media in Vienna, Austria, June 24, 2016. REUTERS/Leonhard Foeger/File Photo

VIENNA (Reuters) - Austria’s chancellor, who has expressed objections to a trade deal between the European Union and Canada that is due to be signed this month, has said that a German court ruling will strongly influence whether it goes through.

Chancellor Christian Kern is keeping other countries guessing on whether Austria will give its final approval for the Comprehensive Economic and Trade Agreement (CETA). EU ministers in charge of trade are expected to vote on the deal on Oct. 18 before a planned signing at an EU-Canada summit on Oct. 27.

Kern took over as head of Austria’s coalition government in May and raised objections to the deal in August, at which point the agreement was largely finalised. Trade deals like this one are unpopular in Austria, and his decision to resist the agreement at the last minute has raised doubts about his aims.

In an interview with broadcaster ATV due to be aired on Monday evening, Kern said much would depend on a ruling by Germany’s Constitutional Court on Thursday on a complaint brought by anti-CETA activists.

“I am convinced that the decision of the Federal Constitutional Court will have a great influence. If it is positive, then the Oct. 27 (summit) will hold, then there will be this signing ceremony,” he said in an extract released on Monday before the ATV broadcast.

While that suggested Austria would follow the German court’s lead, Kern also said it would depend negotiations still going on between EU states and Canada on a declaration accompanying CETA in Austria’s decision on the deal.

“I hope that by then we have improved this contract enough that it is acceptable to us,” he said.

Canada has emphasized that the declaration will not add new elements to the deal.

Major points that remain to be settled are whether the declaration will be legally binding and how far-reaching the decisions of investment tribunals created under the pact would be, particularly the damages they could award, Kern told ATV.

While it made sense for an expropriated investor to be awarded compensation, Kern said that if unlimited future earnings were included in the calculation of damages, that could lead to claims against governments worth billions of euros.

“That can really be a potential threat - that governments no longer dare take political decisions because they are afraid of these lawsuits worth billions of euros,” he said. “That is a point where we can imagine a clarification being made.”

Reporting by Francois Murphy; Editing by Louise Ireland

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