The Comprehensive Economic and Trade Agreement between Canada and the European Union (CETA) and its Impact on Property and Zoning in Germany

Abstract

The European Commission hopes that the Comprehensive Economic and Trade Agreement with Canada (CETA) will result in increasing wealth, more competitiveness, and hundreds of thousands of new jobs. There are also plans to harmonize standards and to introduce or monitor new regulations and norms that go beyond the existing member-state legal framework and are to be safeguarded by means of regulatory collaboration and legal supervision. The debate on CETA has not yet reached planning law, construction law, or procurement law in practice. Land as immovable property is mentioned explicitly as an investment asset, and land policy is the “blind spot” in foreign investment treaties. This chapter analyzes the current dynamics for the comprehensive land policy structure in Germany. In this paper, the purpose and proportionality test of CETA—from the constitutional and national spheres down to the municipal level—will comprise of the criteria of fairness, legitimacy, the balancing of investors’ expectations, and states’ regulatory measures. This chapter explains why the standards and provisions of CETA potentially conflict with the constitutionally guaranteed principle of local self-governance in land policy. The democratic legitimacy of foreign investment treaties regarding real estate remains to be verified, since the controversial relation and distinction between lawful regulation, the fair and equitable treatment standard, and indirect expropriation, lack substantial empirical evidence.