Resistance Grows To Inclusion Of Corporate Sovereignty In Canada-EU Trade Agreement (CETA)
from the just-get-rid-of-it dept
Remember CETA, the Canada-EU trade agreement, officially known as "Comprehensive Economic and Trade Agreement"? You could be forgiven for losing track of where things were with the negotiations, which have been dragging on since 2009, but a kind of milestone was passed recently:
Commission President José Manuel Barroso and Canadian Prime Minister Stephen Harper have today reached a political agreement on the key elements of a Comprehensive Economic and Trade Agreement (CETA) after months of intense negotiations between EU Trade Commissioner De Gucht and Canadian trade Minister Ed Fast. It will be the first free trade agreement between the European Union and a G8 country.
Despite that "political agreement", there still remains plenty to be done, as this CBC article explains:
Some areas of the agreement still need drafting, while others need fine-tuning, reporters learned through a briefing. But the most contentious points have been settled. The agreement text then has to be drafted, run past lawyers and translated into 24 languages for the 28 EU countries to examine.
The document Harper and Barroso signed Friday is an agreement in principle and full ratification is likely two years away.
Although the CBC post claims "the most contentious points have been settled", that's not true for one of the most controversial areas: corporate sovereignty, officially known as investor-state dispute settlement -- and resistance is building. For example, the European Trade Union Confederation, which claims to represent more than 60 million workers in Europe, "strongly opposes the inclusion of ISDS in CETA." And as negotiations on the ISDS chapter begin, over 80 organizations have put together a "transatlantic statement" calling for the corporate sovereignty chapter to be withdrawn from CETA completely:
As European and Canadian trade officials meet again in Brussels today to continue negotiating an investment protection chapter in the Comprehensive Economic and Trade Agreement (CETA), transatlantic civil society groups are demanding that this chapter be removed entirely as an affront to democracy, an attack on the independent judiciary, and a threat to climate change and our shared environment.
The accompanying statement (pdf) provides a useful summary of why the inclusion of corporate sovereignty in so-called trade agreements is so worrying. Here are some of the main points:
The CETA "will include a controversial and unnecessary investment protection chapter and investor-to-state dispute settlement process (ISDS) that a growing number of countries are rejecting for good reasons," says the transatlantic statement, which is endorsed by more than 80 organizations in the European Union, Canada and Quebec. "These excessive corporate protections, built into thousands of investment treaties and free trade agreements, serve no social or economic purpose other than to undermine our democratic rights to decide public policy and public interest regulation."
CETA will permanently freeze existing rules governing investment and then strictly limit government regulation of services, investment, natural resources, environmental protection and public safety measures in the interests of corporations. All existing government policies in all these areas that have not been excluded from the agreement up front will be covered, making it difficult for countries to introduce new services or regulations in the future that affect however modestly the investment opportunities of foreign companies and investors.
In fact, changes to regulations are still possible, but the ISDS chapter means in practice that they will always be in favor of corporations, not the public. That's because the intentional asymmetry of corporate sovereignty allows companies to sue a government for unlimited sums when they don't like changes in regulations, but the public has no equivalent rights. This naturally encourages governments to listen to corporations and ignore its citizens.
There is no comfort in claims by the Commission or Canadian government that "frivolous" claims, or challenges to environmental policy, will be filtered out. Despite efforts in the North American Free Trade Agreement (NAFTA) to limit what kinds of government decisions might violate an investor's minimum standards of treatment or other investment chapter protections, Canada continues to face investor-state disputes attacking environmental measures that affect national and foreign investors in exactly the same way (e.g. a partial
moratorium on shale gas extraction in Quebec).
The declaration has a good explanation why this happens:
Likewise, we are not satisfied by efforts to limit the meaning of "indirect expropriation" so that legitimate public welfare objectives should be immune from investor challenges. The final determination is always made by the private investment tribunals themselves, and these unaccountable tribunals have a built-in bias toward the interests of multinational corporations.
Techdirt readers may recall that it was precisely this concept of indirect "expropriation" that Eli Lilly invoked when suing Canada under NAFTA's ISDS section. As the declaration rightly notes, the lawyers who make up ISDS tribunals are inherently biased in favor of corporations because they can represent the same companies in other corporate sovereignty cases -- an extraordinary conflict of interest.
Finally, the declaration points out why it is really important to remove the ISDS chapter from CETA before the final ratification:
Whatever the EU gets away with in CETA, including on investment protection, will just create a new ground floor on which multinational corporations will build even more.
The way all these agreements work is that they seek to take the results of previous treaties as a baseline, and then go beyond them -- but always in favor of big business, never to the benefit of the public. That means one of the best ways of fighting corporate sovereignty in TAFTA/TTIP is to make sure it's taken out of CETA.