"ISDS lawsuits are decided by private commercial arbitrators who are paid for each case they hear, with a clear tendency to interpret the law in favour of investors."
The video helps to explain the so-called "free trade" agreement now being negotiated between the United States and the European Union. In doing so, it promotes popular literacy on the issue and popular resistance to the deal. US and European negotiators had hoped to agree to a draft TTIP text by this coming December, but now concede negotiations will extend into 2016 (thus narrowing the window for ratification given the November 2016 presidential election cycle).
In particular, the video does a good job of explaining what's wrong with the investor-state dispute settlement (ISDS) provision.
A report produced by the Council of Canadians and allies in Europe and Quebec explains, "The ISDS mechanism gives foreign corporations the ability to directly sue countries at private international tribunals for compensation over health, environmental, financial and other domestic safeguards that they believe undermine their rights. These investor-state lawsuits are decided by private commercial arbitrators who are paid for each case they hear, with a clear tendency to interpret the law in favour of investors. ISDS can prevent governments from acting in the public interest both directly when a corporation sues a state, and indirectly by discouraging legislation for fear of triggering a suit."
The report also highlights, "Canadian subsidiaries of US-headquartered multinationals will also be able to use the Comprehensive Economic and Trade Agreement (CETA) to sue European governments, even if the EU eventually excludes or limits investor-state dispute settlement within the Transatlantic Trade and Investment Partnership (TTIP) currently under negotiation with the US. This is particularly worrying for Europeans as US corporations dominate the Canadian economy. EU-based subsidiaries of foreign companies would also have the same power to challenge measures in Canada."
As CETA moves toward ratification votes in early 2016, it should be noted that some European governments and parties have argued for reforms to the ISDS provision including: 1) bringing national courts into the investor-state system; 2) establishing an appeal system administered by an international organization so that arbitration tribunal decisions could be challenged; and 3) addressing conflict of interest issues in arbitration cases. And the European commissioner for trade Cecilia Malmstrom is also reportedly trying to use the 'legal scrubbing' process for the deal to modify its ISDS provision.
But the Council of Canadians stands with its European allies who assert that this is insufficient and that what is needed is not a revision of the arbitration mechanism, but its removal.
And given the Harper government refuses to re-open negotiations on the deal to amend the ISDS provision, we continue to argue that CETA, as noted in our report, "will significantly expand the scope of investment arbitration, exposing the EU, its member states and Canada to unpredictable and unprecedented liability risks."
To watch the handimation video, please click here.
For information on our campaign to stop CETA, click here.