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Canada agrees to special court for transnationals to sue governments with CETA


While negotiations on the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) were concluded almost three years ago, Canada and the EU announced today that they have agreed to changes to the controversial investor-state dispute settlement (ISDS) provision in the yet-to-be ratified deal.

Reuters reports, “In a statement, Canada and the EU said they had made changes to increase the rights of governments to regulate and set up a permanent and transparent tribunal to settle disputes. ‘We have responded to Canadians, EU citizens, and businesses with a fairer, more transparent system … We are confident that CETA will be signed in 2016 and will enter into force in 2017’, the statement said.”

According to the news report, Canada and the EU now say:

  • governments would be free to set policies, “even those that hit investors’ profit expectations”

  • the tribunal would not work in secret

  • the tribunal would be chosen by governments, rather than partly by investors

  • there would be the right to appeal its decisions

  • they would seek to create a permanent multilateral investment court in the future.

While details on this are sparse at this point, these amendments were reportedly made somehow during a “legal review” of the deal without technically reopening negotiations.

Canadian trade minister Chrystia Freeland says, “I’m absolutely confident that Canadian investors and Canadian businesses will have their rights fully protected in this agreement.”

That’s very likely the case, and to the detriment of the public good.

CBC reports, “The Council of Canadians, which had been in Europe trying to mobilize opposition to the investor-to-state dispute settlement (ISDS) mechanism, said today’s announcement was ‘smoke and mirrors’. ‘It still enshrines corporate rights and enables giant European corporations to sue the Canadian government’, said Garry Neil, executive director of the Council of Canadians in a written statement. ‘Tinkering with the dispute settlement process doesn’t change this fundamental flaw.'” Reuters also reports, “The Canadian consumer rights group Council of Canadians called it ‘smoke and mirrors’, while Friends of the Earth Europe described CETA as dangerous and said it should be rejected.”

When EU trade commissioner Cecilia Malmström first proposed to reform the ISDS provision in the United States-EU Transatlantic Trade and Investment Partnership (TTIP), Council of Canadians chairperson Maude Barlow commented, “This reform still fails to require foreign investors – like everyone else, including domestic investors – to go to a country’s domestic courts before seeking an international remedy. The proposed investment court system still gives a special status to foreign corporations by allowing them to challenge the laws that apply to everyone else through a special system outside established court systems.”

Today, Barlow stated, “This is a dangerous new way to give transnational corporations their own court, which local companies and groups can’t access. These changes don’t address the concerns that led to the massive public outcry over ISDS in both Canada and Europe.”

Our allies including War on Want, Transport & Environment, and Friends of the Earth Europe oppose the European reform of ISDS. Global Justice Now has highlighted that 97 per cent of respondents in a consultation rejected investor-state provisions in any form. French MEP Yannick Jadot says, “It is necessary that Member States hear that European citizens do not just want a change at the margin of the arbitration, but removal of the provision.” And MEP Ska Keller says, “[This] would be little more than a PR stunt, ignoring the core of the problem. The proposal changes nothing about the fact that investors get an extra-judicial system that will only deal with their rights, not their obligations.”

It is expected that CETA will go before the European Parliament for ratification votes either in late 2016 or early 2017. Prime Minister Justin Trudeau has already instructed trade minister Chrystia Freeland “to implement” CETA.

For more on our campaign against CETA, please click here.

Further reading
Trudeau reportedly pressuring India against reform of ISDS provision (Feb. 17, 2016)