“CETA, in its current state does not effectively protect the environment,” states the Canadian Environmental Law Association in a new report on the Canada-EU Comprehensive Economic and Trade Agreement. The report, based on previous leaked versions of the draft CETA text and released just days before a 9th round of Canada-EU trade negotiations will take place in Ottawa, lists the potential liberalization of essential public services such as water, and the inclusion of an investor-state dispute process as amongst the most controversial parts of the deal. But CELA adds, “The narrow definition of ‘environmental laws’ and narrow exceptions for those ‘environmental laws’ from stringent liberalization provisions are also of concern.”
CELA has been critical of past free trade deals. In the opening lines of its new report, the association says:
If free trade agreements (‘FTA’s) are not drafted carefully, they can seriously hamstring the ability of governments to enact legitimate public interest policy. Without appropriate safeguards, FTA’s can be detrimental in the long-term, in areas such as public health, reduction of poverty, sustainable development, and environmental protection generally.
The association makes several recommendations it considers to be bare minimum changes to CETA in order to protect the ability of governments to set appropriate environmental policy. Notably, CELA opposes the inclusion of an investor-state dispute process, as does the recent final draft of the EU’s Sustainability Impact Assessment of the proposed Canada-EU deal. The association also writes it “does not support the liberalization of essential public services, such as drinking water and waste disposal.”
CELA’s recommendations compiled at the back of its new report include:
Generally
• Broad exceptions for environmental protection policy, in particular, the removal of necessity requirements.
• Include a broad definition for ‘environmental laws.’
• Include a climate chapter.
• The precautionary principle should be listed as a valid defense for the enactment of environmental policy.
• There should be unbound flexibility for governments to put in place policy to protect nonrenewable resources necessary to support human and ecosystem health.
National Treatment principle
• Flexibility for local governments to enact geographically specific public interest policy.
Government Procurement & Offsets
• Include an allowance for green government procurement policies.
• Exclusions for sub-national governments.
• Include an ‘offset justification’ provision.
Limiting Technical Barriers to Trade
• Labeling standards should be guided by the precautionary principle and should enable eco-labeling requirements.
Subsidies
• Allow for environmental subsidies.
Environmental Consultations & Dispute Settlement
• Environmental experts should not be an optional part of the expert panels, but rather, should be mandatory.
• The environmental dispute settlement mechanism should apply to any environmental measure being challenged under CETA, rather than just matters under the environment and trade chapters.
• Environmental measures under dispute should not expose parties to the threat of monetary compensation, as this serves as a regulatory chill to governments considering putting in place environmental legislation.
Multilateral Environmental Agreements (MEAs)
• Include a positive listing mechanism for external MEAs.
• Remove any references to necessity.
• Environmental disputes arising under MEAs should be handled under their dispute settlement mechanisms rather than under any CETA dispute mechanism.
Expropriation
• The definition of indirect expropriation should be limited.
• Foreigner investors should not be granted rights greater than those of domestic investors in relation to expropriation.
Investor-State Dispute Settlement Mechanisms
• Following the lead of the United States and Australia, CETA should not include an ISDS mechanism.
• Any included dispute settlement mechanism should ensure that tribunal members are required to defer to environmental experts when dealing with environmental matters.
• A monitoring group on investments should be established.
Market Access
• CETA should not open essential public services like water and sewage treatment to market access.
To read the full report, click here.