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CETA changes make investor-state provisions worse

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In a recent editorial, the Globe and Mail endorsed proposed changes to the Canada-Europe Comprehensive Economic and Trade Agreement (CETA), namely to the investment-state dispute settlement provisions that allow foreign corporations to sue governments over regulatory changes that affect their profits.

These changes include modifying the lawsuit and arbitration provisions so that they would resemble, in the Globe’s words, “more of a court,” thus helping the agreement pass through the European Parliament.

The editorial board argues, “Fixing CETA in this way would respond to critics of the deal, while improving it. Sounds like a win-win. Where do we sign?”

Having toured Europe and met with both politicians and grassroots groups, I can tell you that a court system is not going to placate European activists or many parliamentarians. Some are already calling it a PR stunt that does nothing but put a Good Housekeeping seal of approval on an already flawed system.

It won’t convince them to support this dangerous deal.

French MEP Yannick Jadot declared, “European citizens do not just want a change at the margin of the arbitration, but removal of the provision.” German MEP Ska Keller stated, “The proposal changes nothing about the fact that investors get an extra-judicial system that will deal only with their rights, not their obligations.”

Not only do the proposed changes fail to address concerns about the investor-state provisions, they actually make them worse. The reforms enshrine extra rights for foreign investors that everyone else – including domestic investors – don’t have. They allow foreign corporations to circumvent a country’s own courts, giving them special status to challenge laws that apply equally to everyone through a court system exclusively for their use.

Some have called it an oversized public insurance scheme for companies that are unwilling to assume the normal risks of doing business.

Even to call the new arbitrators “judges” is a misnomer, as these tribunals will not be taking into account environmental protection, human rights or other non-corporate considerations that a regular judge usually has to balance. What’s more, the arbitrators of this new court system can moonlight as lawyers with the very same corporations that are launching these cases. This is a lucrative business that could cloud an arbitrator’s judgment.

There is no proposal to set limits on how much a company can sue for, resulting in a continuation of the multi-million and billion lawsuits already on the table around the world.

It’s not an easy change to implement either. It will be politically difficult for Canada to agree to this revision as long as the Americans, who are negotiating their own Transatlantic Trade and Investment Partnership (TTIP) with the Europeans, seem to be rejecting it.

Furthermore, trying to sneak the changes in through the legal scrubbing process, without reopening the negotiation process, will lead to further questions about CETA’s democratic legitimacy.

While Marie-Anne Coninsx, EU ambassador to Canada, characterizes the opposition as “mainly led by many people who are anti-U.S., anti-globalization,” demonstrations against CETA and TTIP in Berlin in 2015 attracted over 250,000 people. Surely, they are not all “haters” of Uncle Sam.

Contrary to these lazy clichés, I can guarantee you that the opposition is organized, informed and sophisticated. Europeans are coming together irrespective of their differences in language, culture and country. Their issue is with corporate dominance, not with Americans.

The Europeans are calling for a completely different paradigm on how we look at trade agreements. There are many countries – Brazil and India, to name only two – that have rejected trade agreements with investor-state provisions. That should be the future of trade agreements, not quasi-judicial tribunals that exclusively serve foreign corporate interests.

Published in the Huffington Post, February 2, 2015