In April 2012, the Harper government launched a propaganda campaign in response to growing criticism of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). The campaign material, housed on a new DFAIT webpage, attempts to respond to several claims about CETA which the government believes to be myths. Unfortunately, in answering these claims, the Harper government introduces even more misleading and even false information about the impacts that “next generation” trade agreements like CETA will have in a number of social and public policy areas. Today, the Council of Canadians responded to Harper’s propaganda campaign with a new report called The CETA Deception. In it, we challenge the government’s reassurances that its EU trade deal will not affect public health or environmental regulations, will not allow foreign corporations to challenge public policy, will not undermine public services or municipal democracy, will not increase drug prices or hurt Canada’s supports for arts and culture. In each case, the government’s position is either misleading or demonstrably false.
HARPER SAYS: CETA will create $12 billion in new wealth and put $1,000 into the pockets of every working family, which is equivalent to creating 80,000 new jobs.
WE SAY: The magic $12 billion figure has been seriously discredited since it made a first appearance in 2008. An independent assessment of CETA done for the European Commission estimates a GDP boost of between ¼ and ½ that amount, or between $3 and $6 billion. But even the lower estimate needs to be taken with a grain of salt since the economic modelling used to calculate all these numbers assumes full employment, total reinvestment of trade gains into new production, and other conditions that don’t exist in the real world. In fact, studies have shown that CETA will lead to job losses by increasing Canada’s existing trade deficit with EU countries and reinforcing an imbalanced trade relationship where we export raw resources to the EU and import high-value manufactured goods.
HARPER SAYS: Canada’s free trade agreements exclude health care, public education and other social services maintained for a public purpose.
WE SAY: Public pressure forced the Canadian government to seek better protections for health care in the North American Free Trade Agreement (NAFTA) but CETA could undermine those protections. As private, for-profit activity increases in health care, education and other social services, it’s not clear a trade or investment panel would agree that these are services “maintained for a public purpose.” As proposed by Scott Sinclair, senior trade expert with the Canadian Centre for Policy Alternatives, Canada should negotiate a new exemption, modeled on the cultural exemption in Canadian trade deals, which assures that nothing in CETA “shall be construed to apply to measures adopted or maintained by a party with respect to health care, public health insurance, public education and other social services.”
HARPER SAYS: Free trade deals like CETA do not prevent governments from regulating standards that protect the public, including in the areas of the environment, labour, health care and safety.
WE SAY: CETA and free trade deals like it are designed specifically to limit opportunities for governments to introduce new rules and regulations that have an impact on trade and investment flows, even if the intention of the rules was to protect the environment or public health. The United States has just lost three World Trade Organization disputes involving meat labelling, a ban on flavoured cigarettes to discourage smoking among children, and voluntary measures designed to protect dolphins from tuna fishing. CETA and other trade deals include language on avoiding new regulation as the best and least trade-distorting option. CETA will provide Canada and the EU with tools to frustrate or delay the introduction of new standards. It will give corporations the right to sue governments in the event that regulations interfere with their profits.
HARPER SAYS: Canada’s FTAs do not force governments to privatize, contract out or deregulate water-related services.
WE SAY: European member states are so concerned about how CETA might affect their ability to deliver public water services that they have proposed to exclude drinking water from their side of the bargain. With only one exception in Yukon, federal government, provinces and territories have not asked for the same protection for water services, which leaves Canada’s public water systems vulnerable to claims by the EU or its large private water companies that their investment opportunities are being undermined either by local water monopolies, or, where there is already some level of privatization, by new water use or other standards.
HARPER SAYS: CETA and free trade deals do not allow foreign investors and foreign companies to challenge Canadian laws and regulations.
WE SAY: NAFTA’s chapter 11 protections for foreign investors have allowed corporations to challenge dozens of Canadian laws and regulations simply because they interfere with profits. Canada is the sixth most sued country under the investor-state dispute settlement regime, which exists in around 3,000 bilateral investment treaties globally. Those corporate lawsuits have attacked environmental assessments, the failure to get approval for unpopular or environmentally dangerous quarries and dumpsites, measures to reduce the use of pesticides, research and development payments from offshore oil and gas production, the way hunting and fishing licences are distributed, and local content quotas in Ontario’s Green Energy Act. Canada has had to pay out or is on the hook for over $200 million in settlements or losses to investors under these extreme investor rights which countries such as Australia are now avoiding in their trade deals.
HARPER SAYS: It is a myth that a Canada-EU free trade agreement would increase drug and health care costs.
WE SAY: It is a certainty that extended patent and other monopoly protections for brand name drug companies will increase the price of drugs. These controversial changes in CETA’s intellectual property rights chapter are estimated to add almost 3.5 years to the time it takes to put cheaper generic drugs onto the Canadian market. That means public and private drug plans will be paying higher prices for longer, adding nearly $3 billion annually to the already inflated price of drugs in Canada. Provincial governments are so concerned that they have asked the federal government to compensate them in the event that CETA results in higher drug prices.
HARPER SAYS: It’s a myth that CETA would prevent Canada’s municipal governments from sourcing goods and services locally.
WE SAY: The procurement rules in CETA will prohibit any covered government or public agency from preferring one bidding firm over another based on the amount of Canadian or local content in the goods or services that firm is offering. Already procurement, or public spending, is open and transparent in Canada. Already European firms bid on and win major construction and other projects. The only thing CETA does is lock municipalities into one way of spending, where the lowest bid wins every time. It means giving up the right to use procurement as a sustainable development or job creation tool.
HARPER SAYS: CETA has been the most open and transparent trade negotiation in Canadian history.
WE SAY: So why did it take the government three years to try to explain the agreement to the public? The fact that the provinces are negotiating a trade deal for the first time says nothing about transparency since the provinces are being even more tight-lipped than the Harper government. There have been and will not be any opportunities to see or modify CETA before it is signed, perhaps as early as this winter. Once it is signed, the Harper government will block attempts to modify it in parliament. This is the antithesis of transparency. If CETA and agreements like it are supposed to be 21st century or “next-generation” free trade deals, they should be negotiated in 21st century ways — openly, transparently, and with broad public input.