The Mint, a ‘premium’ newspaper in India that was launched in collaboration with the Wall Street Journal, reports, “India is likely to exclude in bilateral trade pacts a clause that permits a foreign investor to sue the host country at an international dispute settlement agency. The department of industrial policy and promotion (DIPP) has in principle decided not to include such a condition, an official said on condition of anonymity, which allows firms of the partner country investing in India to take legal action against the government at a global forum in case of any dispute.”
This is notable, in part, because Canada has already completed three rounds of talks with India for a free trade agreement (more specifically a Comprehensive Economic Partnership Agreement, or CEPA). In his speech to the World Economic Forum in Davos last week, Stephen Harper stated, “We will work to complete negotiations on a free-trade agreement with India in 2013.”
Simillarly, the newspaper reports (as trade campaigner Stuart Trew has also noted in his blogs), “Australia has said that it will not include a clause that allows an overseas investor to sue the country at any global arbitration body in any of its future bilateral trade agreements.”
Furthermore, an official with India’s department of industrial policy and promotion goes as far as to say, “This is now the view worldwide that the state should not get drawn into private disputes. That’s why we are cautioning to be more careful.”
Significantly though, the article notes, “The contentious (investor-state) clause is part of the bilateral investment promotion and protection agreements (BIPAs) that India has signed with 82 countries. Out of these, 72 have come into force and the remaining pacts are in the process of being enforced. Whenever a CEPA is signed with a country or region, the BIPA is weaved into the investment chapter of the trade agreement. While CEPAs are the turf of the commerce and industry ministry, BIPAs are signed by the finance ministry. The DIPP official said the department also wants to review this particular clause in all the existing BIPAs. However, a finance ministry official said BIPAs help Indian companies more than the foreign firms. …The DIPP official said irrespective of the finance ministry’s move, his department would like to review the clause in the existing CEPAs.”
In early-November, the Guardian UK reported, “Like NAFTA, (a recently concluded ‘energy charter’ between the European Union and fifty-one other countries) permits, perhaps inadvertently, western European investors…to bring claims against other European governments such as the German, French and British. The recent claim by (the Swedish energy company) Vattenfall (against Germany’s nuclear phase-out) warns of another crack in European cohesion as European investors start using investor-state arbitration in treaties governed by public international law, which will prevail over national and European Union law.”
For a campaign blog about the Canada-India CEPA talks, please see http://canadians.org/blog/?p=12821.
