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Trade Justice Network releases “October Draft” of CETA

Yesterday, the Trade Justice Network met again in Ottawa to discuss campaign work against the Canada-EU free trade negotiations. Several important new reports about the Canada-EU Comprehensive Economic and Trade Agreement have come out over the past month, including a legal opinion we commissioned with the Indigenous Environmental Network on the likely impacts of the deal on tar sands development and regulation. Serious questions have also been raised in a CCPA report by CAW economist Jim Stanford on job losses, and separately by the National Union of Public and General Employees, Canadian Health Coalition and Canadian Generic Pharmaceutical Association on how CETA’s intellectual property chapter could add millions of dollars to the cost of health care in Canada (more on that in another post). Following the morning meeting, the network released a new draft of CETA from early October. The text, and recent statements from Canada’s lead negotiator, have renewed our fears that CETA will have a much more important impact on Canadian public policy than even NAFTA has. I’ll just touch on the new text here with some help from others.

INVESTMENT TRUMPS PUBLIC POLICY

According to Gus Van Harten at Osgoode Hall Law School and David Schneiderman, professor of law at the University of Toronto, in an voluntary review of CETA’s investment chapter for the Trade Justice Network:

The text replicates a typical model of international investment law that emphasizes investor protection over government policy space in areas such as financial regulation, economic development, public-private partnerships, and health and environmental protection… This raises general concerns about the implications of CETA for democratic choice, policy-making flexibility, and judicial independence in Canada and Europe. The model provides powerful mechanisms for large firms to frustrate regulatory initiatives without a comparable mechanism by which to regulate investors for failures to comply with domestic or international law.

Van Harten and Schneiderman are co-signers, along with 46 other international trade experts, of a recent Public Statement on the International Investment Regime. The statement, which is mentioned in an excellent column by Frances Russell today, recommends that states “should review their investment treaties with a view to withdrawing from or renegotiating them in light of the concerns expressed above; should take steps to replace or curtail the use of investment treaty arbitration; and should strengthen their domestic justice system for the benefit of all citizens and communities, including investors.”

In their review of the CETA draft for the TJN, Van Harten and Schneiderman continue:

From a Canadian perspective, it is troubling that the text omits exceptions contained in Canada’s Model Foreign Investment Protection Agreement for measures necessary to ensure financial stability, protect human health, and conserve natural resources. General exceptions for existing non-conforming measures of provincial governments, as contained in NAFTA, also appear absent. Overall, the text goes beyond NAFTA in its extension of privileges to foreign investors and fails to address a number of flaws of the NAFTA investment regime.

The academics note the absence of an investor-state dispute mechanism as exists in NAFTA Chapter 11. But we know from briefings with Canada’s lead negotiator that this is one of Canada’s main demands in CETA, awaiting only a mandate in Europe for the European Commission to negotiate the highly controversial and unnecessary process. If the EC does not get that mandate before CETA is signed, like the EU-Korea free trade agreement, a process will be built in to negotiate an investor-state dispute mechanism at the earliest opportunity.

A Canada-EU investment treaty with investor-state built in would be a clear stepping stone toward the failed Multilateral Agreement on Investment — a new global regime in which corporations, and not states, would decide what economic and social policies are acceptable or not.

“For jurisdictions with mature, democratic systems of justice that are available to protect all investors, it is inappropriate to give the final say over public law to arbitrators who are dependent on business and government officials for their financial and career advancement,” say Van Harten and Schneiderman in their review of CETA.

SUSTAINABLE DEVELOPMENT CUT IN HALF BY CANADA

At the top of the October draft of the CETA text we see a note that the Sustainable Development chapter has now been chopped into separate Labour and Environment chapters. We heard from Canada’s lead negotiator during one briefing session that the Canadian side was worried how the disciplines in a Sustainable Development chapter would affect market access in other parts of the agreement. Like in its traditional free trade agreements, the Canadian government appears to be trying to sideline environmental and labour concerns to unenforceable side-agreements, or in this case unenforceable chapters.

The Canadian Environmental Law Association put it this way in a briefing note for the Trade Justice Network:

Sustainable development has now been made a marginal issue that is only supported by the EU. However, it addresses a far broader range of issues and concerns that are of significance to environmental groups and the interests of civil society at large. Examples include mandated transparency and public participation, an emphasis on trade supporting sustainable development (e.g. through the promotion of fair/ethical trade and corporate social responsibility), the creation of a Board on Trade and Sustainable Development, and the creation of a Civil Society Forum. It would also include a definition of “Environment” that includes terrestrial and marine ecosystems, atmospheric conditions and climate change issues.

The Canadian government has no experience with the kind of civil society engagement foreseen by the EU in these proposals. (A meeting yesterday with the European Economic and Social Committee, a civil society bridge with the European Commission and Parliament, convinced me that Canadian groups should approach the possibility of EU-style civic engagement with extreme caution. The committee has a purely advisory role with no power to see or alter trade agreements before they are signed, merely to monitor their effects and give even more advice, which may or may not be taken into consideration by the European Commission.) It is also hostile to strong environmental and labour protections that might interfere with trade and investment flows.

Environmental policy will be further undermined by a Regulatory Cooperation chapter that is well advanced. The chapter would give each party to the agreement advanced notice of any proposed regulatory changes in the other, 60 days to study the regulations, and the right to demand scientific data used in compiling them. Europe is friendlier to the precautionary principle when making rules on food, health, toxics and consumer product safety. But the European Commission and Canadian government are hostile to that kind of sanity. The Regulatory Cooperation and Technical Barriers to Trade chapters give Canadian and European industry a foot in the door to delay and frustrate regulatory measures  of the other party.

PLEASE SHARE THE TEXT

There’s lots more in the October draft worth looking into. Please share the text (available at http://tradejustice.ca, along with the January draft we released in April) with anyone interested. And please continue to write your councillors, provincial-territorial legislators and members of parliament demanding transparency on the CETA negotiations. We should never accept the faulty logic of trade negotiators and our governments that trade needs to be negotiated in secret.

A new trade model is badly needed where public input outside the business community actually informs the goals of negotiation, where we could develop strong climate, environmental and labour protections alongside mechanisms to hold corporations legally to account for their actions, and where democratic decisionmaking is protected to the maximum. In other words, an anti-CETA — that’s what we need.