EU-Canada Trade Agreement 'Celebrated', Text Officially Released; Even Worse Than Feared

from the handy-little-blueprint-for-TAFTA/TTIP dept

Techdirt has been covering the " Comprehensive Economic and Trade Agreement " (CETA) between the EU and Canada for a while now. Or rather, trying to, given the obsessive secrecy that has surrounded the negotiations, just as it does for TAFTA/TTIP and TPP. However, the agreement's text has now been officially released (pdf) -- on the day that those negotiating it declared it finished. This means that at precisely the moment when the people most impacted get to see what has been agreed to in their name, there is no point in expressing their views, since nothing can be changed. This is the shabby trick that governments routinely pull for these kinds of deals: the public is promised that it will have its say once the final text is available, but when that moment comes, people are informed that obviously no changes can be made since it has already been finalized.

However, in CETA's case, it's not quite so simple. During the ceremony marking the end of the negotiations, the leaders of Canada and the EU declared: Today marks a truly historic moment in the evolution of the Canada-EU relationship as we celebrate the end of negotiations of the Canada-EU Trade Agreement. Not "sign", but "celebrate". That's because Germany is threatening to withhold its support for CETA, as reported here by The Star: New doubts about the fate of Canada’s long-sought free-trade deal with the European Union have cast a shadow over a meeting Friday where Prime Minister Stephen Harper and senior EU officials were to celebrate the completion of five years of negotiations.



A day before the Canada-EU summit in Ottawa, Germany signalled it won’t approve the landmark trade pact in its current form because of objections to the investor-protection measures included in the Comprehensive Economic and Trade Agreement (CETA). It turns out that CETA contains many other deeply worrying aspects. That's doubtless why the negotiators were so keen to keep the text secret, but now that we have it, detailed analyses are coming through. The first in-depth look at what's lurking among CETA's 1500 pages comes from the Canadian Centre for Policy Alternatives (CCPA), which has produced a document called "Making Sense of the CETA: An analysis of the final text of the Canada–European Union Comprehensive Economic and Trade Agreement". Even that runs to over a hundred pages; what follows are some of the key points that it highlights.

Significantly, CCPA's analysis begins with the most contentious aspect of CETA, the investor-state dispute settlement (ISDS) chapter. It's crucially important not just because Germany is refusing to accept it, but also because it is likely to form the basis of a similar chapter in TAFTA/TTIP -- the European Commission included a draft version of the chapter as part of its public consultation on corporate sovereignty, offering it as a blueprint. One of the European Commission's repeated claims is that it will "fix" ISDS by making it clear that governments always retain the right to regulate, and that corporate sovereignty does not overrule that right. But CCPA's analysis shows why that is not true in CETA, despite similar claims there: The 'right to regulate' is mentioned three times in the agreement. In the preamble, the parties simply 'recognize' that the CETA protects the right to regulate ("RECOGNIZING that the provisions of this Agreement preserve the right to regulate..."), yet the text fails to clearly and unequivocally confirm this right, especially in the investment chapter. The other mentions are to be found in the labour and environment chapters, so that, in effect, the CETA shields the right to regulate from any international obligations to protect labour or the environment but not from all the detailed obligations in the investment chapter. Also in the environment chapter, the right to regulate is limited by formulations which require environmental policies to be implemented “in a manner consistent with the multilateral environmental agreements to which they are a party and with this Agreement,” meaning that environmental policies have to be consistent with the CETA -- not the other way round. CETA also includes a definition of "investor" that will make it easy for US companies to sue the EU using CETA and "treaty shopping", just as Philip Morris is suing Australia via its Hong Kong subsidiary: For the purposes of this definition an 'enterprise of a Party' is: (a) an enterprise that is constituted or organised under the laws of that Party and has substantial business activities in the territory of that Party”). The reference to 'substantial business activities' is not enough to prevent 'treaty shopping.' For example, U.S. investors in Canada would be able to use the CETA investment provisions and ISDS to challenge European state measures. One major surprise is found in the chapter covering regulation. Like ISDS, this is already a hot issue for TAFTA/TTIP, where many fear that national sovereignty will be sacrificed to the corporate kind. CETA shows another way in which this can happen -- and which is likely to be adopted in TAFTA/TTIP as well: Parties to the agreement have to ensure that the licensing and qualification requirements and procedures are based on particular criteria to preclude regulators from acting in “an arbitrary manner” (Article 2.1). Specifically, covered regulations will have to be: “a) clear and transparent; b) objective; c) established in advance and made publicly accessible” (Article 2.2).



Parties have to ensure “that licensing and qualification procedures are as simple as possible and do not unduly complicate or delay the supply of a service or the pursuit of any other economic activity” (emphasis added) (Article 2.7). Making licensing procedures "as simple as possible" sets an absolute value on the ease with which corporations can get their projects approved to the detriment of all other considerations. The CCPA report explains how this new requirement could have a major impact on regulation: If a dispute panel interpreted "objective" to mean "not subjective," regulations could be overturned if they are based on the regulator's necessarily subjective balancing of different factors such as public input, the scenic impacts of a development and environmental considerations. For example: Dispute panels could determine that public input, environmental assessments and archaeological studies do not constitute a process that is "as simple as possible." CETA also provides some hints about the shadowy Regulatory Council that TAFTA/TTIP is likely to set up in order to ensure the convergence of future US and EU regulations. The danger here is that such a council will effectively vet or change new regulations before they are made public, and allow corporations with privileged access to government sources to prepare their lobbying well in advance. Indeed, that's exactly how CETA's "Regulatory Co-operation Forum" will work: Parties will endeavor to share "proposed technical or sanitary and phytosanitary regulations that may have an impact on trade with the other Party at as early a stage as possible so that comments and proposals for amendments may be taken into account." This means that information on future legislation could be shared with the other Party even before it has been shared with their Parliaments. If that were the case, the other Party could make amendments and comments before the country's own parliament got their hands on the draft legislation. These are just a few of the awful things that are starting to crawl out of the CETA text now that it has been exposed to some sunlight. CCPA's excellent analysis is grim but required reading, not just in order to understand what is in CETA, but also as a taster for some of the bad stuff that is likely to turn up in TAFTA/TTIP too.

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Filed Under: canada, ceta, corporate sovereignty, europe, isds, trade agreement