By Nick Dearden, First published on the World Deevelopment Movement website on 9th September 2014.
The Comprehensive Economic and Trade Agreement (CETA) is a “next generation” free trade and investment pact that Canada and the EU have been negotiating since May 2009. It has taken nearly a year since the 18 October 2013 ‘agreement in principle’ was reached to iron out the ‘final difficulties’ and we now expect an announcement on its completion at the EU-Canada Summit on 25th September.
Member states have until 12 September to make amendments to the text – after which point it is essentially set in stone. However, this will only be the beginning of the ratification process, which could take up to 2 years to complete.
Based on the leaked text we have seen, we oppose CETA. CETA could unfairly restrict how local governments spend money by banning ‘buy local’ policies, and create pressure to lock-in privatisation of services.
We also have immediate concerns about how CETA will be ratified – and fear CETA could pass into force without being examined by MPs.
1. CETA is unlikely to receive proper scrutiny
As is usual with trade agreements, negotiating texts have been kept secret for the entire process to date. Even today, we only know what’s in the treaty through leaked documents. Formal texts will not be released until the negotiations have been completed, we anticipate on 25 September. To date, we believe that only the EU Scrutiny Committee has had any input into the negotiations. This exclusion of parliamentary input into the process is not a good start.
We anticipate CETA will go to the European Parliament in 2015. If the agreement is judged ‘mixed competency’, as we suspect it will be, it will then go to member state parliaments for ratification. We are seriously concerned that the agreement is still secret, and that it could easily pass through the British parliament with no debate and no vote. There will be no possibility of amending CETA.
We are calling for immediate release of the text and agreement that CETA needs full discussion, scrutiny and debate in the British parliament.
2. CETA could come into force before the British parliament has ratified it
It is not unusual for trade agreements to enter into force before they have even been through this minimum ratification process. Once signed off by European Council and Commission, it is possible for elements of the treaty to enter into force – including the ability of corporations to sue governments through ISDS (see below). We have been given no indication of how the process will operate in this case.
We are calling for CETA to not enter into force until it has been properly debated by the European Parliament and nation state parliaments.
3. CETA will give Canadian companies (including companies with Canadian subsidiaries) the right to sue the British government for sovereign decisions
Investor-state dispute settlement (ISDS) provisions allow corporations to sue a government before a special tribunal rather than within the regular court system. Corporations can sue governments for ‘indirectly expropriating’ their assets, which in recent years has been interpreted extremely broadly to mean reducing the profits expected under an investment. This can be applied to many pieces of regulation and social policy, including the NHS and public education.
ISDS already exists in other, smaller, treaties and has been used to: challenge the placing of health warnings on cigarette packets, renationalising health systems, setting minimum wages, setting environmental regulations, setting prices for medicines, fining companies for breaking national laws. ISDS strongly discourages governments from taking democratic and sovereign action.
We are completely opposed to ISDS provisions. We call on the British government to remove ISDS provisions on 12 September.
4. CETA will have a major impact on the British government’s ability to run public services, introduce financial regulation, protect the environment, support local business.
Based on analysis of leaked texts we have seen, there are numerous reasons to be worried about the impact CETA will have on government’s ability to protect and regulate. For instance:
– CETA will help lock-in the private control of public services, whatever a future government decides. The Council of Canadians says: “If you privatize a municipal water service, or you create a public-private partnership and then the citizens of that same municipality 10 years on decide… that they want to re-municipalize, then you open yourself up to an investor claim.”
– CETA will limit the use of procurement as an economic development policy tool and interfere with municipal governments, universities or hospitals which, for example, want to control their food purchasing policies.
– CETA includes financial services which means limiting regulation which a government can introduce on the banks without challenge. There is a caveat which allows a government to introduce ‘prudential measures’ (for example, to stabilise their economy), but the legitimacy of such action will be ultimately judged by a dispute panel of financial experts.
All of these potential consequences are very serious for any government’s ability to protect its citizens. At a minimum, they require serious scrutiny which has not been possible to date and looks unlikely in the future.
5. CETA is a model for TTIP – and global trade rules
TTIP is the Transatlantic Trade and Investment Partnership currently being negotiated between the United States and the European Union. TTIP is extremely controversial in the EU and US, with very broad implications. CETA is being seen as a model for how TTIP will be negotiated, ratified and enforced. If we allow CETA to be passed in an undemocratic manner, changing and stopping TTIP will be that much more difficult.
Both CETA and TTIP attempt to set a new ‘gold standard’ for international trade agreements. As such, the final resolution to these agreements has global implications.
