While there is growing awareness and rejection of TTIP (the US/EU free trade agreement called the Transatlantic Trade and Investment Agreement), another corporate-benefit âfree tradeâ agreement that is a back-door for TTIP is much more advanced and deserves our urgent attention.
CETA is the EU/Canada free trade agreement, called the Comprehensive Economic and Trade Agreement. Another of the ânew generationâ so-called âfree trade agreementsâ that are not about trade but about corporate rights, CETA, like TTIP, has Investor State Dispute Settlement provision (ISDS).Â ISDS allows transnational corporations to sue governments for any threat to their bottom line, such as socially or environmentally useful legislation.
With CETA in place, US corporations will be able to sue EU governments via their Canadian subsidiaries even before or without TTIP. In London, 70 Fleet St is the secretive, unmarked location where arbitration tribunals hear ISDS cases.
CETA in fact now has a worse version of ISDS than that in TTIP.
To address public and European Parliamentary concern about ISDS in TTIP, the European Commission has recently proposed an adjusted version of ISDS for TTIP, even changing the name to ICS (International Court System).Â This still has the same core problem of giving rights to transnational corporations to sue governments, outside of national court systems, while denying governments and citizens’ rights to sue corporations.
But CETA still has the unadjusted version of ISDS, so without even the inadequate changes.
Attention to CETA is urgent because negotiations have already been finalised, with fanfare exactly a year ago, although the 1600 page document was only actually finalised six months later.
Following the processes for all âfree-tradeâ agreements, the CETA document is now being âlegally scrubbedâ to ensure legal coherence across the various chapters of the agreement. It will then be translated into the languages of the EU member states.
Although the European Commission and the UK Department of Business Innovation and Skills (BIS) continue to assert that the agreement will be ready for the following stage by early 2016, translators do not seem to have even received the document yet, suggesting that mid or late 2016 is more realistic. But we should not underestimate the push to complete the whole process as fast as possible.
The next stage is for the European Council, made up of member state governments, to agree the document.Â For this, member state governments will need to sign individually, towards a consensus decision.
Any member state could veto CETA in the Council. This is a key stage and we need to inform the public and to pressure the UK government, exposing the fact that without analysis and public debate on what is in this agreement, our government should not be signing up to it.
If CETA passes the Council stage â and the Council did grant the Commission the original mandate to go ahead and negotiate CETA – it will then come before the European Parliament. The EP only has the right of assent.
While the US President has had to seek special, limited-time âFast Trackâ permission for trade agreements to go quickly through the Congress with only an up or down vote and no amendments, that, in fact, is all that EU âdemocracyâ ever allows the European Parliament in respect of trade agreements â a yes or no vote with no amendments.
Once the assent of the European Parliament is achieved – and this deserves much wider attention – the Commission, according to the Lisbon Treaty, can then provisionally implement all parts of the agreement for which it has âcompetencyâ.Â The UK Business Department (BIS) estimates this will be 98% of the agreement. It will certainly, according to the Lisbon Treaty, including investment.
Importantly, ISDS liabilities kick in at this stage. If this seems academic, consider that the biggest pay-out ever ordered by an arbitration panel – for Russia to pay out $50b to Yukos and other oil companies from a dispute brought via other states under the Energy Charter Treaty – dated from the provisional period of the Treaty, which Russia did not, in the end, join.
The final stage of the process for CETA, as with other trade agreements, is ratification by each member state parliament â but only if there is a decision that member states do share competency for some parts of the deal. This is not yet decided.
When provisional implementation in place, the EU is in no hurry for this ratification to occur. Delay is not refusal. But, at least theoretically, if any member state does refuse to ratify the agreement, the whole deal has to be renegotiated. Under these circumstances, the Commissionâs ability to provisionally implement appears inconsistent, but that is the arrangement and it is not the only inconsistent and unresolved issue in EU trade processes.
When the UK Business Department trade lawyer was asked if a sub-national parliament, not the UK devolved parliaments but eg a German state government, or, with CETA, a Canadian provincial parliament, could also veto a trade deal, he was unable to confirm or deny if this is the case – though the question seems to be of key importance.
However BIS staff are happy to point out that, if any member state did not agree with a trade deal, it would be most likely have shown up at the Council stage.
Therefore we should not look to member state ratification stage for a last minute veto for any of these deals.
EU activists were slow to take notice of, and act, on CETA, expecting a deal with Canada to be benign.Â Canadian trade activists however, with the experience of NAFTA (the North American Free Trade Agreement, recognised the risks from the outset.
Now we need to urgently raise awareness of this backdoor CETA before our government signs up to it in the Council and particularly before our MEPs vote on it.