Photo credit: Olaf Brostowski, Flickr Creative Commons
Seven years after negotiations began on the Canada-EU Comprehensive Economic and Trade Agreement (CETA), the Trudeau government is poised to sign the deal at a ceremony in Brussels in October. Whether Europeans are ready to actually ratify it is still an open question.
A once low-key affair, CETA is today the target of huge protests, as took place over the weekend in Germany. These are not so-called nativists opposed to immigration, multiculturalism and trade “openness.” The protestors are overwhelmingly progressives who correctly see CETA as a threat to democracy, public services and action on climate change.
Canadian Trade Minister Chrystia Freeland was dispatched to Europe this week to try and snatch CETA from the jaws of potential defeat. There are very good reasons Canadian progressives should hope Freeland fails in this task.
Much more than a trade deal, CETA is a sweeping constitution-style document that will restrict public policy options in areas as diverse as intellectual property rights, government procurement, food safety and environmental protection, financial regulation, the temporary movement of workers, and public services.
While CETA’s safeguards for labour and the environment are mainly voluntary and weak, the investor protections are strong and fully enforceable. Such an agreement could only be considered enlightened in an upside-down world.
For example, despite a few procedural improvements, CETA still includes a badly flawed investor-state dispute settlement process. Canada’s experience with investor-state arbitration under NAFTA is pitiful. We are the most-sued NAFTA party despite our highly developed legal system and strong protections for private property. Many of these challenges involve environmental protection policies that were legally enacted, but which upset an investor’s plans or profits.
Just last year, Canada lost a disturbing NAFTA dispute over an environmental assessment that recommended against a massive quarry in an ecologically sensitive part of Nova Scotia. Canada currently faces a raft of claims as a result of progressive policies, such as banning natural gas fracking in the province of Quebec.
European labour unions, environmentalists and human rights advocates question why Canada and the EU would want to expand this anti-democratic process through CETA. Despite being rebranded as an “investment court system” with pretenses to judicial independence, the substantive protections afforded to foreign investors remain largely intact. This will expose taxpayers in both Canada and the EU to huge financial liabilities and have a chilling effect on future progressive public policy.
European progressives are also asking important questions about the interplay between CETA and public services. CETA contains no clear protections for governments hoping to expand public services into areas where there is currently private sector competition, or to bring previously privatized services back under public control. Doing so can actually trigger foreign investor claims for compensation, effectively locking in privatization.
Given these and other flaws in the agreement — patent extension rules will add hundreds of millions annually to the cost of medications in Canada — it is baffling Freeland is portraying CETA as a “progressive trade agreement.” Other than some relatively minor changes, it is the deal negotiated by Canada’s former Conservative government, one of the most right-wing regimes in recent Canadian history.
The concerns being raised about CETA in Europe are not part of some inward-looking, alt-right backlash. In fact, the pro-Brexit U.K. Conservatives are among CETA’s loudest supporters, while the critics are strongest in the continental, social democratic heart of Europe.
In an attempt to appease them, the German government has convinced Canada and the European Commission to attach protocols to the CETA text that would assert their understanding of the impacts of the deal on labour rights, environmental policy and public services. But both parties insist no renegotiation is possible.
It’s doubtful this tactic will work. European opponents can see CETA is a “gold-standard” agreement only in the sense that it goes further than previous free trade treaties in protecting the “gold-plated” rights of corporations and foreign investors. It is a backward-looking, last-century free trade deal that will erect even more barriers to addressing today’s two most pressing issues: climate change and inequality.
If the European Commission and the new Canadian government are serious about making CETA a truly progressive agreement, they should not be able to get away with a mere rebranding exercise or legally empty gestures. If they do not want to take the time to get it right, they should be prepared to watch CETA falter.
Scott Sinclair is a senior trade researcher with the Canadian Centre for Policy Alternatives. Stuart Trew is editor of the CCPA Monitor.
This op-ed first appeared in the Toronto Star.