In the third of this 5-part series: Canadians’ wants and needs may change in the coming two decades, but the constraints under our new treaty with the European Union will not
After four and a half years of negotiations Canada and the European Union announced last October that they had an agreement in principle on the Comprehensive Economic and Trade Agreement (CETA). It’s not one to be shared with the public, however.
In January, a formal access to information request by the Council of Canadians for the working text of CETA was denied yet again. Leaked documents are available but government still refuses to discuss their content with concerned civil society groups. Politicians at the federal, provincial and municipal levels have also been kept in the dark. Eventually, we’re told, there will be some sort of debate in parliament. However, one doubts how useful that will be given the government has already said it will not allow substantive changes to the terms of the treaty. In fact, Parliament itself cannot actually ratify CETA, or any other trade agreement, to be passed into law. This can be done by an order in council from cabinet to the minister of foreign affairs.
So who has the government been willing to talk to about CETA, if not the Canadian public? Jürgen Thumann, president of the corporate lobbying group Business Europe, answered that question in a speech to the Canadian Chamber of Commerce. The two groups, he said, “will have to work hard during the period…[to] define the challenges and help the negotiators overcome them”. They “will stay pro-active to help our governments find their way through complex negotiations.”
The cozy relationship between the negotiators and corporate lobbyists isn’t the only glimpse we have of a biased negotiation process. A 2012 Corporate Europe Observatory report revealed a revolving door relationship existing between government negotiators and the arbitration law firms that pursue investor lawsuits against governments. It concluded, “Investment lawyers have encouraged governments to sign investment treaties using language that maximizes possibilities for litigation,” which raises the question: Does this type of conflict of interest exist among CETA negotiators? If so, we should expect a substantial increase in corporate investor-state lawsuits in a post-CETA world.
Foreign corporate investors want two main things from this treaty: (a) greater access to government spending, including the delivery of public services, and (b) the minimization of regulations that impede corporate profits. They are going to get both, although not immediately.
The Canadian government’s claim that public services and the right to regulate have been protected is only a half truth. It is true there will probably be no forced privatization of existing services and no forced dismantling of existing regulations. Nothing will change dramatically the day after CETA is implemented. CETA’s failure to protect our traditional rights will happen gradually. That’s because both the federal and provincial governments have chosen not to write into the agreement broad, umbrella rules in strong language that would guarantee their right to respond to unforeseeable future situations. Life’s circumstances change. CETA constraints do not.
What does this mean sector by sector?
Public services: At present, existing services are protected. However, if provincial or municipal governments choose to privatize through Public Private Partnerships (P3s), or in other ways, these services will fall off the protected list. As for new services government might like to implement in the future, unless they’ve been planned for and specifically protected in the agreement, they must be open to some form of P3.
The regulatory capacity of government: An International Institute for Sustainable Development report concluded that the Canadian government’s protection of the right to regulate under CETA provides “false comfort”. This is due, in part, to a ‘necessity clause’ built into the agreement which would require government to prove any new regulation is absolutely necessary. In reality, I strongly suspect it will be very difficult for provincial governments to bring in new regulations once the treaty is ratified.
Furthermore, in the future, regulations cannot be altered in any way considered inconsistent with CETA, and if repealed cannot be reinstated. Any attempt to pass, alter or reinstate a regulation could be legally challenged by corporate investors in offshore private tribunals where Canadian law counts for nothing.
Public Procurement: CETA stipulates the only legitimate criteria for government procurement are cost and the ability of suppliers to fulfill a contract. No ‘hire local’ or ‘buy local’ policies will be allowed beyond the threshold amount of $340,000. This effectively prevents governments from investing public resources in job creation or economic development for the 20 year duration of the agreement.
The Environment: According to the Canadian Environmental Law Association, “CETA, in its current state, does not effectively protect the environment.” Of particular concern are: (a) the straitjacketing of environmental laws by “the necessity test”, and (b) the risk that the narrow definition of environmental laws will lead to “unreasonable” corporate legal challenges in offshore private tribunals where investors’ negotiated rights will override environmental concerns.
Under CETA Canada may well end up with a patchwork of differing laws across the country, as some provinces choose to protect specific regulations, services and resources, while others make different choices. Given the difficulties of planning for every contingency and then writing it all down in the appropriate legal language, the risk of error or omission is also significant. If a province forgets to include something related to health care, energy, water, resources, et cetera, the door to privatization or deregulation will open and stay open. There will be no recourse.
CETA is being negotiated at a time of change and uncertainty for Canadians. Our aging population means there will be increasing demands on our health care system. Our resources risk being over-exploited and their extraction is increasingly polluting the environment and biosphere. The world has been buffeted over the last decade by economic and climatic instability. This will probably continue. And yet, here we are, about to sign an agreement that will straitjacket future governments’ right to act in the interest of the public, local economies, and the environment.
What is the justification for doing this to ourselves? Even influential players in the corporate world have admitted that the economic benefits of CETA are very small. The unpleasant truth is that we are pursuing CETA because the transnational corporate world wants it. CETA’s handicapping of government is not accidental. It is deliberate and devious and has been done with the collusion of our governments.
Part 4 of Cutting through the spin on CETA will focus on what is, for many, the most contentious part of the agreement: the Investor-State dispute settlement mechanism. Find out next week how the scope of this mechanism has been widened to allow corporations to challenge even the limited protections governments have negotiated under CETA.
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