New debate needed on Canada-EU trade deal | - 0 views
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It is time for Canada to lead in re-evaluating what type of trade agreements are needed for this century.
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While the Comprehensive Economic and Trade Agreement (CETA) text was in long-term legal scrub, it had taken a back seat to discussions over the Trans-Pacific Partnership Agreement (TPP) concluded by the Conservative government during the last election campaign. The TPP has attracted vocal opposition from very diverse sources in Canada, including major innovators, labour unions and organizations focused on achieving sustainable development. With the release now of the final CETA text—the trade agreement between Canada and the EU—new debate is needed on it as well.
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Included in the statement released by Canada and the EU to mark the end of the legal review was the announcement that the investor-state arbitration model long entrenched in Canada’s international agreements has been replaced by a system that more closely resembles an international court. The new court-like system includes independent judges, an appeals process and, generally, more transparency and predictability. There can be little doubt that this is a significant improvement over the previous arbitration process.
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Trade Minister Chrystia Freeland, after referring to CETA as a gold-plated trade agreement, stated that with these changes, “Our dispute resolution process is brought up in this agreement to the 21st century democratic standards that Canadians demand.” This view begs two questions. First, why have a new international court that can override domestic courts that already meet the democratic expectations of Canadians? Second, does the rest of the agreement also reflect 21st century democratic needs and standards?
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The investment chapter and its international court will still give foreign investors special rights and remedies to challenge government actions that they see as unfavourable to them. This gives one economic stakeholder a significant legal advantage over all other actors and stakeholders in the economy. It will allow this one class of economic actor to circumvent domestic courts by going directly to an international court whose role is to apply international law to protect their investor rights.
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The justification for this is that these mechanisms will attract new investors to new places. However, this fails to stand up to empirical evidence developed over the past 10 to 15 years that shows these types of special rights for investors have no impact on investment flows. In short, there is no payoff for governments that put their countries at risk of exposure to international dispute settlement processes that circumvent domestic courts.
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So do the other provisions of CETA reflect 21st century goals and standards? In both the TPP and CETA, it is the chapters that don’t directly relate to trade that make the agreements ‘comprehensive.’ It is these rules that are becoming increasingly broad and ever more favourable to large economic actors.
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Let’s take the Intellectual Property Rights (IPR) rules, for example, which go farther to favour European drug manufacturers over Canadian manufacturers, and Canada’s health care system, than any previous IPR agreement. There is also the chapter on “Domestic Regulation” that goes farther in limiting government rights to review and regulate new investments in every sector of the economy than any previous treaty has gone. The CETA also features a long list of limitations on government’s ability to maximize the value that Canadians derive from foreign investment, including such future projects as Ontario’s ring of fire for mining.
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These non-trade chapters will contribute to the ongoing growth of legal and economic inequality of average citizens and small and medium-size businesses compared to the large economic actors. These chapters simply replicate and deepen provisions from 10, 15 and 20 years ago, or more, with no new assessment of their impacts in today’s world, on climate change responses, or on the needs of sustainable development.
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The UN Sustainable Development Goals adopted in 2015 provide a framework to realign the goals of trade and economic agreements for the future rather than just replicate the measures of the past, measures that continue to work against sustainable development needs. With the growing concerns over TPP, the inconsistent approaches between TPP and CETA on key democratic principles, and the obvious need to prioritize climate responses over trade policy, it is time for Canada to lead in re-evaluating what type of trade agreements are needed for this century.
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Canada now has a unique opportunity to step back, reflect, and then return to lead global trade-law into a sustainable development era.
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Howard Mann is the senior international law adviser with the International Institute for Sustainable Development.