In Multipolarity

News compilation by New Cold, Oct 31, 2016

Walloon acceptance of flawed Canada-Europe trade deal does Canada no favours

By Thomas Walkom, national affairs columnist, Toronto Star, Oct. 28, 2016

Canada’s proposed pact with the European Union was bad enough before. It is worse now.

canada-eu-trade-deal-ceta-image-by-council-of-canadiansA Belgian region’s decision to let the Canada-European Union trade deal go forward is being portrayed as victory for Canada. It is not.

The so-called Comprehensive Economic and Trade Agreement (CETA) between Canada and the 28-member EU was flawed before it ran into opposition from Belgium’s francophone region of Wallonia. It is more so now.

In particular, the deal as written contains a fundamental imbalance. European firms would be able to challenge, at special investment courts, Canadian laws and regulations that interfere with profit-making. But Canadian firms would have the same rights only in those EU countries that specifically allow such challenges. That’s because the EU treats the proposed Investment Court System as a matter of national, rather than Pan-European, concern.

Thousands protest in Brussels on Sept 20, 2016 against TTIP and CETA investment deal proposals (Eric Vidal, Reuters)

Thousands protest in Brussels on Sept 20, 2016 against TTIP and CETA investment deal proposals (Eric Vidal, Reuters)

In Canada, on the other hand, investment courts need only the imprimatur of the federal government to come into effect. As Osgoode Hall law professor and trade expert Gus Van Harten notes, this is not a trivial matter. Many Europeans are wary of allowing foreign corporations to override domestic laws. Any proposal to set up investment courts is sure to run into tough opposition in European legislatures.

Such opposition was one of the reasons behind Wallonia’s initial decision to veto CETA. Under EU rules, the unanimous consent of all 28 member governments — including Belgium’s — is needed to ratify the deal. Under Belgian rules, the consent of the country’s regions — including Wallonia — is needed to sign any international pact. When tiny Wallonia (its population is 3.5 million) used those rules to hold up CETA, Ottawa was taken aback.

The Walloon move scuppered a carefully choreographed plan to have Prime Minister Justin Trudeau fly to Brussels to sign the agreement. Theoretically, that signing can now go ahead. But as Van Harten points out, Ottawa may want to put the investment court portion of the deal on ice until the EU nations decide which of them will agree to it.

The Guardian reports that as part of its deal with Wallonia, Belgium has agreed to ask the European Court of Justice whether the investment court dispute settlement proposal is even legal. It is possible that, in the end, the controversial dispute settlement system will be scrapped entirely.

If so, that would remove one of the worst elements of CETA. A similar dispute settlement system in the North American Free Trade Agreement has allowed foreign firms to override domestic environmental laws.

But even if the investor courts are scrapped, much else is wrong with CETA. A 2010 study by the Canadian Centre for Policy Alternatives estimated that removing tariffs on European cars and trucks would cost the Canadian goods-producing industry between 28,000 and 150,000 jobs.

According to one 2013 estimate, drug patent rules envisioned by the treaty would end up costing both individual consumers and provincial governments up to $1.6 billion each year, making it even more difficult to set up a national pharmacare plan.

Canadian dairy farmers would be hurt as would fish processors. Canadian beef and pork producers would probably benefit from exporting more to Europe — although the scale of this has been called into question.

The government says the deal will create 80,000 net new jobs in Canada. But as economist Jim Stanford has pointed out, this number is based on the dubious assumption that no worker can ever be unemployed.

The main economic benefit of CETA may be that it would allow Canadians to buy European luxury goods at marginally cheaper prices. Otherwise, this never was a compelling deal. Even without CETA, the EU is already Canada’s second-largest trading partner.

Canada began negotiations with Europe seven years ago, largely to avoid being sidelined by any future EU trade and investment pact with the United States. Such a pact now seems most unlikely.

In short, the Walloons may not have done Canada any favours by deciding to reverse course and support CETA. Their consistent opposition could have allowed this flawed agreement to die a well-deserved and quiet death.

Think TTIP is a threat to democracy? There’s another trade deal that’s already signed

By Nick Dearden, The Guardian, May 30, 2016

If you needed proof that trade agreements are just an excuse to hand big business power at our expense, look no further than CETA, a deal between the EU and Canada

As the great powers gathered in Japan for last week’s G7 summit, a series of massive trade deals were under attack from all sides. And yet, from Donald Trump to Jeremy Corbyn, there is a recognition that “trade” has become little more than a synonym for big business to take ever more control of society.

The U.S.-Europe deal TTIP (the Transatlantic Trade and Investment Partnership) is the best known of these so-called “new generation” trade deals and has inspired a movement. More than three million Europeans have signed Europe’s biggest petition to oppose TTIP, while 250,000 Germans took to the streets of Berlin last autumn to try to bring this deal down. A new opinion poll shows only 18% of Americans and 17% of Germans support TTIP, down from 53% and 55% just two years ago.

But TTIP is not alone. Its smaller sister deal between the EU and Canada is called CETA (the Comprehensive Economic and Trade Agreement). CETA is just as dangerous as TTIP; indeed it’s in the vanguard of TTIP-style deals, because it’s already been signed by the European commission and the Canadian government. It now awaits ratification over the next 12 months.

The one positive thing about CETA is that it has already been signed and that means that we’re allowed to see it. Its 1,500 pages show us that it’s a threat to not only our food standards but also the battle against climate change, our ability to regulate big banks to prevent another crash and our power to renationalise industries.

Like the U.S. deal, CETA contains a new legal system, open only to foreign corporations and investors. Should the British government make a decision, say, to outlaw dangerous chemicals, improve food safety or put cigarettes in plain packaging, a Canadian company can sue the British government for “unfairness”. And by unfairness this simply means they can’t make as much profit as they expected. The “trial” would be held as a special tribunal, overseen by corporate lawyers.

The European commission has made changes to this “corporate court” system that it believes makes it fairer. But researchers have found it would make no difference to the dozens of cases that have been brought against countries in recent years under similar systems. Canada itself has fought and lost numerous cases from U.S. corporations under the North American Free Trade Agreement (NAFTA) – for example, for outlawing carcinogenic chemicals in petrol, reinvesting in local communities and halting the devastation of quarries. Under CETA, such cases are on their way here.

The whole purpose of CETA is to reduce regulation on business, the idea being that it will make it easier to export. But it will do far more than that. Through the pleasant-sounding “regulatory cooperation”, standards would be reduced across the board on the basis that they are “obstacles to trade”. That could include food safety, workers’ rights and environmental regulation.

Just consider financial regulation. The ability of governments to control banks and financial markets would be further impaired. Limiting the growth of banks that have become “too big to fail” could land a government in a secret tribunal.

Indeed the onslaught has already started. Tar sands oil is one of the most environmentally destructive fossil fuels in the world, and the majority of this oil is extracted in Alberta, Canada. There is currently little tar sands in use in the EU, but that’s changing. When the EU proposed prohibitive new regulations to effectively stop tar sands flowing into Europe, Canada used CETA as a bargaining chip to block the proposal. If CETA passes, that decision will be locked in – a disaster for climate change.

Finally, through something called a “ratchet clause”, current levels of privatisation would be “locked in” on any services not specifically exempted. If Canadian or EU governments want to bring certain services back into public ownership, they could be breaking the terms of the agreement.

So why have so few people heard of CETA? Largely because Canadians and Europeans think they’re quite alike. They don’t fear the takeover of their economy in the way they do when signing a trade deal with the U.S. But this is a big mistake, because these trade deals are not about Europeans versus Americans or Canadians. They are about big business versus citizens.

If you needed proof that modern trade agreements are actually nothing more than an excuse to hand big business power at our expense, you need look no further than CETA. No wonder the public outcry is growing, and opposition to TTIP is spilling over to the Canadian deal.

When CETA goes to the EU council (of all EU governments) for ratification in late June, Romania – which is in dispute with Canada over visa issues – has threatened to veto it. The Walloon parliament voted a critical motion on this deal that could tie the hands of the Belgian government and force its abstention. The Dutch parliament has also passed a motion rejecting provisional application of the deal, which would allow it to be implemented before parliament had a chance to vote on it.

David Cameron takes the most aggressive position on CETA – not only supporting it entirely but pushing for provisional application in the UK. On this basis, CETA could take effect in Britain early next year without a Westminster vote. In fact, even if the British parliament voted CETA down, the corporate court system would still stay in effect for three years. Cameron’s Brexit rebels are not going to like that much.

The G7’s problems show that many of us have recognised that trade deals have made the world a playground for the super-rich – they are part of our staggeringly unequal economy. But the G7 is unable to think beyond the interests of the world’s elite. It’s up to us to reclaim our democracy as citizens, and the movements against TTIP and CETA are the frontline.

TTIP symbolises the worst of global capitalism. Cameron pushes it at his peril, commentary by Nick Dearden, The Guardian, May 20, 2016

CETA and the crisis in world trade, by Michael Roberts, published on his blog The Next Recession, Oct 31, 2016

… As I have argued before, these regional bloc deals have replaced all encompassing world deals through the World Trade Organisation (WTO) because global deals have failed time after time since the global financial crash.  And the reason is clear.  It’s because world trade growth has slowed to a stop.  When a cake gets larger and larger, those cutting it up are happy to reach an agreement to share.  But when a cake starts to get smaller, people don’t want to give up their piece and share.  That’s the situation now.  The Long Depression with its low real GDP growth rate and no inflation in prices of commodities has shrunk the cake…

Five major obstacles to the ratification & implementation of CETA

By Brent Patterson, Council of Canadians, Oct 31, 2016

Prime Minister Justin Trudeau and European Union leaders signed the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) on October 30, but signing and ratification are two very different things. The agreement still faces an uphill ratification battle that could be played out over the next five years.

1. A Belgian region could scrap it during provisional application
The Globe and Mail reports, “[It has] emerged [that CETA] could be scrapped at any time before final ratification… Final ratification is still required by the European Parliament and the legislatures in each EU member country… The EU and Belgium have now agreed that any one of Belgium’s regions can scrap CETA at any time before the final ratification vote if MPs don’t believe CETA is working… That would effectively kill the treaty because it would mean Belgium couldn’t ratify it.”.

2 European Court of Justice ruling on ICS
The Globe and Mail also reports, “The fate of its key dispute resolution system remains in limbo. …Much of the opposition to CETA surrounds the treaty’s controversial dispute resolution system… [The Investment Court System] will not take effect provisionally and it will have to be approved by each EU member before it comes into force. Belgium has also asked the European Court of Justice to review the ICS proposal. …The EU and Belgium have now agreed that any one of Belgium’s regions can scrap CETA [if] ICS doesn’t meet ECJ standards. …Olga Zrihen, an MP in the Socialist government in Wallonia, said the Walloon parliament won’t back CETA without changes to the ICS.”

3. Regulatory harmonization on beef
The Canadian Press reports, “Questions over the resolution of outstanding technical barriers caused the Canadian Meat Council to be cautious in its praise for the deal. Spokesman Ron Davidson says one major barrier involves the Canadian use of anti-microbials like citric acid on beef. In Canada and the U.S., he says anti-microbials are used to ensure the product is safe for consumers. But in Europe, he said fewer anti-microbials are used. …’So, it sets up two different systems.’ …The Canadian Agri-Food Trade Alliance and the Canadian Cattlemen’s Association also noted that the technical barriers would need to be resolved.”

4. Compensation for dairy farmers
Global News reports, “Under [CETA], EU cheesemakers will be allowed to sell 30,000 tonnes of cheese in Canada, more than doubling the current 13,000 tonnes.” iPolitics adds, “Dairy Farmers of Canada has estimated those concessions will cost the dairy industry $300 million in market losses. In October 2015, the Conservatives promised Canadian dairy, egg and poultry farmers $4.3 billion in compensation over 15-years funding, to cover concessions made on supply management under CETA and the Trans Pacific Partnership [but the Liberal government has not made a similar promise]. …Canadian dairy farmers have repeatedly insisted a compensation plan must be in place before the deal takes effect.”

5. Provincial approval in Canada
And CTV reports, “Canada’s newly minted trade pact with the European Union could face significant hurdles at home… The road to full ratification could prove to be an uphill climb, said one expert. …International relations Professor Elliot Tepper said provincial governments have quietly gained powerful leverage over Ottawa now that the deal has been signed — the question is will they choose to use it. ‘You can take your pick which of our provinces might have some grievances they’d like to have looked at prior to signing on’.” CBC adds, “Newfoundland and Labrador Premier Paul Davis made his province’s support of CETA contingent on the federal government delivering a fishery fund. Local seafood processing requirements, which can protect jobs, run counter to the trade deal negotiated with the EU.”

The CBC has noted, “Canadian MPs will vote too [but] the responsibility for ratifying treaties rests with the executive: Trudeau’s cabinet. Trade Minister Chrystia Freeland is expected to introduce an implementation bill before the end of the year to change laws affected by the agreement. Because CETA crosses into provincial jurisdictions (opening up municipal procurement, for example), provincial legislation needs to pass too. Provinces negotiated CETA’s gives and takes alongside the federal negotiators. They’ve already signed off — no one expects any Wallonia-like standoffs.”

We’ll see.

Making sense of CETA

2nd edition published in Sept 2016 by Canadian Center for Policy Alternatives, 82 pages

Download the text here, 6.51 MB

This follow-up to the 2014 report, ‘Making Sense of CETA’, assesses the final text of the Canada-EU Comprehensive Economic and Trade Agreement as released in February 2016. The dozen or so European and Canadian contributors look at how CETA would, if ratified, have far-reaching and problematic impacts on public services, domestic regulation, intellectual property rights, and government measures implemented to address climate change or improve food security.

A chapter on investment protection in CETA challenges claims a proposed “investment court system” sufficiently addresses concerns about the anti-democratic nature of investor-state dispute settlement. A final chapter on the lengthy ratification processes in Europe and Canada suggests CETA will be the subject of intense public debate, especially in Europe, for some time to come.


EDITOR’S NOTE: We remind our readers that publication of articles on our site does not mean that we agree with what is written. Our policy is to publish anything which we consider of interest, so as to assist our readers in forming their opinions. Sometimes we even publish articles with which we totally disagree, since we believe it is important for our readers to be informed on as wide a spectrum of views as possible.

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