Is CETA a Sugar-coated Poison Pill?

Letter Published in the Telegram, October 29th, 2014

After more than five years of secrecy, the final text of the Canada European Comprehensive Economic and Trade Agreement (CETA) has been released. We can at last compare the essence of CETA with government rhetoric, which roughly goes like this. Trade is good for Canada. The European Union will make a good trading partner. Therefore, CETA is good for Canada.

More specifically, the Harper government claims that CETA will boost the Canadian economy by $12 billion annually and equates that with the creation of 80,000 new jobs. Increased European investment in Canada will also create more industries. Finally, CETA will make it much easier for Canadian businesses to expand into the huge European market.

But is this information accurate or realistic?

 Even the corporate sector has publicly doubted government’s predictions of increased GDP and job growth. The (CCPA) Canadian Centre for Policy Alternatives’ projection of GDP contraction and job losses seems more probable. Given that CETA targets government procurement and our public service sector, it’s also doubtful that European investment will create new industries. NAFTA style takeovers and privatizations are more likely.

As for corporate expansion into Europe,  Canadian per capita investment in the EU is already fifteen times that of European investment in Canada, which suggests our big corporations there (mostly finance and insurance) are doing just fine without CETA. Smaller Canadian corporations face significant barriers to penetrating the EU market that have nothing to do with tariffs. These include a fluctuating dollar, high shipping costs, and regulations and languages that differ from country to country.

It is not, however, CETA’s questionable benefits that have pushed groups like the Council of Canadians to oppose the agreement. It’s CETA’s real intent, which is to shift power away from governments and our own court system into transnational corporations and corporate friendly offshore tribunals.

CETA bypasses national courts: In a recent interview with The Globe and Mail, senior German official Uwe Beckmeyer made it clear that Germany finds unacceptable CETA’s Investor-State Dispute Settlement (ISDS) mechanism that allows corporations to sue government in offshore tribunals where national law counts for nothing. By contrast, the Harper government continues to proclaim the benefits of CETA’s ISDS clauses, in spite of the fact that, under NAFTA, Canada has already paid out $170 million in ISDS damages to corporations and is currently facing billions of dollars in current NAFTA lawsuits.

CETA prohibits Buy Local and Hire Local policies:  Even though they seldom exercised this right, provinces, municipalities and crown corporations could in the past favour local businesses that paid local taxes and hired local workers.   On purchases of goods, services or construction projects over certain low thresholds, this right will be gone under CETA. European corporations will have unconditional access to a significant portion of the enormous government procurement market, generally valued at 10 to 15% of GDP or $130-$200 billion annually.

CETA restricts the right to regulate: Loopholes in CETA’s language suggest that governments will have the right to regulate only in so far as their policies are consistent with the obligations in the investment chapter of CETA. This means that governments will increasingly hesitate to regulate to protect the environment or community and worker rights because of the risk of facing ISDS lawsuits.

Expect more privatization of public services under CETA: Nothing in CETA can compel Canadian governments to privatize. However, the federal government is clearly pushing municipalities in this direction through its funding for public private partnerships. Municipalities should realize that once they choose this route for services like wastewater management it will become very difficult (and expensive) to reverse course, given corporate recourse to ISDS lawsuits. Moreover, under the “list it or lose it” approach CETA negotiators have taken to public services, it will also be hard for governments to introduce new public services in the future. All of this undermines the right of citizens to democratically choose which services they want their governments to deliver and to change their opinion on this issue over time.

Young, educated Canadians will face increased competition from temporary foreign workers under CETA: The federal government and some provinces have accepted without reservations a CETA clause that allows European university educated workers (self-employed or working for a European company with Canadian contracts) to fill one year, contractual positions that can be renewed for up to two years.

CETA will increase drug costs: Since 2003, big brand name pharmaceutical manufacturers in Canada have consistently failed to meet previous pledges to invest 10% of their sales revenues in research and development. 2013 was the lowest year on record at 5.4%. Yet, in spite of this, CETA has extended patent protection on pharmaceutical drugs. It’s estimated that this will cost Canadians at least an extra $850 million annually.

CETA will reinforce our competitive trade disadvantage with Europe: Canada runs a $20 billion trade deficit with the EU and it’s been growing. Furthermore, 83% of the EU’s exports to Canada are comprised of highly processed or finished products compared with only 18% of Canada’s to Europe. CETA will remove 99% of import tariffs which we cannot then re-impose. The ability of fu­ture governments to utilize tariffs to support strategic sectors as Can­ada competes with the much larger EU economy is gone. That’s an enormous concession. Canadian industries that will be most negatively affected by cheaper EU imports include processed foods, textiles, clothing, motor vehicles, machinery and equipment.

As for exports, Newfoundland and Labrador may well sell more fish to the EU but the minimum processing jobs that give employment to people will be gone. Canadian farmers probably won’t increase agricultural sales to Europe by much, as the Europeans produce and export beef, pork and food crops.

The really big winner may actually be the oil industry. The Harper government has intensely lobbied the EU over the last five years to get tar sands oil into Europe. Is it possible that the enormous giveaways detailed above were made to achieve that purpose? If so, was this ever necessary? The deteriorating relationship between Europe and Russia, a major exporter of oil to Europe, already means that Europeans are reconsidering their position. In June Spain received its first shipment of tar sands oil.

A report worth reading: In a timely manner, and for this I’m very grateful, The CCPA has just come out with a 127 page analysis of the CETA document. The shift towards expansive corporate rights documented in Making Sense of the CETA is so profound that one has to ask why any elected government would want to do this to us. As to the how, they managed to do it, that’s simple. They held highly secret negotiations to which corporate lobbying groups had access while just about everybody else was excluded. MPs, MLAs and MHAs were told virtually nothing about CETA. Around 50 municipalities across the country, including both small and very large, were so upset by what they learned from CETA leaks that they actually requested to be exempted from the agreement. Their requests were ignored. 

Ratification of CETA may take up to two years but the Harper government has already asserted that they will not entertain any major changes to the agreement.  But heh!  Trade is good for Canada.  The European Union will make a good trading partner. Therefore CETA is good for us. 

#CETA protested in Ottawa, Sept 26, 2014

Photo from Council of Canadians Facebook 
The Council of Canadians, and numerous other groups like the Seafarers International Union (SIU), Campact, CUPE, CUPW, RQIC and numerous others marched in Ottawa Sept 26, 2014, to speak out against the Canada-EU summit taking place in Ottawa today to mark the so-called completion of the negotiations for the CETA 'free trade' agreement. Citizens Against CETA stands in solidarity with the grassroots mobilization against CETA.

Photo from Council of Canadians Facebook 
With around 300 people gathering on Parliament the event showed that there is widespread doubt and misgivings around the so-called benefits of CETA. Yesterday Germany effectively put the CETA trade deal on hold over investor-state lawsuit provisions that would allow corporations to sue countries. 

The European Commission has said if the deal were to be reopened at this point that it would be effectively dead.  
So while Harper may want to trumpet his 'accomplishment' of securing a free trade agreement with Europe, the reality is that governmental and public opposition is only growing and CETA faces an uphill battle to be ratified over the next 2+ years.  
The Council of Canadians has been campaigning to derail CETA since 2009 and remains committed to working with allies both in Canada and Europe to defeat this dangerous deal.
Together in solidarity we can stop CETA!  

Photo from Council of Canadians Facebook 
Watch comedian Scott Vrooman criticize investor protection clauses, which allow corporations to sue governments for lost profits.

#CETA, temporary workers, and the attack on middle class jobs

Originally published The Independent

On Thursday the German media leaked a substantial portion of the Canada-European Economic and Trade Agreement (CETA) text. There were some surprises. In particular, there is a section in the “Cross Border Trading in Services” chapter that makes the federal government’s Temporary Foreign Workers program, which gleaned so much negative publicity a few months back, look like an appetizer.

“This Chapter reflects the preferential trading relationship between the Parties as well as the natural objective to facilitate trade in services and investment by allowing temporary entry and stay to natural persons for business purposes…..” (Article 1.1 Chapter X, CETA leaked document)

Unlike many European countries, the federal government appears to have chosen not to write in reservations or restrictions to this clause. That decision means that, at the federal level, the right to set entry quotas in order to give preference to Canadian workers during times of high employment has been forfeited.

Temporary work permits can be issued to Europeans for a year with the possibility of an extension of two years. Potential workers must hold a university degree or its equivalent. With that qualification, they can enter the country, either as employees of a European corporation doing contract work in Canada, or as independent, self-employed professionals that have secured contract work here. Sectors of the economy that will be open to them include: legal, architectural, engineering, computing, research and development, market research, management consulting, mining, higher education, and much more


#CETA text leaked by German TV

Via the Council of Canadians

The Council of Canadians is pleased that the Canada-EU trade deal, the Comprehensive Economic and Trade Agreement (CETA), has seen the light of day after German television show Tagesschau provided the full text online this afternoon.
  • This text (and earlier versions of it) should have been made public to give the public the appropriate amount of time to read it, discern its contents and comment on it fully. The whole CETA negotiation process has been undemocratic, and has failed in terms of transparency.
  • The 25-page investor-state section appears to be a standard investor-state dispute settlement: a three-person panel that would make decisions rather than the mature court systems. This probably will not placate Germany.
  • The 30-page procurement section appears to give no consideration to the numerous Canadian municipalities that requested to be exempted from its provisions.
  • The EU language was adopted on resolution of pharmaceutical patent disputes. This will open the flood gates to pharmaceutical companies’ law suits. This will lengthen patent lengths and delay generics coming to market. In the end, this could severely increase public health care costs by $900 million to $1.7 billion.

“Throughout the process, this agreement and its devastating impacts have been kept locked away from legislators and the public, shielded from a democratic process. Finally, it comes to light, probably because people in Germany are fed up with the secrecy and fed up with being taken hostage by companies,” says Maude Barlow, Council of Canadians national chairperson.

Read the leaked text here: 

Coverage in the Huffington Post: 

Germany rejects CETA and TTIP

via the Council of Canadians

The Council of Canadians applauds Germany's rejection of the Canada-EU and EU-US trade deals reported in Reuters today. The German government decided to reject these trade deals because of provisions that allow companies to sue governments for infringing on their profits.
"This is a victory for democracy. We are pleased that the German government has listened to critics of the investor-state dispute settlement provisions of the deal that give foreign corporations the right to dictate domestic policy," said Maude Barlow, national chairperson of the Council of Canadians.
"We've worked to educate European politicians on just how harmful allowing companies to sue you can be," said Scott Harris, trade campaigner with the Council of Canadians. "We've told them about all the lawsuits Canada has faced under NAFTA for legitimate regulations that protect our health and environment."

[webinar] CETA's investment chapter: Where do the negotiations stand?

One of the most contentious issues in the Canada-EU Comprehensive Economic & Trade Agreement (CETA) negotiations is the inclusion in these deals of broad investor rights backed up by an investor-state dispute settlement (ISDS) process.

Like NAFTA’s Chapter 11, ISDS clauses would allow foreign corporations to directly sue governments over regulations and policies put in place that supposedly violate “fair and equitable treatment” or are seen by corporations as “indirect expropriation.” Inclusion of ISDS in the US-EU TTIP agreement has been met with such widespread opposition in Europe that the European Commission has halted negotiations on ISDS in the agreement while a three-month EU-wide consultation takes place.

This Council of Canadians webinar (click here for the link) featuring the International Institute for Sustainable Development’s Senior Law Advisor Howard Mann, presents an analysis based on the latest leaks of the CETA Investment Chapter and Investor-State Dispute Settlement Chapter, and the implications CETA’s investment and ISDS chapters might have on public interest regulations and policy in Canada if CETA is finalized and ratified.

There are good reasons to oppose Trade Deals

Wednesday’s editorial (“Whew! That’s over”) included two quotes from the recent NDP convention: “Nothing good happens when big business takes over things …,” and “CETA and evil have both got four letters, and to me they’re both the same thing.”

Not having attended the convention, I don’t know where the quotes came from, nor what the supporting arguments were. However, I take issue with two of The Telegram’s conclusions.
“Politics is about forging a middle ground, one that isn’t going to scare off either end of the spectrum.” Unfortunately, the middle ground in politics today bears little resemblance to how we governed ourselves 50 years ago. Green Party leader Elizabeth May perhaps summed it up best in an interview with the McGill Reporter.
“It’s arguable that we now live in a dictatorship, punctuated by manipulated elections. The symptoms of the problem are easy to spot — low voter turnout, with worryingly low levels among young people with no sign they will start voting once they are over 30, a less than vital Fourth Estate, undermined by an alarming level of concentration of media ownership in very few hands, public apathy, indifference bordering on antipathy toward the whole process, excessive power in the hands of the few (or the one, since I refer to PMO), a loss of respect for the fundamental principle of the supremacy of Parliament, misuse of the talents of members of Parliament of the large parties, as MPs are expected to toe the party line on every issue, big and small, and its flip-side, excessive control by the unelected top party brass in all three main parties.”
May’s conclusions are very much in line with what is happening elsewhere. A recent study by Gillens and Page of Princeton and Northwestern Universities concluded that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”
Nowhere is this erosion of democracy more evident than in the way we negotiate trade agreements. It’s not just that concerned civil society groups are denied any kind of access to what is being negotiated. So, too, are our elected MPs and MHAs.
Meanwhile, transnational corporations are working hand in hand with our negotiators to ensure that their interests are taken care of. That’s been true with CETA, the Trans Pacific Partnership Agreement (TPP) which we’re negotiating with 11 countries and probably to the little known but alarming Trade and Services Agreement (TISA) which includes 23 countries representing 50 countries.
Trade agreements tend to build on the ones before them, so that any protections for public services or regulatory capacity achieved in a specific agreement become targets for elimination in the next one. The common thread throughout is an agenda skewed towards global corporate interests and the super-rich elites behind them.
The solution is not, as The Telegram’s editorial suggests, “a little more scrutiny and oversight” of trade deals. We need a full discussion of how this generation’s treaties have evolved into constitutional-style documents that constrain governments, and in ways that are only loosely related to trade. We need to talk about how government and the mainstream media stifle debate by typecasting those of us who oppose the agenda of these new trade agreements as being anti-trade in general.
The latter was subtly evident in your editorial reference to the “Business-is-evil old guard” of the NDP. Those of us who oppose CETA, the TPP and TISA are not against trade agreements or business. But we are against trade agreements that erode democratic rights and hand over power to huge transnational corporations that concentrate wealth in the hands of offshore elites. We believe that a healthy democracy must include strong, vibrant, small- and medium-size businesses. They are a disappearing breed, and trade agreements — contrary to the rhetoric — rarely benefit them.
Perhaps that’s what the discussion was about at the NDP convention.

10 Reasons why we should be concerned about 21st century trade agreements

Corporate Europe Observatory has just released a report outlining serious problems surrounding trade agreements that the media never talks about. Click here to read the details.
    1. ISDS is a tool for big business to make governments pay when they regulate

    2. The investor-state arbitration system is fundamentally flawed.

    3.  Corporate super-rights are an instrument to rein in democracy..

    4. The investor rights provide VIP treatment to companies.

    5. The Commission’s ‘reform’ agenda does not even touch upon these basic flaws of the system.

    6. The risks of being sued by big business are ever growing for governments.

    7. The investor privileges enable backdoor corporate attacks on court decisions.

    8. The investor rights do not bring the economic benefits claimed for them.

    9. The global tide is turning against excessive corporate rights.

    10. There are alternatives.


"Players, absentees and spectators in the CETA ambush"

**The final part of Cutting Through the Spin on CETA, originally published in the Independent.

Who supports the Comprehensive Economic and Trade Agreement, and why? Who might have opposed it, but hasn’t? Are there prospects for stopping it? 

Persuading the average Canadian to take a closer look at the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is an uphill challenge, partly because people are skeptical about how damaging a trade agreement can actually be. Tariffs and quotas, imports and exports – where’s the deep menace in that?

Of course, readers who have persevered through my last four articles in this series on CETA know the menace is hidden behind the rhetoric about trade. The devil is in the details, and the details are not being discussed by government.

What about the agreement offends those who most oppose CETA? Is it the deliberate inclusion of  the “most favoured nation” and “fair and equitable treatment” provisions in CETA that will allow corporate investors to use language from other treaties to ambush governments’ possible attempts to protect themselves? Is it the offshore private tribunals riddled with conflict of interest that will effectively allow corporate lawsuits against government to bypass our own judicial system? Is it the biased negotiating process that has excluded civil society groups but welcomed input from the corporate sector? Or is it that we have a government in Ottawa that has not only allowed, but enthusiastically supported, all of the above?

Who supports CETA?

From the beginning the transnational corporations have pushed for CETA. In Europe, the big players are the pharmaceutical companies, along with water and waste water service delivery corporations. The Europeans have also targeted energy delivery as a service area of interest. Indeed, according to the European Commission, “50% of the total expected gains for the EU are related to trade in services.”
In Canada, support for CETA also comes primarily from global corporations. The agribusiness sector is hoping the agreement will breach European resistance to North America’s genetically modified crops, and to cattle and beef dosed with the drug ractopamine. Our Canadian mining companies love trade agreements because they can use the Investor-State Dispute Settlement (ISDS) mechanism, with its offshore tribunals, to sue countries who oppose or try to regulate their practices. Then there are our financial corporations – the banks and insurance companies. They don’t need CETA to gain access to Europe because they are already there, big time. One presumes they support CETA because they’ve allied themselves with the increasingly offshore, corporate, financial world that fuels globalization.

So too, it seems, has our Canadian government. Did you know it was Canada, not an initially reluctant European Union, that pushed for the inclusion of the ISDS section in CETA? That our provincial and territorial governments have gone along with all this is puzzling, given the limited benefits CETA will bring them, and the increased risk of lawsuits they will face.

Also troubling, of course, is the performance of our two main federal opposition parties. The Liberals have indicated they are “broadly supportive of CETA,” while the NDP originally said they would not support any trade agreement with an ISDS mechanism but appear to have backed off from that position. According to the Globe and Mail, “the NDP’s position is now that it ‘welcomes’ the deal but is staying neutral until a final text is released in a few months.”

Prime Minister Harper must be delighted with the response of the NDP and Liberals, especially since almost all of the political debate around CETA has focused on trade issues to the exclusion of the real elephant in the room: the assault on our legislative and judicial sovereignty. You have to wonder how many of our MPs and MHAs have taken the time to read the leaked documents or consult with experts who could interpret them.

In Europe the situation is slightly different. The driving force behind CETA has been the European Commission – the bureaucrats in Brussels. The European Parliament has been much more ambivalent and uneasy, in particular about the ISDS mechanism. It remains to be seen whether they will pass CETA in the agreement’s present state.

Our disengaged intelligentsia

Disappointing and surprising is the apparent absence of analysis or public debate about CETA among academics. To be fair, the Canadian Association of University Teachers has joined the Trade Justice Network in opposing CETA’s investment rights and investor-state dispute mechanism. There are, as well, individual professors vocally opposing CETA, most notably law professors Michael Geist of the University of Ottawa and Gus Van Harten of Osgoode Hall Law School at York University. Their contributions to informed debate about CETA have been invaluable.

On the other hand, the response to CETA from within the university community has been, well, overwhemingly non-existent. Nowhere is that more obvious than in the business schools, economics and political science departments across the country. The very people you would expect and want to add their expertise to the debate either say nothing or choose to talk only about narrow trade aspects of the agreement. There seems to be reluctance on campuses to analyze concerns about the implications of the investment chapter and the ISDS mechanism.

Where do we go from here?

For groups like the Council of Canadians, the Trade Justice Network and Citizens against CETA here in Newfoundland, opposing CETA has often been a lonely and frustrating journey. The implications of the treaty are rarely analyzed or scrutinizes by the corporate press. The result is that, after almost five years of negotiations, most Canadians still know almost nothing about this agreement. Consequently, if the Europeans okay CETA, this treaty will quickly become law in Canada with barely a whimper from the public. Two things could prevent this outcome:
  • Full disclosure of the CETA draft document to the public, followed by organized town hall meetings around our province so that government and citizens can discuss the treaty openly.
  •  A provincial referendum on CETA. Let the people decide if this treaty is in our best interest.
Of course this won’t happen unless ordinary people push for it. So how do people mobilize? Here are some suggestions for groups that could be started by people of all ages and backgrounds:

Teenagers against CETA: It’s your future CETA is messing with, guys. Protest it.
Grandparents against CETA: Who better to speak up for our children’s future?
Lawyers against CETA: Rise up against the ISDS mechanism and offshore courts!
Musicians against CETA: How about giving us a marching song!
Academics against CETA: Who better to analyze the real consequences of this deal!
Citizens against CETA: We exist. Consider joining us!

CETA is not a trade agreement in isolation; it’s just one tentacle of a global corporate octopus whose intent is to squeeze the power out of democratically elected governments everywhere. Other Canadian “trade” tentacles yet to be passed by our federal government include the 12-country Trans Pacific Partnership Agreement, the Canada-China Foreign Investment Partnership Agreement and a host of smaller FIPAs.

I think we have become the “unconscious civilization” that John Ralston Saul identified so eloquently in his 1995 Massey Lecture. Preoccupied with our daily trials and distractions, we cannot foresee that we are creeping towards the day when we become subjects, not citizens. We fail to notice that those who insist to us that all these trade agreements are in our best interest use ideology, not logic, slogans, not rational debate, and stealth rather than disclosure. We may be better educated than previous generations but we’re letting ourselves be outsmarted.

To use a sports analogy, it’s time to get off the couch and switch from spectator to player.