Tuesday, 17 November 2015

Great video on free trade deals (like CETA and the TPP)

"The video - narrated from the perspective of business supporter of free trade agreements - highlights that trade and investment agreements increase corporate power, erode state sovereignty, weaken democratic authority and are central to the neoliberal framework of privatization and deregulation. It also notes the investor-state dispute settlement (ISDS) provision that affords foreign corporations the right to sue for compensate when public services are expanded or when privatization is reversed." 

Read more about the Council of Canadians and Common Frontier video here.

Thursday, 24 September 2015

Citizens Against CETA to Participate in Days of Action Against CETA

We teamed up with the St. John's chapter of the Council of Canadians to make this video to bring CETA -- and the considerable European grassroots opposition to it (2.7 million and counting petition signatures) -- back to the limelight in an election race that's mostly ignored the issue.

Citizens Against CETA is joining with other local groups and activists across the country in days of action against CETA. Sept 25 and 26 take action to spread awareness about the downsides to CETA (i.e., weakening environmental policies, making it easier for corporations to sue governments for loss of profits, allowing the privatization of public services, bypassing local democracies).

Visit the Council of Canadians website to learn more about how to take action: http://canadians.org/ceta-days-action

------- Below is A selection of our article published in the Independent! 

There is near silence on what is probably the number one problem facing young people today — finding a decent job.

According to a 2015 report by theCanadian Labour Congress, “nearly three quarters of the jobs created in Canada over the past six years have been precarious —- part-time, temporary, or in the self-employed sector,” and upward of “a million Canadians have to work multiple jobs just to make ends meet.”

Canadian Association of University Teachers President Robin Vose said last year that the fact that more than one third of post-secondary instructional staff are now casual labourers “is a societal problem.”

Then there’s underemployment.

2014 report published by the Ontario Society of Professional Engineers found that “only about 30 per cent of employed individuals in Ontario who held a Bachelor’s degree or higher in engineering were working as engineers or engineering managers.” 

As for unemployment, Statistics Canada reported that at the end of 2014 for every job vacancy in Canada there were five people looking for work.

Could the root causes of our increasingly dismal employment landscape have something to do with another issue our three major parties are choosing to ignore?

Free Trade and the Loss of Local Jobs

The best example of how free trade has led to job losses comes from the automobile industry.
Back in 1965 Canada and the U.S. negotiated a free trade deal called the Canada—United States Automotive Products Agreement, a central and highly successful tenet of which was that automotive production levels be proportionally maintained in Canada. By 1980 the “Auto Pact” was responsible for the creation of 100,000 automotive jobs in Canada and at least as many more in supporting industries.

Everything changed with the 1994 North American Free Trade Agreement. NAFTA allowed cars produced in Mexico—where labour costs were much lower—to be sold in Canada free of import taxes or tariffs. Gone was the proviso that production levels had to be maintained in Canada. Delighted auto manufacturers began closing their Canadian plants and relocating to Mexico where they could earn bigger profits.

The massive Trans Pacific Partnership (TPP) currently being negotiated with Pacific Rim countries and will further pressure both Canada the U.S. to open up tariff-free markets for car imports. If North American car producers relocate as a result of the increased competition these cheaper imports will create, the economic impact would be severe. Automotive sales—almost entirely to the U.S.—are still our second biggest export, after oil.

Of course, Canada’s automobile industry isn’t the only one that has been hit hard by tariff reduction. Unable to compete with cheap imports, a significant number of Canadian manufacturing and hi-tech companies have either shut down or relocated abroad.

Attempts to build new industries to replace those that have disappeared are proving difficult for governments. When Ontario put a feed-in tariff on wind projects that didn’t have a 25 per cent made-in-Ontario component, the WTO sided with the EU and Japan by ruling these tariffs were unfair. Government intervention in the marketplace to help stimulate job and industry growth doesn’t fit with mainstream economics’ neoliberal obsession with free trade.

Read the full article on The Independent: http://theindependent.ca/2015/09/24/the-missing-election-issue-free-trades-assault-on-jobs/

Wednesday, 3 June 2015

CETA: Market Ideology Obscures Consequence

From a letter published in the Telegram  on June 3, 2015

In his letter to the editor on CETA, Derek Butler of the Association of Seafood Producers asserts that the market should determine whether or not we export our fish processed or unprocessed.   He makes a comparison with our desire and expected right as consumers to have access to fresh, unprocessed fruit. 

If it was European consumer demand for unprocessed fish that drove the elimination of minimum processing requirements, he would have a valid point.  But we didn’t give up minimum processing requirements because European consumers wanted unprocessed fish.  We gave it up so that powerful fishing corporations in European countries could do the processing. 

We’re not taking about a free market here with a level playing field.  Instead, it’s a market that will unfairly disadvantage our workers in favour of theirs, thanks to massive EU subsidies that remain untouched under CETA.

For the last couple of years the provincial government has been granting some limited or temporary exemptions to minimum processing requirements.  As an opponent of CETA, we have no problem with these decisions.  Government should have the flexibility to react to immediate market problems in the fisheries.  But CETA takes away that right.  Under this trade agreement we will never again be allowed to implement MPRs no matter how much demand there is for our fish.  That’s the real problem.  CETA is an assault on our right to govern.

We find it interesting that our provincial government still doesn’t get that point.  In last week’s announcement they asserted that CETA was, aside from the MPR debacle, a good deal for the province.  The downside, be it the straitjacketing of our regulatory capacity, the risk of offshore lawsuits, the  cost increase for drugs, the end of the right to favour local economies, the expected increase in Canada’s trade deficit, (and so much more) is never to be acknowledged.  Our ruling politicians adhere to the simplistic idea that trade with the EU has to be good,  regardless of the terms. “The Market” apparently always knows what’s best for us. 

We live in an age where Ideology increasingly trumps rational analysis.  To whose benefit is this?

Wednesday, 6 May 2015

May 6th, 2015

Here's what we had to contribute to the Newfoundland and Labrador  Fracking Panel that is accepting submissions up until June 1st.

To: Members of the NLHFRP Fracking Panel

What are the risks of investor-state lawsuits if we allow fracking?

I’m writing on behalf of a St. John’s based group, Citizens against CETA, to present arguments against allowing fracking to take place in Newfoundland and Labrador. Our focus is not the potential environmental and health effects of fracking, but rather the risk they bring of investor-state lawsuits.

Investor-state lawsuits are permissible under the auspices of trade agreements like NAFTA and take place in independent, offshore tribunals. There are no permanent judges in these tribunals and judgements are decided by three lawyers, appointed each time a corporate investor chooses to sue government. Neither is there an appeals process, which is particularly alarming given that independent studies have revealed that corporate bias and conflict of interest are inherent to these tribunals.

If Newfoundland and Labrador go ahead with fracking the ensuing legal costs for our provinces could be very high. Here’s why:

Fracking companies use investor-state lawsuits: There is already fracking litigation under NAFTA. Lone Pine Resources, a Canadian company with registration in the US, is suing Canada for $250 million because of the Quebec government’s decision to impose a temporary moratorium on fracking.

Suing governments has become an industry in itself: The likelihood of a corporate lawsuit is much greater than in the past. That’s because hedge funds and other financial institutions are increasingly offering to finance the corporate share of lawsuits in return for a percentage (usually between 30-50%) of the settlement or damages awarded. Mining companies are the most frequent users of investor-state lawsuits worldwide.

Damages awarded can be huge: Increasingly, damages are based on the estimated loss of future profits. The largest award to date is $2.3 billion against Ecuador for cancelling the operating contract of an oil company in the Amazon region.

Canadian and NL laws count for nothing in these tribunals as judgements are based on treatment according to the language in the trade agreement(s). For example, in February of this year a NAFTA tribunal awarded Exxon Mobil and Murphy Oil $17 million in damages after our province tightened up requirements relating to their research and development spending in this province. What most people aren’t aware of is that three levels of Canadian courts had already rejected the corporations’ argument that they were being unfairly treated. The Canadian courts cited the oil companies’ responsibilities under the Atlantic Accord as their reason for denying them damages. That argument counted for nothing in the NAFTA tribunal.

Who will pay the costs? It is Canada, not the provinces, that has to pay the the costs of investor-state lawsuits because it is the federal government that is sued, even if it is a municipal action that causes the lawsuit. However, the federal government has served notice that it will find ways in the future to reclaim costs and damages from the provinces.

Will the federal government defend us against lawsuits? They did not do so in the case of the Abitibi-Bowater dispute, in spite of a request from the province. The result was a $123 million settlement.

What will be the impact of CETA? If the CETA trade agreement between the European Union and Canada is ratified, the risk of investor-state lawsuits will be made greater as CETA’s environmental regulatory protection is weak. That will encourage lawsuits. Over half of the investor-state lawsuits worldwide so far have been filed by European corporations.

If our province allows fracking and then tries to back out or tighten up regulations at a future date we risk very costly lawsuits in tribunals with dubious legal and ethical legitimacy. Where are the long term benefits of fracking that would justify this undermining of the Canadian judicial system and possibly cost us huge amounts in damages?

Marilyn Reid
for Citizens against CETA

Tuesday, 24 March 2015

The Failure of Trade Agreements & Investment Liberalization over the last 25 years

Ascent of Giants, the 60+ page 2015 study by Jordan Brennan, contrasts what we are told about the benefits of trade agreements and investment liberalization with the much more negative reality reflected in meaningful statistics.  He highlights the lackluster growth, under-investment and weak employment results of the post NAFTA period.  All of that adversely affects ordinary Canadians, particular young workers locked into precarious employment. Meanwhile, intense corporate merger activity since NAFTA has led to the growth of huge firms, increased corporate investment abroad and enormous CEO salaries.  Brennan demonstrates the correlation between the above and increasing inequality in Canada. Here is a summary of his main points.

The rationale sold to us for trade agreements

TAIL (Trade and Investment Liberalization) through trade agreements like CUFTA (Canada-US) and NAFTA (Canada-US-Mexico)  were sold to us on two grounds: necessity and prosperity

  • Canadians were told that technological change meant that production and markets were globalizing, and should Canada not secure predictable access to the U.S. market it would be relegated to the periphery of the global political economy
  • The Economic Council of Canada forecast a 1.8% boost in employment. The federal Department of Finance predicted a boost to long-term economic performance, including a long-term increase to inflation-adjusted GDP of 3%.
  • The explicit assumption was that gains from TAIL would be shared with workers in the form of higher wages
Statistics that show a reality different to the neoliberal rationale for TAIL

GDP:  In the quarter-century to 1988, GDP grew at a per capita rate of 2.8%.  Since then the rate has halved.

Employment:  In the quarter-century to 1988, the rate of growth of private sector employment was 2.4%.  Since then it has halved.  Although it appears that unemployment levels fell during the 2000s (after having risen in the 1990s), when we take into account the rise of precarious work, (contract, part time, etc.), unemployment has remained higher than in earlier postwar decades.

Inequality: Income inequality rose sharply over the last 20 years and correlates highly (.91) with the rise in corporate power.  At one end are the very high executive salaries, at the other end, the low wages associated with precarious employment.  Good paying jobs are disappearing for most new workers.  (In the last decade 520,000 manufacturing jobs alone have been lost.)

Trade:  In 1988, Canadian exports amounted to 26% of GDP.  By 2012 Canadian exports were only 30% of GDP, down from 44% in 2000.  (A probable reason for the growth of exports in the 1990s was the low value of the Canadian dollar.) The two largest exports by far to the United States are oil and automobiles.  In the case of oil it is demand that drives exports, not lower tariffs through NAFTA.  The Canada-US Auto Pact explains why automobile exports to the U.S. are high.

How do we explain the disjuncture between the omnipresent cheer-leading for “free trade” by the Canadian intellectual class and the negative investment, employment and growth performance in the TAIL era? If trade flows are falling, investment has lessened, employment growth has worsened and GDP growth has slowed, why the unrestrained euphoria for more “free trade” agreements like CETA?

1.      Control of the NAFTA message by dominant, very large                      corporations

Commentary on the 25th anniversary of the Canada-U.S. Free Trade Agreement (CUFTA) and the 20th anniversary of the North American Free Trade Agreement (NAFTA) has tended to proceed in three steps.

  • The commentator begins by trumpeting the virtues of the agreements, loudly proclaiming that its advocates were wise to counsel such a shift in policy.
  • Commentary proceeds to deride those who raised questions about the deal or who opposed it, declaring (by fiat) that “the debate is over,” usually without providing sufficient evidence to substantiate the assertion.  
  • The commentator often concludes by trotting out a few exhausting clichés about the glorious future Canadians can expect courtesy of the “free trade” agreements currently under negotiation.
2.         The failure of  our intellectual  class to challenge the corporate              message

  • The Canadian intellectual class has failed to engage in a debate about the merits and demerits of the TAIL regime.
  • Contemporary economic thinking seriously constrains the range of permissible questions and the content of acceptable answers.  In particular, economists don’t want to look at the reality of power, preferring to talk about the ideal of free markets and level playing fields..  Political Scientists, on the other hand, ignore markets.

Why have TAIL and Trade Agreements not led to increased GDP and employment?

1.     Corporations have failed to invest in fixed assets in this country.

  • In the quarter-century to 1988, the rate of growth of business investment in fixed assets, a key driver of GDP and employment growth, averaged 4.8%.  That has been halved since 1988.

2.        Large corporations have chosen, instead, the Mergers and Acquisitions             route.

  • In the three-quarters of a century from 1914–1988, for every dollar spent on building new industrial capacity an average of 23 cents was spent on M&A. In the quarter-century since 1988, for every dollar spent on expanding industrial capacity an average of 93 cents was spent on M&A — a four-fold increase.
  • The four fold Increase in mergers and acquisitions under TAIL is a phenomenon of big business.  Small and medium size corporations don’t engage in M&As.
  • There is a logical progression to this acquisition process.  Large firms first merge in their industries, which means less corporations supplying a broader sector.  Next is the formation of multi-unit, vertically-integrated, nationally-embedded firms. In the final stage large corporations seek acquisition targets in other countries.

3.       Large corporations are increasingly hoarding their money.

  • Instead of investing in fixed assets, corporations now hoard in preparation for mergers and acquisitions.  
  • Between the early 1960s and the early 1990s the stockpile of corporate cash averaged 4% of assets but this nearly tripled (to 11%) between 1990 and 2012. 

4.         Large Canadian corporations are choosing to invest abroad rather than              in Canada.

  • In the quarter-century to 1988 the stock of Canadian direct investment abroad (CDIA) averaged 8% of GDP. In the quarter century since 1988 the stock of CDIA peaked at 40% of GDP in 2009.  
  • Put another way, in 1960 the profit of Canadian corporations was almost entirely domestic in origin, with foreign profits representing just 5% of total profit. A long-term rise in foreign operations followed, with foreign profit reaching a high of 47% of total profit in 2010.

The Winners and the Losers under TAIL

The Growth of Dominant Firms, increasingly internationalist in scope
  • There is now an enormous concentration of corporate profits and wealth among the large firms.
  • In 1950 the largest 60 firms in our country accounted for 29% of total corporate profit, which was little changed in 1993 (30%) on the eve of the NAFTA. By 2011 it was 58%.
  • In the early 1960s the largest 60 firms held 27% of total corporate assets, rising to only 30% in the early 1990s. But by 2010 the largest 60 firms controlled 46% of all corporate assets.
  • There are 1.5 million registered corporations in Canada. The 60 largest firms account for roughly 60% of all corporate profit in Canada

Increasing Inequality

  • Over the past century there has been an extraordinarily high (.91) correlation between concentration of corporate power and  income inequality.
  • For example: Increased market power among large firms is closely associated with the national redistribution of income between capital and labour — owners at the expense of workers. There also appears to be a positive relationship between surging executive salaries and income inequality, on the one hand, and corporate concentration on the other.
  • The increase in foreign investment by the dominant corporations has meant that fewer corporate resources are employed for hiring Canadian workers.  
  • The emphasis on corporate flexibility has led to an increase in precarious employment, the weakening of unions and minimal wage gains.
  • Another reason for increasing inequality is that the restriction of competition leads to an increase in price, thus undermining the tendency towards equality.

Alternative Strategies

Jordan Brennan believes that an alternative set of state policies could change this set of outcomes. A trade and investment regime that actually promoted domestic investment and Canadian exports (like the Auto Pact) and that fostered inclusive, wage-led growth (which typically arises when the trade union movement is nurtured and strong) would alter the distribution of income, wealth and power.

Our Conclusions at Citizens against CETA

Dominant corporations will continue to show little interest in investing in the manufacturing sector in Canada as long as they can use mergers and buy-outs to dominate the market and reduce competition. This is being accomplished with the full blessing of the current federal government, who have deliberately made it easier for global corporations to takeover Canadian businesses by raising the threshold from $344 million to $1.5 billion9 before any foreign transaction is reviewed.

Our dominant Canadian corporations have become internationalists. They prefer to invest where they can get the greatest return and that’s not Canada. That’s bad news for Canadian productivity and is accelerating our over reliance on the export of base commodities rather than value added products. It’s, bad news for our young people who still believe that getting a good education will get them a good job. Finally, it’s bad news for government revenues given the rampant use of tax havens by dominant corporations.

Our dominant Canadian corporations control the major political parties and the political agenda. That’s evident in the enthusiastic, uncritical acceptance of trade agreements like CETA by the federal Conservatives, Liberals and NDP.

Our dominant Canadian corporations control the mainstream media. That allows them to control the message we receive, through repetitive clichés about future benefits that just never seem to arrive. This is particularly true in television and radio. Gone are the balanced debates about public policy we saw and heard in the past. One liners and quotes increasingly dominate. Were it not for the phone in talk shows and the Letters to the Editor that some newspapers still encourage, the public would suspect nothing about the dramatic negative impact that neoliberal globalization is going to have on our children and grandchildren.

Our dominant corporations increasingly control what gets talked about in our education systems – and what doesn’t get talked about. Courses that provide opportunities to discuss the huge economic, political and societal changes at the heart of globalization have disappeared from the high school curriculum in some provinces.

Our publicly funded universities have acquiesced, through their silence, to the uncritical promotion of TAIL by corporate think tanks. Does this disinclination on the part of the intellectual class to analyze the impact of the last 25 years of neoliberalism reflect the increasing corporate influence in our universities?

The Harper government’s is straitjacketing public policy criticism by NGOs through Revenue Canada’s new rules on what charitable organizations are allowed to talk about.

Who is left to speak out for the public good and democracy?

Wednesday, 11 February 2015

What Government doesn't want you to know about ISDS

What government doesn't want you to know about ISDS

In, 2013, an offshore investor-state dispute settlement (ISDS) tribunal ordered Libya to pay U.S. $935 million to corporate investors for “lost profits” from “real and certain lost opportunities” on a cancelled tourism project, even though the corporate investors had only invested $5 million in the project and construction had not started.

Canadians should take note of this outrageous decision. According to the latest figures on ISDS claims from the United Nations Conference on Trade and Development, Canada is now the most sued developed country in the world. This dubious distinction is entirely due to ISDS corporate lawsuits under NAFTA. Imagine how this will accelerate once we’ve concluded CETA, the TTP and TISA, three other trade agreements our federal government is determined to sign and ratify.

What’s wrong with ISDS?

The original justification for holding ISDS lawsuits in off-shore tribunals was to protect transnational corporations from unfair expropriation or nationalization of their assets by governments which might have a corrupt court systems. By this criterion there was no good reason to include ISDS clauses in CETA, given the integrity of the judicial systems in Canada and Europe. Yet they were included.
As for the risk of nationalization, the interpretation of expropriation has now evolved to include the “indirect expropriation” of corporate assets, including corporate profits. Damages, as Libya found out, now take into consideration not just immediate restrictions on profits, but also lost opportunities for future profits.

Here’s a sample of what recent ISDS lawsuits against Canada have looked like:
  • Eli Lilly is suing the Canadian government for $500 million under NAFTA for invalidating its patent for Strattera and another drug after a federal court found the company had failed to demonstrate the drugs would deliver the benefits promised in the patent application. Strattera had only been tested in a short 7-week long study involving 22 patients.
  • Exxon Mobil and Murphy Oil won their NAFTA lawsuit against research and development regulations put in place after the Government of Newfoundland and Labrador determined the companies were not living up to their commitment under the Atlantic Accord. Three levels of Canadian courts had previously rejected arguments that the companies were being unfairly treated. Damages have not yet been revealed.
Profiting from Injustice, a comprehensive report by Corporate Europe Observatory, reveals the corporate bias that exists in the off22shore tribunals that judge cases like these. That includes:

National Rule of Law counts for nothing: Democracy and constitutional law have no place in these offshore tribunals. Instead, decisions are based on the interpretation of the legal language in the trade agreements (and sometimes even other trade agreements). There is no Appeals Court if a country objects to the judgment rendered. Furthermore, only companies can sue governments. Abusive corporations cannot be sued, for example, when they violate human rights.

The illusion of neutrality: Investor-state disputes are usually decided by a tribunal of three arbitrators. Unlike judges, they do not have a flat salary but are instead paid per case. This creates a strong incentive to side with corporations, because investor-friendly rulings set precedents that pave the way for more cases and more income for the very small, elite group of arbitrators that service the ISDS industry.

Profiting through speculation: Suing governments in offshore tribunals has turned into a money-making industry with investment funds lining up to help corporations fund Investor-state disputes in exchange for a share (typically between 20-50 per cent) in any granted award or settlement.

The revolving door syndrome: The small, elite group of arbitrators and lawyers in the ISDS process move effortlessly from defending corporations to defending governments and back again. This revolving door allows them to aggressively promote investment arbitration in trade agreements as a necessary condition for the attraction of foreign investment. Ignored is the research suggesting that trade agreements are not a decisive factor in whether investors go abroad.

The number of ISDS disputes worldwide has exploded, from just 38 in 1996 to 568 by the end of 2013. Equally worrying is that the growth in damages has been both exponential and dramatic. The most noteworthy victim to date is tiny Ecuador. Ecuadoreans have been ordered to pay $2.3 billion after losing an ISDS lawsuit filed by Occidental Petroleum.

Internationally, over half of the ISDS lawsuits have been instigated by European corporations. CETA is their ISDS entry into Canada.

ISDS lawsuits against Newfoundland and Labrador: Who will pay? Who will defend?

ISDS lawsuits are directed against the federal government and must be defended by the federal government, even if it’s a municipal or provincial action or decision that a corporation might be objecting to. That means that technically, it’s the Canadian government that’s on the hook for payment of costs and damages. However, all that is going to change. The federal government has served notice that it will find ways in the future to reclaim costs and damages from the provinces.
Unfortunately, there is no guarantee that the federal government will adequately defend lawsuits against provincial interests. For example, they chose not to defend against Abitibi-Bowater’s dispute with our province in spite of urgings from multiple groups. The result was an out of court settlement of $130 million, which sets a troubling precedent that undermines public ownership and control of natural resources on crown land.

What sectors of our provincial economy are most vulnerable to lawsuits?

Anybody thinking that our province is fully protected in CETA against ISDS lawsuits is in denial about the all-pervasive scope of this kind of litigation. ISDS lawsuits have been used to challenge government attempts to raise minimum wages, introduce buy-local policies, reduce subsidies, reject new open pit mining proposals, protect water, health or the environment, initiate or modify regulations to gas, nuclear energy, telecommunications, marketing and tax measures, restructure debt to address impending financial collapse, and so on.

Our economy is largely dependent on resource extraction. Oil and mining companies are the most frequent users of ISDS worldwide, so it would be complacent to think there is little possibility of lawsuits here. One obvious example is fracking. If our government decides to permit fracking and then reconsiders policy, NAFTA will allow corporate challenges in the manner of the $250 million Lone Pine Resources lawsuit following the Quebec moratorium. CETA will open that up to European corporations.

On the other hand, if the province defied CETA and continued with minimum processing requirements, I don’t think European processing plants would be easily able to use ISDS lawsuits. That’s because, as far as is known, they are not investors in the Canadian economy. The EU would have to find other ways of punishing us, probably through tariffs.

Does that mean our Canadian-owned fishing sector is protected against ISDS lawsuits? Doubtful, given that the nationality of corporate investors is often not clear. Do we really know how much foreign ownership exists in our fisheries, particularly in the offshore sector? Could minority foreign owners of boats claim to be investors in the Canadian economy, and therefore, mount challenges? What about our aquaculture industry? What’s the capacity for foreign investment there? Once foreign investors gain a foothold in our fisheries, CETA will allow them to sue in all sorts of ways that they can’t at the moment. Given the strong neoliberal bias of the federal government towards deregulation, one has to wonder what kind of defense would be mounted to protect the livelihood of our harvesters and local communities.

Then there is Muskrat Falls. Big contracts have been signed. Government has entered into public-private partnerships. Are we aware who all the corporate investors are? To what extent could investors use subsidiaries under NAFTA or CETA to pursue lawsuits against future government decisions? Has government even considered the ISDS risks there?

Why and how ISDS got put into CETA

ISDS fulfills three central purposes. First, it allows transnational corporations to sue governments for increasingly huge amounts of money in biased, corporate-friendly offshore tribunals where governments can’t use arguments of accountability to the public. Secondly, ISDS, in bypassing national court systems, renders a huge blow to the judicial independence that is fundamental to our democracy. And finally, ISDS effectively straitjackets and undermines regulatory flexibility. The effect on new legislation is chilling, as everything begins to be looked at through the prism of potential lawsuits. The result of all of this is that ISDS facilitates gains in transnational corporate power that are going to be, in the long term, enormous. So too will be the losses to national sovereignty and democracy.

Transnational corporations themselves cannot put ISDS sections into trade agreements between countries — so who does? In the case of CETA, the answer is clearly Prime Minister Harper and his government. It was the Harper government that pushed for ISDS to be included in CETA right from the start. It’s time to face the unpleasant probability that our side may be playing for the other team — not the EU team, but the transnational corporate team.

Can CETA be stopped?
Our province’s recent stance in pulling out of CETA over the dispute about the compensatory $280 million fisheries fund can’t stop the trade agreement going through. However, it has raised public awareness. There’s even a ‘Thank Newfoundland and Labrador’ petition on the go with more than 33,000 signatures on it so far.

Has the ensuing publicity caused politicians to take a closer look at CETA itself? Unfortunately, no. Across Canada, aside from at the municipal level, there’s still little political opposition to the trade agreement (NDP Lorraine Michael has been the notable exception here). One has to wonder how it is politicians in all three major parties have let themselves either be cajoled or whipped into ignoring the different ways CETA is an assault on our democratic and judicial decision making. Their collective silence is alarming.

If CETA is to be stopped, it could be the Europeans who do it. In the space of a couple months in late 2014 more than a million Europeans signed a petition opposing the ISDS sections of CETA and the TTIP deal. Last month France and Germany made a joint announcement they wanted to reopen and amend the ISDS section of CETA. And Syriza, Greece’s newly elected government, has already stated it will not sign on to CETA.

We may yet be rescued from this deal by the Europeans

Friday, 23 January 2015

CETA: Much Theatre … Little Debate

 Published in the Telegram, January 23, 2015

Those of us who oppose the CETA trade agreement between the EU and Canada are grateful that CETA is finally making front page headlines, even if it is for the wrong reasons. If you listen carefully to the words of Ministers Hutchings and King, nowhere do they actually express any doubts about CETA itself. It’s their perceived betrayal by Ottawa over the fisheries development fund that fuels their indignation.

I don’t doubt that our province was misled by the federal government. But have they considered they've been misled in other ways about CETA? Independent research has indicated that CETA will lead to a decline in GDP, exports and jobs, particularly in the manufacturing and processing sectors. But far more alarming than that is the twisty legal language in CETA that will allow transnational corporations to sue us in special, offshore, investor-state tribunals (where Canadian law counts for nothing) if government initiatives risk interfering with future corporate profits.

We shouldn’t underestimate the scope and size of lawsuit payouts. In, 2013, an off-shore investor-state tribunal ordered Libya to pay US$935 million to corporate investors for “lost profits” from “real and certain lost opportunities” on a canceled tourism project – even though the corporate investors had only invested $5 million in the project and construction had never even started.

Could that kind of injustice happen to us under CETA? Our province has already been the subject of two NAFTA investor-state lawsuits compliments of Abitibi-Bowater and Exxon-Mobil. We are especially vulnerable, given that oil and mining companies are the most frequent users of anti-government lawsuits worldwide. Then there is the fact that over half of the investor-state lawsuits worldwide have been instigated by European corporations. CETA is going to give these corporations access to us.

Given that the federal government has stated that in future they will claw back costs and damages from provinces that incur lawsuits, you would think our government would be worried about being sued under CETA. And what about the chilling effect that the mere fear of lawsuits will have on future government initiatives to protect the environment or local economies? Have they considered that?

To be fair, other provincial legislatures are guilty of similar complacency about CETA's impact on democratic decision making. However, our government is now in the unique position of having experienced firsthand how underhanded the Harper government can be in promoting the benefits of CETA. They could take the high road and use this realization as an opportunity to open up the whole CETA can of worms to public debate. They could challenge other provinces to re-examine the extent to which CETA will allow huge corporations to undermine their ability to govern.

That would be splendid leadership. But will they do that? Or will they simply focus on their grievance with the federal government over the fisheries investment fund? What’s it going to be? Continued theater of the David vs. Goliath style – or genuine debate, discussion and consultation about the main event with us, the people who elected them?