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In the U.K. and France, politicians from left and right are attacking European plans to put an investor-state dispute process into a U.S. (and Canadian) free trade agreement. They're worried U.S. firms will be able to use investment arbitration to challenge public health and environmental policies, or decisions to bring privatized services back into public hands. And they're obviously correct since that's exactly what happened to Canada under NAFTA, and what is happening increasingly within Europe as well. You can read about the British unrest in Brent Patterson's blog here.
In France, a January 9 debate in the Senate raised similar issues with the proposed investment protections in both the CETA and Transatlantic Trade and Investment Partnership (TTIP).
Socialist Senator Daniel Raoul said "We wish that this arbitration option be removed. This provision is likely to impose unacceptable costs on states, thus undermining their ability to legislate." Centre-right candidates worried about the U.S. deal's impacts on dairy farmers and cheese producers while "the sharpest remark," according to Euractiv, came from the government's socialist majority member Marie-Noëlle Lienemann:
"I am very hostile to this treaty... We are forced to note that happy globalisation did not happen! … multinational companies are in a situation that we cannot regulate."
Both the U.K. and French debates are supported by European civil society groups who are opposing the U.S. and Canadian transatlantic agreements in growing numbers. On January 9, a collection of 10 leading public health, transparency and environmental NGOs published an open letter on the TTIP, which challenged the investment protection chapter:
"Member States will be afraid to introduce new and effective legislation that may have positive social and environmental impacts but which risks upsetting our trade partners," says the letter. Another concern is cost: "The arbitration panels over these disputes may have the ability to levy crippling fines in line with "potential" profit loss. One can easily see how smaller Member States would effectively handover sovereignty to multinationals as fines could be equal to a significant proportion of GDP."
The letter concludes with a warning about CETA:
The ISDS arrangements in the draft EU-Canada Free Trade Deal which was recently agreed by the European Commission, though not yet approved by the European Parliament and Member States, have still not been made public. How can we be reassured by Commissioner De Gucht that similar provisions in TTIP will pose few problems when we still cannot get access to the details of already negotiated agreements? Civil society groups on both sides of the Atlantic are right to feel uneasy; what is masquerading as a trade deal may be a far more sinister attempt to roll-back environmental and public health laws built up over decades in the name of corporate efficiency.
The next round of TTIP talks is expected to happen in Brussels at the end of February. Though the Harper government announced an end to the CETA negotiations on October 18, in fact talks continue and the investment chapters have not progressed since the end of November.
If European angst over investor-to-state dispute settlement continues to spread, there is a real danger the European parliament could veto a Canadian deal that includes it. The European institutions, including the Commission and Parliament, will break in April for elections. It's not clear how this will affect the Harper government's plans to sign CETA before too long so the deal can be introduced into Parliament for ratification.
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