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Canada stands to lose plenty in European free trade deal

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Image: Flickr/Mehr Demokratie

Not all the news these days is bad. Last month, Prime Minister Harper and European Union officials were in Ottawa to celebrate a much ballyhooed "free trade" deal between Canada and the EU, called the Comprehensive Economic and Trade Agreement (CETA). No, that's not the good news, nor was the $300,000 we, the people, spent to fly the EU mucky-mucks back home to Brussels on a Canadian government airbus.

Normally these VIPs fly commercial business class for about $9,000 each. Of course 300 grand is non-organic chicken feed to our government, though it might've come in handy in Ebola-stricken West Africa or the teeming refugee camps of the Middle East.

Oh, yes -- the good news. Just as the Ottawa celebrations were beginning, a German cabinet minister announced that Germany wouldn't sign the deal unless the clause that allowed companies to sue governments was deleted. This key issue had previously been the lost cause of leftist researchers. No more.

You might have heard of this curious clause in one of its other guises -- extreme investor rights, a Corporate Charter of Rights, investor-state dispute settlements, ISDS. Over the years it's been written into many state-to-state agreements, including our own NAFTA -- the North American Free Trade Agreement. Here's how civil society organizations from around the world described it last week in a joint letter to the UN's trade body, UNCTAD:

"the international investment protection regime, codified in a growing number of bilateral investment treaties (BITS) and investment chapters in free trade agreements, creates major impediments to sustainable development and the role of the state in protecting the public interest.

"ISDS tribunals....usually comprised of three private attorneys, are authorized to rule against public interest policies on the basis of broad foreign investor rights that surpass those afforded to domestic firms. The tribunals often order "compensation" to foreign corporations for the 'expected future profits' that they believe were impeded by the challenged policies. There is no outside appeal....

Through the dispute process, states' regulatory efforts in the areas of health, environment and climate change, financial stability, water, labour rights, and agriculture among other areas have been challenged, with billions of dollars of taxpayer money already awarded to corporations, and with many billions more still pending.

Thank heavens Germany finally blew the whistle on this scam. But why has it taken so long? By what conceivable rationale should a foreign corporation be able to sue an elected government for implementing its campaign promises? How does one reconcile this with any possible definition of democracy? By what gall, by what perverse definition of free market competition, has the corporate world persuaded its friends in government around the world to give them such a privileged playing field?

The consequences are clear enough. As the CCPA's Scott Sinclair pointed out recently in an important analysis called "Making Sense of CETA,"

"Under similar investment protections in the NAFTA, Canada has already paid out more than $170 million in damages and is facing billions of dollars in current ISDS claims related to resource management, energy and pharmaceutical patents."

Ah yes, those generous patents for brand-name pharmaceuticals, based on the phenomenon known somewhat oxymoronically as "intellectual property rights" for the world's giant pharmaceutical companies. Expanding these already lavish rights is a feature of just about every trade agreement as Big Pharma flexes its Hulk-sized muscles and wins ever-greater protection for its products.

I should admit my own intellectual failing here. Maybe it's because I'm not a trained economist. But it baffles me why these fantastically profitable behemoths should get any protection of any kind from any form of competition. Isn't that the very spirit of capitalism -- to build the better mousetrap? To succeed by providing the most sought-after products? But those who claim to worship the free market and free competition are remarkably flexible in their religion when it comes to self-interest. I guess it's free enterprise if necessary but not necessarily free enterprise.

As Scott Sinclair observes, CETA extends Big Pharma's patent rights at an additional cost estimated at least at $850-million annually. How is this a good deal for Canadians? Big Pharma has reams of polished propaganda to explain why they are entitled to such protection, but their hardball lobbying practices are what's really at play here. Interesting to know how many Ottawa lobby firms are on Big Pharma's payroll.

All agreements have winners and losers. The Harper government pretends that in CETA, Canada is the Big Winner. For example, they use carefully chosen weasel words to imply that CETA would create 80,000 new Canadian jobs. But this happy fiction has been disproved by both trade union economists and economists from RBC and Capital Economics as well. But don't imagine for a second that you'll not hear the Conservatives repeatedly throwing around that invented 80,000 figure before the next election, or assuring us suckers that Canada somehow won't be able to thrive without even greater rights for both corporate investors and "intellectual property."

This article originally appeared in The Globe and Mail.

Image: Flickr/Mehr Demokratie

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