Yesterday in the House of Commons, Prime Minister Harper tabled a technical summary of the political deal Canada reached with the European Union on Friday, October 18. He invited a dozen or more CEOs to witness the spectacle from the bleachers, and they partied it up with Trade Minister Ed Fast in the afternoon (even though negotiations on key issues like investment and sustainable development continue in Brussels on November 25 and December 2).
The summary Harper tabled contains very little new information about the CETA trade-offs that was not already available on the government's Action Plan website, or that was not already reported in news stories this week. What it does contain confirms our fears about the EU deal -- that what little new access Canadian businesses will find in Europe is more than offset by the costs (financial and democratic) we will face if CETA is eventually ratified in its current form.
From the few details in the flimsy technical summary, a few things jump out for me:
- The government continues to misleadingly claim that CETA will protect "governments' right to regulate and right to sovereign control over the development of natural resources." Canada and the provinces have a right to introduce new policy but only if it does not upset the ample investor (corporate) rights in CETA. That's why Lone Pine Resources is suing Canada for a moratorium on fracking in parts of Quebec -- because under NAFTA we are forced to compensate companies for the indirect expropriation of their profits. CETA will be nearly identical to NAFTA in its investment protection provisions, meaning we only have a right to pay to regulate under this deal. CETA's investment chapter makes it no less likely that Canada will see more NAFTA-like disputes against environmental and resource-related policy -- a growing focus of investor lawsuits globally.
- Only public health care, public education and public social services are excluded from CETA, which will otherwise lock in existing levels of privatization in those sectors, putting pressure on us to further liberalize. If we wanted to limit privatization or increase public involvement in any of these sectors (e.g. by introducing a national pharmacare plan to contain costs), we could be sued by the EU or EU companies for lost investment opportunities.
- The summary provides no details on what service sectors are excluded from liberalization commitments in CETA other than the misleading comments about social services. It is almost certain that public drinking water and sanitation services are covered, meaning that the privatization of water that the Harper government is encouraging at the municipal level will also be locked in by strong investment protections. Up to this spring, the EU was protecting its water sectors from these pro-private rules (exempting water). The Harper summary suggests there will be an exemption for P3s (where most water privatization is happening) but that only applies to CETA's procurement rules, not the rules on expropriation. That means it will be difficult to impossible for municipalities to reverse water privatizations under CETA, even if the water companies are not meeting public expectations.
- Liberalization and deregulation of telecommunications will be locked in by CETA, according to the document, opening the door to widespread foreign ownership of Canada's telecom and cultural sector.
- Financial services policy will be subject to investor-state dispute settlement for first time but with a screen for prudential measures that governments take to stabilize the economy or avert a financial crisis. European companies will still be able to claim expropriation from financial stabilization measures that hurt profits, but a committee made up of financial regulators will have to first agree that the measure in question was excluded by the prudential carveout.
- There are no details on the chapter on state-owned enterprises and monopolies, which could interfere with the functioning of Crown corporations, Canada Post, Ontario Power Generation, etc in the interests of increased privatization.
- In the procurement blurb, we find out that "buy local" is gone for most government entities, including municipalities, but there are no specifics. The Harper government is pretending that cities will still have the capacity to encourage local development and jobs via loans and grants, but this is obviously a much more expensive way to attract investment than by simply requiring companies bidding on public projects to source some of their goods or services locally. We also learn that about 75 per cent of hydro procurement is covered, and there major concessions on transit. Only Quebec has held onto the right to insist that subway cars, trolleys and busses are assembled in Canada. How the heck did the Federation of Canadian Municipalities come out in support of this deal when they expressly asked for the space to apply local content rules on transit projects?
- Canadian firms already have access to the EU procurement market. It was almost completely open, with no restrictions for Canadian firms, before CETA negotiations began. So the section on "new" access for Canadian firms in Harper's summary can be torn out or ignored.
- Canada's regional development exception from the procurement chapter is limited to contracts under $1-million, and only for some provinces, and can only be used 10 times in one year. So it is barely worth the exception at all. This was a royal cave in to aggressive European demands to make it impossible for the provinces and municipalities to use public spending as a job creation or local development tool.
- The government summary admits again there will be costs to pharmaceutical patent term extension but now says it "is prepared to address" them once those costs begin to be felt in 2023. Is that a step down or backing away from provincial demands that these costs be compensated?
- We need to see the copyright chapter (and full intellectual property chapter) to see whether it really does not reproduce elements of the Anti-Counterfeiting Trade Agreement (ACTA) that were rejected by the EU parliament in 2012. There have been no leaks of this chapter since February 2012 and the government summary is unhelpful.
- There seem to be over a dozen new committees that will be established to review the implementation and functioning of CETA if it's ever ratified. In other words a massive, expensive state bureaucracy to police the new corporate order. It's another public cost associated with CETA when there are so few real economic gains for the vast majority of people from that order.
- Like NAFTA, CETA can be cancelled with six months' notice (but the investment protections will live on for 20 years after termination).
- Last but not least, there will be no penalties at all or trade sanctions if the labour or environmental chapters are violated! Get in the way of corporate profits and you can face punishing lawsuits of billions of dollars. Upset labour rights or multilateral environmental agreement commitments and you don't even get a slap on the wrist.
The CEOs in the bleachers today must have been smiling, giggling even. CETA will take the corporate agenda to the next level, removing public oversight and democratic decision making from even more areas of our lives and giving private investors more rights to penalize governments like Quebec for trying to protect the environment or reduce climate emissions. Even the basic right to "buy local" instead of buying from the big multinationals will vanish for Canadian communities.
Please sign the CETA petition demanding a that the Harper government make the deal public and give the public a chance to review, revise or reject parts or all of CETA. If your mind is made up, you can also write to Prime Minister Harper asking him to tear up the agreement and walk away. Visit canadians.org/CETA for more information about the Canada-EU corporate rights deal and what you can do to stop it in your community.
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