CETA: The real reason Europeans oppose CETA

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The real reason Europeans oppose CETA

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Waterloo Region Record By Gus Van Harten October 28, 2016

Europeans have great affection for Canadians. Yet millions of Europeans oppose the Comprehensive Economic and Trade Agreement (CETA) between Canada and Europe. Why?

Some commentators suggest it's because of pettiness or internal squabbling in Belgium. Those claims are wrong.

The real reason is that many people in Europe have learned about parts of CETA that have little to do with trade and decided to oppose them.

Time and again, in countries where almost no one had heard of CETA, public opinion shifted suddenly. The recent opposition in the Belgian region of Wallonia is just the latest example.

For those who have watched these events unfold over the last two years, the leading reason for European opposition is clear. CETA would expand a controversial foreign investor protection system known as "investor-state dispute settlement" (ISDS) or the "investment court system" (ICS).

A similar system to protect foreign investors is found in other trade agreements, led by the North American Free Trade Agreement (NAFTA). Canada's acceptance of ISDS in NAFTA remains unique among developed countries, even two decades later. ISDS is also prevalent in over 2,000 bilateral investment treaties, but in a context where it primarily disciplines developing and transition countries.

CETA would greatly expand the existing foreign investor protection system. Combined with the proposed Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP), it would apply ISDS comprehensively among developed countries. Put differently, a few new massive trade deals would turn ISDS into an immutable global institution.

ISDS is controversial for four reasons:

•It gives powerful rights to foreign investors, without corresponding responsibilities.

•It creates potentially massive financial risks for democratic regulation.

•It allows foreign investors to sidestep courts.

•And it compromises judicial independence and fair process, despite improvements on this point agreed earlier this year between the Liberal government of Justin Trudeau and the Europeans.

Millions of Europeans have rejected ISDS in remarkably strong terms, most notably in Austria, Belgium, Germany, Hungary, the Netherlands, Poland, Romania and Slovenia. Many have seen through claims by ISDS lawyers and the European Commission — carried widely in European media — that ISDS only protects foreign investors from discrimination and expropriation, or that it does not interfere with democratic law-making. These claims are misleading, to put it mildly.

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Gus Van Harten is a professor at Osgoode Hall Law School and the author of Sold Down the Yangtze: Canada’s Lopsided Investment Deal with China (Lorimer).