The 'Canadian TTIP': a unique gift for transnational corporations

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• September 21st, 2017

Francesca Ricciardi, Lucia Bárcena and Tom Kucharz  
Members of Ecologists in Action and the State Campaign No to TTIP, CETA and TiSA

On September 21, the trade and investment agreement between the European Union and Canada (CETA) will be applied on a provisional basis, a gift to economic and financial elites that has clashed with mobilizations and unprecedented political opposition on this political issue.

The first thing to note is that only 4 parliaments from the 28 EU Member States have ratified the agreement. 

However, the CETA will only come into full force when all EU parliaments have ratified it. And we are very far from that. 

In spite of this, most of the agreement provisionally applies, such as the sections on the elimination of tariffs on goods, the chapter on services and public procurement, as well as regulatory cooperation.

With provisional application Canadian beef and pork products with toxic and banned products in the EU (such as hormones or ractopamine) or transgenic salmon can be imported due to the lack of controls and certification procedures for Canadian meat and fish on arrival at European border inspection posts. 

With the sole control of the Food and Veterinary Office in Canada, there is no guarantee for animal welfare, its food and antibiotics supplied, the absolute lack of traceability and the labeling of products containing genetically modified organisms (GMO), as well as the type and levels of pesticides authorized and used.

Canada still allows 46 banned active substances in the EU and that maximum permitted levels of pesticide residues in food products are much less demanding in Canada than in the EU.

Imports of meat are a matter of concern to European family farms because production costs are lower in Canada. 

This could aggravate the price war. With the reduction of tariffs in CETA (for example 87% in processed food), prices for poor food will be further reduced, which will increase health risks.

What are the implications of the chapter on regulatory cooperation?

This chapter will have very negative long-term impacts, delaying or complicating the regulation of parliaments and governments because there will be more mechanisms to block new regulations from the Canadian government and business associations.

We have seen it with the regulation to ban hormone contaminants (endocrine disruptors) and regulation of toxicants in the EU (REACH). 

Canada, the United States lobbying in Brussels, and the transnational corporations that employ these chemicals in their products, have been able to delay the regulation of endocrine disruptors by almost four years.  

Endocrine disruptors alter the hormonal system and by this alteration can produce diseases like cancer and metabolic problems (obesity and diabetes). 

Its health cost in the EU is estimated at a minimum of 160,000 million euros per year.

As of September 21, transparency regarding the work of the regulatory cooperation bodies is not guaranteed. 

We are concerned that the various regulatory co-operation committees will start operating without being obliged to publish ex-ante agenda, activity reports and conclusions, as well as the opinions and positions of the different authorities on draft regulations which will be affected by CETA.

These committees are mainly seeking to increase economic exchanges and not to strengthen standards of protection of health, workers and the environment. 

The mechanisms of dialogue envisaged short-circuit democratic parliamentary processes, and at this stage a risk of interference of private interests in the decision-making process can not be ruled out.

The problem is that many of the effects of regulatory cooperation will be difficult to understand. 

This is the pressure behind closed doors on officials who prepare or change laws, which we will never be able to detect or prove in case of doubt. Parliamentary control of how this chapter will be used will be crucial.

This means increasing control over business lobbies. We must be vigilant and react to any denunciation of deputies and officials when the authorities are pressured by CETA means. And we need officials to make public this pressure.

CETA enables the banking and financial sector to expand the cross-border sale of high-risk financial services to and from the EU's single market. 

And instead of prohibiting speculative trading, CETA will constantly adjust based on the evolution of both markets. 

A step to give more rights to banks and speculators, preventing urgent regulations in this sector that may trigger new outbursts of speculative bubbles such as real estate in Spain.

With the provisional application, the energy sector will also be liberalized, which will deepen the climate crisis. 

Canada will export more products derived from the extraction of hydrocarbons from tar sands, increasing the demand for unconventional oil and the exploitation of fossil fuels. 

It is shameful as the Canadian government itself advertises on its website the "opportunities and benefits of CETA for Canada's oil and gas exporters" by dropping tariffs on tar sands from 2.2% to 0%.

In Spain, no commission has yet been set up to oversee the provisional implementation of CETA, which could be asked to assess the health and environmental impact and to monitor sensitive issues such as new techniques for obtaining genetically modified varieties, as well as the evolution of regulations on plant protection products (eg classification and prevention by endocrine disrupters).

The protection of investors in CETA is one of the most dangerous chapters of this agreement

Arbitration litigation in CETA will be much easier than in other treaties such as the NAFTA, the trade agreement between the United States, Canada and Mexico that is currently being negotiated. 

CETA is the first treaty in the world to explicitly protect the "legitimate expectations" of investors through what is known as a "fair and equitable treatment" clause. 

If this chapter were to come into force, a broad interpretation of this clause could be typified, which would create "the right" to a stable regulatory environment. 

This would give investors an instrument to combat any regulatory change, even if it is adopted in the light of new evidence or democratic options.

Just before the CETA was signed a year ago, the European Union and Canada have tried to divert the substantive debate on the incompatibility of arbitration tribunals and the rule of law with very misleading explanations. They have signed interpretative statements, without changing the content of the chapter. 

But it is sad that this offensive of makeup and propaganda has managed to catch part of the media and political parties.

Without analyzing that the CETA could trigger a rise of litigation of large companies which could constitute a serious threat to the initiatives of the governments and parliaments to protect the citizenship and the environment.

Belgium has used the arbitration system before the Court of Justice of the European Union

There are lawyers who consider it likely that the European Court of Justice will decide that investor protection in CETA is not compatible with EU law. 

The European court could argue that only European courts are responsible for the interpretation of European law and not an international arbitration tribunal. 

But there are, of course, lawyers who see it differently. 

The process of analysis by the CJEU alone is a small victory of the CETA movement and could prolong the ratification process. 

Some parliaments will want to wait for the court's ruling before voting on the treaty if there are concerns about the legality of CETA.

And what happens if a country does not ratify the CETA?

If a country says No, ratification has failed and the treaty will not be legally binding. 

There is also the assumption that some countries will never bring the treaty to ratification for fear of losing the vote. 

That would mean that most of the CETA would be implemented by way of facts, but not legitimately or democratically. 

And without the full ratification and entry into force of CETA, the chapter on investment protection never came to light. 

This, too, would be a victory for the resistance movement against the neoliberal policies of the EU and the Spanish Government.

Nonetheless, the social and political organizations that are part of the campaign against CETA are confident that citizen and legal initiatives will succeed in curbing the CETA and launching alternative trade policies that place the fulfillment of human rights at the center. gender equality, labor rights and social and environmental justice.