“Thinly veiled threats” from corporations.
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
Visibly shaken, as Reuters put it, Canadian trade minister Chrystia Freeland walked out of EU trade negotiations in Belgium on Friday evening, lamenting that the EU is “incapable of reaching an agreement – even with a country with European values such as Canada.”
A big trade deal that had taken years to negotiate, mostly in total secrecy, had just collapsed. So how in the world did such a mega screw-up happen?
In Europe, all that is needed for the Comprehensive Economic Trade Agreement (CETA) with Canada to come into effect, “provisionally” (in EU double-speak, more or less irrevocably), before being passed to national parliaments to vote on, is for the governments of the EU’s 28 Member States to sign along the dotted line.
This could usher in a new age of corporate domination, for CETA, just like its sister deals TTIP, TPP and TiSA, is not really a trade deal at all; it’s an investment rights deal that will effectively neuter the ability of national elected governments to regulate in the interests of their electorate.
Yet almost all of the EU’s national governments are firmly on board. Even the UK government has promised it will sign the deal, even as it prepares to negotiate a clean break from the EU. In Spain, there is no elected government, yet Rajoy’s caretaker administration has assured Brussels that it, too, will happily lend its signature to the agreement.
But the European Commission needs the signatures of all 28 nations. And to its mounting frustration, the Belgian region of Wallonia refuses to sign the agreement, citing a host of social, political and economic reasons, including the inclusion of an Investment State Dispute Settlement (ISDS) clause and the possibility of non-Canadian corporations using the deal to gain greater access to EU markets. As long as the region of 3.5 million refuses to sign along the dotted line, Belgium’s federal government’s hands are tied.
Wallonia’s resistance has already prevented EU trade ministers from gaining unanimous support for the deal at a meeting in Luxembourg on October 18, as was originally planned. Senior Eurocrats and members of the Canadian government are understandably furious. So, too, are the hundreds of business lobby groups that kindly helped draft the trade agreement.
“Nobody would understand if it were not possible now, after so many efforts,” said an exasperated Martin Schulz, the EU Parliament chief.
“The problems go beyond CETA,” warned the president of the European Council, Donald Tusk. “If we are not able to convince people that trade agreements are in their interest (Ha!), that our representatives negotiate the FTAs to protect people’s interests (Ha Ha!), we will have no chance to build public support for free trade, and I’m afraid that it means that CETA could be our last free trade agreement.”
Predictably, Walloon President Paul Magnette has come under intense pressure to change his mind on CETA, after Wallonia’s regional legislature rejected the deal on Oct. 14. The Canada European Roundtable for Business promptly sent Magnette a “bluntly worded letter,” while Canada’s Trade Minister Chrystia Freeland dispatched Pierre Pettigre, a former trade minister (and current director of several Canadian mining interests) to meet with Magnette.
After the meeting with Pettigrew, Magnette told reporters that “the pressures are very strong.” He also complained that his region had faced “thinly veiled threats” from corporations before the Oct. 18 trade ministers meeting in Luxembourg. None of which should come as a surprise given the stakes involved. As Tusk said, “to have the deal between over 500 million EU citizens and 35 million Canadians fall apart over the objections of a region of 3.5 million after seven years of talks would undermine the credibility of the EU as a whole.”
It would also deliver yet another heavy blow to the designs and aspirations of the global corporatocracy, which has already had to suffer the ignominy of failing to get the Transatlantic Trade and Investment Partnership (TTIP) passed into law before the end of President Obama’s second term, due to the sheer scale and intensity of public opposition to the deal in Europe. Even the Trans-Pacific Partnership, which has already been signed but not ratified, is beginning to face mounting opposition in countries like Japan, Vietnam, and the US.
The biggest concern in Europe is over the much greater role that private arbitration will play in a post-CETA world. It would effectively grant corporations full sovereignty rights – including the right to sue any government that threatens their ability to earn profits at just about any social, human, or environmental cost. The difference between CETA and its sister agreements TPP and TTIP is that instead of investor-state dispute cases being heard in private arbitral tribunals, they would be heard in a permanent international Investment Court System – ICS – with real judges and slightly more transparency.
But the end result would be more or less the same: punitive legal fees for national governments and billions of euros in damages drained from public coffers. That’s not to mention the inevitable rise in regulatory chill, as governments refrain from passing regulatory measures in the public interest due to the threat of being sued by private foreign investors. Once such a system is in place, each and every investment that foreign corporations make in a member country will effectively be backstopped by that government (and by extension, its citizens and taxpayers); it will be too-big-to-fail writ on an unimaginable scale.
And yet, in the most perverse of ironies, it is a system that appears to be almost universally endorsed by our political leaders, who are effectively voting themselves out of a job. It is an irony that was not lost on the Spanish arbitrator Juan Fernandez-Armesto, who had the following to say:
When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all […]. Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.
If CETA is signed, it won’t be just Canadian investors and companies who will be able to sue EU governments. As the second edition of the report Making Sense of CETA argues, 81% of US enterprises active in the EU (about 42,000 firms) would conceivably fit the definition of a Canadian “investor” with recourse to ISDS under the EU-Canada agreement:
US companies are already known for this kind of aggressive exploitation of the ISDS system. Should the provisions on investment protection in CETA survive, if or when the agreement is ratified, there would be virtually no need to incorporate them in the Transatlantic Trade and Investment Partnership (TTIP).
In other words, it would be game, set and match for the global corporatocracy. The only thing stopping that from transpiring is the government of the tiny region of Wallonia in the small country of Belgium. By Don Quijones, Raging Bull-Shit.
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