What you need to know and what you can do to stop CETA from being ratified!
Click here for a video panel discussion on the detrimental aspects of CETA –
The Comprehensive Economic Trade Agreement (CETA) is a free trade agreement (FTA) between the EU and Canada. (1) The ratification of CETA in the Dail is set to go to a vote very shortly, which is due to the inclusion of the investor protection mechanism within the agreement.
Eamon Ryan was formally opposed to CETA, however, he now is in the process of pushing through adherence within the Green Party in relation to the ratification of CETA. (2) Before Christmas this FTA was nearly ratified in the Dáil, yet, some in the party were diametrically opposed to ratifying for a number of reasons. (3)
The provisional application of this agreement commenced in 2016 excluding the investor protection mechanism provisions that are encompassed within CETA. (4) There are a number of contentious points that have been raised by civil society, due to the numerous implications this agreement will have in terms of the deregulation of standards, the environment/ climate justice, the erosion of the precautionary principle and opening future progressive governments to a litany of arbitration or at the very least lead to a regulatory chill effect on future policy decisions.
CETA is a free trade agreement that has rarely featured in terms of a national debate over the last few years, but, it will have far-reaching impacts for Irish society and here is why; (5)
- There are no current Bilateral Investment Treaties (BITs) besides some sector-specific obligations included under the Energy Charter Treaty. The ratification of CETA would mean that really for the first time ever, we accept liability to investors for the ways regulations and administrative decisions impact them, which will give them privileges beyond those in existing domestic and European Laws. (11)
- The ratification process was nearly rushed through before Christmas in Ireland. The investment obligations in CETA will continue for 20 years even if the rest of the agreement is terminated. This 20-year obligation has led to the coined term ‘sunset clause’. Other agreements with Vietnam are also awaiting ratification, so this perhaps could be Ireland’s only opportunity to say “No”.
- Specifically, people and civil society have a number of qualms with the investment protection mechanism (ISDS/ICS) that allows investors foreign corporations to bring legal challenges against governments, who are deemed to have directly, or indirectly, expropriated their property/ forecasted unearned profits. (6)
The average cost of these cases can be very expensive ranging from $8 million and awards have been as high as $50 billion. (7) As well as the high costs associated with these cases the constraints that they put in place in terms of inhibiting future progressive governments from introducing a policy that is in the interest of the public good but impacts the forecasted profits of these non-domestic corporations. (6) Buzzfeed published an in-depth investigation into Investor-State Dispute Settlement (ISDS), which can be accessed here.
The other concerning aspect of the Investor Court System (ICS) formally (ISDS) investment protection mechanism is that it only allows foreign corporations to sue governments outside national and EU courts, so it is very much a one-way system. (8) The ICS may say courts, however, this is misleading, as they are not courts with judges they are arbitrations with arbitrators, who have an interest in seeing the cases prolonged.
This quasi-judicial court system will include a group of 12 arbitrators, who individually will accrue €24,000 a year, as a flat retainer. When these arbitrators sit on the panel they will be paid €2,000-3,000 a day if they go to appeal the three arbitrators presiding over the case will be paid + €7,000 a day.Link to source: https://www.tni.org/files/download/profitingfrominjustice.pdf
The arbitrators in these cases obviously have a financial interest and the longer these proceedings take place, inevitably the higher frequency of corporations winning will inevitably ensure arbitrators services are in high demand in the future. (9)
What do the council of Canadians say? Click below –
The fear of regulatory chill is not a new concern, as there were numerous cases taken previously that impinge on a government’s ability to regulate an industry in the interest of the public good. (10) The reason for this chill can be due to the fear of costly litigation associated with these arbitrations. The state can be inclined to avoid entering into arbitration by seeking to settle or completely discontinuing their intended policy that is in the interest of wider society, as it conflicts with the potential forecasted profits of foreign corporations. The root issue with this “investment protection is that there is no plausible problem to which it is the solution.” (11) The constraints apparent within the CETA investment chapter are misaligned with national and global environmental objectives aside from the obvious conflict with future governments integrating progressive policies.
Noam Chomsky points out during an interview with Channel 4 that “The so-called free-trade agreements are not free-trade agreements. To a larger extent they’re not even trade agreements. These are investor rights agreements.”https://www.salon.com/2016/06/04/the_media_unleashed_this_beast_partner/
The conventional narrative associated with the justification for investment treaties primarily lies in utilising these agreements, as a way for attracting foreign direct investment. Empirical studies cast doubt on that story, which found they have little or no effect on investment flows as a result of establishing these agreements. (12) The rationale underpinning these provisions were primarily centred on providing ‘peace-of-mind’ to investors, who may have concerns investing in developing countries with weak rule-of-law institutions, the perceived risks of discrimination, expropriation and inadequate access to justice. (11) As alluded to by Suttle in his Business Post article “Ireland has had no issue attracting international investment providing these additional international legal guarantees.”
‘CAI’ a free trade agreement recently signed between China and the EU, which excluded the ICS/ ISDS provision. (13) The renegotiated North American free trade agreement, (NAFTA) which was signed by the US, Mexico and Canada included this ISDS provision but after recent negotiations will be excluded from applying to Canada. While governments have the rights to regulate, companies also win the right to “legitimate expectation” of profit, and to “fair and equitable treatment”, so we still have the option to improve laws and regulations, however the taxpayer will have to pay companies for all their ‘lost’ future unearned income.
“It is precisely because the ICS (ISDS) component of the CETA (the only part of the agreement which needs member state parliamentary approval in order to be ratified and come into law) will involve future financial charges on the state that the Tánaiste is forced to seek approval of CETA under a motion, “in accordance with Article 29.5.2 of the Constitution”. When an international agreement can result in the state being charged or fined then prior to its adoption, the Constitution requires the Dáil to approve it under Article 29.5.2. This relates to the ICS (ISDS) of CETA.” (Finnegan, 2020) The German Association of Judges has claimed in its public opposition to the proposed new legal parallel system of CETA, the ‘reformed’ Investor Court System (ICS) that it, “sees neither a legal basis nor a need for such a court [i.e. the ICS]” (12)
Three final things to note:
- The environment and the labour chapters of CETA are legally unenforceable,
- Nowhere in the document does it refer to the role trade play in the fossil fuel emissions, biodiversity loss and deforestation (Finnegan, 2020)
- On March 6th 2018, the ECJ ruled that ISDS agreements between EU member states were incompatible with EU treaties and therefore illegal. The judgement said that only the ECJ (CJEU) had the right to interpret and apply EU law:
New ECJ ruling could spell the end of 200 intra-EU investment agreements. *
How to get involved find out more –
Find out your TD – https://www.whoismytd.com/
The full panel discussion hosted by Slí Eile –
Follow on Twitter – https://twitter.com/StopCetaIreland?s=20
Make your community a CETA free zone –
Link to a great recording of a panel discussion summarising CETA – Tortoise Shack & Alice-Mary Higgins Stop CETA – https://tortoiseshack.ie/ep-452-stopceta-with-alice-mary-higgins/