The Newfoundland and Labrador Independent | 3 October 2014
The threat of CETA: trade, investment and workers’ rights
By: Mary Shortall
The damage CETA will wreak on our economy and our democratic rights is unprecedented. But it can still be stopped.
Our economy has long operated and flourished by trading goods and services. Unions agree that our society and the well-being of its citizens benefit from trade deals that put people first. We recognize that good trade relations are key to supporting a strong and diversified economy. Labour’s concerns are not with the idea of trade, but with the details that appear in these negotiated deals. Such is the case with the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).
One of the questions we use to assess a trade deal is: how will this deal impact our democracy? Will there be a greater imbalance of power between the wealthy and the rest of us? The CETA is a clear example of the type of trade agreements negotiated by the Harper government that put corporate rights first. Let’s be clear — multinational corporations, global investors and “free-market” policy makers were at the table calling the shots during these negotiations, and we ended up with a deal that increases inequalities and erodes workers’ and citizens’ rights.
CETA details finally released
After years of secret meetings between Harper and the power brokers of the EU—with absolutely no consultation with the general public—the details of the CETA have finally been released.
While the Harper government would like us to believe that the CETA is a done deal, there are other folks in the EU—notably Germany—who have a different opinion. In fact, debate over the deal is ongoing within the European Parliament and all 28 member states. The CETA is far from being ratified. Thomas Walkom of the Toronto Star recently wrote that in Europe, the politics of CETA have become “enmeshed in the debate with the Americans” (over a potential free trade deal with the U.S.), and that the “Investor State” provisions (legal protections which could allow corporations to sue governments to stop or repeal laws) in the CETA could set a precedent for the Americans to exploit.
The supposed benefits for Canadians, as touted by Harper, are also easily refuted by our own critics. For example, we are promised that 80,000 new Canadian jobs will be created. Jim Stanford, an economist with Unifor, says this bogus number is based on the assumption that no one can ever be unemployed. Beef and pork producers, cheese makers and domestic automakers are also wary of any benefit government claims they will receive by having more access to European markets that produce and export the same goods.
Details from Ottawa have been scanty at best. There has been very little hype anywhere in Canada. No accident, that! The people who stand to benefit know all about it. The rest of us—the majority of Canadians—will be left to pay the price.
The “Cost” of the CETA for Canadians
The Canadian Centre for Policy Alternatives (CCPA) has been busy putting together a very comprehensive 127-page analysis of the CETA’s final text. One of the most telling signs according to their analysis, is that even without this agreement, trade barriers between Canada and the EU are already very low. So, what’s in it for the “big guys”? And what does the average Canadian worker have to worry about?
The reality is that this agreement is about much more than trade. According to the CCPA, the CETA is a “sweeping constitutional-style document that affects many matters only loosely related to trade, including investor rights, intellectual property protection for pharmaceuticals, government procurement, buy-local food policies, public interest and financial regulation, the temporary movement of workers, domestic regulation and public services.”
What that means is that our ability to develop policy and enact regulations that protect workers and local purchasing, our environment and our public sector—including health—is all at risk.
We can expect to pay more to boost profits for the big pharmaceutical companies as patent protection becomes extended for medicines. A study done by the Universities of Calgary and Toronto reported that these changes would cost Canadians almost $3 billion more in drug costs a year. Drugs are the fastest-growing component of health care costs in Canada, yet there has been little public debate about this aspect of the CETA.
The purchasing authority of municipalities may be severely restricted too. Cities that prefer to purchase Canadian goods, or which put minimum Canadian content quotas on infrastructure projects—including local labour—may be prevented from doing so under the CETA.
European woes could spread to Canada
According to CCPA’s research, Europe is going through a profound transformation. As part of its unification process, it has adopted an agreement on procurement that not only allows the private sector of each country free entry into all other EU countries, but also paves the way for their success by promoting—often by law—public-private partnerships (P3s) to enhance business opportunities for these corporations.
As a result, Europe is privatizing its public utilities and services such as transit, water, postal, and hydro at an alarming rate. This is the model of development being negotiated for Canada in the CETA. Add to this the “austerity measures” now being imposed on many European countries, which include the wholesale sell-off of assets such as water, and we are talking about a very different Europe where workers are struggling for basic rights and where basic social services are being privatized.
Many municipalities have now passed resolutions demanding to know more about the CETA threat to their jurisdictions and, in particular, many are demanding that water services be fully exempt.
For the first time, under the CETA, the provinces were at the table negotiating away their own rights and those of their municipalities. The CETA allows corporations to bid on all “sub-national procurement” — that is, all the ways in which provincial and municipal governments spend our tax revenues. Access to these levels of government contracts was not available in previous trade deals and represents a lot of money for foreign companies — anywhere from $100 billion to $200 billion a year.
European corporations want to sell Canadians the services we now receive publicly; services such as health care, education, water and mail delivery. The CETA will give these private companies the right to bid on government tenders for goods and services — among them schools, hospitals, airports, public transit, ports, and hydro projects.
Under the Harper government, Canada has doubled the number of free trade deals it has signed: 10. It has 14 more agreements in the works, along with a series of proposed Foreign Investment Promotion and Protection Agreements (FIPAs), which provide North American Free Trade Agreement (NAFTA)-like rights and privileges to foreign investors. That means the debate over free trade and its role in facilitating economic expansion, prosperity and development is far from settled.
Investor State Dispute Settlement (ISDS)
The CETA includes an investment chapter that is “the icing on the cake” for foreign investors and multinational corporations. Canada and the EU commit themselves in this chapter to “strong market access rules, prohibition of performance requirements, non-discriminatory treatment of foreign investors, and high standards of investor protection.”
In other words, these foreign investors and corporations can sue our government using an independent court whereby a private (for-profit) arbitrator gets to render a decision—bypassing all domestic courts—clearly undermining governments’ right to regulate, and actually discriminating in favour of the foreign investors and corporations.
Newfoundlanders and Labradorians will remember when our government was sued under a similar provision in NAFTA after the closure and expropriation of the paper mill and land in Grand Falls-Windsor. The Harper government paid Abitibi Bowater $130 million for the timber and water “rights” the company claimed when it picked up and left this province and its workers high and dry.
Any rules or practices that favour local economic development, support local food production or promote local or Canadian goods and services can be challenged as unfair barriers to trade. As well, these corporations will have the right to challenge any local laws that promote fair trade or reflect the environmental concerns of the community, such as bottled water bans. In essence, European corporations will have the right to sue Canadian governments if they think we are interfering with their “right to profit”.
So what do we do now?
By all accounts, it will take another two years or so for the CETA to be ratified by all member countries. What can we do in the meantime?
We know there are other options besides a “pro-investor” agreement like this. We need to bring this debate to the public forum. Australia and South Africa, for example, have been able to reduce corporate privilege in trade deals. We must organize and mobilize around a different set of guiding principles that govern trade.
“Fair” Trade Deals should incorporate principles that matter to the citizens of Canada. Agreements where corporations and citizens benefit should feature fairness, transparency, inclusiveness, the protection of public services, workers’ rights, Indigenous rights, autonomy and national self-determination. They should be about industrial and social development, cultural sovereignty, sustainability, and not about state investment chapters or dispute settlements.
The upcoming federal election is an opportunity for progressive voices to promote our vision of fair trade. We can challenge the federal government on their trade agenda and encourage opposition candidates to challenge these deals. We can talk to our sister unions in the countries where these deals are being negotiated. Provincially, we need to demand a full and open debate on the CETA. We need to engage the citizens in a discussion about trade deals and alternatives. We need to engage our members as well on how these deals impact their lives.
That is what real democracy looks like.