Secret Details of Canada-EU Pact Prompt Scrutiny

Last Updated on January 24, 2019

A text of Canada’s free-trade deal with the European Union has apparently been leaked by a German news outlet and it suggests that Canadian authorities will be facing possible legal challenges from Europe-based corporations who believe that Canadian government’s decisions hinder their profit-making ability.

Final touches on the deal were put by negotiators last week, however Harper’s government has not yet confirmed when the MPs and the Canadian public will get to know what Ottawa agreed to with the EU. However, certain versions of the pact emerged from Europe last week.

Many have questioned whether the deal should include an investor-state dispute settlement (ISDS) mechanism, which is a measure similar to the much-maligned provisions in Chapter 11 in NAFTA, which allow multinational businesses to go to a special tribunal instead of regular courts in order to sue governments for regulations that a corporation believes to be discriminatory.

The leaked text confirms that Canada and the EU have agreed on ISDS measures as part of CETA. Although these measures are being welcomed by businesses, there is a growing concern in Europe that this will give corporations too much power and that businesses should go through the regular court procedures in Europe or Canada if they wanted to sue governments.

Shannon Gutoskie, spokesperson for International Trade Minister Ed Fast, said, “Canada does not comment on leaks of purported negotiating texts. We have released comprehensive materials which describe the various elements of the agreement and clearly show the significant benefits that will be generated in every region of Canada upon the agreement’s entry into force.”

Germany and France have particularly raised concern over the deal and trade experts feel that the EU and Canada might have to refine the ISDS provisions in CETA to meet the European objections since the process of final approval grinds away over the next two years.

Emerging details of the pact also suggests that CETA is likely to raise more concern about procurement rules that limit the ability of federal, municipal and provincial governments in Canada to favour local companies on a wide range of construction, supply and service contracts. In recent years, several local governments across Canada have objected to being subjected to CETA’s procurement provisions.

The leaked texts also say that Ottawa has agreed to the new rules concerning pharmaceutical patents that might eventually push up the cost of prescription drugs by about $850 million or more annually.

“I think this final text shows us that we’ve had every reason to be concerned about procurement and investor-state and certainly other provisions of the deal. We’re not seeing anything here that would alleviate the profound concerns and criticisms that we have of this so-called deal,” said Brent Patterson, political director of the Council of Canadians.

According to Patterson, the leak “is really a first chance for the public to be able to scrutinize the deal the way we should have been given the right to do months or years ago.” Patterson also said that he expected to see increased opposition to CETA now that details of the deal are becoming available.

The Harper government has said CETA will give a long-term boost to Canadian economy by opening up the huge European market to Canada’s businesses.

Harper, who went to Europe last fall to sign a tentative agreement on CETA, is going to host a Canada-EU summit in Ottawa next month to officially approve the pact which is now in its final stages of the approval process. However, it still needs to be translated, legally vetted and ratified by Canada and the 28-member EU before it comes into force. According to Canadian officials, this is expected to happen in 2016.

This deal will also set out the creation of Canada-EU committees on subjects like customs co-operation, government procurement, services and investment, financial services, sustainable development and regulatory co-operation to address issues arising in these areas.

The pact also shows how tariffs will be eliminated over a period of seven years or so and sets out how much will be duty-free for products like shrimps, frozen cod and wheat during that time frame.

It is estimated that by sixth year of the deal, Canadian producers will be able to export 75,000 tonnes of pork, more than 45,000 tonnes of fresh and frozen beef and veal, and about 18,000 tonnes of cheese to the EU.

Attorney Colin Singer Commentary: These developments will favour increased mobility of skilled trades’ personnel between Canada and the EU.  It will favour new labour mobility agreements to facilitate easier access to the Canadian labour market and provide EU Nationals with lower barriers to Canada work permits and Canadian permanent residence.

Source: Thestar