Fighting TTIP, CETA and ISDS: Lessons from Canada By Maude Barlow About the author Maude Barlow is the National Chairperson of the Council of Canadians. Maude is the recipient of twelve honorary doctorates as well as many awards, including the 2005 Right Livelihood Award (known as the “Alterna- tive Nobel”). She served as Senior Advisor on Water to the 63rd President of the United Nations General Assembly and was a leader in the campaign to have water recognized as a human right by the UN. She is also the author of dozens of reports, as well as 17 books, including her latest, Blue Future: Protecting Water for People and the Planet Forever. She has been active in the fight for fair trade deals in Canada and around the world for decades. This report was made possible through the generous support of the JMG Foundation. Photo credits CC by-nc-sa 2.0 Page 2: Photo © Wolfgang Schmidt Cover: “Canadian Pride“ by Brandon Koger, cropped and modified, Fighting TTIP, CETA and ISDS: Lessons from Canada is published under the Creative Commons licence Attribution- NonCommercial-ShareAlike 4.0. Fighting TTIP, CETA and ISDS: Lessons from Canada 2 Fighting TTIP, CETA and ISDS: Lessons from Canada Contents Introduction .................................................................................................................................................................................... 5 What are TTIP and CETA? ......................................................................................................................................................... 5 How do TTIP and CETA curtail the right of governments to regulate? ................................................................. 6 What is ISDS? .................................................................................................................................................................................. 7 What is Canada’s experience with ISDS under NAFTA? ............................................................................................... 9 Why does CETA matter as much as TTIP? ...................................................................................................................... 11 What about attempts to reform ISDS? .............................................................................................................................. 13 How can we work across borders to defeat these deals? ......................................................................................... 14 Endnotes ........................................................................................................................................................................................ 15 Fighting TTIP, CETA and ISDS: Lessons from Canada 3 Fighting TTIP, CETA and ISDS: Lessons from Canada 4 This paper is offered as a warning to Europeans who care about the health of their people, the resilience of their communities, the fate of their public services, and the protection of their natural resources. Introduction What are TTIP and CETA? In 1989, Canada and the United States signed TTIP is a proposed trade and investment agree- the Canada-United States Free Trade Agreement ment between the EU and the U.S. to open up (CUSTA). In 1994, the two countries and Mexico their markets to one another’s corporate sectors, signed the North American Free Trade Agreement including pharmaceuticals, textiles, energy and (NAFTA). These two deals set the tone for the new agriculture. Negotiations have been held largely generation of bilateral and regional trade deals, behind closed doors with sporadic information and created a model still vigorously pursued by leaked to the public. most governments. CETA is the Canadian equivalent, but is much Under CUSTA, Canada would lose much of its further along in the negotiating process. In Sep- manufacturing base as American corporations tember 2014, Canadian Prime Minister Stephen closed their Canadian plants and moved them off- Harper, then European Commission President shore. Canada also gave up regulatory control of José Manuel Barroso, and then European Council its energy reserves. NAFTA introduced a new pro- President Herman Van Rompuy signed a joint vision – investor-state dispute settlement (ISDS) declaration to “celebrate” the end of CETA talks. – whereby corporations from the three countries Meanwhile, there is still clear opposition in both could sue one another’s governments for changes Canada and Europe, and the deal is far from done. to laws, policies or practices that hurt the corpo- rations’ bottom lines. This was the first time the text of the agreement NAFTA’s legacy is alive and well in both the wasProponents officially claim released that toTTIP the and public. CETA will “grow” Transatlantic Trade and Investment Partnership the economies of both the EU and North America, (TTIP) between the European Union and the creating jobs and wealth for both North Ameri- United States and the Comprehensive Economic cans and Europeans. The NAFTA experience, and Trade Agreement (CETA) between the EU and Canada. While these deals push the trade exclusively to the wealthy and big corporations. envelope in several new ways, both contain ISDS however, shows that any benefits went almost provisions, which are especially controversial in soared in Canada since 1994, family and worker Europe. incomesWhile CEO have salaries stagnated and corporate and family profits debt has have risen to historic levels.1 As a result of NAFTA, Canada is the most investor- state challenged country in the developed world, TTIP and CETA, as with most modern trade deals, and Canadians have an important story to share are also about taking down “non-tariff barriers” with Europeans as they grapple with TTIP and to trade. These include standards and regulations CETA. This paper is offered as a warning to Euro- that may differ markedly between countries in peans who care about the health of their people, - the resilience of their communities, the fate of ronmental legislation and labour standards. their public services, and the protection of their areas such as food safety, financial services, envi natural resources. Fighting TTIP, CETA and ISDS: Lessons from Canada 5 Transnational corporations want a “level playing As the Transnational Institute explains, down- ward harmonization reduces controls and lowers the lowest common denominator. Standards on standards that are put on capital and corpora- foodfield” safety, when socialcrossing security borders, and and the they environment fight for tions. If EU labour laws offer more protection to were all harmonized downward in Canada after workers, all governments will be pressured to NAFTA. adopt U.S. norms that deregulate workers’ rights.4 A major report found that NAFTA facilitated the be pressured – even required – to harmonize to a expansion of large-scale, export-oriented farming moreIf financial deregulated controls standard. are stronger in Canada, it will that relies on pesticides and GMOs, encouraged a boom in environmentally destructive mining in - Mexico, undermined Canada’s ability to regulate cial crisis of 2008 because it kept strict controls its own energy industry, locked Canada into ship- In fact, Canada, which largely survived the finan ping large quantities of fossil fuels to the U.S., - and weakened environmental safeguards across viceson its corporationsbanks, has already operating opened in Canada up its financialin a way North America by providing corporations with evensector NAFTA to challenge did not. from If a EuropeanEuropean financialbank believes ser new tools to challenge environmental policy mak- that it is being discriminated against as a result of ing.2 the Canadian government.5 - Canada’s stricter financial regulations, it can sue tional governments (municipalities, provinces - andWith states) CETA andwill TTIP,be subject for the to first local time, procurement subna ments to include mandatory regulatory coopera- commitments that bar them from favouring local tionFurther, – sometimes TTIP and referredCETA are to the as firstregulatory trade agree con- companies and local economic development. Ac- vergence – a process of harmonizing standards cording to an analysis from the Canadian Centre and regulations among all the jurisdictions on for Policy Alternatives, this will substantially goods as diverse as pipelines, chemicals and food. restrict the vast majority of local governments in North America and Europe from using public CETA commits to a process whereby any differ- spending as a catalyst for achieving other societal ences in regulations between Europe and Canada, goals – from creating good jobs, to supporting lo- be they labour rights, environmental protection cal farmers, to addressing the climate crisis.3 standards, food safety rules or tax laws, could be considered an obstacle to trade and suppressed. Both parties agree to share information of con- How do TTIP and CETA curtail the templated or proposed future regulations with right of governments to regulate? one another even before they share them with their own elected parliaments in order to ensure TTIP and CETA impose new limits on the right of they are not trade distorting. That means the governments to regulate on behalf of their people other party could make changes to a piece of leg- or the environment, establishing obligations that islation before it has been seen by its own elected go far beyond the traditional requirement in trade deals not to discriminate between foreign and lo- cal