ISDS-lite could yet scupper the EU-Canada trade deal
The TUC is no fan of the revised Investor-State Dispute Settlement (ISDS) process that EU Trade Commissioner Malmstrom has persuaded the European Parliament to back in the Transatlantic Trade and Investment Partnership (TTIP) deal between the EU and US currently being negotiated. Claims that this new ISDS-lite isn’t ISDS at all are clearly nonsense, and while it certainly improves upon ISDS-heavy by stripping out some of the most unacceptable elements, it only gets rid of some, and it retains the most objectionable element of all: a privileged route to compensation for democratically-decided government actions for one class of citizen, foreign investors. And yet, ISDS-lite could still scupper another trade agreement, between the EU and Canada, that everyone thought had already been finalised.
The Comprehensive Economic and Trade Agreement (CETA) was originally signed off by the Canadian government and the European Commission, on 2013 (and again in 2014 – indeed it seems that every time Canada’s PM needs a photo opportunity in Europe, CETA gets agreed all over again!) Canadian unions in the Canadian Labour Congress and Canadian civil society organisations are opposed to it. So are the European Trade Union Confederation and European civil society groups. And that’s partly because of the ISDS it contains (there are other problems about liberalisation of public services and inadequate enforcement mechanisms for fine words on workers’ rights and environmental standards.)
But CETA contains ISDS-heavy, the unreformed version. And according to the European Parliament vote last week, pretty much everyone is now against that version, and agrees it must be scrapped. The Green, Left and eurosceptic groups (along with groups like the UK Labour Party) opposed ISDS outright. The Liberals in ALDE, the Christian Democrats in the EPP, and even the Conservatives in the ECR, opposed ISDS-heavy, although there must be some suspicion that this was so that ISDS-lite stood a chance of getting adopted.
So what does that mean for CETA, which, although agreed so many times, still needs the legal i’s dotted and t’s crossed, and still faces a simple yes/no vote in the European Parliament, each of the EU’s 28 national parliaments, and the Canadian legislature (which faces a general election this autumn)?
The President of the European Parliament, Martin Schulz, who crafted the compromise ahead of last week’s vote, and the leader of the Party of Socialists & Democrats Gianni Pitella MEP, whose split group helped deliver the majority for that compromise, say CETA must be reopened, or renegotiated. The Canadians are worried, although the current Canadian government maintains it can secure sufficient votes in the European Parliament to get the deal through (expect some mammoth arm-twisting, which we must resist.) The Liberal and NDP parties likely to overturn the current Conservative majority in the Canadian Parliament are keeping their cards close to their chests.
So the fightback on CETA, while it still contains ISDS-heavy, begins.
PS. It would of course be wrong to say that everyone is now opposed to ISDS-heavy in TTIP (just everyone in the European Parliament!) The right-wing US Heritage Foundation still keeps the flame of unrestricted foreign investor rights burning, and insists that the ‘European compromise’ should be rejected. It’s difficult to see how the US administration could agree a different ISDS with Europe in TTIP than they are currently negotiating with Pacific partners in TPP (the Trans-Pacific Partnership), but another right-wing foundation, the Cato Institute, argued some time ago that the US should drop ISDS in order to get TTIP agreed.