The European Commission and Canada have revealed the details of a new trade liberalization agreement. Under the offer virtually all traditions tariffs will be eliminated and markets for services will be exposed. However the agreement still needs approval from the EU parliament and faces particular opposition from Germany. Critics say the deal restricts the billed power of democratic government authorities in relation to big business. It’s not simply maple syrup. Traded products, in both directions, range from machinery, chemicals, and transportation equipment to services such as insurance and marketing communications.
The European Commission has said the offer would boost bilateral trade by 23%. And a joint EU-Canadian study has put the combined annual economic benefits at about 20bn euros although those figures were published six years ago. However, a provision contained in the deal to bolster the rights of international traders, known as Investor State Dispute Settlement (ISDS) could still avoid the deal being approved. Campaigners say it gives big business too much power with regards to democratically elected government authorities wishing to present new procedures.
One thing could still derail the deal. The Germans don’t like the proposal that’s included for a new system of tribunals, under what’s understanding as ISDS. If foreign investors feel they are mistreated they can turn to these tribunals and even in some instances apply for settlement. ISDS has actually been around for years.
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But lately campaigners have begun to argue that it is undemocratic because of the constraints it puts on elected governments. Including the tobacco company Philip Morris is taking legal action against Australia over its ordinary packaging laws and regulations – there has been no ruling yet on this case. Other instances have involved rules of energy prices, disputes over patents and alleged wrongful legal prosecution.
The German overall economy minister Sigmar Gabriel has said he’d reject the Canada offer if the ISDS elements stay. Which has cast new question on whether the offer will ever enter into pressure and it suggests an uphill struggle for other trade discussions still being hammered out behind the moments. Nick Dearden director for the World Development Movement says of the EU Canada deal: “If it’s agreed, it will undermine the power of democratically elected governments to make decisions in the public interest”.
Supporters of ISDS say it provides foreign investors with security against discriminatory treatment and that means they will take the plunge and invest. The EU’s top trade official, Commissioner Karel de Gucht rejects the issues against ISDS, although he has acknowledged concerns about some agreements. He informed the European Parliament: “On investment, the contract establishes a system that sets a new standard for investor-to-state dispute negotiation procedures”. He said the deal with Canada “directly addresses all the concerns which have emerged so far”. The controversy about ISDS led the European Commission to start a public consultation earlier this year about its addition in trade liberalization negotiations with the US.