The EU-Canada trade deal CETA has been approved by the European Parliament by a vote of 408 to 254, with 33 abstentions.
The deal is now set to be voted on by national and regional parliaments across Europe.
In a last minute intervention, Britain’s biggest unions wrote to Labour MEPs urging them to oppose the deal.
The letter, signed by the general secretaries of 12 UK trade unions, challenged the merits of the deal, arguing that it undermines labour rights, threatens environmental rules, and promises little if any economic growth.
But it is CETA’s ‘investor court system’ (ICS) – that allows for corporations to take legal action against countries – that proved most contentious.
The letter reads:
Under ICS, big business can still sue for changes made to the regulatory environment that breach a company’s ‘legitimate expectations’, resulting in taxpayers’ effectively providing risk insurance for North American big business. Any government’s ‘right to regulate’ will be determined by a ‘necessity test’, while investment is still defined in such a way (“the expectation of gain or profit”) that companies will be able to sue for future lost profits.
It echoes criticism made by trade unions in both Europe and Canada, who have also previously expressed concern over the lack of “enforceability of labour rights” and voiced opposition to the ICS.
The main purpose of CETA isn’t tariff elimination, which is at an all time low, its regulatory cooperation.
But this process, which does not require a mandate from the European Parliament or have transparent measures, could be hijacked by big business lobbyists set on weakening standards, just as it was in the US-Canada trade deal NAFTA.
A new report from Corporate Europe Observatory (CEO) details just how this happened, with industry massively overrepresented in the deal’s Regulatory Cooperation Council (RCC) in comparison to civil society groups.
It led to a race to the bottom between the US and Canada, with regulators working to accommodate producers rather than protect consumers.
There are concerns over the similar Regulatory Cooperation Forum (RCF) planned for in the CETA text.
The Canadian government has long taken issue with REACH, the comprehensive chemical regulations in place in Europe.
As revealed by The Center for International Environmental law last year, Canada filed 21 complaints against REACH at the World Trade Organisation.
Canadian companies have also used the trade agreements to take legal action against countries with regulations they don’t like on 42 occasions, according to data from the Investment Policy Hub.
Canada is ranked 5th among the nations in which this type of investor-to-state lawsuit have been filed.
For the British government, CETA is both an example and a lesson.
Ministers claim that it is the kind of deal they’d like to strike with the EU post-Brexit.
And yet the trade union secretaries argue that “the UK’s interests have been poorly defended in the negotiations of CETA,” and observe that it is “unique among EU Member States in not protecting any of its products, whether Cornish Pasties or Cheddar Cheese”.
Government has also taken note of the problems CETA has faced in getting approved by parliaments across Europe, especially around the time of the Walloon blockade.
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