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CETA to be signed unchanged, but less likely to be ratified after Wallonian resistance

October 28, 2016

5-minute read

wallonia An advertisement for Wallonia at the Brussels airport.

A week of pressure from four Belgian regions opposed to CETA, led by the courageous Walloons, has produced a revised “joint interpretive instrument” and, importantly, a new list of conditions that must be met before Belgium can ratify the deal.

The instrument, agreed to Thursday and part of a package being voted on by regional parliaments today, is hardly changed from an earlier “interpretive declaration” the CCPA has dissected here. As we wrote last week, the declaration “does little or nothing to address, let alone fix, the public and political concerns being raised about CETA.” In most respects, it merely elaborates on previous European Commission talking points and Conservative government promotional material released in 2013.

The fuss over whether or not the declaration or instrument (or whatever they choose to call it) is “legally binding” is a distraction. In the final version, the parties have simply made explicit what was implicit in all previous drafts. The document is part of the legal context of the treaty and, under the Vienna Convention on the Law of Treaties, must be considered by tribunals or dispute settlement panels when they interpret CETA.

The problem is that the instrument doesn’t alter, let alone override, the text of CETA. Article 31 of the Vienna Convention states that treaties “shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.” If there is any conflict or confusion between CETA’s plain wording and the instrument, it is CETA’s text that prevails. The instrument adds nothing to, subtracts nothing from, and changes nothing in the text itself.

Unfortunately, the joint interpretive “instrument” is mostly artful deception. To take just one example, the instrument’s affirmation of the right to regulate is meaningless. Of course, the parties have not entirely given up their right to regulate. But the fact is, even if the instrument had full legal force under international law, CETA would still threaten the ability of Canada or EU governments to regulate in the public interest, enhance public services, and hold multinational companies accountable for their actions. “The critical point missing,” as we wrote previously, “is that while the parties retain the right to regulate, they must do so in conformity with their CETA obligations and commitments.”

Likewise, the European Commission’s confirmation, in a separate, unilateral, declaration, that “nothing in CETA prevents the application of the precautionary principle in the European Union as set out in the Treaty on the Functioning of the European Union,” is cynically circular, since precautionary measures that violate CETA’s rules on investment, domestic regulation, cross-border trade in services, technical barriers to trade, etc., could still be disputed by aggrieved investors or by the Canadian state. These unilateral declarations have even less weight than the instrument.

The corresponding European Commission clarifications with respect to the functioning of the eventual investor court system, as proposed by the commission and accepted by Wallonia, do not even address the fundamental problems with CETA’s investment rules on which future investment panels will base their decisions about the legitimacy of public policy measures.

For example, CETA’s vague definition of “fair and equitable treatment” in Article 8.10 says that an investor-state tribunal, or in this case an investment court, “may take into account whether a Party made a specific representation to an investor to induce a covered investment, that created a legitimate expectation, and upon which the investor relied in deciding to make or maintain the covered investment, but that the Party subsequently frustrated.” This language goes beyond protections for foreign investors in NAFTA and will almost certainly result in more investor lawsuits related to failed energy and mining projects.

Nothing in the investor court system changes the fact it will only be accessible by foreign investors, and only to challenge the legitimacy of government decisions. In other words, there is no recourse in CETA or anywhere else to hold investors (multinational corporations) accountable for environmental, human rights and labour rights abuses. It is comical the Canadian government continues to describe CETA as “the most progressive” trade deal ever negotiated.

“At the heart of criticisms of the CETA’s provisions on foreign investor protection is the concern that costly foreign investor claims will deter future democratic and regulatory decisions,” writes Osgood Hall law professor Gus Van Harten in a recent paper. “The Declaration repeatedly uses evasive language to avoid this issue.”

Canadian and European trade unions have seen through the façade. In a joint declaration issued Friday, the Canadian Labour Congress and European Trade Union Confederation “condemn the pressure made on Wallonian institutions” and ask Canada and the EU to reopen the CETA negotiations “to fully address major concerns that the CLC and the ETUC jointly outlined months ago, notably on enforcing labour rights, fully protecting public services and public procurement, addressing environmental issues, and rejecting investors clauses.

Wallonia’s principled stand did, however, produce some important results. While most of the media attention in Canada appears to have focused on the joint instrument, the more interesting and potentially significant development may be the accord between Belgian governments that spells out the grounds for Belgium’s federal government to sign CETA.

For example, Belgium will now ask the European Court of Justice to give an opinion on the legality of CETA’s investment court system within the EU. Even more importantly, four of Belgium’s regional governments also state that they reject CETA (notably its investment chapter) as negotiated and that Belgium will refuse to ratify the treaty unless these concerns are addressed. In other words, while Belgium is now in a position to sign CETA, it will not be able to ratify the deal as it stands.

This means that CETA’s investment chapter, at a minimum, must be revised or the investment court system scrapped, before CETA can be ratified by Belgium. The accord also includes assurances that if any Belgian regional government refuses to ratify CETA, the federal government must give notice to the EU that Belgium cannot ratify, an act that could potentially trigger the end of CETA’s provisional application in all European member states.

The German constitutional court staked out a similar position in the event that Germany fails to ratify CETA. That decision, by the way, will not be made by the German government alone, but in conjunction with Germany’s second chamber, which is currently controlled by the anti-CETA Greens and Left parties.

So while CETA proponents have undoubtedly cleared a big albeit unanticipated hurdle in getting the deal signed, their machinations may have made CETA’s full ratification even less likely. CETA’s passage in Europe is far from assured, despite the apparent breakthrough in Belgium.

The Walloon government’s resistance will have emboldened people and elected decision-makers across the continent, who must still decide, in 40 parliaments, if they wish to ratify the Canadian deal. Citizens and lawmakers will want—and deserve—more than soothing words in a flimsy declaration designed to allay rather than address their concerns.

Scott Sinclair is the director of the CCPA’s Trade and Investment Research ProjectStuart Trew is the editor of The Monitor, the CCPA’s national magazine. Follow Stuart on Twitter @StuJT.

Scott and Stuart just returned from Brussels, where they spoke about CETA in the European Parliament and discussed the deal with civil society organizations and others. Their new book, The Trans-Pacific Partnership and Canada: A Citizen's Guide, is available now from Lorimer.

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