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Leaked Doc Puts Spotlight on Corporate-Friendly Trade Deal

Text of Comprehensive Economic and Trade Agreement shows how much power corporations could have over municipalities' water

Andrea Germanos

A leaked document is putting the spotlight on a trade deal between Canada and the European Union that one critic says is all about "giving corporations rights."

The text of the deal, the Comprehensive Economic and Trade Agreement (CETA), had thus far been kept from public scrutiny. But the German television show Tagesschau uploaded a 521-page portion (pdf) Wednesday, said to be roughly a third of the full text.

Garry Neil, Executive Director of the Council of Canadians, an Ottawa-based organization that has challenged CETA, sounded alarm over potential threats that still appear to be part of the deal to people in the EU and Canada.

One of those issues is the investor-state dispute settlement (ISDS) mechanism. As the Toronto Star explained, this is "similar to the much-maligned Chapter 11 provisions in NAFTA that allow multinational businesses to go before a special tribunal — rather than regular courts — to sue governments over regulations a corporation believes are discriminatory."

"The substance of the ISDS remains," Neil told Common Dreams. "They may have put limitations on it... but effectively you still have investor-state dispute settlements. It's a central part of the agreement."

In fact, he said, "It's a central part of the selling feature that our government announces to our business community. The substance of it remains the same, which is that individual companies have the right to sue governments, and those cases are tried not in a domestic court but are tried in an independent tribunal."

A key concern linked to the ISDS has to do water, Neil explained.

While the agreement has "some good language" around water, for example, that a country has the right to prevent bulk exports of water, he said that if water becomes a "commercial service, then it becomes a good," so the outcome is the same. "If you privatize a municipal water service, or you create a public-private partnership and then the citizens of that same municipality 10 years on decide... that they want to re-municipalize, then you open yourself up to an investor claim."

"Or," he continued, "if you give rights to Nestle, because Nestle is a European corporation, you give rights to them to take water from the aquifer and bottle it and sell it back to us.  And then suddenly you decide, 'Wait a minute. There's something fundamentally wrong with that. We're running out of water. We're not going to allow them to do that anymore.'  Suddenly [water] is a good under the agreement because you're giving that permission and if you change the rules, then they would have a right to sue you."

Neil stressed that this is not a kind of trade agreement in which consumers have something to gain. "It's all about effectively giving corporations rights."

Another concern Neil mentioned is that of Canada agreeing to extend the patent protection on pharmaceutical drugs. "By our own government's admission,' Neil said, "extending patent protections for pharmaceutical drugs will cost our healthcare system roughly a billion dollars a year. So preventing the generic manufacturers from producing cheaper alternatives even for a few years will have that kind of impact." Neil noted that healthcare is a provincial responsibility, so though it is the federal government that is agreeing to this deal, it is the provinces that will ultimately face the increased costs. Though the federal government said it would pick up that tab for the first few years, he said that it will ultimately be "an additional cost on our already overburdened healthcare system."

On top of the drug patent and ISDS problems in the trade deal, Neil stated, is the issue of government procurements. As Andrea Rexer reported in The Tyee, this part of the deal "will likely severely crimp if not end 'buy local' strategies at all levels of government in Canada." Rexer continues:

Many local governments and municipalities have used public tenders to foster a stronger local economy, requiring, for example, that winning bidders employ people in the region. Or governments have tried to strengthen the local food movement, as the city of Toronto does with its local food procurement for public child care.

But with CETA in place, it won't be possible to favour local suppliers when governments buy. Under the rules of free trade, European companies must not be discriminated against.

Yet there's still time to fight, Neil said, as "the endgame has just begun." Ratifications by the EU member states and Canadian provinces could take quite some time.

Though the deal is slated to be signed at the end of September in Ottawa, "that only begins the next stage in the fight," he said.

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