As CETA Advances, Reports Warn Deal Will Ruin Economies, Cement Corporate Power

An estimated 300,000 people marched in cities across Germany on Saturday to voice opposition to the pending CETA and TTIP trade agreements. (Photo via Campact/Twitter)

As CETA Advances, Reports Warn Deal Will Ruin Economies, Cement Corporate Power

Germany's minority Social Democratic Party backs trade agreement despite 300,000-strong protest on Saturday

As the pro-corporate Canada-Europe trade deal notched another victory on Monday, a pair of new studies underscored how the health, rights, and livelihoods of people on both sides of the Atlantic will suffer under the pending deal.

Germany's minority Social Democratic Party (SPD) voted in favor of the Comprehensive Economic and Trade Agreement (CETA), making it increasingly likely the trade deal will be approved by the country's Parliament. The backing came despite the fact that on Saturday over 300,000 people across Germany marched in opposition to the deal and its "toxic" sister agreement, the Transatlantic Trade and Investment Partnership (TTIP).

As Deutsche Wellenoted, CETA "is scheduled to be signed by Ottawa and Brussels next month. However, each [European Union] member state would then need to fully ratify the agreement for it to come into force."

Critics say that the agreement will only increase corporate power and that its provisions will "water down or abolish environmental, health, and consumer protection regulations."

To that end, European campaigners Global Justice Now, Corporate Europe, and the Transnational Institute released a new report (pdf) on Monday underscoring how the deal's investor protections, including the Investor State Dispute Settlement (ISDS) system, "could dangerously thwart government efforts to protect citizens and the environment."

According to the study, CETA would "arguably grant ever greater rights to foreign investors than NAFTA, increasing the risk that foreign investors will use CETA to constrain future government policy."

What's more, the report points out that Canadian subsidiaries of U.S.-headquartered multinationals will also be able to use these provisions to sue European governments. Given that E.U., Canadian, and U.S. companies are already "among the most frequent users of investment arbitration...there is every reason to expect that they will use CETA to rein in government measures."

Commenting on the study, Nick Dearden, director of the UK-based Global Justice Now, said the agreement "would open up [E.U.] government to a deluge of court cases by North American multinational corporations and investors. It presents a threat to our ability to protect the environment, to protect the public, and to limit the power of big banks. It's thoroughly undemocratic and must be stopped."

But Europeans are not the only ones at risk.

Researchers with the Global Development and Environment Institute at Tufts University found that the agreement poses a real threat to Canada's economy and puts more than 23,000 jobs as risk.

As the first independent, academic study (pdf) on CETA, its findings throw into question claims that the trade agreement will bolster the GDP of Canada and European member states and critiques prior studies, namely those commissioned by signatory governments, for relying on "flawed models containing neoclassical economic assumptions, which are biased towards market liberalization."

The report also found that CETA "will lead to a reduction of the labor income share." So as profits rise, the amount reaching workers will actually fall, with losses reaching as much as $2,656 per person over seven years.

Further, "CETA will lead to net losses of government revenue." As governments reduce corporate taxes to compete for investment, tax income will decrease by an estimated 0.12 percent of GDP while public spending will fall by 0.20 percent of GDP.

"There are a lot of myths about free trade and CETA. Here's an independent study that suggests that there aren't economic gains--only job losses, inequality, and the erosion of the public sector," said Maude Barlow, national chairperson of the Council of Canadians.

"But that's only the economic part," Barlow added. "We haven't begun to quantify the damage to our laws, policies, and democracies through regulatory harmonization and corporate lawsuits challenging our environmental and social standards. Not to mention attacks on farmers and municipalities. So what are we getting out of this?"

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