January 21, 2016 - by Dr. Kurt HuberDirector of the Institute for European Studies at the University of British Columbia

For quite a while it was one of the most published secrets that the the investor-to state dispute settlement (ISDS) mechanism included in the final version of CETA will not hold, at least in Europe. Canadian media were not overly eager to deal with this secret. The situation changed with the change in government. Now Canadian, too, learn that since quite a while talks between EU and Canadian representatives are under way, to use the ongoing 'legal scrubbing' process to change the ISDS mechanism. Both sides eagerly avoid the term 're-opening of negotiations', but then again what is being discussed is a pretty stark deviation from the current text.

 

The extremely successful campaigns of civil society organizations - more so in member states of the EU than in Canada - lifted trade policy into the center of political attention. Those campaigns started with making the 'chlorine chicken' exported by the US the culprit but then moved swiftly to the more concerning and serious ISDS clause. Even though public debates often neglect the fact that this clause has been prominently introduced by a German government in the 1950s and since has become a regular feature of most international agreements, it is also a fact that this clause has strong negative implications for democratic market economies as it offers highly mobile global companies a venue for private law. Any government that intends to keep up with basic democratic norms needs to assess the past experience with this clause, and also needs to justify to its citizens why such a clause is compatible with democratic processes and actually creates net benefits for societies.

Rather than tip-toeing around those issues and starting to fantasize - as the European Ambassador to Canada did the other day - about 'technical adjustments' to ISDS, it is time to have a serious conversation with citizens about costs and benefits of such a clause - and serious means not to reduce the conversation to simple economic figures. To some degree, European countries started such a conversation some time ago, and even though parts of the conversation come with ideological fog, the result was that the EU felt the need to change parts of its trade policy approach, and especially to get rid of its ISDS practice. This conversation has not ended yet. High time that we in Canada catch up.

Dr. Kurt Huebner is the Director of the Institute for European Studies at the University of British Columbia and holds a Jean Monnet Chair for European Integration and Global Political Economy. He is also part of a pan-Canada network of experts working on European policy issues, the Strategic Knowledge Cluster Canada-Europe Transatlantic Dialogue.

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