Monday

23rd Jan 2017

Analysis

What the leaked EU-Canada trade paper means for TTIP

  • Barroso and Harper shook hands on the EU-Canada free trade deal last October (Photo: European Commission)

EU trade negotiators, who like to give as little away as possible, will have been deeply dismayed by the leak of 520 pages of their latest baby: the EU-Canada free trade agreement (Ceta).

The document, published by German broadcaster ARD last week, set out a large portion of the draft agreement reached after close to five years of painstaking talks.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • EU trade chief Karel de Gucht has publicly described the Canada trade deal as a "template" for TTIP. (Photo: Jacob Earl)

For trade geeks or those with severe insomnia the good news is that there is more to come. The Canadian government has indicated that it expects the entire agreement to span around 1,500 pages in total, which will be made public following an EU-Canada summit in September.

Delivering a trade deal is a slow business.

European Commission President Jose Manuel Barroso and Canadian Prime Minister Stephen Harper formally signed off the end of the political side of negotiations last October. It has since been subject to 10 months of fine-tuning by trade officials and legal scrutiny ahead of the September summit.

It will then face two years going through the Canadian and European parliaments, as well as Canada’s 13 provincial assemblies, before deputies take the final votes on whether to put it into law.

But Ceta, which the commission claims will be worth over €25 billion per year, is more important to Brussels than the average free trade deal.

Its passage has become a test run ahead of the anticipated trans-Atlantic trade and investment deal between the EU and the US known as "TTIP". EU trade chief Karel de Gucht has publicly described it as a "template" for TTIP.

Unsurprisingly, most of the document’s contents are, at first glance, punishingly boring to the average reader.

There are, however, interesting quirks and exceptions to the principles of unfettered free trade. For example, it reveals that the Canadian provinces of Ontario and British Columbia will be allowed to have no more than 292 and 60 shops, respectively, that exclusively sell Canadian wines. No chablis or rioja for them.

Much of what is contained in Ceta is uncontroversial and large tracts of it will almost certainly re-appear, perhaps even word for word, in TTIP.

More interesting is what will be different about TTIP and what will be left out.

For starters, it will be more difficult to keep the contents of TTIP under wraps.

Last month, the European Ombudsman opened an investigation calling for the Council to publish the EU negotiating directives for the TTIP negotiations. She has also proposed to the European Commission a range of practical measures to enable timely public access to TTIP documents.

Meanwhile, financial services will not be included at all in TTIP (at the behest of the Americans) and the section on geographically-specific foods such as Parmesan and Feta cheese is likely to be different.

Last month, Washington DC’s EU ambassador, Anthony Gardner, told this website that the EU had “exaggerated the protection of some of its geographical-specific products".

“We were not happy with the GI [geographic indicators] proposal in Ceta ... but in our agreement it will not be dealt with in the same way,” he added.

Most important, however, are likely to be the sections of TTIP that deal with investor-state dispute settlement (ISDS) – the provisions which allow companies to sue governments if they believe themselves to have been treated unfairly, and have stoked such controversy in European debate.

Around 30 pages of Ceta focus on the rights of Canadian and EU investors in the other’s territories.

Again, most of the language appears innocuous legalese. Officials often argue that ISDS is fundamentally protection from discrimination. For example, the investment articles would forbid the EU and Canadian governments from limiting foreign shareholding, imposing quotas on employee numbers, forcing firms out by limiting the number of firms that can operate in a specific sector.

It then goes on to list the rights and legal process under which companies can appeal against a government that it feels has breached the principles of ‘fair and equal treatment’.

Sounds fair enough?

To most people, the answer would be Yes. Apply the same language to a trade deal with the US - and its reputation for cut-throat corporations - rather than to those wholesome Canadians, and the average Joe is likely to be less sanguine.

For example, Article X(9) paragraph four in the section on investment protection contains a phrase that will almost certainly be used by anti-TTIP campaigners.

"A Tribunal may take into account ... whether a Party (government) created a legitimate expectation ... upon which the investor relied in deciding to make or maintain an investment".

Phrases such as "legitimate expectation" are the kinds that have corporate lawyers immediately pricking up their ears.

Like the EU’s own treaties, there are numerous annexes in Ceta devoted to areas that are politically important to both sides.

Intriguingly, there is an annex to clarify how investor-state dispute should be handled in the financial services and intellectual property fields, but no protocol or statement on the general purpose or limits of ISDS.

The draft Ceta agreement also includes a provision that governments should be allowed to have their courts interpret intellectual property rights on the basis of domestic law, which some legal analysts have suggested is the result of an ongoing dispute between the Canadian government and US pharmaceutical giant Eli Lilly.

Eli Lilly is pursuing a $500 million law suit claiming that Canada is in breach of the North American Free Trade Agreement (Nafta) by allowing its courts to revoke two of its patents.

The controversy over ISDS is a relatively recent phenomenon and one that, in large part at least, is the result of fears about litigious US multinationals.

Without similar provisions to those in Ceta, plus cast-iron guarantees that investor protection rules will have no impact on whether governments can legislate in the environmental or public health fields, it is hard to see how ISDS will survive as part of TTIP.

Trade negotiators are often at pains to stress how technocratic, de-politicised and plain dull their work is. Much of Ceta’s contents bear this assessment out.

But that line will not prevent TTIP from being treated differently to previous trade deals. It is simply too big and too important and, already, too political.

Far-right groups pledge allegiance ahead of elections

Far-right leaders Le Pen, Wilders, Petry and others gathered in Koblenz in the hope of gaining political momentum ahead of national elections this year. The event was met with thousands of protestors.

News in Brief

  1. Fury over UK 'cover up' of failed missile test
  2. Theresa May: I will not be afraid to stand up to Trump
  3. Brexit will destroy NI peace deal, says Gerry Adams
  4. EU housing price increase by 4.3%
  5. EU trade chief says UK deal will take 'couple of years'
  6. German defence spending boost not enough for Nato goal
  7. Belgian MPs refuse to give up free alcohol
  8. Merkel last leader to get call from Obama

Stakeholders' Highlights

  1. World VisionEU Urged to do Better Ahead of Helsinki Conference on Syria
  2. Caritas EuropaEU States to Join Pope Francis’s Appeal to Care for Migrant Children
  3. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  4. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  5. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  6. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  7. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  8. European Free AllianceMinority Rights and Autonomy are a European Normality
  9. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  10. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  11. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  12. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!

Latest News

  1. Future of euro on EU agenda This WEEK
  2. Pope warns populism could lead to 'saviours' like Hitler
  3. How the EU can protect the world’s forest by tackling corruption
  4. Leftist newcomer takes lead in French Socialist primary
  5. Far-right groups pledge allegiance ahead of elections
  6. Trump pledges US-first foreign policy
  7. GMO opt-out plan remains in waiting room
  8. Trump: New sheriff in town

Stakeholders' Highlights

  1. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey
  2. Zero Waste EuropePublic Support Needed to Promote Zero Waste in More Municipalities
  3. Belgrade Security ForumEU Cannot Afford to Ignore the Western Balkans as Populism Surges
  4. Dialogue PlatformFethullah Gulen Calls for an Investigation on the Assassination of Russian Ambassador to Turkey
  5. World VisionAmid EU Talks on Migration, Children on the Move Remain Forgotten and Unprotected
  6. Centre Maurits CoppietersAlex Salmond Receives Coppieters Award for His Service to Scotland and Europe
  7. International Partnership for Human RightsStrong Support for Hamburg Declaration on Human Rights Defenders
  8. Swedish EnterprisesHow to Use Bioenergy Coming From Forests in a Sustainable Way?
  9. Counter BalanceReport Reveals Corrupt but Legal Practices in Development Finance
  10. Swedish EnterprisesMEPs and Business Representatives Debate on the Future of the EU at Winter Mingle
  11. ACCAFifty Key Factors in the Public Sector Accountants Need to Prepare for
  12. UNICEFSchool “as Vital as Food and Medicine” for Children Caught up in Conflict