How can you say you own a house if you essentially need permission from foreign shareholders before you can decide what colour to paint your kitchen?
That’s a wild oversimplification of a critical flaw that critics say exists with the Comprehensive Economic and Trade Agreement (CETA) between Canada and Europe. (The part of CETA that’s probably best known in this province is the multimillion-dollar fund that the Dunderdale government agreed to in exchange for dropping requirements that fish caught off this province be processed here before shipment.)
The concern in other places is that the agreement would force signatory countries to protect the rights of foreign investors.
Here’s how the Wall Street Journal describes problems with what’s known as the investor state dispute settlement process: “ISDS would allow foreign investors from either side to challenge potentially unfair treatment by their investment’s host government. Crucially, these challenges would take place in special tribunals that lie, to varying extents, outside the country’s own legal system.”
In practice, the concern is that investors from a foreign country inside the trade agreement could take action if they have an investment in a country trying to bring in new environmental standards, simply because more stringent standards might reduce the potential value of their investment.
In other words, the rights of investors would trump a country’s ability to make its own laws, and would be heard outside a country’s legal system.
That’s created a big hiccup in Germany, which is hinting it will not go ahead with CETA if the ISDS rules are adopted, and has suspended talks with the United States, in part because of a similar issue in that negotiation.
All 28 EU nations have to agree in order for CETA to go ahead.
There are already some cases creating concern, especially for the Germans.
The German government is being sued by a Swedish power company over Germany’s decision to phase out nuclear power, a case that could cost the Germans billions.
And why shouldn’t a government, representing its citizens, not be allowed to ban the export of its waters, the damming of potentially profitable rivers or damaging mining practices?
Closer to home, a similar suit, using North American Free Trade Agreement rules, has an American company, Lone Pine Resources, suing the federal government for $250 million as a result of stricter fracking regulations.
And, in another NAFTA-related case that people in this province will certainly remember, the federal government forked over $130 million for the expropriation of AbitibiBowater assets by the government of Newfoundland and Labrador.
It is a legitimate concern: governments are supposed to make decisions based on the needs and desires of their citizens. The rights of Canadian voters are supposed to come first, rather than the protection of foreign investors to earn the best possible profits from Canadian resources.
In other words, if you don’t like the colour of our kitchen, you don’t have to come in the house. But don’t think you have a right to order up the colours from afar.