Thursday, 17 April 2014

Free Trade: Pathway to Prosperity - or Back Road to Corporatism?

by Larry Powell

As globalization reaches a frenzied pace, free trade agreements (FTAs) between nations are coming thick and fast, too. 

Now, a knowledgable source with impressive credentials is sounding the latest cautionary note about "CETA," the Comprehensive Economic and Trade Agreement which Prime Minister Harper and the European Union signed, in principle last year. 
Howard Mann PhD (1988): London School of Economics.
Master of Laws LL.M. (1984): London School of Economics.
Bachelor of Civil Law (1982): McGill University. 
Senior International Law Advisor to the IISD, the 
International Institute for Sustainable Development.
Photo credit – Sue Danahy, Ottawa

A Canadian expert in international law, Howard Mann, (above) is lending an important new voice to a now-familiar chorus of alarm about "CETA," in particular.  

For decades, large corporations have been using provisions within existing free trade agreements to sue sovereign nations who pass certain laws protecting the environment and health of their citizens. The corporations view such laws as assaults on their own "rights" to do business and make a profit in those countries.
  • For example, as long ago as the 1990s, an American company, Ethyl Corp. sued Canada under a clause in "NAFTA," the North American Free Trade Agreement. Canada had banned its fuel additive, MMT due to concerns that it was a poisonous neurotoxin. The ban stuck, but Canada had to pay the company (the same one which brought leaded gasoline to Canada back in the 20s), $17 million in compensation.  
  • Fast forward to today, and the stakes are much higher.
  • The US-based pharmaceutical giant, Eli Lilly and Company is currently suing Canada, also under NAFTA, for $500 million. The move comes after Canadian courts struck down the company’s patents on two of its drugs. Those rulings removed Lilly's monopoly and allowed another company to replicate the medications, in a cheaper, generic form. (Ironically, the drugs in question, both antipsychotics, are suspected of causing a number of mental patients, both young and old, to take their own lives. However, those adverse reactions played little or no part in the court decisions.) 
When contacted by PinP, Claude Rochon, a spokesperson for Foreign Affairs, Trade and Development Canada, would say only, “Our Government's actions will continue to reflect our commitment to ensure Canadians continue to have access to the affordable drugs they need, while promoting innovation and job creation.”

  • Another, similar case has been launched by LonePine Resources, a Texas-based oil company. LonePine is suing Canada for $250 million because Quebec refused to allow it to "frack" beneath the St. Lawrence River, at least until better regulations could be put into place. "Fracking," or hydraulic fracturing, involves the controversial practise of pumping chemicals under pressure into underground shale formations, to force out the oil or gas. In documents filed under NAFTA, LonePine calls Quebec's actions, "an arbitrary, capricious, and illegal revocation of the Enterprise’s valuable right to mine for oil and gas..." 
  • Some three years ago, the global tobacco company, Philip Morris, sued the Australian government for passing a law requiring it to market its product in plain packages. The company claims the move breaches Australia’s bilateral investment treaty (FTA) with Hong Kong. Phillip Morris says it will seek billions of dollars in damages. 
In a twist to what critics might already call a sordid tale, a Canadian company, Infinito Gold, based in Calgary, is suing the Central-American nation of Costa Rica under terms of an FTA between the two countries. 

It wants $100 million dollars from the small nation for saying "no" to a company plan to build a "cyanide-leach" gold mine in one of its pristine rain forests (PinP photo - r.). Costa Rica depends for much of its revenue, on tourists coming to enjoy the nation's natural beauty. 
Some observers say the company will win its case.

And, in a recent column, British journalist George Monbiot writes, "In El Salvador, an Australian company is now suing the government before a closed tribunal of corporate lawyers for $300 million (nearly half the country's annual budget) in potential profits foregone. Why? Because El Salvador has refused permission for a gold mine that would poison people's drinking water."

Except for Ethyl Corp., none of these cases has been resolved yet.

When PinP asked the government official, Claude Rochon, to respond to the trade actions against Canada, he responded, "As always, the Government of Canada will vigorously defend interests of Canadian in this dispute settlement process. The Government of Canada is committed to transparency in NAFTA Chapter 11 disputes and posts public versions of documents on the Department's website."
So what does the future hold in a world where free trade agreements 
are becoming "the new normal?"

Howard Mann testified before the Commons Committee on International Trade that, “In my opinion, the Investment Chapter (of CETA), if it continues on what appears to be its present course, will provide foreign investors into Canada with the most investor-friendly set of corporate rights ever drafted by the Canadian government into a treaty." After studying secret drafts which have leaked out, he declared, "This is a Big Deal. A Very Big Deal!" 

In an interview with PinP later, Mann suggests, we haven't seen anything yet, in terms of the number of lawsuits which Corporations will be launching against Canada once CETA becomes law. 

PinP: Is there a risk that CETA, once ratified, will lead to more lawsuits by investors against Canada?" 

Mann:  “No, there is a certainty! There have been over 600 such arbitrations commenced globally in the past 20 years, about half by EU-based companies. There is no reason to think they will not be equally aggressive using the mechanism against Canada. The creativity of industry in using the investor-state arbitration process to fend off any and every kind of government measure continues to amaze me, even after 18 years working in this field. From challenging anti-smoking measures, to protecting against side-effects of medications, fracking under the St. Lawrence River, protecting water basins in fragile environments, there is no area of decision-making that is outside the scope of these agreements.”

Mann further warns that CETA's provisions for increased investor rights, “Will weaken the ability of Canada’s elected lawmakers, both federal and provincial, to legislate in major areas of public policy, including environment and health.”

Partisan Politics Enters the Fray

Mann is surprisingly candid over the lack of “critical review” by the opposition Liberals over CETA.

“That the Liberal party supports free trade and increased investments is fine. That they are blind to the fact that the language used in such agreements can have multiple effects, including on Canadian regulatory capacity to replace the environmental laws the present government has dismantled, as they have promised they will, is incomprehensible. Words matter, but it seems they prefer to support the notion of free trade without any attention to the actual language in the actual text. As a life-long Liberal, I find it stupefying.”

A Study in Contrasts

Just how the governments of Canada and the U.K. are approaching such trade treaties has become a study in contrast.

In the United Kingdom, MPs from all parties have called for a halt to talks on a very similar treaty with the U.S. Why? According to the newspaper, The Independent, they fear it may put “British sovereignty ‘at risk’ by surrendering judicial independence to multinational corporations.”

In Canada, far from showing hesitation, there’s been nothing but unbridled enthusiasm on the part of the federal government. Prime Minister Harper calls the CETA, “The biggest deal Canada has ever made.” In a letter to the editor, one of his western MPs, Robert Sopuck, writes, it will bring many jobs to his riding while raising the incomes of families there.

A Government website boasts that Canada “currently has 25 foreign investment promotion and protection agreements (FIPAs) in force around the world, with hope of more to come. It further boasts that negotiations over the CETA have been “the most transparent and inclusive in Canada’s history.”

But the reality, according to Mann, is quite different. 
A redacted document on early CETA talks, which leaked onto the internet.

“The EU-US investment negotiations have been put on hold in order to have a full-scale three month public consultation. 

No such opportunity has ever been had in Canada on the CETA. We have to depend on leaks because our government will not issue an official draft.”

As significant as his warnings are, they are not the first. Groups such as the Council of Canadians and Canadian Centre for Policy Alternatives have been saying similar things for years.

But, given Mann’s impressive credentials and experience, and, as all the cumulative evidence piles up, will Ottawa finally pay attention, or ignore it as its peril? 


Maggie Romak said...

Read this article and you will soon see who is really calling the shots.
Thanks to NAFTA and other Free Trade agreements, the corporations can and do sue when they are not allowed to do terribly destructive things in
other countries. Ex: the Texas company that is suing Canada because
Quebec will not allow fracking under the St. Lawrence River For Christ's
Sake!!! I should hope not!
And a Cdn. gold mining company from Calgary is suing Costa Rica
because they can't do a toxic process there in the middle of a pristine
rain forest. Greedy companies, stupid politicians.

Terry Conspiracy said...

Two of the biggest mistakes of modern Western civilization, was the abandonment of a sound money system of commerce, and the granting of the rights of a person to Corporations.

These two major issues must be addressed before a positive value future can be envisioned for future generations on this planet.

PinP said...

Bought some Canadian tomatoes in the supermarket yesterday; Sixty cents more than the ones from Mexico; Another clear reminder that the globalists/free marketeers are winning. Their system actually encourages the movement of food across continents, pissing out deadly carbon fumes all the while. When are we going to realize that the epidemic of "free trade" agreements which parties of all stripes are clamouring to approve, will only increase this misguided behaviour and carry our planet ever-closer to the brink of oblivion? Who do they (the mega-food corps.) think they're kidding? This system comes at horrendous cost to ordinary people like you & me, paying untold billions through our taxes the cost of upkeep of airports, highways, bridges and all the rest. Not to mention, the relentless march of climate change and all that implies for future generations. As Naomi Klein might say, capitalism is now at war with all life on earth. Sorry, folks. She's right!

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