Better Trade & Regulation

Better Trade & Regulation

Leaving a good deal to be desired

2016 may have been the first and last time in history when a trade deal like CETA was possible. All going well, our efforts, and those of grassroots movements around Europe, have made it politically impossible for the EU to again strike deals providing investors with private arbitration courts outside Europe’s legal system.

Special privileges for corporations in major trade deals are a serious threat to democracy and the environment. In a report with Friends of the Earth Europe and the Sierra Club, T&E examined how the TransCanada Corporation was using investor privileges in the North American Free Trade Agreement (NAFTA) to demand USD $15 billion from the US government following its rejection of the Keystone XL tar sands pipeline. With President Trump having just given the pipeline the go-ahead, the arbitration case may no longer be necessary. But the threat of enshrining such investor protections in trade deals was clear. It came at a crucial stage: the EU had just presented a new ‘Investment Court System’ (ICS) in talks with the US on the Transatlantic Trade and Investment Partnership (TTIP). T&E immediately identified ICS as a mere rebranding exercise; it would resolve none of the fundamental concerns about granting special privileges for foreign investors, undermining national laws and bypassing domestic courts.

A European grassroots movement was growing fast in opposition to trade deals the EU was lining up: the Comprehensive Economic and Trade Agreement (CETA) with Canada, and TTIP with the US. The coalition of activists voiced the full range of concerns: from food quality standards to chemicals regulation. On the environment, claims that CETA would be a ‘gold standard’ of trade deals for the betterment of people and the planet were undermined by a toothless environment chapter that cannot be properly enforced and a tribunal system which will prioritise corporate interests. T&E analysed the agreement with legal NGO ClientEarth and found it does nothing to encourage climate mitigation measures, such as transitioning to renewable energy, as called for in the Paris climate agreement which was signed by both Canada and EU. Its International Court System would threaten measures taken in the public interest, such as national policies favouring the development of renewable energy or laws to ensure the decarbonisation of transport fuel, such as the EU’s Fuel Quality Directive.

Better Trade & Regulation

At first, the European Commission considered not giving national parliaments a say on the final deal. It was only after numerous governments – under pressure from citizens – said that their national assemblies must have a say that the EU executive relented. What happened next grabbed world headlines: the regional parliament of Wallonia, in Belgium, voted to block the Canadian deal as it stood. Having listened to civil society, the politicians of Wallonia took issue with ICS and other provisions of the deal. After a tense stand-off it won a guarantee that Belgium would be able to go to the European Court of Justice to determine whether ICS was compatible with EU law – something which the European Parliament, cowed by corporate interests, has refused to do.

CETA drew much more public criticism than the European Commission had ever imagined. ICS would be unacceptable in future agreements. The Commission is now working on a more radical solution: a multilateral investment court. It would be a full time court with properly independent judges. Though the concept is in its early stages, T&E has already offered its constructive criticism and will monitor closely what the Commission does next.

Cécile Toubeau, a member of the European Commission’s TTIP advisory group, and the Transport and Environment campaign group, said: “If TTIP wants to set the global ‘golden’ standards it should tackle production fossil fuel subsidies, a highly trade distorting instrument, in a legally binding chapter. Without a concrete timeframe to end fossil fuel subsidies, it will be impossible to stop our oil addiction and therefore uphold the Paris deal.” The Guardian, 13 July 2016

What governments get up to

Civil society has long noted and been left frustrated by the total lack of transparency and accountability in the EU body where national governments meet – the Council. Often meeting behind closed doors, governments can do whatever they want in Brussels and then blame Brussels for everything that goes wrong, although they were at the table when it was decided. Additionally, governments will make promises to citizens on certain issues in national media, and yet in Brussels will water down or block the very law that could deliver on those promises. Notoriously, in the aftermath of the VW scandal, national representatives weakened air pollution limits.

T&E’s plan is to take the fight to national capitals. Based on a detailed analysis of the Council, we launched our Council strategy in 2016. By hiring a permanent national expert in both Italy (Rome) and Spain (Madrid), T&E now has staff members on the ground who will work in close cooperation with our Brussels team and our member organisations in the capitals. As an organisation, we benefit from having staff working on all T&E issues in national capitals. Our members also benefit from having a close ally working on EU issues, who could provide indirect additional capacity. Working together, we can help ensure that T&E’s knowledge of what a government gets up to in Brussels doesn’t stay in Brussels.

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