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Leaked 5-page ‘declaration’ previews path to compromise on Canada-EU trade deal

A leaked final draft began circulating around Europe Wednesday evening of a “joint interpretative declaration” Canada hopes will be enough to satisfy the remaining critics of the trade deal it hopes to sign with the European Union at the end of the month.

While much of the declaration appears to restate the shared principles driving the Comprehensive Economic Trade Agreement (CETA), a key section on its fifth and final page offers new language around the deal’s controversial government procurement provisions.

The text says that CETA “maintains the ability” to “use environmental, social and labour-related criteria” in tendering, “in a way that is not discriminatory and does not constitute an unnecessary obstacle to international trade.”

As CBC News reported last month, Canada agreed to work with key European players on “clarifications” to the final 1,600-page deal amid concerns that it wasn’t progressive enough to win the support of key political players in the European centre-left, including social democrats in Germany and Austria.

In particular, critics said the negotiations that concluded several years ago failed to adequately protect individual governments’ rights to regulate in areas like environmental protections or labour standards. The opening of more public sector procurement raised concerns about whether the interests of multinational corporations would interfere with local sovereignty. 

Senior trade representatives from the 28 member countries of the European Union meeting in Bratislava, Slovakia, through Friday are expected to discuss the new text. Canada’s chief negotiator with the European Union, Steve Verheul, is part of the talks.

Declaration not unprecedented

The Canadian government will not confirm the authenticity or accuracy of the draft, nor the status of negotiations, saying only that there is no final joint declaration yet and nothing will be released this week.

“Canada and the EU are working on a legally-binding joint declaration that underlines the progressive elements of this trade agreement,” Alex Lawrence, International Trade Minister Chrystia Freeland’s spokesman, wrote in an email. “This includes confirming our shared views on the delivery of public services, labour rights, environmental protection, and an improved, independent investment dispute system.”

Labour unions and civil society groups have organized large protests in Europe, mobilizing hundreds of thousands and applying political pressure ahead of the European Council giving its final approval for signature.

Austria Migrants

Austrian Chancellor Christian Kern, seen here with German Chancellor Angela Merkel in Vienna last month, was seen as one of the final holdouts on backing CETA’s ratification. But recent comments suggest he’s reconsidering. (Ronald Zak/Associated Press)

Austrian Chancellor Christian Kern signalled earlier this week that his opposition to the deal may be abating, particularly if the new investor court system is not provisionally applied before the deal is ratified in the individual national parliaments.

Other members of his party who sit in the European Parliament issued a statement Thursday that any declaration would need to have equivalent legal status to the rest of the CETA text.

Once the deal is signed, it must pass a ratification vote in the European Parliament. 

A declaration like this is not without precedent in international trade. The parties to the North American Free Trade Agreement (NAFTA) have used a similar declaration to clarify how aspects of that deal should be interpreted in court, for example.

Neither side wanted to re-open negotiations, which could really complicate things — from reconsidering the deal’s tradeoffs in light of the United Kingdom’s planned exit to re-arguing details individual countries still don’t like. 

Canada already agreed to rework the ISDS clauses last winter, adopting instead a new investor court system the European side proposed.

‘Diversion without teeth’

Skeptics say if both sides want something changed, they should just change it before signing.

Lawyer Steven Shrybman, who was asked by the Council of Canadians to provide a legal opinion of the declaration before the draft text was available to review, was dismissive of its potential legal value, calling it “simple rhetoric.”

“A joint statement doesn’t change the provisions of CETA,” Unifor national president Jerry Dias said. “Having this joint letter, touchy-feeling, isn’t going to save us in courts when we get into arguments over the investor rights rules.”

“I think it’s a diversion because it doesn’t have any teeth,” he said, calling it more of a political statement.

Germany TTIP Protest

Demonstrators hit the street in Berlin Sept. 17. Unions and civil society groups take credit for forcing changes to the deal after mobilizing political pressure. (Markus Schreiber/Associated Press)

Prior to last month’s protests across Europe, German unions and the Canadian Labour Congress (CLC) jointly called for improvements before ratification.

“Clearly they attempt in the [draft] document to speak to a variety of those issues that we had raised to them,” said Hassan Yussuff, the president of the CLC. “The bigger question is, does it have legal weight? Is it going to protect the things that we’ve been concerned about?” 

“I think it’s getting close to a progressive trade agreement in some ways, but it is not yet a fair trade agreement,” he said. “We reserve judgment until we see the final agreement.”

“I think there’s an attempt here by Chrystia Freeland to try to do the right thing,” he said.

‘Panels will look at it’

Trade lawyer Mark Warner said that while much of the leaked text reads like boilerplate, a few key lines build on what was negotiated previously.

For example, the draft speaks of preventing “shell” or “mailbox” companies established by investors from other countries from bringing claims under the deal’s investment dispute provisions.

That may be an attempt to address concerns in Europe about American corporations using Canada’s deal as a backdoor.

“Largely it reads like a political document to me, but to the extent that there’s a divergence, and there are a few, that’s where it tends to take on some legal significance,” he said.

“Future [arbitration] panels will look at it in interpreting the rules,” he said.

Sources tell CBC News the leak may be a trial balloon to gauge public opinion before CETA’s final approval and planned signing ceremony on Oct. 27.

Article source: http://www.cbc.ca/news/politics/ceta-canada-eu-trade-leak-interpretative-declaration-1.3794013?cmp=rss