Since discovering the newly formed Hamilton Chapter of Council of Canadians, Big Lady Justice has decided to start letter writing.
Below is a copy of her first letter sent yesterday, Feb 6, 2012.
Next step on Big Lady Justice's agenda: call MPs!
Chris Charlton
Via Email: chris.charlton.c1@parl.gc.ca
232-845 Upper James St,
Hamilton, Ontario L9C 3A3
Hamilton, Ontario L9C 3A3
Scott Duval
Via Email: scott.duvall@hamilton.ca
Hamilton City Hall 2nd floor
71 Main St. West
Hamilton, Ontario L8P 4Y5
Monique Taylor
Via Email: mtaylor-qp@ndp.on.ca
Unit 2, 952Concession Street
Hamilton, Ontario L8V 1G2
Hamilton, Ontario L8V 1G2
Dear Ms. Charlton, Ms. Taylor & Mr. Duval,
Re: STOP THE CETA
I’d like to begin by thanking you for proudly representing the interests of our community.
I have to tell you, I am concerned about the potential impact CETA will have on our economy and our quality of life, here in Hamilton.
Background
Canada’s existing commitments covering provincial and local government purchasing under international trade treaties such as the NAFTA are quite limited.
The municipal government purchasing is fully excluded under both the NAFTA procurement chapter and the World Trade Organization’s (WTO) government procurement agreement. Consider for example, the basic rule in NAFTA for the sub-federal levels of government—Article 105 Extent of Obligations of the NAFTA— which expressly states that provincial and state governments will be covered, EXCEPT for chapters where states & provinces are exempted (such as Chapter 9 Technical Barriers to Trade ((TBT) requirements).
The NAFTA has a general rule that these sub-federal rules are covered. Most of time, under the WTO agreement, the sub-federal level is not covered (or at least not covered with such a strong obligation on part of the federal government).
Consider Art. 901 in the NAFTA Internal federal/state/provincial separation of powers. When a similar foreboding provision appears in the CETA, the federal government could always mandate compliance by sub-federal governments and non-governmental organizations (NGO). Investor parties in the EU could seek through such measures to ensure observance in the CETA by municipalities, provinces, or NGOs.
Please explain—how can our government balance our sovereignty, trade interests and non-trade interests in a transparent and accountable manner within the CETA?
The leaked text of the CETA procurement chapter reveals that coverage under its rules would preclude the use of legitimate and beneficial public procurement policies. It would appear that the EU’s highest priority in the CETA talks is unconditional access to government procurement, particularly at the sub-national level.
What is your position on the CETA? What are you going to do, to prioritize legitimate objectives of our domestic market? Will the CETA also exclude protection of domestic production, as the NAFTA does?
Legitimate Objective
Consider how the definition of ‘legitimate objective’ does not include protection of domestic production (see Article 915 of the NAFTA). A legitimate objective can be any standards related measure. That means that if there is an international standard, then you HAVE to use it as a basis. (Please see Article 905 Use of International Standards of the NAFTA).
Previously, the international standards were not seen as binding, until the Ch.7 Sanitary and Phyto-sanitary (SPS) and Ch.9 Trade Barrier Tariffs (TBT) agreements in the NAFTA and WTO.
Are you prepared to bind our municipalities to these international standards, which turn into trade obligations?
What is our government doing, to evaluate whether the demonstrable purpose of the measures in the proposed CETA are to achieve legitimate objectives?
Market Access Approach
It seems that since the mid 90s, —there has been a shift in trade liberalization to a stronger Market Access approach of non-discriminatory treatment from the previous National Treatment (Art. 1102) in the NAFTA. Our government has not been able to balance non-trade interests with trade interests throughout this shift, but instead has been obligated to provide foreign investors with better treatment than national citizens. (Please see Article 1110 Expropriation and Compensation in the NAFTA)
Property cannot be expropriated unless it is done for a public purpose, on a non-discriminatory basis, in accordance with due process of law, and on payment of just compensation. This applies to foreign investment as well. But foreign investors get better treatment than National Treatment. Contracting Parties in the CETA would be obliged to give the investors of other CETA Parties treatment no less favourable than they give their own domestic investors. (Please also see Art. 1103 Most Favoured Nation Treatment (MFN)).
Most Favoured Nation
MFN guarantees that treaty-protected investments will be treated at least as favourably by the CETA state as nationals and firms from any third state. Essentially, MFN means that foreign investors cannot be singled out and treated poorly compared to other foreign treaties.
There is little doubt the CETA will include controversial articles similar to NAFTA protecting foreign investors and investments, against expropriation.
It seems that the main source of trade disputes —which appear to be potential, real obstacles to trade include: product standards; certifications; labeling requirements; and similar requirements by individual countries. In order to resolve these trade disputes, our government will likely implement a similar mechanism for resolving investor dispute settlement in the proposed CETA, similar to Chapter 11 of the NAFTA.
In fact, NAFTA deals with more than 1 level of govt within each Party, so the Agreement provides that subnational govts must provide the best “in-province” or ”in-state” treatment available. Please see Article 1102(3) of the NAFTA. In comparison, the proposed CETA will include municipalities.
Serious risks of material injury to our domestic market, would be permitted by such investment rules as proposed under the CETA, similar to Chapter 11 in NAFTA.
Unfortunately, in Chapter 11—UNICTRAL’s full international commercial arbitrations can get very expensive. And if it is under ICSID, the fees are controlled in an administrative structure. The claimant investor can also choose the Washington Convention as one of three different types of dispute rules that claims can be submitted under: UNICTRAL; ISCID or Washington Convention. From perspective of the parties it can make a big difference. Look at the matters that have gone to arbitration, they’re generally smaller companies.
When and if the CETA implements provisions substantially similar to Chapter 11 of the NAFTA, the investor must agree to consent to the investor-state arbitration rules and waive all other legal recourse other than that provided by the CETA before a claim can be considered. (Please see Article 1121 of the NAFTA)
Under the CETA, foreign companies would have the right to challenge both the process and the terms of covered procurements, creating a significant risk of litigation for public authorities.
Consider the consequences of the CETA—exposing domestic small companies to expensive disputes by foreign claimants for breach of the CETA provisions. Once there is a final award, it’s binding. The Panel structures set up are made to favour commercial arbitrations.
In the NAFTA set up process for private tribunal panels, there was very little input for outside parties, including NGOs to get involved. This is the case with the undisclosed CETA set up process as well, where our government appears to be subordinating the public interest of citizens to the private interests of negotiators. Private, administrative commercial arbitrations undermine the ordinary control in a judicial process.
The tribunals awards are supposed to be a monetary award of damages in lieu, but it could also award restitution of property to the EU investor; or the tribunal could tell the domestic company to give the property back. If the parties do not comply, the domestic court system can be used for collections.
Expanding public serves into areas where substantial foreign investment interests are already established will almost certainly trigger investor-state challenges and compensation claims. It is a foregone conclusion that investor parties to the CETA will demand that host states accord investments Minimum Standard treatment (please see article 1105 of the NAFTA) which requires fair and equitable treatment and full protection and security to foreign investors and investments.
Unfortunately, federal negotiators, however, have a strong built-in interest in getting municipalities covered to the fullest extent possible. As already requested in the motion initiated by the Council of Canadians on December 12, 2011—the Province of Ontario needs to fully disclose its initial procurement, services and investment offers to the EU; explain how the impacts of the CETA would have on municipal governance, and give M.U.S.H sector entities the freedom to decide whether or not they will be bound by the procurement, investment and regulatory rules in the agreement. These non-disclosed particulars are not the private, divine right of kings, nor should they be withheld from citizens.
It seems that municipalities will not gain from reciprocal access to EU procurement markets. The type of economic, social and environmental benefits that progressive government procurement policies can bring —will be sorely needed as we move forward into the 21st century.
Progressive municipal leaders must speak out publicly and build support and awareness among their own citizens and electors.
Thank you for your time.
Yesterday, Big Lady Justice wrote a letter to her elected representatives.
It concerns the Canada-European Union Comprehensive Economic & Trade Agreement (CETA).
