Van Harten: Canada "Recklessly" Entering Trans-Pacific Partnership, FIPA

Thu, 2012-12-13 11:05Carol Linnitt
Carol Linnitt's picture

Van Harten: Canada "Recklessly" Entering Trans-Pacific Partnership, FIPA

Last week Foreign Affairs and International Trade Canada announced Canada had “officially joined the latest round of Trans-Pacific Partnership (TPP) trade negotiations” after more than two and a half years of talks by previously engaged nations. The 15th round of talks, involving Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, wrapped up yesterday in Auckland. 

The TPP has already been the cause of significant concern in the U.S. where citizen groups and elected leaders have argued the agreement is shrouded in secrecy, leaving the American public to speculate about its consequences. This summer, after members of Congress complained corporate access to the trade documents superseded their own, leaked portions of the agreement began to circulate online. 
 
At the time Lori Wallach, director of Public Citizen's Global Trade Watch, said, “the outrageous stuff in this leaked text may well be why U.S. trade officials have been so extremely secretive about these past two years of [trade] negotiations.”
 
During those two years, while Canada was vying for a seat at the TPP table, America made arguments that seemed to anticipate the furor Canadians would soon feel after the announcement of the Canada-China Foreign Investment Protection and Promotion Agreement, or FIPA
 
Much like FIPA, the TPP grants unprecedented power to corporate entities with access to international tribunals that have the authority to overrule Canadian decisions regarding domestic policies that may apply to environmental regulation or reform, finance and labour policies and First Nations rights.
 
International investment lawyer and trade agreement expert, Gus Van Harten told DeSmog that Canada is currently on track to become “the most locked in developed country in the world in investor-state arbitration.” He added, Canada is “proceeding recklessly” into this enfeebling agreement which will give “almost all foreign corporations in the country exceptional leverage to pressure governments behind closed doors.”
 
The Harper government is selling out Canada's long term sovereignty and prosperity in what appears as a thoughtless gamble, without so much as a financial risk assessment. As Van Harten puts it below, “We do not intend to slip on the sidewalk in winter, but we still check for ice.”
 
I asked Professor Van Harten 5 questions about the TPP and its relation to the politically-contentious FIPA
 
Carol Linnitt: What is the significance of Canada's entry into the TPP?
 
Gus Van Harten: Alongside the Canada-China FIPA and the Canada-Europe CETA [Comprehensive Economic Trade Agreement], the TPP is very significant for Canada. These are part of the trio of trade or investment deals now pursued by the government and they are the most significant such deals for Canada since NAFTA.
 
CL: Is the TPP Agreement made public in Canada, either to citizens or elected officials? In other words, do we know what the TPP entails for Canada?
 
GVH: A version of the TPP investment chapter was leaked over the summer. Other parts of the TPP may also have found their way on the public record. But, other than through such leaks, the TPP text would not be public or available to elected members of the legislature, in general, until the negotiations were concluded and agreed text was made public. So we can speculate, or rely on leaked documents, about the content of the treaty in order to analyze its potential implications.
 
CL: You have mentioned before that entry into trade agreements of this nature force disputes of national interests to be settled by international arbiters. 
 
GVH: That is correct. The TPP, as proposed, would include an investor-state arbitration mechanism like the one in NAFTA Chapter 11 and, as proposed, in the Canada-China FIPA and the Canada-EU CETA. If Canada agrees to these various deals, it will be the most locked in developed country in the world in terms of investor-state arbitration.
 
This is in contrast the movement by some countries, such as Australia, India, and South Africa, away from investor-state arbitration due to its negative impacts on governments.
 
CL: Does the TPP favour corporate interests and trade expediency over national self-governance? Is Canada in danger of loosing its decision making authority over its own resources and trade preferences? Are we in essence giving up that control to corporations?
 
GVH: Through this network of investor-state mechanisms Canada would give almost all foreign corporations in the country exceptional leverage to pressure governments behind closed doors and, if the companies were unsuccessful in this arm-twisting, to take their claims to arbitration tribunals where the process favours the corporate interest over those of governments, domestic companies, and other domestic constituencies.
 
It is a dangerous and unfortunate development, especially in light of how corporations have used these arbitration mechanisms to frustrate legitimate policy measures on the economy, financial regulation, taxation, public health, and the environment, for example.
 
CL: What are the similarities between FIPA and TPP? If Canadians are concerned about FIPA should they also be concerned about the TPP?
 
GVH: The key similarity is that both contain an investor-state arbitration mechanism that gives special rights and protections to foreign companies to challenge any government decision outside of the Canadian legal system and Canadian courts in arbitration processes that are not independent, open, and fair in the manner of a court.
 
The difference lies in which country's foreign companies obtain these new rights and protections under each treaty. For the government to rush into the FIPA or the TPP, without doing proper risk assessments and legal analyses and without working out the constitutional issues that arise for provincial powers and First Nations rights is irresponsible. Other governments have pulled back from these arbitration mechanisms after they were hit with major lawsuits by major corporations; Canada has a chance to learn from this experience and avoid these outcomes but is proceeding recklessly in the face of evidence about the serious risks to taxpayers and constraints on voters.
 
For example, the federal government indicated, when asked, that it had not done a fiscal risk assessment of the Canada-China FIPA (although it raises a risk of multi-billion dollar awards against Canada) because it had no intention of violating the treaty. This was not a good answer.
 
We do not intend to slip on the sidewalk in winter, but we still check for ice.
 
Moreover, Canada has in various cases been found to have violated NAFTA and ordered to pay compensation to foreign companies, as have other countries under treaties with similar arbitration mechanisms.
 
Image Credit: PMO Photo Gallery
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