A controversial investment protection clause in the Canada-European Union trade deal has been amended, according to the country’s minister of international trade.
“Canada and the European Commission are very pleased to announce that the legal review of the Canada-European Union Comprehensive Economic and Trade Agreement [CETA] English text has been completed,” a joint statement by Canadian International Trade Minster Chrystia Freeland and Cecilia Malmström, European Commissioner for Trade, said today.
“As part of the legal review, modifications were made to the investment chapter, further to discussions between European Union [EU] and Canadian officials,” according to the two officials. “With these modifications, Canada and the EU will strengthen the provisions on governments’ right to regulate; move to a permanent, transparent and institutionalized dispute-settlement tribunal; revise the process for the selection of tribunal members, who will adjudicate investor claims; set out more detailed commitments on ethics for all tribunal members; and agree to an appeal system.”
Negotiations for CETA were supposed to have concluded in the summer of 2014. An agreement was signed in principle in 2013.
However, the CBC reported in January that European officials approached the new Liberal government in and quietly asked for a review of the investment protection clause of the deal.
The investor-to-state dispute settlement (ISDS) mechanism Canada negotiated on CETA is similar to Chapter 11 of the North American Free Trade Agreement (NAFTA). It provides protection to s that businesses from arbitrary government policies. It allows corporations to recover damages aims to force governments to fulfill the trade deals they sign, or be held accountable.
On one end of the debate, the ISDS is seen as good for businesses but there are sectors that argue that taxpayers could be on the hook if corporations are allowed to sue governments. There have been calls for more transparency in negotiations as well.
Today the EU and Canada governments said they have “responded to Canadians, EU citizens and businesses with a fairer more transparent system.”
“These modifications reflect our desire to reform investment protection and dispute-resolution provisions and to continue working together to improve the process, including working with other trading partners to pursue the establishment of a multilateral investment tribunal, a project to which the EU and Canada are firmly committed,” the statement said.