The draft trade agreement between the European Union and Canada (CETA) threatens the Internet, health and democracy. The agreement contains an investor-state arbitration clause, which gives multinational companies the right to directly sue states in international tribunals. CETA places these arbitration tribunals above the high courts of Europe and Canada.
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Investor-state arbitration clauses give multinationals the right to sue countries if they dislike legislative changes. Tobacco company Philip Morris sued Australia over the Tobacco Plain Packaging Bill, which introduced restrictions on the use of cigarette company’s logos on cigarette packets and allow for more space for health warnings. After Australia’s High Court dismissed the legal challenge, Philip Morris launched an investor-state case. As a result, Australia decided not to sign treaties with investor-state arbitration clauses any more.
The EU and Canada have been negotiating the Comprehensive Economic and Trade Agreement (CETA) since 2009. Negotiations took place behind closed doors, the draft texts are still secret. The website bilaterals.org and Kriton Arsenis, a member of the European Parliament Committee on Environment, Public Health and Food Safety, revealed the existence of the investor-state arbitration clause. Arsenis criticizes the arbitration clause as an easy way to bypass democracy.
Conflicts of Interest
Multinationals see reform of legislation that could reduce their profits as expropriation and demand high damages. In recent years, arbitration tribunals increasingly stretched the concept of expropriation. Lawyers advise multinationals in setting up investment structures, and these same attorneys and their office colleagues also act as arbitrators in tribunals. This gives rise to conflicts of interest.
The arbitration clause will have a negative impact on innovation and the Internet. The trade agreement with Canada will allow multinational companies to attack legislative reforms and protect old business models. This endangers reform of copyright and patent law.
The Internet suffers from an excessive enforcement of an outdated copyright. Filtering, blocking and banning links hamper the functioning of the Internet. CETA will give multinationals the possibility to thwart necessary reforms.
EU trade commissioner Karel De Gucht will visit Canada on 6 February 2013 in the hope of concluding the trade talks. A day earlier, he will visit the US to prepare trade talks with the US.
On 7-8 February, the EU’s 27 heads of state and government will meet in Brussels to discuss trade and foreign affairs.
For context, see also:
Brewing Storm over ISDR Clouds: Trans-Pacific Partnership Talks – Part I and Part II