by Paul Wells
A reader wrote after my last column on the Belgians and the Canada-EU trade deal. “Hi Paul: Just a note to express disappointment.”
Yeah, well, get in line.
“Vern in Alberta,” the email’s author, wished I would speculate “just what the Canadian populace would think” if they knew “non-voting multinational corporations” are trying to get “the right to sue governments if they perceive a loss of profit due to government actions.”
Vern concludes: “Please write this up if your leaders permit.” I guess we’re about to find out. I didn’t even ask my leaders. I just started typing. We’re all Thelma and Louise up in here today.
Vern was describing the controversy over so-called “Investor-State Dispute Settlement” provisions in CETA, and indeed in a number of modern international trade treaties.
These provisions do indeed provide for ways a company from here, if it sets up shop over there, to seek legal redress if the Government of Over There changes its laws in a way that hurts our company’s competitive situation. Sauce for the gander: they give the same rights to companies from over there that want to do business here.
I don’t need to speculate how people would react to all this. Many obviously don’t like it.
Already four years ago, 50 municipalities across Canada had passed resolutions asking to be exempted from CETA. Similar investor-state provisions have provoked widespread backlash against TTIP, the proposed trade deal between the United States and the EU. (It’s not a perfect comparison: TTIP is almost certainly doomed anyway, because the Americans aren’t offering trade benefits to match the gains they seek in Europe.)
But outrage at these investor-state provisions is easy to understand. Foreign multinational comes to town, sues our elected government because it doesn’t like the rules. What’s to like?
My answer is that the investment is what’s to like. That’s why the latest generation of trade agreements seeks to promote investment and competition in services, not just trade in goods.
Think about it, for a moment, from a company’s perspective. Not a faceless Darth Vaderesque billionaire multinational corporation, but the kind of widget company your cousin might own. Making its first foray into a foreign market. Worried that, if it manages to compete fair and square, widget companies over there will lobby their governments to change the rules. Your cousin will wish he had recourse. These trade deals are designed to provide it.
But even as I make the argument I know I’m asking people to show goodwill to corporations, often large ones, and to people in government who seem eager to smooth their path. And who has a surplus of goodwill toward big corporations and their friends in high places?
I could point out that CETA’s investor-state provisions have been substantially improved since Chrystia Freeland became Canada’s trade minister, to increase transparency and impartiality. I could quote Pascal Lamy, former World Trade Organization head, who told the French magazine L’Express: “When you read CETA’s text and compare it to other bilateral treaties that didn’t cause problems, it’s by far – by very far, really – the most protective of states’ right to regulate.”
I could do all that, but the fact is that big corporations generate a lot of mistrust these days. And why wouldn’t they, after Wall Street collapsed at the end of 2008 and most of the companies responsible were able to get relief from the Bush and Obama governments?
CETA isn’t out of the woods. The deal among Belgian institutions that was the fruit of Freeland’s walkout from Brussels provides many opportunities to walk away from the treaty later.
It may simply be that there is an upper limit on the economic integration international treaties can provide, and that public suspicion of corporate power helps set that ceiling.
This could mean trouble for Justin Trudeau’s government on another front. Next week Finance Minister Bill Morneau will announce plans to attract private investment in federal infrastructure projects. The goal is to multiply each federal dollar by four or five, using money from, mostly, pension funds.
But Robert-Falcon Ouellette – a Liberal MP from Winnipeg – has been derisive of the scheme, calling it “a massive transfer of public funds toward the private funds in order for them to make money – a subsidy towards business.”
The notion that private and public interests might coincide is in low repute these days. Much of Trudeau’s agenda depends on aligning the two. It is not guaranteed to work.
Paul Wells is a national affairs writer. His column appears Wednesday, Friday, and Saturday.
Copyright 2016-Torstar Syndication Services