On January 13 Hassan Yussuff, leader of the Canadian Labour Congress, travelled to the European institutions for discussions on the EU-Canada Comprehensive Economic and Trade Agreement (CETA), as well as other relevant trade agreement such as the Trans-Pacific Partnership (TPP) and of course the Transatlantic Trade and Investment Partnership (TTIP). After a meeting with Reinhard Bütikofer alongside the Green MEPs, we had a chance to interview him about his views on these controversial agreements.
Hassan, as a long-time activist and now the leader of the Canadian Labour Congress, you had to deal with quite a few trade agreements and their impact on the Canadian economy and the people. On balance, how do you evaluate the experience with these trade agreements, considering that Canada is hugely dependent on trade?
NAFTA and its predecessor have had a huge impact on Canada. We warned that these deals would weaken social programs, and that's what we see now. We warned that NAFTA would decimate manufacturing in Canada, and we've lost nearly 600,000 manufacturing jobs over the past 15 years. Our experience is that the structure of the Canadian economy has reverted to being more dependent on the extraction and export of raw materials. We know that trade is important, but trade deals need to respect labour rights, environmental rights, and not just corporate rights.
The previous very conservative Canadian government negotiated two major trade deals that have not been finalized but can be assessed because the negotiated texts are public: the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada, and the Trans-Pacific Partnership (TPP). To pick TPP up first: this is a very hot potato across the political spectrum south of your borders in the US. How about Canada? Would Canada benefit or maybe rather, who would benefit in Canada? Is there a possibility that because of criticism TPP could be rejected?
I think that it took longer for the TPP to become a political issue in Canada, but it is definitely generating a lot of public criticism now, and from many corners. It's not clear how workers benefit at all from this deal, and it puts thousands of auto jobs at risk, while opening up more avenues for temporary work visas. Canadians are concerned about the deal's impact on the government's right to regulate in the public interest, how it will affect publicly-provided medial services, changes to privacy rights, among other key issues. Right now we're asking the federal government to hold thorough and transparent hearings, so that we can make an informed decision on ratifying TPP.
The CETA trade agreement between Canada and the EU has come under fire over here mostly in the context of the investor-state-dispute-settlement mechanism foreseen in the draft agreement. What's your experience in Canada with investor state disputes? What are other elements of major concern to the CLC?
There is an investor-state-dispute mechanism in NAFTA, and it's been disastrous for Canada. We've been sued 35 times under NAFTA, and paid out settlements to US firms of approximately €135 million. Environmental regulations are frequently the target of ISDS suits. More than just suing Canada, though, the existence of ISDS puts a chill on governments who are considering regulations in the public interest. It's bad for democracy.
We're also concerned with other elements of CETA, what they call the “standstill” and “ratchet” clauses that lock in privatization of public services, and make it far more difficult to introduce new public programs such as pharmacare. We're concerned about the ability of provinces and municipalities to use public procurement to uphold social standards, support local economic development and a just transition to a green economy. CETA will make prescription drugs more expensive, and threatens our dairy industry.
In the European Parliament it's highly questionable whether CETA could manage to get a majority, which it would require to get enacted, without at least a revision of the presently foreseen investor state language. The European Commission under Trade Commissioner Malmstrom has come forward recently with proposals for some very slight improvements regarding the investor state mechanism - question is, whether these could still be introduced into the CETA agreement. As far as you know, do you think there's openness on the Canadian side for a rebalancing of the text here? And how much might that help to reign in corporate power grams at the expense of constitutional democratic government?
What we've heard is that the Canadian government would likely be open to changing the language on investor-state as part of the legal scrubbing process. In my opinion though, what's been proposed would do very little to limit the damage of ISDS. Foreign investors would keep their own custom-made judicial process: at the very least, ISDS-like processes should be subsidiary to national court systems, not independent and parallel.
If the international community gave you the job of drafting a WTO-based agreement on investor protection, what would you propose?
Investors should have basic and reasonable protections from arbitrary expropriations. However, there is no a priori reason why this should take the form of the protection we commonly find in ISDS-like processes. First, the definition of investment should be restrictive and not cover expected future profits as is the case now. Second, the process should be subsidiary to the national justice systems. Third, it should be a state-to-state process, as is the case for labour-related or environmental disputes. Fourth, it should enshrine the states’ right to regulate for the public interest. Finally, investors should not only have right to protection but responsibilities to their workers and communities in which they operate.