Last week I asked you to write to the relevant UK minister in order to keep ISDS out of CETA. I said at the time it was a bit of a long shot given his obvious support for the idea. However, we have another chance with a group that is likely to be much more rational about this. Tomorrow, the Members of the European Parliament are holding a debate where they can discuss these issues. Again, this is not likely to change things dramatically, but if enough MEPs speak out against including ISDS in CETA it will add to the growing pressure on the European Commission. Worth a try, I think...
You can use the indispensable WriteToThem.com to find out who your MEPs are. Here's what I've sent to mine:
As you know, the CETA trade agreement between the EU and Canada is finally finished, and likely to be signed soon. It includes a chapter on investor-state dispute settlement (ISDS), which is worrying many people because of the way it places foreign companies above national and EU courts.
Specifically, it will allow Canadian (and US) companies to sue for an alleged "indirect expropriation" of future profits if the EU or national governments bring in laws or regulations that are likely to impact them adversely. Well-known examples of how ISDS is being used to thwart legitimate democratic decisions include Philip Morris suing Australia over its restrictions on tobacco, and the Swedish energy company Vattenfall claiming 3.7 billion euros from the German government for the latter's decision to phase out nuclear power.
Various arguments are made in favour of including ISDS in CETA and TTIP. It is said that it is needed in order to encourage investment, but this is clearly not the case for Canada or the US, both of which already invest in Europe on a massive scale, even in the absence of ISDS. An unfair system like ISDS that socialises the costs and privatises the benefits is also unnecessary because alternative mechanisms such as insurance exist for companies that are nonetheless concerned about protection.
It is said that ISDS is needed to protect companies investing in the EU, or Canada and the US; but all of these countries have highly-developed and efficient legal systems. There is simply no need to give secret tribunals unconstrained and arbitrary powers to make awards of any amount - recently one was made against Russia for $50 billion.
It is also claimed that the EU and its member states already have hundreds of treaties that include ISDS, and that there has never been a problem with them. But these are all with weak and emerging economies; the reason ISDS is included is to allow Western companies to sue local governments. There has never been a problem because there has never been a treaty with a powerful economy with large companies able to turn ISDS against the EU.
The key difference with TTIP and CETA is that it will allow US companies to sue countries like the UK, Germany and France for the first time (US companies will be able to use CETA via Canadian subsidiaries). For example, there are around 50,000 US companies with offshoots in EU, any one of which could potentially use TTIP to sue the EU over "indirect expropriation" of future profits. This is completely different from the existing situation.
Moreover, as you know, 150,000 people responded to the European Commission’s consultation on ISDS, the vast majority of whom rejected ISDS completely. If ISDS is included in CETA despite this, it will be a slap in the face of the European public, which is anyway questioning whether the European project makes any sense, and whether the European Union takes into account their views. Including ISDS in CETA and TTIP despite the clear concerns would stoke those doubts yet further.
For these and many other compelling reasons to do with the inherently flawed nature of ISDS – something admitted even by Karel De Gucht – please call for the Commission to remove the ISDS mechanism from the CETA agreement, and to drop it from the TTIP negotiations.
Thank you for your help.