CETA is more about corporate rights than free trade

Vancouver Sun, Canada

CETA is more about corporate rights than free trade

Opinion: A number of CETA provisions strengthen investors’ rights to the detriment of democracy

By Yves Engler, Special to The Vancouver Sun

7 November 2013

Since announcing the Comprehensive Economic and Trade Agreement (CETA) two weeks ago Harper’s Conservatives have repeatedly labelled those questioning the deal as “anti-trade”. But this Canada-European Union accord is one part trade and four parts ‘corporate bill of rights’.

While the government has promoted the part of the agreement that would eliminate 98% of all tariffs, this masks the fact that these are already low (or non-existent) on most goods traded between Canada and the EU. On combined bilateral trade of $85 billion a year EU exporters currently pay $670-million in tariffs while Canadian producers pay only $225-million in duties.

To put this sum into perspective, eliminating all current Canada-EU tariff payments will barely cover the increased drug costs caused by another part of the agreement. The extension of Canadian patents under CETA is expected to drive up pharmaceutical drug costs in this country by between $850 million and $1.65 billion a year, according to a Canadian Centre for Policy Alternatives study. In other words, Harper’s Conservatives are proposing to add a billion dollars or more to the cost of our health care system, in return for a cut of less than $900 million in tariffs, most of which will benefit European producers. Is this really a good deal for ordinary Canadians?

And, one might ask, what does extending patents have to do with free trade? In fact, as a type of monopoly, patents stifle competition, which is supposed to be a pillar of free trade ideology. Of course the powerful brand-name drugmakers pushing the patent extension are more interested in increasing their profits than economic theory.

Another part of CETA that has little to do with expanding free trade is the investor state dispute settlement process. This will give corporations based in Canada and the EU new powers to sue governments for pursuing policies that interfere with their profit making.

A number of other CETA provisions also strengthen investors’ rights to the detriment of democracy. For example, the agreement will make it more difficult for municipalities to set up new publicly operated social services. It also ‘locks in’ reforms to the Telecommunications Act buried in last year’s 450-page omnibus budget. The Conservatives’ changes allow foreign-controlled corporations to buy a majority stake in telecommunications companies holding up to 10 per cent of the Canadian market (and then grow without limit from there). Under the banner of “free trade”, CETA will make it extremely difficult for a future Canadian government to reverse recent reforms to the Telecommunications Act.

This is just one more example of the Conservatives sneaking through their ideological agenda without proper, transparent debate in Parliament.

Last week International Trade Minister Ed Fast told the House of Commons that “the NDP remains beholden, bothfinancially and organizationally, to the big union bosses and anti-trade activist groups.” For his part, Prime Minister Harper told the press that “ideological opposition to free trade in Canada is really, today, part of a very small part of the political spectrum — a very small and extreme part — and for that reason I think you will find very few Canadians who are opposed in principle to having a free-trade agreement with Europe.”

Yes, few Canadians oppose trade with Europe “in principle”, but CETA is only partly about trade. The deal mostly benefits multinational corporations and it isn’t “anti-trade” to say so.

Yves Engler is a researcher with Unifor. His latest book is The Ugly Canadian: Stephen Harper’s foreign policy.