CETA Isn't Dead, But Its Corporate Sovereignty Chapter Is Still A Huge, Unresolved Problem

CETA Isn't Dead, But Its Corporate Sovereignty Chapter Is Still A Huge, Unresolved Problem

Techdirt|Glyn Moody

It's been a while since we last wrote about CETA, the trade deal between Canada and the European Union. Back in March, we noted that the French Secretary of State for External Commerce, Matthias Fekl, said that France would not ratify CETA unless the corporate sovereignty, or investor-state dispute settlement (ISDS), provisions were removed or replaced by something completely different. Of course, it's hard not to be sceptical about these statements, since politicians like to grandstand, and are happy to change their positions every few months. But not, it seems, Matthias Fekl. According to a report on the French site Le Devoir (original in French), he's still of the same opinion:

For the Secretary of State for Foreign Trade, Matthias Fekl, who expresses the official position of France, it is not only a question of principle but a fact of life today. If negotiators do not rewrite Article 33 of the [CETA] Treaty which deals with dispute resolution, there will be no ratification.

And it's not just France that has a problem here. According to the article, Fekl said:

Look, this [refusal to accept the corporate sovereignty provisions in CETA] will also be the case in other countries. This isn't meant as a threat. But as far as this chapter is concerned, things must definitely move.

The EU Commissioner for trade, Cecilia Malmström, is well aware of the issues here -- not least because 145,000 people told her in the ISDS consultation last year -- and has presented a concept paper entitled "Investment in TTIP and beyond – the path for reform" (pdf). These are quite similar to proposals made by Fekl for the creation of a new European court to settle trade disputes. But there are two big problems with following that path.

First, the European Commission (and Fekl) have only just begun to sketch out how that reform might look. It is likely to take some time to come up with alternatives like entirely new courts. There is no way that something will be agreed for CETA, which may be ready for ratification quite soon. There's also the problem of TAFTA/TTIP. Given that Malmström has admitted that the current ISDS is unsatisfactory, and that she is trying to come up with something better, it will be hard for her to include it in TAFTA/TTIP in its current form. But the US side has made it clear that it is not happy with dropping corporate sovereignty completely, which leads once more to the problem of time-scales, since a serious replacement for ISDS may not be available even for TTIP. It will be interesting to see how Malmström deals with this key issue for both CETA and TAFTA/TTIP.