EU-Canada FTA as a Precursor to an EU-US Deal

European activists believe stopping Canada precedes stopping America.

It appears that the EU-Canada FTA, a.k.a. the Comprehensive Economic and Trade Agreement (CETA), may soon be a done deal with Germany's SPD junior coalition partners indicating that they will let it push through despite initial misgivings about investment protection clauses that many left-leaning folks believe infringe on national sovereignty in the interests of global capital. Actually, bilateral EU-Canada negotiations were wrapped up a few months ago; these clauses and what to do with them have been among the principal sticking points:

German Vice Chancellor Sigmar Gabriel said he expected his Social Democrat party (SPD) would back Europe's free trade agreement with Canada (CETA), which has faced opposition from party left-wingers due to its investment protection clause. The deal, which could increase bilateral trade by a fifth to 26 billion euros ($34 billion) and is widely seen as a template for a larger trade pact between the EU and the United States, was wrapped up in August after five years of tricky negotiations.
However, critics say the investor protection clause, allowing companies to bring claims against a state if it breached the treaty, would give multinationals too much power and could lead to governments being pressured into ignoring laws on labor, the environment, data protection or food standards.

It is unclear whether all 28 EU states will have to ratify CETA. The EU Commission believes it is not necessary, but member states want a say, which means the dispute may have to be settled by the European Court.

The concern of European anti-globalization activists is not so much Canada as it is the United States. For, US firms with Canadian operations may use these investment protection clauses to sue EU nations over unfavorable state policies even if the EU-US FTA--a.k.a. the Transatlantic Trade and Investment Partnership (TTIP)--does not have them:

American multinationals could use investor-state dispute settlement (ISDS) provisions in the European Union-Canada trade deal to sue EU governments in costly legal battles that could stymie policymaking, campaigners have warned.

Corporations with Canadian subsidiaries and holdings could use the Comprehensive Economic and Trade Agreement (CETA) to take countries to international arbitration tribunals, even if the ISDS clause is dropped from the EU-US Transatlantic Trade and Investment Partnership (TTIP). US companies with “substantial business interests” in Canada would be able to use the CETA ISDS mechanism, if it is ultimately cleared by European and national parliaments.

They include ExxonMobil Investments, which used ISDS in the North American Free Trade Agreement (NAFTA) between Canada, the US and Mexico, to successfully sue Canada in 2007. The energy giant’s investment arm with Murphy Oil claimed about €49 million, but their final award was never made public. US food processing company Cargill would also qualify. In 2004, Cargill sued Mexico through NAFTA ISDS, winning €71.8 million. Mexico had tried to introduce a tax on drinks containing high fructose corn syrup. The syrup is linked to obesity.

American multinational conglomerates raise fears seldom matched by few others.  Uncle Sam is always the big, bad guy.