At a key meeting in Bratislava last Friday, EU ministers effectively put the controversial Transatlantic Trade and Investment Partnership (TTIP) negotiations on hold, perhaps forever. Even the perennially upbeat EU commissioner responsible for trade, Cecilia Malmström, admitted: "All ministers expressed their doubts about being able to conclude this before the end of the Obama presidency, and indeed, it looks increasingly unlikely." Since both candidates for the US presidency have said they are dissatisfied with current trade negotiations, that makes TTIP's long-term fate extremely uncertain.
According to a report in Politico.eu, Austria's economy minister made the suggestion to “relaunch [the TTIP negotiations] after the U.S. elections, with a new name, better transparency and also clearer goals.” However, another, unnamed minister said: “I don’t think there will be less demonstrations if we call it ‘John’.”
The failure to be anywhere near completion of TTIP after three and a half years of negotiations has added to the political pressure on EU ministers to pass the smaller trade deal with Canada, known as the Comprehensive Economic and Trade Agreement (CETA). Despite worries expressed by a number of member states, it looks increasingly likely that EU nations will formally sign CETA on October 18. According to Reuters, in a final attempt to quell doubts, "ministers agreed the two sides [Canada and the EU] would produce a binding declaration that spelt out the limits of the pact to dispel public concerns."
However, that is still not the end of the CETA saga, which began back in 2009. After the EU Council has signed the agreement, it must also be ratified by the European Parliament and by every EU member state individually. Since all EU national parliaments must agree to pass CETA, there are still numerous ways in which it could fail. For example, in Germany CETA is facing a challenge in the country's constitutional court, with a decision expected in October.
In addition to attempts to stop CETA in the courts, and a call from consumer organisations to reject the deal, recently there have been large-scale public demonstrations in Germany and Austria demanding that both TTIP and CETA be dropped. The inclusion of CETA in those demonstrations is significant. As Ars reported a few months ago, unlike TTIP, CETA had largely escaped the EU public's attention, even though it was much further advanced, and shared many of TTIP's features. That has now changed, and many people are as concerned about CETA as about TTIP.
A further reflection of civil society's increased focus on CETA is the number of studies that have been released recently. Perhaps the most comprehensive is the second edition of Making Sense of CETA. The first version came out in September 2014 when the final text was released. In the intervening two years, people's understanding of the main 1,598-page CETA agreement has deepened. As a result, the new report says:
[CETA] is now the target of a resurgent progressive coalition of social justice groups, environmental organisations and labour, who perceive the deal, correctly, as a threat to democracy on both sides of the Atlantic. Public opinion has also shifted, with many Europeans now keenly aware of the broad similarities between the imminent CETA and the politically toxic Transatlantic Trade and Investment Partnership (TTIP).
Significantly, the first chapter of the report concerns investment protection, which has become the most contentious part of both TTIP and CETA. As it explains, ISDS is link that binds the two agreements:
According to recent estimates, 81% of US enterprises active in the EU (about 42,000 firms) would conceivably fit the definition of a Canadian "investor" with recourse to ISDS under the EU-Canada agreement. US companies are already known for this kind of aggressive exploitation of the ISDS system. Should the provisions on investment protection in CETA survive, if or when the agreement is ratified, there would be virtually no need to incorporate them in the Transatlantic Trade and Investment Partnership (TTIP).
In other words, halting TTIP on its own is not enough, since many US companies will still be able to sue the EU and its member states for alleged losses caused by laws and regulations, using the CETA provisions as a backdoor. Similarly, this cross-linkage would also undermine any improvements to ISDS that might be included in TTIP or its putative successor:
By the same token, if CETA passes with Chapter 8 [covering ISDS] intact, any further adaption of the provisions on investment protection in TTIP, without a corresponding change to CETA, would be futile. Companies could simply choose the regional agreement that is more favourable for their purpose, i.e. CETA over TTIP. Therefore, the announced transatlantic "reformation" of investment protection would reach a dead end with CETA. The vague promise of a future ‘multilateral investment tribunal’ (CETA Article 8.29) could remain unfulfilled indefinitely.
The chapter on ISDS explains that supposed safeguards incorporated in CETA are not as strong as the European Commission and others like to claim. For example, a "right to regulate" is supposed to ensure that the EU and Canada can still legislate freely without worrying about future threats of ISDS claims. However, "the ‘right to regulate’ is merely a vague norm to be interpreted during the ISDS process itself, offering arbitrators considerable leeway to decide in favour of the investor, i.e. against state regulation." That is, it is the same ISDS tribunals that will rule on whether a government does indeed have a "right to regulate," confirming that ISDS powers trump national ones.
Similarly, although there is supposed to be a new appeals mechanism that will allow egregious awards and manifest errors to be corrected, "its realisation is deferred into the future, with no concrete deadline." Until that undefined future time, CETA's ISDS tribunal rulings will be final, with no way to appeal against them.
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