France Says Corporate Sovereignty Must Come Out Of CETA, Or Be Replaced By Something Completely Different

There are so many massive trade deals on the go at the moment that it is easy to lose track. In the US, TPP is at the forefront of many people’s thoughts; in Europe, it is TAFTA/TTIP. TISA is just starting to appear on the radar, while CETA, the trade agreement between the EU and Canada, is dropping off it. That’s because there is a general belief that CETA is “done” — even if the text needs “legal scrubbing”, the assumption is that no more changes can be made. Evidently, somebody forgot to tell the French government, which is calling for the corporate sovereignty chapter to be dropped according to this article in Le Devoir (original in French, found via @StuJT):

Although he is generally in favor of this agreement [CETA], the [French] Secretary of State [for External Commerce] considers that before ratifying the treaty it will be necessary either to withdraw current sections on ISDS or rewrite them entirely. Moreover, the opinion of [the French Secretary of State] Matthias Fekl represents not only the official position of France, but also a consensus shared by Germany and the European social democrats. In the daily Le Monde, he said on Wednesday that the only options remaining on the table were “the withdrawal, pure and simple, of ISDS or coming up with something new.” There is therefore no question of the Secretary of State signing the Canada-EU treaty without “inventing something new, that is no longer [investor-state] arbitration, but a new way to settle disputes, by integrating public courts in the procedure.”

That position will be a massive spoke in the wheel for the ratification of CETA, since there is no indication Canada would be willing to remove or renegotiate the corporate sovereignty provisions there. It’s also interesting that Germany is mentioned in this context: its position on ISDS has been rather inconstant — as has France’s, for that matter — and the latest news would seem to indicate that things are still up in the air for that country too.

The declaration of the French Secretary of State undermines a speech made very recently by the European Commissioner responsible for trade and TTIP, Cecila Malmström, at a meeting with the International Trade Committee of the European Parliament. Here’s the context she gave:

the vast majority of the individual responses [to the Commission’s consultation on corporate sovereignty last year] rejected either TTIP in its entirety or ISDS more specifically. But the responses from interest groups representing groups of people were more mixed.

Let me be clear on how we interpret those results. The consultation was not a referendum even if the responses showed huge scepticism and concerns about the system.

What the consultation did do is allow us to understand the main concerns about the system and give us ideas for how to address them.

In other words, we are going to ignore what 145,000 people said, and retain the anti-democratic corporate sovereignty structure intact. Malmström then goes on to give some specious reasons why ISDS must be kept in TAFTA/TTIP, albeit in a modified form — and yet strangely omits to mention a far simpler solution, which is for companies that are worried about their foreign investments to take out insurance — for example, from the World Bank’s Multilateral Investment Guarantee Agency.

She then tries to suggest that CETA’s ISDS chapter can act as a template for TTIP — even though a detailed analysis from the Canadian Centre for Policy Alternatives indicates that the new corporate sovereignty provisions it contains are still deeply flawed (pdf). But if France really does stick to its view that ISDS must be removed from CETA, or replaced by a completely different mechanism, the argument that CETA’s corporate sovereignty approach shows the way forward for including ISDS in TAFTA/TTIP collapses. Expect the European Commission to ignore this inconvenient fact, and to press on regardless.

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