CETA (Comprehensive Economic and Trade Agreement)

Oymyakon

Hi all, I hope this is a useful thread and in line with the rules of this board, this is my first time posting a new thread here.

The majority of the trade terms of CETA have been in force since 2017. The Irish government are seeking to ratify CETA so that the remaining elements of the agreement can be implemented, notably the controversial Investor Court System (ICS).

Opposition parties (including the official policy of the Green Party) have concerns in relation to the ICS due to the idea that corporations can take legal action against a state for estimated losses due to government policy changes. This in theory would have the potential to jeopardize environmental and climate action, social protection, food safety standards and so on.

How valid are these fears over the ICS? The Irish examiner notes the below from a NAFTA trade deal:

For example, in 2013 Lone Pine Resources filed a CA$250-million (€161 million) damages claim under the North American Free Trade Agreement (NAFTA) against Canada over Quebec’s moratorium on fracking.

https://www.irishexaminer.com/opinion/commentanalysis/arid-40191654.html

The European Commission has claimed that the ICS and CETA are in line with the Paris Agreement.

The Green Party are now urging its members to support ratification of the deal, on the basis that the Programme for Government explicitly states that Ireland must support EU treaties and trade deals.

Infini

I'd be honest the Investor Dispute clause is honestly the one thing that's actually risking the deal in general it's something that really should not be allowed as it's just ripe for trolling unless all cost's were awarded against the investors if they lost.

Had a look on wikipedia Cyprus has rejected it due to local concerns.

twinytwo

Just imagine the lawsuits, private companies will dictate government policy.

Only would the Irish government look to just automatically approve all the EU stuff.

FreudianSlippers

twinytwo wrote: »

Just imagine the lawsuits, private companies will dictate government policy.

Only would the Irish government look to just automatically approve all the EU stuff.

CETA allows for arbitration between Canada and the EU only as it applies to any dispute concerning the interpretation or application of the provisions of the Agreement itself. See Article 29 of CETA.

So I'd be interested to hear how specifically you think it will allow for this even remotely?

Oymyakon

I think it isn't feasible for a corporation to take legal action against a state in practice, particularly when it comes to climate, as this deal has to support the aims of the Paris Agreement.

View

If corporations can take legal action against a state for estimated losses due to government policy changes, then presumably they should also be able to take legal action against a state for estimated losses due to government failing to make policy changes.

That in theory would have the potential to ensure environmental and climate action, social protection, food safety standards and so on. So what’s the problem?

moon2

View wrote: »

If corporations can take legal action against a state for estimated losses due to government policy changes, then presumably they should also be able to take legal action against a state for estimated losses due to government failing to make policy changes.

That in theory would have the potential to ensure environmental and climate action, social protection, food safety standards and so on. So what’s the problem?

If that were true then you're saying someone can sue the government whether they change, or refuse to change, a policy. Every decision* has winners and losers so that's a lot of potential lawsuits

* Don't quote me on that

FreudianSlippers

moon2 wrote: »

If that were true then you're saying someone can sue the government whether they change, or refuse to change, a policy. Every decision* has winners and losers so that's a lot of potential lawsuits

* Don't quote me on that

As I said, that's only correct if the policy itself is contained in CETA and the failure or refusal to implement CETA in and of itself (or the incorrect application of CETA rules - akin to State Aid rules we currently have within the EU) causes damage.

A company in Canada can't just sue (they're not suing) bring a Member State to the arbitration panel for random policies it doesn't like.

jimmycrackcorm

I'd be interested to know if a Canadian tobacco company (or US company with an office there) could sue Ireland for anti-tobacco policies such as forcing pack labels to show diseased lungs as an example.
Also whether in practical terms, could such actions even remotely succeed regardless?

FreudianSlippers

jimmycrackcorm wrote: »

I'd be interested to know if a Canadian tobacco company (or US company with an office there) could sue Ireland for anti-tobacco policies such as forcing pack labels to show diseased lungs as an example.
Also whether in practical terms, could such actions even remotely succeed regardless?

No, they wouldn't. Chapter 12, Article 12.2.2 specifically excludes "audio-visual services and, as set out in its Schedule to Annex II, health, education, and social services, gambling and betting services, and the collection, purification, and distribution of water."

rock22

I know this is almost like Brexit talking, but if the Government policies are subject to legal action by a corporation , not a citizen, then surely this is total loss of sovereignty ( and no i don't want to link it with Brexit, but it is hard to see how any Government can agree to this. Yet 14 EU governments have , so i must be missing something. )

View

moon2 wrote: »

If that were true then you're saying someone can sue the government whether they change, or refuse to change, a policy. Every decision* has winners and losers so that's a lot of potential lawsuits

* Don't quote me on that

I have no problem with anyone taking a case against governments on the policies they are following or failing to adopt.

I question the assumption though that the courts are going to automatically rule against governments since governments have to have a large element of freedom to change policies. I would say if governments lose cases it would probably be because, for political reasons, they ignore scientific evidence.

View

rock22 wrote: »

I know this is almost like Brexit talking, but if the Government policies are subject to legal action by a corporation , not a citizen, then surely this is total loss of sovereignty ( and no i don't want to link it with Brexit, but it is hard to see how any Government can agree to this. Yet 14 EU governments have , so i must be missing something. )

That’s not the case. Were that true then no one could ever sue a government on anything lest it infringe on “sovereignty”.

Sam Russell

View wrote: »

I have no problem with anyone taking a case against governments on the policies they are following or failing to adopt.

I question the assumption though that the courts are going to automatically rule against governments since governments have to have a large element of freedom to change policies. I would say if governments lose cases it would probably be because, for political reasons, they ignore scientific evidence.

It is a question of level of proof, and the level of remedy. Look at the Apple tax case - and the cost to the Irish Gov defending their pov.

It should be very hard to take a case based on policy, requiring a very level of proof, and a high bar to taking a case at all.

Think of the Minimum Pricing of Alcohol, or the plain package for tobacco products. The Gov defence should always prevail if it is for public health, as is the case in both these instances.

FreudianSlippers

rock22 wrote: »

I know this is almost like Brexit talking, but if the Government policies are subject to legal action by a corporation , not a citizen, then surely this is total loss of sovereignty ( and no i don't want to link it with Brexit, but it is hard to see how any Government can agree to this. Yet 14 EU governments have , so i must be missing something. )

Again, at the risk of being a completely broken record - this isn't a remotely correct reading of CETA. A Member State (or the EU as a whole) can only be brought to arbitration as to the implementation of CETA, the exact same principle as WTO trading rules and EU Internal Market rules. The main difference is that CETA outlines the makeup of the tribunal for arbitration.

FreudianSlippers

View wrote: »

I have no problem with anyone taking a case against governments on the policies they are following or failing to adopt.

I question the assumption though that the courts are going to automatically rule against governments since governments have to have a large element of freedom to change policies. I would say if governments lose cases it would probably be because, for political reasons, they ignore scientific evidence.

There is no mechanism for a dispute pursuant to CETA to go to court other than for enforcement of a ruling by the arbitration panel, which enforcement shall follow the jurisprudence of the party against whom the arbitrators ruled.

EDIT: Apologies, the other way a dispute can go to court is for judicial review of a decision of the arbitration panel. Slipped my mind there!

FreudianSlippers

Sam Russell wrote: »

It is a question of level of proof, and the level of remedy. Look at the Apple tax case - and the cost to the Irish Gov defending their pov.

It should be very hard to take a case based on policy, requiring a very level of proof, and a high bar to taking a case at all.

Think of the Minimum Pricing of Alcohol, or the plain package for tobacco products. The Gov defence should always prevail if it is for public health, as is the case in both these instances.

I'm not sure minimum pricing of alcohol is a great example when it comes to CETA (I've already addressed tobacco earlier in the thread) for two main reasons:

1) Does the minimum pricing fall foul of the EU's internal market rules?

2) Article 17.1 of CETA

service of general economic interest means, for the European Union, a service that cannot be provided satisfactorily and under conditions, such as price, objective quality characteristics, continuity, and access to the service, consistent with the public interest, by an undertaking operating under normal market conditions. The operation of a service of general economic interest must be entrusted to one or more undertakings by the state by way of a public service assignment that defines the obligations of the undertakings in question and of the state.

If the answer to 1 is yes, then immediately the policy is invalid regardless of CETA (and there are probably good arguments from an EU Competition policy perspective vs health grounds on both sides - I probably would slightly lean towards minimum pricing being anti-competitive by its nature).

If the answer to 2 is no, then surely a Member State couldn't then implement a policy of minimum pricing which is deemed to be not anti-competitive within the EU but would be seen as being anti-competitive outside of the EU. The only way I could imagine this happening would be if (and this isn't something that is likely to happen) a Member State imposed a minimum pricing on EU products and a higher minimum price on Canadian products.

Supreme Court hearing the case against CETA today

https://www.irishtimes.com/news/crime-and-law/courts/supreme-court/supreme-court-hearing-green-td-s-appeal-over-ceta-trade-deal-1.4839384