|21 July 2016
EU-Canada trade agreement (CETA)
Thank you for your letter of 23 August. We continue to have concerns regarding the threat to sovereignty, public services and labour standards of the EU-Canada Comprehensive Economic and Trade Agreement (CETA). In addition, developments in Germany this week suggesting that there might be changes to the proposed agreement will require further examination. For these reasons we urge the UK not to support ratification or provisional application of CETA when it is considered at the informal trade council meeting in Bratislava on 23 September. I understand Lord Price is attending the meeting and am copying this letter to him.
We are concerned primarily that CETA will result in a significant loss of sovereignty. We do not agree that adequate safeguards are in place in the Investment Court System (ICS) to protect government. Legal analysis has shown that the wording around ‘fair and equitable treatment’ and what constitutes ‘indirect expropriation’ would allow foreign investors significant scope to sue governments for policies and actions they want to overturn. Over 80% of US businesses in the EU have bases in Canada. This increases the risk of the UK government being sued by ICS in CETA as US businesses are notoriously litigious and have significant investments in UK public services.
Even if ICS and the investment protection provisions in CETA were not provisionally applied –which is by no means certain – provisional application of the deal would bring into force a number of other obligations that would limit the ability of the UK government to control its own affairs. The threat to the UK government’s control over public services is particularly stark. We note the concern you registered over the impact of TTIP on the NHS during the reading of the Queens’ Speech in May. CETA poses very similar threats, and I would be grateful if you could clarify whether you remain concerned about those threats, and if so what you intend to do about their presence in CETA?
CETA also contains inadequate measures to enforce labour standards, and I am particularly concerned that in your letter of 23 August, you made no mention of workers' rights as one of the legitimate policy objectives which you say are protected under CETA. I would be grateful if you could clarify whether or not you consider the right to regulate to establish workers' rights to be protected?
While CETA commits the EU and Canada to uphold core ILO standards, there are no effective sanctions if labour rights are violated. Instead, trade unions will only be able to raise concern through advisory groups. Clearly this is unfair when compared to the multi-million legal claims foreign investors would be able to lodge through the ICS in CETA when they feel their rights have been infringed.
We are also concerned that CETA would set a bad standard for any future trade deal negotiated between the EU and UK. As described above, a CETA-style deal would give trading partners the power to overturn UK laws, harm public services and set lower standards.
Finally, should CETA eventually be endorsed by the Council and the European Parliament, could you let me know what process and timetable you envisage for its consideration in Parliament?
cc Lord Price, CVO