We don’t know much about the Trans-Pacific Partnership that the Conservatives recently signed except that it will replace North American Free Trade Agreement.
As a trading nation, Canadians generally favour trade agreements. Last year, an Angus Reid poll showed 68 per cent in favour of a trade deal with Europe.
We favour of trade deals while being woefully ignorant of the details; sometimes in the dark about their very existence. In the case of the TPP, Environics showed that 75 per cent didn’t even know what the TPP was; let alone that the Conservatives were negotiating it on our behalf.
This blind faith in the concept of trade agreements often leads us into a blissful unawareness. One principle about the TPP will likely remain constant: private tribunals will replace our courts when it comes to disagreements.
That’s what the Investor–State Dispute Settlement provision does under NAFTA. I would hazard a guess that few Canadians are even aware of the ISDS provision under Chapter 11.
ISDS allows foreign investors to settle disputes with governments through binding private arbitration instead of Canadian courts. Yes, governments can be dictated to by arbitrators. Why would governments give up such a mandate of their power? The Monitor magazine explains:
“The dubious rationale for granting this extraordinarily sweeping right to foreign investors was that the Mexican courts of the day were prone to corruption and political interference.”
If that were a valid justification, Mexico should be on the receiving end of corporate claims. In fact, Mexico has only had a few while Canada has had the most.
“Canada has faced 36 ISDS claims, more than any other developed country in the world, and since 2005 we’ve been hit by 70% of all NAFTA investor lawsuits.”
One of those claims against Canada came in March this year after ExxonMobil’s Canadian subsidiary won $17.3 million in damages after challenging requirements that they dedicate a tiny percentage (0.33%) of their revenues to research and development, education and training in Newfoundland and Labrador.
“But what is especially galling about this case is that Exxon, along with every other company active in the offshore oil sector, had explicitly agreed to abide by provincial R&D commitments.”
In 2010, the federal government had to pay AbitibiBowater $130-million to settle an ISDS complaint after former premier Danny Williams’ expropriation of the company’s mill. Williams said that the owners had broken the lease agreement by walking away from mill, leaving 800 unemployed.
The Harper government tried to weasel out of paying the settlement claiming that the province had caused the problem. More likely, it was an attempt to punish William’s for his lack of Tory support. The last time I looked, Newfoundland is still part of Canada and since NAFTA applies to Canada, it applies to Newfoundland. If the offending province were Alberta, Harper probably would not have complained.
Most of the talk around the TPP has been whether car parts will hurt and beef parts will prosper. Don’t hold your breath waiting to hear how Canada will be dictated to by corporations through private tribunals held in secret.