CETA Leak: foodwatch publishes secret negotiating mandate – Documents reveal: investor-to-state dispute settlement was not originally provided for in the EU-Canada free trade agreement

Berlin, 1 October 2015. The previously undisclosed EU negotiating mandate for the CETA agreement with Canada has been published on the Internet by the consumer organisation foodwatch. This means that, following the publication of the mandate for the trade agreement between the EU and US (TTIP), another key document for the planned free-trade areas has been made available to the public.

On the website www.CETA-leak.foodwatch.de foodwatch has published a total of three leaked CETA documents in German language classified at the level “Restreint UE/EU Restricted”: the original text of the mandate from April 2009, a draft revision from 2010 and the guidelines added to the mandate in July 2011. These papers reveal that the controversial investor-to-state dispute settlement (ISDS) mechanisms played no role whatsoever in the opening of the negotiations, at least for the EU. The corresponding investment protection clauses were only added to the negotiating directives two years later, in 2011. Moreover, these clauses make the provision of ISDS mechanisms politically binding, giving this requirement much more weight than the governments’ right to regulate standards in pursuit of public policy aims.

“Investor-to-state dispute settlement mechanisms have by no means always been an indispensable part of CETA, as they are being portrayed today. When the negotiations were first launched, EU decision-makers expressed no interest whatsoever in a parallel legal system for investors – now that the CETA agreement has been negotiated, their stance has suddenly changed to ‘nothing can be done to change it’,” criticised foodwatch spokesman Martin Rücker. “The leaked documents prove that the free trade agreement is still not being debated openly and honestly.”

Responding to a foodwatch enquiry, the EU's Trade Commissioner Cecilia Malmström recently announced that she would support the publication of the CETA mandate, while at the same time pointing out that this issue would have to be decided by the Member States. However, the European Council refused to publish the mandate. These documents have now been leaked to foodwatch. They give important insight into the criteria agreed by the EU Member States for the negotiating directives of the European Commission: 

  • In the original mandate from 2009, no provisions whatsoever were made for the far-reaching investment protection clauses, in particular the controversial investor-to-state dispute settlement mechanisms. It was not until the amended 2011 version that the corresponding provisions were added: “The Agreement must provide for an effective and state-of-the-art investor-to-state dispute settlement mechanism” (guidelines added to negotiating mandate, paragraph 26, translated from German version by foodwatch). For some time now, German Vice Chancellor Sigmar Gabriel has been conveying the impression that a CETA agreement without investment protection would be possible. However, the truth is that the European Commission has long since been politically bound by the negotiating guidelines to push through specifically these provisions. The previous German CDU/FDP government under the leadership of Federal Chancellor Angela Merkel played a part in adopting these guidelines.
  • In light of the fact that the provision has been worded as a “must”, investor-to-state dispute settlement mechanisms are given more weight than the “right of the parties to take measures to achieve legitimate public policy objectives on the basis of the level of protection that they deem appropriate” – which, according to the guidelines, only “should” be mentioned in the preamble of the CETA agreement. Furthermore, the CETA mandate places restrictions on the governments’ right to regulate, leaving it open to interpretation (“provided that these measures do not constitute a means of unjustifiable discrimination or disguised restriction on international trade”; negotiating directives, paragraph 5; all quotes translated from German version by foodwatch).
  • The TTIP negotiating mandate, unlike the CETA document, formulates the aim of providing for investor-to-state dispute settlement mechanisms not as a “must”, but only as a “should” (TTIP negotiating directives, paragraph 23). This fact sheds new light on recent developments: for example, EU Trade Commissioner Cecilia Malmström has proposed a new system of investment courts to replace the classic investor-to-state dispute settlement mechanisms for TTIP but apparently had no intention of applying this proposed change to CETA. However, both mandate and draft treaty could of course be changed by EU decision makers.

foodwatch reiterates its call on the EU and its Member States to reject ratification of the CETA agreement and to stop the TTIP negotiations under the current conditions. The consumer organisation is also of the opinion that the Malmström proposals would not solve the problems associated with investor-to-state dispute settlement mechanisms. Firstly, American companies could use the CETA agreement to file arbitration claims through a Canadian subsidiary. Secondly, the establishment of an investment court system misses the main point of the criticism: in spite of the proposed changes, a special legal system would still be set up for investors. Companies would use this system in cases when their chances of being awarded compensation were higher than with the ordinary state courts.

Sources

Contact details

foodwatch Germany

Martin Rücker

E-mail: media@foodwatch.eu

Phone: +49 (0)30 / 24 04 76 - 2 90