In my last newsletter, I had welcomed the European Commission’s decision to make CETA a ‘mixed’ agreement, meaning that all national parliaments as well as the European Parliament and Council would need to ratify the agreement in order for it to come into force in the EU.
I believe this was a necessary decision given the intense debate surrounding the transparency of trade negotiations in recent times as well as the hotly contested issue of including a form of Investor State Dispute Settlement (ISDS), an investor to state arbitration system where companies can sue governments when they feel their investments have been compromised. This would be the first time such a system would be part of an EU trade deal. Following extreme resistance from civil society organisations across the EU, the Commission came forward with a proposal for a revamped system of ISDS called the Investment Court System (ICS). Although it aims to make the process more transparent, it remains a court system where investors would receive special standing with no appeals mechanism.
Since my last newsletter, there have been major developments in the ratification process. In mid-October, the regional Belgian parliament of Wallonia, who due to the complex constitutional system of Belgium must consent before the central government can accept CETA, voted to reject it - halting the deal’s progress just two weeks prior to the final deadline. Indeed the same week as the Walloons decided to reject the agreement the Irish Seanad passed a motion to stop Ireland signing up to CETA, although with less of a practical impact.
In the end, a compromise was reached for Wallonia. The Belgian agreement for the most part simply added clarity and interpretation to several aspects of CETA and maps out that the deal would not impinge on EU laws in relation to genetically modified goods and would not affect the EU’s ‘precautionary principle’ regarding regulation. There were also some guarantees on the selection process and code of conduct for judges hired by the investors’ tribunal system under the Commission’s new ICS proposal. It also notes that the authorities would carry out regular checks on the socio-economic and environmental effects of the deal. Belgium would retain the veto-right to prevent the ‘definitive’ implementation of CETA and also would reserve the right to draw up a safeguard mechanism to protect farmers in case of ‘market turbulence’.
Despite the dramatic developments over recent weeks the European Parliament still has to vote on the final agreement including on these new concessions to the Belgian regions. I remain very concerned regarding the inclusion of an Investment Court System for the first time in an EU agreement. ISDS has become a lightning rod for opposition to CETA and TTIP (the EU-US Transatlantic Trade and Investment Partnership) over recent years. Citizens are rightly concerned that the EU would sign a trade deal that allows investors access to a special court in order to sue Member States over certain policy decisions that would negatively affect their investments. However it isn't only citizens who are concerned.
Indeed referring to ISDS, President Jean Claude Juncker, in one of his first speeches to the European Parliament said ‘I wouldn´t like us to be setting up a parallel secret jurisdiction’. In another address to the Parliament he said ‘my Commission will not accept that the jurisdiction of courts in the EU Member States be limited by special regimes for investor to state disputes’. In July 2015 the European Parliament passed a resolution which said that any ISDS courts should respect the jurisdiction of European and national courts.
I believe these arguments are as true today as they were before this ‘new and improved’ Investment Court System was proposed by the Commission. Most recently, I along with seven other MEPs from across the political spectrum authored a motion for resolution to refer the ICS mechanism to the European Court of Justice to see if it is compatible with EU treaties. While many MEPs supported the motion, it was defeated. The final CETA agreement will come before the Parliament for a vote of consent (a yes or no vote on the deal, specific aspects cannot be voted on individually) in Strasbourg in the New Year and as CETA now stands, I could not support it.
I have consistently opposed the inclusion of any form of ISDS in any trade deal. This is a crucial issue for Ireland. I applaud Senator Higgins for raising the issue and getting agreement of the Seanad on this matter. We must have a full debate on ISDS so that Irish people know what our Government is signing up to - this debate will now have to happen in the European Parliament following the concessions made to national parliaments.