CETA Trade Deal May Result in Booming Investor Claims Against Canada, EU

The Canada-EU Comprehensive Economic and Trade Agreement (CETA) may result in a boom of investor lawsuits against the governments of the European Union and Canada, which are likely to be resolved in favor of the investors, a report released Monday said.

MOSCOW (Sputnik) — According to the Transnational Institute’s updated report, the original version of which came out in November 2014, CETA “poses a serious threat to governments efforts to protect citizens and the environment” due to its  Investment Court System (ICS) investor-state dispute settlement mechanism.

“[ICS] could unleash a corporate litigation boom against Canada, the EU and individual EU member states, and could dangerously thwart government efforts to protect citizens and the environment,” the international research and advocacy institute’s report said.

The ICS allows foreign corporations to directly sue governments at international tribunals to claim compensation over health, environmental, financial and other domestic safeguards they find problematic for their businesses. The mechanism is also able to prevent governments from making decision in the interest of the public by allowing corporations win lawsuits against a state or discouraging laws that could trigger court claims from investors.

“These investor-state lawsuits are decided by private commercial arbitrators who are paid for each case they hear, with a clear tendency to interpret the law in favour of investors,” the report added.

In September 2014, the European Union and Canada announced the conclusion of the CETA agreement. Brussels and Ottawa hope that CETA, which seeks to lower trade barriers and create more jobs, will be signed this fall and implemented in early 2017.