Canada and the TPP

What are we to make of the Trudeau government’s schizophrenic attitude towards the Trans Pacific Partnership (TPP)?  Trade Minister Chrystia Freeland formally signed the agreement yesterday in New Zealand but repeated her assurances that critics shouldn’t worry – the government hasn’t committed to ratifying it and consultations and a full Parliamentary debate will precede any ratification. Fair enough – ratification is at least two years away. Yet so far the consultation process has not penetrated the ideological bubble created by her trade department officials. In spite of the fact that by far the biggest concern of critics of the deal (including Joseph Stiglitz and a United Nations report) is the Investor State Dispute Settlement (ISDS) feature (the one that allows corporations to sue governments for regulating), she seems to be either ill-informed or misled about its impact. At a panel discussion in Vancouver in January she seemed unaware of the ISDS.  Her fellow panelists, both economics professors, actively downplayed the threat of ISDS.

For many of us who have dealt in the past with the trade bureaucrats promoting these investment protection agreements it is easy enough to suspect that Freeland is being deliberately misinformed by her own staff. There is no doubt that the Trudeau government is eager to portray itself as open to persuasion on the TPP. To bolster the position that they still might say no, the government has engaged in a flurry of consultations across the country and has made a point of inviting ordinary concerned citizens to send in questions and criticisms to Global Affairs Canada. Sounds good so far. But it is the execution that raises serious questions about how genuine the consultation will be.

First, the consultations reveal that the vast majority have been with groups supportive of these agreements: provincial government ministers, business groups, industry reps, universities, etc. Of 74 such meetings (as of Jan 31) there have been just a handful with “students” (but no student council representatives who have actually studied the TPP) and a couple with labour – the CLC and Unifor. There have been literally no meetings with NGOs who have actually taken the time to closely examine the TPP – not the Council of Canadians, not the Canadian Centre for Policy Alternatives, not any First Nations (whose solemn agreements with governments can be trumped by ISDS) nor any environmental groups.

Obviously there is still time for such NGO engagement but the opening volley does not bode well for balanced input. The more serious sign that trade officials are busy manipulating their minister is the answers that Global Affairs Canada provides to individual Canadians who take them up on the offer to engage. When they write to the government asking about investment protection and the ISDS in the TPP here’s the response they get:

“With respect to Investor-State Dispute Settlement (ISDS), the TPP will not impair the ability of Canada or its partners to regulate and legislate in areas such as the environment, culture, safety, health and conservation. Our experience under the NAFTA demonstrates that neither our investment protection rules nor the ISDS mechanism constrain any level of government from regulating in the public interest.”

This official government reply to Canadian citizens is so brazenly dishonest and demonstrably false as to shock even the most jaded cynic. Does Freeland know what is being said in her name? Since NAFTA came into effect on Jan 1, 1994 it has been subjected to over 35 NAFTA investor-state claims. Nearly two thirds of these have involved challenges to environmental protection or resource management. Canada has already paid out over $170 million in damages in six cases (lost or settled) and abandoned most of the “offending” legislation and regulations. We currently face additional corporate challenges totaling over $6 billion in potential penalties for NAFTA “violations” such as the Quebec government’s decision to ban fracking under the St. Lawrence River.

This, of course, does not take account of the legislation and regulations (including those of the provinces) that have never made it out their cribs – killed by the chill effect of knowing they wouldn’t pass ISDS muster. A recent UN report quoted a former Canadian official as saying: “I’ve seen the letters from the New York and [Washington] D.C. law firms coming up to the Canadian government on virtually every new environmental regulation…. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”

In one of the most egregious cases ever decided under NAFTA (Bilcon of Delaware) a NAFTA tribunal last year effectively overruled federal and provincial governments’ environmental concerns in allowing a quarry to go ahead in Nova Scotia. In a detailed dissenting opinion one of tribunal’s members, University of Ottawa law Professor Donald McRae stated: “Once again, a chill will be imposed on environmental review panels which will be concerned not to give too much weight to socio-economic considerations or other considerations of the human environment in case the result is a claim for damages under NAFTA Chapter 11. In this respect, the decision of the majority will be seen as a remarkable step backwards in environmental protection.”

When the Bilcon decision came out even one of NAFTA’s strongest supporters, Toronto trade lawyer Larry Herman, immediately expressed concern that the dispute tribunals were unilaterally expanding their mandate to circumvent domestic courts. The Bilcon decision Herman observed: “…will feed ammunition to those who oppose international arbitration as a form of dispute settlement.”

Just as these unaccountable panels are expanding their powers to interfere in the democratic legislative process, Canada is about to extend these arbitrary powers to corporations in nine more countries in the TPP. Yet so far that Bilcon “ammunition” has run smack up against the Kevlar vests in the Global Affairs bureaucracy. The latter is powerfully reminiscent of the bad old days of DFAIT – the old Department of Foreign Affairs and International Development – where a priesthood of trade bureaucrats protected the Holy Grail of “free trade” against all detractors. So deeply did they believe in their mission that factual analysis of agreements like NAFTA and the MAI was not even acknowledged let alone listened to.

Noel Schacter, the Director of the International Branch & chief negotiator of trade policy for the BC NDP government in the late 1990s, recalls dealing with the federal officials:

“Federal government trade negotiators sold free trade by overstating the upsides and underestimating the downsides.  This was especially true of investor-state provisions which had the potential to be lethally damaging to critical social policy areas such as Medicare or the environment.  These public servants appeared to have little knowledge of these social policy areas and little concern. During my tenure I never saw any independent analysis that demonstrated why provisions in trade treaties were necessary or how the broader public good would be served.  It often felt like being in a temple of true believers and those of us who questioned the doctrine were heretics.”

Is there any way to counter the pernicious influence of these free trade zealots?  The most powerful antidote would be independent analyses of the various controversial areas of the TPP – in other words genuine consultation. Literally the only time this has ever been done regarding these agreements was under the NDP government of Glen Clark which provided funding for numerous social sectors – such as First Nations, women, unions, and environmentalists – to hire independent experts and study the impact of the Multilateral Agreement on Investment (MAI) on their constituencies. The resulting studies led the government to oppose the MAI (which eventually failed).

If Mr. Trudeau and his Trade Minister Chrystia Freeland are truly committed to broad consultation beyond the business community they should follow the same model. In fact, they already do something similar under the authority of the Canadian Environmental Assessment Agency which administers a “Participant Funding Program,   which supports individuals, non-profit organizations and Aboriginal groups interested in participating in federal environmental assessments.” It would be a tragic irony if this consultation program led to new environmental legislation – only to find that it violated the TPP and triggered a multi-billion dollar investor-state suit.

MURRAY DOBBIN, now living in Powell River, BC has been a journalist, broadcaster, author and social activist for over forty years.  He can be reached at