CETA: Trading away democracy | Corporate Europe Observatory

CETA: Trading away democracy logo
HOW CETA’S INVESTOR PROTECTION RULES
THREATEN THE PUBLIC GOOD IN CANADA AND THE EU

On September 26, 2014, Canada and the European Union
(EU) announced the conclusion of a far-reaching economic
integration agreement, the Comprehensive Economic and
Trade Agreement (CETA). The agreement includes an
investor-state dispute settlement (ISDS) mechanism, which
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 ISDS mechanism gives foreign corporations the ability
to directly sue countries at private international tribunals
for compensation over health, environmental, financial and
other domestic safeguards that they believe undermine
their rights. 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.

ISDS can prevent governments from acting in the public
interest both directly when a corporation sues a state, and
indirectly by discouraging legislation for fear of triggering
a suit. Globally, investors have challenged laws that
protect public health such as anti-smoking laws, bans on
toxics and mining, requirements for environmental impact
assessments, and regulations relating to hazardous
waste, tax measures and fiscal policies.

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