European free trade deal debated

City council isn't the place where international trade deals are usually debated. But that's what happened in Whitehorse on Monday night.

City council isn’t the place where international trade deals are usually debated.

But that’s what happened in Whitehorse on Monday night.

Tory Russell and Susan Gwynne-Thompson appeared before city council with concerns about the Comprehensive Economic Trade Agreement (CETA) – a free trade agreement between Canada and the European Union.

Under the terms of CETA, municipal governments would be forced to open up tenders to European firms.

And if they didn’t those companies would have the right to take municipalities to court, over discriminatory practices.

“Imagine an EU company challenging how Whitehorse awarded the contract for the Black Street water infrastructure work, or disputing Dawson’s choice for sewage treatment,” said Russell.

Russell and Gwynne-Thompson asked city council to follow the lead of more than 45 other Canadian municipalities and request an exemption from the free trade agreement.

The two women even presented council with a resolution to that effect.

While there have been concerns raised by several municipal governments, the Federation of Canadian Municipalities is largely supportive of CETA.

And Whitehorse Mayor Bev Buckway, who sits on the federation’s executive, has even been involved in lobbying the federal government to tweak CETA .

“I was one of the people that met personally with (Minister of International Trade Ed Fast) when we had discussions about this,” she said.

Many of the provisions in CETA are already enshrined in other trade agreements that the city abides by, said Buckway.

According to the federal government, only procurement contracts worth more than $8.5 million and goods and service contracts of more than $340,600 will be subject to CETA.

“With those dollar amounts it’s liable not to impact us at all, really,” said Buckway.

The debate over CETA has been blown completely out of proportion, said Jason Langrish, the executive director of the Canada Europe Roundtable for Business, which has been lobbying for the deal.

This isn’t really anything that new, he said. The procurement practices of Canadian municipalities were opened up to US companies after the 2008 financial crash in order to get Congress to back away from protectionist “buy American” policies.

“Now we’re saying we can’t make the same commitments to the Europeans,” he said. “But in return for their getting access to our $100-billion procurement market, we’re going to get guaranteed access to their $2.5-trillion market and people are saying that that’s unfair – it’s insane.”

However, there is a difference.

CETA includes investor protections similar to NAFTA’s controversial Chapter 11.

Ostensibly that provision is supposed to protect companies and their shareholders from international discrimination. However, in practice, it’s been used to overturn things like bans on carcinogenic gasoline additives and pesticides.

“Cities and local boards of education will also now be exposed to that same type of challenge and we’ve never had that before,” said Toronto Coun. Kristyn Wong-Tam.

It was Wong-Tam along with Coun. Glenn de Baeremaeker who spearheaded a motion to exempt Toronto from CETA.

That motion, which is largely symbolic, passed last month.

“The vote was very strong,” said Wong-Tam. “We passed it with an overwhelming majority. I think that city councillors, on the large, were not aware that there was this Trojan horse that was being wheeled into our council chambers.

“Toronto may pass a resolution at some point to ban water bottles or plastic bags from the city because of the environmental impacts and that may be challenged by CETA because that could impede a companies ability to sell us whatever.”

And that’s something that the city is ill-equipped to defend, she said.

“Toronto has a huge bureaucracy,” added Wong-Tam. “We have a $10-billion budget. But I don’t have a single person on my legal team that has ever defended the city at an international arbitration panel.

“That alone, trying defend the city’s position, could bankrupt the city. And if we don’t have that capacity, I suspect Whitehorse doesn’t have it either.”

But Langrish thinks concerns over investor protections are overblown.

“Since we signed NAFTA in 1995, almost 20 years ago, there’s only been a handful of cases,” he said.

In fact, there have been 30 cases that have been brought against Canada under NAFTA’s Chapter 11.

Most recently, paper giant AbitibiBowater settled a Chapter 11 lawsuit with the federal government for $130 million after Newfoundland attempted to expropriate its water rights.

But that’s still only a drop in the bucket compared to the $2 billion a day traded between Canada and the US, said Langrish.

And, although Canada has lost some of the cases, those investor-protection provisions are still a good idea, he said.

“Remember, it wasn’t the Americans that fought to have this in NAFTA, it was the Canadians,” said Langrish. “We have to have these binding-dispute mechanisms because we need to have recourse to the courts.

“We don’t have the resources that people like the EU and the USA have, so when you have this legal remedy, it gives certainty.”

The threat of potential lawsuits is the reason that opponents of CETA, like the Council of Canadians, are urging municipalities to take a second look at the deal.

“We’re not giving cities any freedom,” said Stuart Trew, the trade campaigner with the Council of Canadians. “You’re taking away freedom with these trade agreements.”

The council is advocating that vital, publicly delivered services, like drinking water, be excluded from CETA, something that the EU has also requested, he said.

By leaving those things in, “You’re just opening yourself up to trade disputes and investor lawsuits, down the road,” said Trew.

There is nothing in CETA that would force a municipality to privatize any service and Buckway is adamant that nothing like that is planned for Whitehorse.

“I just can’t say it strongly enough that the city has no intentions of privatizing our water,” said Buckway.

The city will be tabling an administrative report about CETA early next month.

Russell remains optimistic that council will take these concerns seriously.

“It seems a long way off, but we have big companies in the Yukon and they all want to use our water for different reasons and I don’t see the wisdom in signing on to a deal that gives them room to operate,” she said. “We want to keep it Yukon – we want to keep it local.”

Contact Josh Kerr at

joshk@yukon-news.com

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