TUC briefing on CETA

The TUC is opposed to the EU-Canada free trade agreement (CETA) due to the significant threats the deal would have on workers' rights, sovereignty and public services.

 

The TUC is concerned that the government has said it will seek to replicate CETA as a standalone UK-Canada trade deal when the UK leaves the customs union, and, even worse, that it will be the model for a future UK-EU trade deal. CETA was negotiated in secret with trade unions provided with no opportunities to input. The result was a final deal that contained no effective enforcement for workers’ rights, no effective protections for public services and the Investment Court System that would allow workers’ rights and the provision of public services to be challenged.

 

In 2014 TUC adopted a position of opposition to CETA and joined with trade unions across Europe through the ETUC to call on MEPs to reject the deal when it came before the European Parliament in February 2017.

The TUC believes the UK should, regardless of the future shape of EU-UK relations, push for a new approach to trade deals which has workers’ rights, decent jobs and fair distribution of wealth at its centre.

Recently, a number of employers’ groups including the CBI and International Chamber of Commerce joined with the TUC and Unite, as well as other groups, to call for a new approach to trade deals that involves trade unions and civil society and promotes fair growth and workers’ rights.

 

CETA contains provisions to establish a special court system for foreign investors called the Investment Court System (ICS). The TUC is opposed to ICS as it would allow foreign investors to challenge any laws or regulations that they regarded as a threat to their profits such as minimum wage laws as a form of ‘indirect expropriation’. The ICS provisions in the deal will not come into force until the European Court of Justice has ruled on whether ICS is compatible with the European Union constitution. The likelihood of this happening has increased since the Court ruled in March that Investor State Dispute Settlement court systems in EU Bilateral Investment Treaties (that is substantively similar to ICS) were unconstitutional. The Court is expected to make a ruling in the new year on ICS in CETA. If it rules that ICS is unconstitutional it seems likely CETA would need to be rewritten and ratified again by the European Parliament and all member states.

 

Trade unions were not involved in negotiations on CETA and had to rely on leaks to see the text being negotiated. The fact unions had no ability to input into the text was the reason that it contains no effective enforcement for workers’ rights, no effective protections for public services and the Investment Court System that would allow foreign investors privileged legal routes to challenge UK laws, as discussed above.

The TUC believes the UK government must not use CETA as a template for future trade deals with Canada or other partners, and especially not with the EU itself. Instead, it should involve unions and civil society in negotiations from the start to ensure trade deals have adequate protections for workers’ rights and public services and to ensure they promote decent jobs across the economy.

 

 

In the services section of CETA, all services are open to liberalisation unless a specific reservation is laid down. The UK government only entered reservations for certain aspects of privately funded health and social services, including privately funded ambulances. This potentially leaves other public services exposed to further privatisation. CETA also contains a so called ‘ratchet clause which makes it impossible for countries to roll back privatisation in any public service that was privatised at the time of CETA entering into force.

 

While CETA affirms that signatories will respect International Labour Organisation conventions on workers’ rights, it contains no mechanism to enforce these commitments with no sanctions possible if workers’ rights are abused. As discussed above, should the Investment Court System (ICS) in CETA come into force, it would give foreign investors the ability to sue governments for passing regulations that they feel threaten their profits. They could potentially claim multi-billion pound settlements from such cases, as they have done in Investor State Dispute Settlement cases in the past. The only sanction for breaches of workers’ rights would be a strongly worded report from an expert committee.

 

As with all recent EU trade agreements, CETA requires the establishment of a ‘Domestic Advisory Group’ drawing together employers’ and workers’ representatives to monitor relevant developments. The TUC will be represented on the CETA DAG as one of the European Trade Union Confederation representatives. We would want any future UK trade deals, and especially those which might be rolled over from existing EU trade deals after Brexit, to have similar structures, but there is nothing in the current Trade Bill that would guarantee such a provision.