European lawmakers threaten to scupper Canada trade deal

Thu Aug 28, 2014 9:32am EDT
 
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By Julia Fioretti and Barbara Lewis

BRUSSELS (Reuters) - EU lawmakers are threatening to block a multi-billion dollar trade pact between Canada and the European Union -- a blueprint for a much bigger EU-U.S. deal -- because it would allow firms to sue governments if they breach the treaty.

The agreement with Canada, a draft of which was seen by Reuters, could increase bilateral trade by one fifth to 26 billion euros ($34 billion).

But European consumer and environmental groups say a mechanism in the accord would allow multinationals to bully the EU's 28 governments into doing their bidding regardless of environmental, labor and food laws and would set a bad precedent for the planned EU-U.S. trade pact.

The European Parliament must ratify both the Canada and the U.S. pacts. Since elections in May, the rise of nationalist, Eurosceptic parties in the legislature, many of them opposed to globalization, have complicated the EU's free-trade ambitions.

"The Greens will fight hard to get a majority in the parliament against (the EU-Canada deal)," said Claude Turmes of the Green group, echoing concerns from others in the European Parliament, including the Socialist bloc.

Tiziana Beghin, an EU lawmaker from Italy's anti-establishment 5-Star Movement who sits on the parliament's influential trade committee, called the EU-Canada deal an "affront to democracy".

"Giving corporations the right to sue governments for loss of anticipated profit would be ridiculous if it were not so dangerous," she told Reuters.

According to the draft accord, the chapter on "Investor-State Dispute Settlement" (ISDS) allows companies to sue either an EU country or Canada in a special court if they think their trade interests have been damaged.   Continued...