Oct 23, 2013
Author: Kip Keen
A major trade agreement between Canada and Europe could provide significant protection from expropriation, among other things, to Canadian companies investing in Europe and vice versa.
Probably the most significant development in the Comprehensive Economic and Trade Agreement (CETA) for miners on both sides of the Atlantic is the inclusion of an investor-state provision that, in practice, ensures foreign companies a process to recoup damages in cases of expropriation or instances where political process is grossly discriminatory against a foreign company.
“From what we know this is a remarkable agreement,” said Riyaz Dattu, a lawyer with the firm Osler, Hoskin & Harcourt who specializes in international trade law.
“It's going to be like what we already have with the United States and Mexico under NAFTA (North American Free Trade Agreement), but it is broader in the sense that it covers all the European Union countries. And the fact that there is an investor-state mechanism in this agreement is one step further towards having a [more global] multi-lateral agreement in investment.”
In recent interviews with legal experts about the Canada-EU trade agreement NAFTA examples often came up to illustrate the significance a similar investor-state clause might have under CETA. The most frequently cited example, a Canadian one, was the recent expropriation of forestry assets from US-based Abitibi Bowater by the province of Newfoundland.
With CETA there are many unknowns, however. Chief among them, the finer details. The full text has not been released – just overviews by the Canada and the European Commission. This is general stuff officials want us to see.
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