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2017 | OriginalPaper | Chapter

A Waiver for Europe? CETA’s Trade in Services, and Investment Protection Provisions and Their Legal-Political Implications on Regulatory Competence

Authors : Amalie Giødesen Thystrup, Güneş Ünüvar

Published in: International Economic Law

Publisher: Springer International Publishing

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Abstract

The Comprehensive Economic and Trade Agreement (CETA) is a bilateral agreement between Canada and the EU that aims at providing a broad set of incentives in order to promote trade and business, and bears important legal and political consequences for trade and foreign investment policies of the parties. This paper aims at exploring CETA’s trade in services and investment provisions on fair and equitable treatment and indirect expropriation. In the section on cross border services, the paper discusses the scheduling modality and the adjustments introduced, with a view to the parties’ regulatory competencies. In the section on investment provisions, it delves further into whether or not it bears the potential to live up to parties’ promises of further clarity, coherence, addressing public expectations relating to unhindered sovereign regulatory authority.

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previous chapter Remarks on the Practice of Regional Development Banks’ (RDBs) Accountability Mechanisms and the Safeguard of Human Rights

next chapter The Human Right to Health: Reflecting on the Implications of IPRs as Endorsed by the Trans-Pacific Partnership Agreement

See, Comprehensive Economic Trade Agreement EU-Canada (CETA), final text, published on 29 February 2016, http://trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154329.pdf (accessed 29 February 2016).

European Commission, Country Report on Canada http://ec.europa.eu/trade/policy/countries-and-regions/countries/canada/ (accessed 6 February 2016).

EU Commission, Joint Statement http://europa.eu/rapid/press-release_STATEMENT-16-446_en.htm (accessed 29 February 2016). An earlier draft, dated September 2014, is also publicly available.

Transatlantic Trade and Investment Partnership between the United States of America and the European Union. The EU negotiation text on investment available via the European Commission, TTIP Negotiation text, http://trade.ec.europa.eu/doclib/docs/2015/september/tradoc_153807.pdf (accessed 6 February 2016).

Trans-Pacific Partnership. Among its signatories are Canada, the US, Australia, New Zealand and Japan. Full text available via the Office of the United States Trade Representative website https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-full-text (accessed 6 February 2016).

Williams (2015).

For a recent example, see Canada moves a step closer to ratifying “gold-plated” trade deal with EU, CBS News, 29 February 2016, http://www.cbc.ca/news/politics/canada-europe-trade-deal-amended-1.3468802 (accessed 1 March 2016); Mas (2016) and for an earlier example, see The Canada–EU trade deal: Atlantic accord, The Economist, 26 October 2013, http://www.economist.com/news/americas/21588418-landmark-agreement-could-show-way-future-deals-atlantic-accord (accessed 6 February 2016); Wagstyl (2014).

European Commission, Accessing Markets http://ec.europa.eu/trade/policy/accessing-markets (accessed 12 March 2015).

Government of Canada, CETA http://international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/understanding-comprendre/overview-apercu.aspx?lang=eng (accessed 12 March 2015).

European Commission Memorandum (2014) http://trade.ec.europa.eu/doclib/docs/2014/december/tradoc_152982.pdf (accessed 6 February 2016).

CETA, supra, n. 1, arts 8.23–8.45.

Ibid.

Dolzer and Schreuer (2012).

CETA, supra, n. 1, art 1.4.

On new markets for trade in services in a bilateral and multilateral context, see Marchetti and Roy (2008).

For an (EU) overview see European Commission, CETA—Summary of the final negotiating results http://trade.ec.europa.eu/doclib/docs/2014/december/tradoc_152982.pdf (accessed on 26 February 2016); European Commission (DG Trade), Public Procurement http://ec.europa.eu/trade/policy/accessing-markets/public-procurement/ (accessed on 14 February 2016); European Commission Country Report on Canada supra, n 2.

European Commission and Government of Canada (2008), Joint Study, Assessing the Costs and Benefits of a Closer EU Canada Economic Partnership, http://trade.ec.europa.eu/doclib/docs/2008/october/tradoc_141032.pdf (accessed on 14 February 2016). Also see European Commission Country Report on Canada.

Chaitoo (2012), p. 2.

European Commission Country Report on Canada supra, n. 2. Also, Europe is the world’s largest exporter of manufactured goods and services, and is at the same time the biggest export market for around 80 countries, according to the Commission, see the European Commission, EU’s Position in World Trade http://ec.europa.eu/trade/policy/eu-position-in-world-trade/ (accessed on 18 March 2015).

Sauvé (2015), p. 2.

Also see Sauvé (2015), p. 3. Except for briefly touching on the chapter on temporary entry of workers, these CETA chapters, their interconnectedness, and their wider implications on services are beyond the scope of this section. See Hoekman (2015) for a recent contribution on one of the main innovations in CETA (its framework for regulatory cooperation, including CETA’s Regulatory Cooperation Forum), extending this discussion to the rise of global value chains.

GATS, art I:1.

Roy et al. (2007), p. 158.

CETA, supra, n. 1, art 9.2 and art 9.1.

CETA, supra, n. 1, chapter 12, art 9.

Ibid., art 9.6.

Ibid., art 9.3.

GATS, art XVII.

NAFTA, art 1202.

Roy et al. (2007), p. 158.

CETA, supra, n. 1, art 9.5.

NAFTA, art 1203.

Roy et al. (2007), p. 158.

CPC (1991), Annex 10.

For this paragraph see Roy et al. (2007), p. 158; Adlung and Mamdouh (2014).

Roy et al. (2007) p. 158.

Ibid.

CETA, supra, n. 1, art 9.7 on reservations and arts 9.3 (NT), 9.5 (MFN) and 9.6 (Market Access).

CETA, supra, n. 1, art 9.7(2).

Roy et al. (2007), p. 158.

Ibid.

This resonates with the preamble which outlines how, in pursuing their economic policies by means of CETA, Canada and EU commit to preserving the right to regulate and their flexibility to achieve legitimate policy objectives, supra, n. 1, Preamble.

For an analysis suggesting that the scheduling approach is less significant and boiling it down to political impetus, see Adlung and Mamdouh (2014), p. 17.

European Commission, Negotiation summary supra, n. 16.

Methanex Corporation v. United States of America, NAFTA Case, UNCITRAL Rules of Arbitration, Final Award of the Tribunal on Jurisdiction and Merits, 3 August 2005; for more recent arbitral disputes see Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12 (pending) and Philip Morris Asia Limited v. Australia, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility, 17 December 2015 (case rejected due to lack of jurisdiction).

See, Indian Model BIT (BIPA) http://finmin.nic.in/the_ministry/dept_eco_affairs/icsection/Indian%20Model%20Text%20BIPA.asp (accessed 6 February 2016). New Indonesian Model BIT has not been made public.

UNCTAD (2010). See Ethyl Corporation v. Canada, NAFTA Case, UNCITRAL Rules of Arbitration, Award on Jurisdiction, 28 June 1998, as an illustration of regulatory chill within the NAFTA context. Also see, generally, Footer (2009); Beharry and Kuritzky (2015) pp. 383–429. More recently, Bilcon et al. v. Canada, PCA Case No. 2009-04, Award on Jurisdiction and Liability, 17 March 2015. See also Behn and Letourneau-Tremblay (2015) for a concise analysis of regulatory chill discussions concerning the Bilcon case.

CETA, supra, n. 1, art 8.10.

Ibid.

A broad reading of legitimate expectations is effectively prevented. See Nyer (2015).

Bernasconi-Osterwalder (2013).

UNCTAD (2012).

International Minimum Standard refers to a CIL rule with regard to how foreigners should be treated abroad. Root (1910), Borchard (1940), p. 445.

Mann (1981).

Pope & Talbot Inc v. Canada, NAFTA Case, UNCITRAL Rules of Arbitration, Award on the Merits of Phase 2, 10 April 2001, para 111.

Ibid., para 113.

FTC Interpretation (2001).

Mondev International Ltd v. United States of America ICSID Case No. ARB(AF)/99/2, Award, 11 October 2002.

L. F. H. Neer and Pauline Neer (U.S.A.) v. United Mexican States (1926). IV RIAA 60.

Waste Management, Inc. v. United Mexican States ICSID ARB(AF)/00/3, Award, 30 April 2004.

Saluka Investments B.V. v. The Czech Republic, UNICTRAL Rules, Partial Award, 17 March 2006; Agreement on Encouragement and Reciprocal Protection of Investments Between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic, 1991.

Vandevelde (2010), p. 47.

Dumberry (2015).

Berman (2013).

Lopez Escarcena (2014).

Ibid.

CETA, supra, n. 1, Annex 8.A.

Ibid.

Model US BIT (2012); Canadian Model FIPA (2004). Also see, Singapore–US FTA art 15.6 and letter exchange on expropriation; Canada–Peru FTA, art 812 and Annex 812.1; Colombia–US FTA, art 10.7 and Annex 10-B; Oman–US FTA, art 10.6 and Annex 10-B.

CETA, supra, n. 1, Annex 8.A.

Its application is “quite infrequent” according to some scholars. Brower and Blanchard (2014), p. 729; also see Kriebaum (2007).

Brower and Blanchard (2014), p. 730.

CETA, supra, n. 1, Annex 8.A.

Central America–Dominican Republic Free Trade Agreement (CAFTA-DR).

Railroad Development Corporation v. Guatemala, ICSID Case No. ARB/07/23, 29 June 2012.

Adel A Hamadi Al Tamimi v. Sultanate of Oman, ICSID Case No. ARB/11/33, Award, 3 November 2015.

US–Oman FTA.

Railroad Development, supra, n. 75, para 368.

Adlung R, Mamdouh H (2014) How to design trade agreements in services: top down or bottom up? JWT 48:191–218. doi:10.2139/ssrn.228168

Beharry CL, Kuritzky ME (2015) Going green: managing the environment through international investment arbitration. Am U Int’l L Rev 30:383–429

Behn DF, Letourneau-Tremblay L (2015) The Bilcon Award: a recent decision from NAFTA investment tribunal sparks new debate on an old issue. PluriCourts – Centre for the Study of the Legitimate Roles of the Judiciary in the Global Order, Research Blog. http://www.jus.uio.no/pluricourts/english/blog/laura-letourneau-tremblay/2015.10.19.behn.tremblay.nafta.investment.html. Accessed 26 Jan 2016

Berman F KCMG QC (2013) The Interpretation and Application of Fair and Equitable Treatment: An Arbitrator’s Perspective. European Journal of International Law Blog (EJIL: Talk!) http://www.ejiltalk.org/the-interpretation-and-application-of-fair-and-equitable-treatment-an-arbitrators-perspective. Accessed 6 Feb 2016

Bernasconi-Osterwalder N (2013) Commentary to the Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). International Institute for Sustainable Development Report

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European Commission (DG Trade), Country Report Canada http://ec.europa.eu/trade/policy/countries-and-regions/agreements Accessed 14 Feb 2016

European Commission, CETA–Summary of the final negotiating results (Note, Feb 2016) <http://trade.ec.europa.eu/doclib/docs/2014/december/tradoc_152982.pdf> Accessed 1 March 2016

European Commission, EU–Canada Agree Deal to Boost Trade and Investment (Memorandum, 26 September 2014) http://ec.europa.eu/rapid/press-release_MEMO-14-542_en.doc Accessed 26 Feb 2016

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Title: A Waiver for Europe? CETA’s Trade in Services, and Investment Protection Provisions and Their Legal-Political Implications on Regulatory Competence
Authors: Amalie Giødesen Thystrup
Güneş Ünüvar
Publisher: Springer International Publishing
Book: International Economic Law
Print ISBN: 978-3-319-44644-8

Electronic ISBN: 978-3-319-44645-5

Copyright Year: 2017
DOI: https://doi.org/10.1007/978-3-319-44645-5_3

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