Canada trade deal CETA will fuel rampant EU inequality

19 December 2016 - 10:30am
War on Want in the news

Mark Dearn, Senior Trade Campaigner, War on Want and Board Member, Trade Justice Movement UK. An edited version of this article was first carried by the Independent.

CETA is an EU-Canada trade deal just like controversial EU-US deal TTIP. It was secretly negotiated over five years, locks in the privatisation of public services and will permit corporations across the North America to sue European governments in a private justice system. Brexit may not happen for at least two years, but CETA will be voted on in February – if it passes, it will immediately apply to the UK.

Inequality is grist to the mill of far right populists, yet the European Commission and members of the European Parliament (MEPs) are failing to learn the lessons of Brexit and the rise of Nigel Farage and Donald Trump. Instead, it’s big business as usual, and continued support for policies that generate inequality and, in turn, fuel the racist right.

This week there has been a clear demarcation of the crucial choice faced by the EU and UK, which may help determine the future rise of the far right in Europe – and, set against it, the decline of out-of-touch, centre-left parties.

On Friday, the International Labour Organisation reports that the top 10% of highest paid workers in Europe together earn almost as much as the bottom 50%. Last week, the European Parliament’s Employment and Social Affairs Committee found that the EU-Canada trade deal CETA will only make this situation worse, "widening the incomes gap between unskilled and skilled workers thus increasing inequalities and social tensions.”

The cross-party committee points to CETA triggering potential job losses of more than 200,000 across the EU. It goes on to point out what campaigners across Europe have long been saying about accords like CETA, TTIP, and the Donald Trump-opposed TPP: “There is a clear disparity between the levels of protection envisaged for investors and for labor [sic] interests and rights.”

These investors are not the small businesses that CETA and TTIP’s supporters repeatedly cite. As the report makes clear, CETA has no chapter with specific measures to help small business.

The clear disparity between workers and investor interests is perhaps best captured in one key element found across all these deals: the widely opposed ‘corporate court’ private justice system that grants big business the power to sue states for policies that affect their profits.

Put more simply, it’s a tax payer-funded risk insurance scheme for corporations that would swing into play were a government to decide to ban nuclear power, oppose fracking or re-nationalise public services like the railways.

Despite voting to leave the EU, CETA can still affect the UK: the deal could be passed within the next two months with large swathes of it immediately put in place– and with it, those already struggling in the UK’s brittle Brexit economy will feel the squeeze of yet more anti-worker policy-making.

Yet despite the clear dangers posed by CETA, Liam ‘take back control’ Fox has already signed the UK up to the deal, wilfully bypassing UK parliamentary scrutiny along the way.

Appearing before the European Scrutiny Committee in October, Fox admitted to and apologised for intentionally side-stepping parliament. His reason: “The treaty was worth a great deal in terms of jobs, investment and prosperity.”

When MPs debate CETA in the new year, they must seize on the chance to hold Liam Fox to account and question him on his anti-democratic support for what economist – and inequality expert - Thomas Piketty calls a “treaty which belongs to another age”.

And when it votes on CETA in February, the European Parliament has a chance to draw a line in the sand by oppose an agenda designed to enrich big business above anyone else. Fail to do so, and the Parliament will threaten the future of social democratic parties and the EU bloc as a whole.

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