By Flannery Dean, CBC News
Posted: Dec 10, 2012 7:37 AM ET
Last Updated: Dec 10, 2012 8:19 AM ET
The federal government and the European Union are deep in negotiations over a major trade pact, and there's a lot on the line for Hamilton depending on which way the talks go.
Hamiltonians need to be aware of how fallout from the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) could affect the way the municipality operates, says Ward 1 councilor Brian McHattie.
He was so worried by the potential implications for municipal governments of the as-yet unsigned deal that last
'Unlike previous agreements like NAFTA, the CETA agreement appears to be reaching into municipal government.'—Brian McHattie, Hamilton councilor
year he joined 41 other municipalities asking that Hamilton be excluded from CETA.
What concerns McHattie most is the fact that "unlike previous agreements like NAFTA, the CETA agreement appears to be reaching into municipal government."
He's also concerned by the fact that there's been little to no public discussion of the CETA negotiations.
"Municipalities are being kept in the dark," McHattie told CBC Hamilton.
Procurement
There are three significant implications that should be of interest to Hamiltonians, said Gus Van Harten, a law professor at Osgoode Law School and a resident of Burlington, Ont. The first one is procurement.
"Procurement is just whenever a government buys goods or services," said Van Harten.
'Any local business that does business with government should be on alert. And any business that is competing with major multinational companies should be on alert.'—Gus Van Harten, Osgoode Law School
Under CETA, municipal governments would have "to give equal opportunity to foreign companies to bid on foreign procurement contracts."
This means local Hamilton businesses, workers and suppliers could all be on the losing end under CETA. Depending on how the agreement is finalized, it could allow municipalities to be called to task by foreign companies for giving preference to local businesses bidding on municipal contracts for goods and services, said Van Harten.
"Any local business that does business with government should be on alert. And any business that is competing with major multinational companies should be on alert," said Van Harten, pointing out that CETA could give foreign bidders a powerful legal bargaining chip.
"Because they are going to be at a competitive disadvantage when the [European] company can go behind closed doors and threaten these arbitration lawsuits that domestic companies can't do."
The issue of procurement also troubles McHattie.
"NAFTA didn't require municipalities to court or entertain foreign bidders on contracts related to municipal infrastructure, for example," said McHattie.
Procurement issues are very wide-ranging and can affect everything from infrastructure to auditing services, explained Van Harten.
"Municipalities have to change the way they do business and make decisions, and that can be extremely costly."
Investment
The second issue of concern, said Van Harten, is "the investment question," which he describes as quite layered and complex.
"This treaty is going to include an investment chapter that protects foreign investors —which really means any European company that owns any asset."
Under CETA, foreign companies will get special rights to challenge local government decisions.
More worrying is the fact that they can bring those claims before arbitrators that don't necessarily have a stellar record when it comes to impartiality or fairness, said Van Harten.
"Disputes will be resolved in a forum that exists outside of domestic courts."
Van Harten doesn't think the "record of the arbitrators would be reassuring to any municipal decision maker."
Additionally, the federal government could come down hard on a municipality that breached CETA's terms.
Health Care
The third issue of concern is health care, said Van Harten.
"It's very worrying the degree to which Canada's generic drug industry is going to be sacrificed," he said.
Europe is asking Canada to lengthen the protection period on drug patents and to subsequently delay the availability of lower-priced generic drugs.
Van Harten points out that many third world countries rely on Canada's generic drug industry to function, but so too does Canada and its local health institutions.
"In Canada, we rely on the industry to reduce the cost of health care. Implications about patents translate directly into the cost and availability of health care to Canadians."
"It's a major issue of relevance to Canadians and also people in Hamilton. It's going to cost the health care system … because it will be paying more to Big Pharma. Costs not covered by OHIP would rise as well," said Van Harten.
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