Moving Regulation out of Democratic Reach: Regulatory Cooperation in CETA and Its Implications

Ronan O´Brien

 

Summary

 

Regulatory cooperation in CETA potentially has profound implications. It is part of a broader

international effort by the rich countries and their companies to control domestic regulation

through international trade agreements that override domestic laws. In CETA, regulatory

cooperation in principle covers a vast area, both goods and services, trade but also investment.

Its formal objectives include prominently the elimination of ‘unnecessary barriers to trade and

investment’; the application of the ‘necessity test’ on foot of this criterion has previously

resulted in a push towards deregulation. Putting the two sides’ regulations in competition after

mutual recognition of potentially quite different regulations is likely to lead to a race to the

bottom in a number of those areas. Both sides commit themselves to regulatory cooperation in

general though in specific cases one side may refuse to cooperate.

 

The CETA institutions and mechanisms are in practice likely to result in large business

driving the agenda for cooperation. The close relationship of Canada to the US regulations

and standards and the involvement of most large US companies in Canada will potentially

open the door for US companies to influence significantly regulatory cooperation in CETA

and achieve a substantial part of the objectives of TTIP. The almost complete absence of any

provision for basic democratic features in the operation of CETA, including access to

information, participation, openness to the public, public debate, or control, in a process

which appears heavily oriented towards the large private interests being regulated, is likely to

give those even greater influence in regulation than at present, at the sacrifice of the wider

public interest in many cases.

 

The additional burden on regulators from the various additional steps due to CETA – and

even more after its potential extension to other countries – in the context of diminished

regulators’ resources, is likely to lead to delays, blockages and a reduction in the standard of

regulation. Use of the precautionary principle is likely to be under great pressure in a number

of areas. All of this is done in the name of economic gains which turns out in the official

impact assessment to be vanishingly small – the equivalent of a cup of coffee every three

months for each European in terms of disposable income – and if the omitted effects of

constrained regulations in the areas of climate change, finance, toxic chemicals, etc., were

included in a more thorough assessment, then the economic evaluation would turn out to be

heavily negative. Locking such provisions into an international treaty would turn out to be the

height of folly.

This is extremely dangerous in an era when major action is needed on climate change and

financial regulation, and with nanotechnologies, endocrine disrupting chemicals, synthetic

biology, taking air pollution much more seriously, pharmaceutical pricing, data protection,

and the problems with the chemical agriculture model, to mention only some of the regulatory

challenges to be faced. It is clear that the public interest desperately needs to be given top

priority in this situation and appropriate regulation not put out of democratic reach.

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