Is the Comprehensive Economic and Trade Agreement (CETA) the beginning of a new era of investment protection under free trade agreements, one that addresses long standing concerns surrounding investment protection? The answer to these questions is, by and large, no. CETA's investment chapter is not only superfluous but harmful because, among other reasons, it distorts competition at the expense of domestic competitors. The comments of Dr. Nils Meyer-Ohlendorf, Senior Fellow at Ecologic Institute, are available for download.
Investment protection under CETA contains a number of positive elements, such as the omission of an umbrella clause or improved investor-state-dispute settlement provisions (ISDS), but CETA is not the beginning of a new era of innovative free trade agreements. The CETA, like virtually all other investment treaties, is still based on the fair and equitable treatment clause, the national treatment requirements, the 'most favored nation' clause, and the indirect expropriation rule. In fact, CETA maintains investment protection, while the EU and Canada have developed functioning legal systems that provide for high levels of investment protection. Against the backdrop of these developed legal systems, CETA's investment chapter is not only superfluous, but harmful because it is distorts competition at the expense of domestic competitors.