Thank you very much.
I should mention that I'm an Ontario lawyer originally, but now I'm an independent arbitrator working out of Hong Kong, Toronto, and Paris. I lived in the European Union, in Paris, for about 12 years.
I endorse the comments of both Pierre Marc and Jason that this is a really positive thing for Canada, because it does give us a very privileged position with the European Union, which is an enormous trading bloc. Also, perhaps we can be a gateway for the United States to Europe, as Jason just mentioned.
However, my comments are going to be focused on the new dispute resolution mechanism of CETA.
For decades—in fact, since the New York convention was born in 1958—international arbitration has been the way people resolved international business disputes. Privacy of the proceedings; confidentiality; efficiency; avoidance of inexperienced, corrupt, or otherwise unreliable courts; and the ability to choose a decision-maker, someone who was trusted by the parties remain valid reasons for choosing arbitration, even though it is becoming increasingly expensive and lengthy.
The stakes, of course, are extremely high. They are enormous. We have more than 3,000 bilateral investment treaties and multilateral treaties in the world, NAFTA being our favourite, of course. The classic dispute resolution system has always been international arbitration, which is more or less an ad hoc system.
The tendency, though, for business people to go to these BITs, these bilateral investment treaties, has been quite recent. It's been in the last two decades that it's mushroomed. A couple of years ago I was in England interviewing the top arbitration partner of a big firm there, who said that it's now the very first stop they go to. When a new client comes in, the first thing they do is look to see if there is a possible treaty claim for their client. It's a multi-million-dollar, even billion-dollar, business.
Also, these awards are getting a lot of publicity. Of course, now that Canada is on the paying end of some of these, we're much more aware of them than we were, say, two decades ago.
It's one thing to want to avoid courts where the ethics are sketchy and the procedures are mysterious or interminable, but some courts are very good and unbiased, so we don't have perhaps the same necessity to avoid the courts.
I think what's happened today is that creative plaintiffs and lawyers have begun to use the treaty system because of the huge possible payoff, and it may be being misused at times. Certainly the secrecy doesn't help, because people are looking at these awards of figures you can't even count anymore and saying, “We are, as taxpayers, going to pay for this.”
I think there's pressure, in fact, from both ends of the political spectrum. You have conservatives saying that these huge awards are going to put pressure on governments and even erode the ability of national governments to legislate for the protection of the public interest. On the other hand, you have small-l liberals saying that big business is getting these markets for its clients, and they lobby for these trade agreements. Then there is also an expense that comes to consumers in health and safety protection, and there's also the labour element.
One other thing is that there's also a perception now that in some cases businesses are using these treaties as a safety net or an insurance policy, and they are actually creating a reverse discrimination in that foreign investors have better rights than local investors. That is a tough argument to counter.
Of course, the secrecy, as I said, has always been a serious problem. ICSID cases are now all published, so we're seeing lot of decisions now and finding out a little bit about what was behind these big decisions.
In 2014, UNCITRAL brought in rules for transparency in international investor state arbitrations, which is going to be a help for future treaties, but I think what has happened with CETA is that we now have this new system that has come about at the very last moment, and there are three main changes that CETA has brought in regarding dispute resolution.
The first one is that instead of an ad hoc tribunal of three arbitrators, with one chosen by each party and then those people choosing a third, we're going to see a roster of 15 arbitrators. There will be five from Canada, five from the EU, and five from outside nations, with the chair from the outside nations.
