To the chair and the committee, thanks very much for the opportunity to present today.
I'm speaking in my capacity as a researcher at the Canadian Centre for Policy Alternatives. It's a progressive policy research institute with offices in Ottawa and five other provinces.
I'm going to focus my comments on the Canada-Indonesia comprehensive economic partnership agreement, but I think they also relate to the ASEAN and the India negotiations.
I'm going to make two points today. The first and main point is that, whatever business opportunities exist in the Indo-Pacific, and I'm sure there are many, obviously, we don't need the investor-state dispute settlement agreement to achieve them. In fact, putting ISDS into any of these agreements would be harmful to all countries concerned, including Canada.
This government celebrated the removal of ISDS from the new NAFTA, if you recall. They did that because, in doing so, according to Minister Freeland, it “strengthened our government's right to regulate in the public interest, to protect public health and the environment”.
As the committee will know, Canada and the U.K. also have no intention of including ISDS in their replacement agreement for the Trade Continuity Agreement for 2021.
These were good moves and very much in line with international backlash to investor-state dispute settlement as an unnecessary, unpredictable and costly handout to big business with dubious economic benefits for countries.
The climate-related case against ISDS is especially strong now that the Intergovernmental Panel on Climate Change has warned in its 2022 report that trade investment treaties could delay or even stop countries from introducing new measures to lower emissions, since countries will be worried about drawing huge ISDS cases for cancelling new fossil fuel projects, for example, or for simply not issuing new permits for projects.
Canada has been burned by such cases like the Clayton/Bilcon successful NAFTA lawsuit against the non-issuance of a quarry permit in Nova Scotia or the pending Lone Pine case against Quebec's moratorium on hydraulic fracking under the St. Lawrence.
New research published in the Journal of Science last week finds that ISDS claims from fossil fuel companies could reach as high as $340 billion in the coming years as countries start to make moves to meet their Paris climate targets.
The risks here go both ways for Canada as well as Indonesia. In Indonesia, 95% of Canadian investment is currently in the mining sector, where Canadian investors have a very high incidence of using ISDS in Canada's existing treaties to challenge environmental decisions in other countries, but they also will affect us here in Canada where there's a lot of Indonesian investment in, say, LNG, forestry and pulp and paper, where future conservation measures or just transition policies may also spark very large claims against Canada, as we experienced under NAFTA.
My second argument is about the poor chances, and I would say the almost non-existent chances, of getting a decent labour chapter in this Indonesia agreement. That will go for ASEAN and India as well. Indonesia told Canadian negotiators last month that a labour chapter is a non-starter. They haven't included labour provisions in any of their current agreements, including the 2020 deal with Australia, so I would say we're sleepwalking—or perhaps sleep negotiating—into an outcome that will likely be negative for workers, women and the environment.
As an example of what I mean, a European sustainability impact assessment of the EU's planned CEPA with Indonesia states that the deal “is expected to result in increased demand for employment in sectors historically less likely to meet decent working conditions including the textile, wearing apparel and leather industry. Concerns also arise that vulnerable groups, including women and children, would bear the brunt of poor working conditions.” The EU impact assessment also says that “considering Indonesia's rather weak implementation of laws on indigenous peoples' land rights, increasing trade in sectors where concerns on land rights are relevant, such as forestry and wood products, could run the risk of increased human rights violations.”
I won't go into detail on that because I think Greenpeace Canada put it very clearly in their presentation to the committee. I'll just emphasize that without a strong floor for labour rights, it is unlikely Indonesian workers will see any benefits flowing from the CEPA with Canada, and they may be worse off. By staying at the negotiating table without a commitment from Indonesia to a high-standards labour outcome, Canada is signalling that it is flexible on this critical issue.
To conclude, I'll just note that there was a period around 2016-17 when Canada looked to be pioneering a more progressive and sustainable trade policy. The government has done some interesting things since then, for example, with respect to gender chapters in new agreements, taking more seriously Canada's obligations to include indigenous peoples in the negotiations themselves and the outcomes, and of course taking ISDS out of the new NAFTA.
It would be a shame to throw that all away to go back to signing lopsided trade investment treaties with a new list of Indo-Pacific countries, just as countries like the U.S. and EU are testing more promising-sounding worker-focused partnerships in the region.
Thank you.