Thanks very much. It's great to be back at committee. I appreciate this.
I'm a researcher with the Canadian Centre for Policy Alternatives. I'm going to represent my views in that capacity. We have about 40-plus years of analyzing free trade and investment treaties at the CCPA, so I'm going to draw from some of the research we've done on the CEPA and other treaties.
As you've heard before at this committee, the Indonesia free trade agreement is unlikely to result in a ton of new two-way trade. In fact, I would say it could easily get in the way of some positive job-boosting industrial strategies in both countries. I'll mention that in a second.
The CEPA establishes top-shelf investment protections while backtracking on human rights, labour rights and environmental protection in recent trade agreements.
One of the most concerning aspects of the CEPA, from our perspective, is its investor-state dispute settlement process, of the kind denounced by governments, lawyers and civil society groups globally for interfering with the achievement of human rights and climate policy. Investment treaties and trade deals with ISDS generally do not do what governments say they're going to do. They do not increase investment flows; there's very little evidence of that. They do not make it more likely that investments will be successful. They do not depoliticize cross-border investment disputes; in fact, sometimes they can ratchet up the politics in it. They do not provide investors with speedier access to justice, as cases can drag on for years. They don't provide a level playing field for investors either, because arbitration panels often rule in different and contradictory ways on similar matters of law.
In that last sense, ISDS does not bring the rule of law to countries where legal systems are not as developed as they are in Canada, it simply complicates their government's and our ability to govern foreign investment. It saddles governments with debt when companies use ISDS to sue for hundreds of millions of dollars, and often billions of dollars.
Canada's currently being sued by an Australian mining magnate behind the Grassy Mountain open-pit coal mine in Alberta. They're using the ISDS process in the CPTPP. The Australian investors are seeking, from what I understand, at least $2 billion from the federal government. Canada's also stuck in an ISDS claim from an American investor related to a planned liquefied natural gas terminal in Quebec. They are looking for $1 billion at least in that case. That was the result of an environmental assessment that said we shouldn't move forward with that project. The economics weren't there, and it would violate indigenous cultural rights.
Indonesian environmental and economic justice groups are opposed to this agreement, in part because of this big risk to communities opposing large-scale mining. The people on the island of Sangihe, for example, have been engaged in a long struggle to prevent the Canadian firm Baru Gold from commencing industrial gold mining operations. The community celebrated in 2023 when the Supreme Court of Indonesia revoked a production permit for the mine.
Of course, things didn't end there. The mining company sought a partnership with a local mining firm, owned by President Subianto's younger brother, and have paid some recent land taxes. Now they're hoping they can get it back on track while the community continues to resist the project. If the community's successful in stopping this project as they hope, were the CEPA to be in place, the company would have a right to sue Indonesia, again for billions of dollars, even if no shovels had been put in the ground, for lost future profits. This is the kind of case that happens all the time in ISDS, and it's surprising that we continue to sign these treaties.
We do it for the mining industry. It's clear from the “what we heard” document on the Indonesia CEPA, and it's clear from the government's summary of the negotiated outcomes, that ISDS is in there for the mining sector. The views of labour and human rights groups on the prevalence of forced labour and human rights in Indonesian supply chains, for example, are barely reflected. In fact, the government walks back its advances on labour protections supported by workers in more recent trade agreements, like the one with Ukraine and in the CUSMA.
The same goes for the environment chapter, which is more or less useless, I would say. Only with recurring incidents of a government relaxing or waiving laws or rules to attract investment and in ways that directly relate to trade with Canada...only in that case can you file a dispute from the environment chapter. Our federal and provincial governments are already arguably violating this provision, because across the country we are waiving and relaxing environmental rules in order to attract foreign investment into fossil fuel and mining projects.
Canada's trade minister said last week that it's not Canada's business to tell Indonesia how to protect the environment or vice versa. Maybe that's true, but this agreement does exactly that for the regulation of e-commerce and digital trade. It does that for food safety. It does it for industrial policy and the regulation of services, and the list goes on. That's what these agreements do.
On digital trade, the agreement reinforces U.S. bullying tactics that benefit mainly U.S. big tech companies, online payment firms, streaming, social media, AI giants and other e-commerce giants. I don't know why we're doing this, to be honest. These are U.S.-made rules based on input from big tech in the United States, and here we are reproducing them in trade agreements like the one with Indonesia, when citizens and businesses in both countries are demanding more from their governments in terms of regulating the activities of these companies for privacy protection, competition reasons and so on and so forth.
To sum up, the presence of ISDS in CEPA and the absence of strong protections for workers on the planet make this a last-generation trade deal. Is this the best we can do? That is my question for the committee. By the government's own numbers, this is going to increase Canada's GDP by 0.012%. We're looking at the low hundreds of millions of dollars in increased trade. Fast-tracking ratification will not save the economy, in other words. It's not going to stick it to Trump. The agreement does not suggest a rupture but rather a continuity, with a fading rules-based order designed by and for powerful corporations.
I want to end by saying that I congratulate members of this committee, among numerous parties, for pushing for a more democratic trade policy. I encourage you to keep doing that. We need more of a parliamentary role in how these agreements are shaped. Otherwise, they're just going to keep looking like this.
