Amended trade declaration not enough to persuade Wallonia

OTTAWA — One day before Belgium’s Wallonia region formally rejected the Canada-EU free trade deal, the two sides pledged in writing to strengthen the controversial dispute settlement section of the pact, the Canadian Press has learned.

The apparent concession to the Walloons was made on Oct. 13 in a short annex that Canada and Europe crafted to assuage critics of the Comprehensive Economic and Trade Agreement, or CETA.

The two sides said in writing that they would do more work to make sure that the people appointed to dispute resolution tribunals were free of bias and other conflicts of interest.

But the new language wasn’t enough to prevent the Wallonia legislature from voting to reject the deal the following day.

On Tuesday, 11 days after that pivotal vote in the small Belgian region of 3.5 million people, the EU was still trying to persuade Wallonia to drop its opposition to the pact, which is preventing Belgium from joining its 27 EU partner countries in approving the deal.

The Walloon opposition to the investment protection section of the treaty remains the major obstacle to the deal being formally approved Thursday in Brussels at a long-planned summit between Justin Trudeau and his EU counterparts.

A leaked document provides insight into the sticking point.

“The European Union and its member states and Canada have agreed to begin immediately further work on a code of conduct to further ensure the impartiality of the members of the tribunals, on the method of their remuneration and the process for the selection,” said the line that was added to the Oct. 13 “Joint Interpretative Declaration.”

An earlier draft of the declaration, dated Oct. 5, did not contain that undertaking to do more work.

Gus Van Harten, an investment law professor at Osgoode Hall Law School, said the trade deal is still full of loopholes on the newly created tribunal system, which is designed to settle disputes.

A key problem — and one the Walloons want addressed — is that there is nothing that prevents an individual from working both as an arbitrator and a judge, he said.

The problem is that an arbitrator’s work is done in secret, and is paid for by corporations, which makes it impossible to know if someone has a conflict of interest when he or she hears a case later as a judge, Van Harten said.