By Stuart Trew | June 20, 2013
Earlier this year, we learned that Canada was considering policy changes, pushed by EU negotiators in ongoing trade and investment talks, that would weaken financial and banking rules that shielded us, to some extent, from the worst of the recent global financial crisis. This week, Scott Sinclair, a senior trade researcher with the Canadian Centre for Policy Alternatives, explains how that would happen, and why we should be very worried about it, in an article in iPolitics.ca and the Epoch Times.
"During the 2008 financial crisis, trillions of dollars of wealth disappeared almost overnight, the global financial system came perilously close to collapse, international trade dried up and most of the richest nations in the world slipped into recession," writes Sinclair. "Clearly, strong government regulation is absolutely essential to prevent speculative excess in the financial sector from damaging the broader economy. Yet one of the largest remaining roadblocks to the CETA is Canada’s unwillingness, thus far, to weaken its regulatory authority over banking and financial services."
Sinclair explains that the crux of the issue "is how much power the treaty should give foreign investors to challenge prudential regulation of financial services–regulations aimed at protecting depositors and ensuring the integrity and stability of the financial system," and whether a planned investor-state dispute settlement process "would give foreign investors extraordinary rights to bypass the domestic court system and directly challenge government regulatory measures."
"The threat of having to pay huge monetary damages to affected investors impedes effective regulation," continues Sinclair. "As the Canadian Press reported recently, Canadian regulators have warned that these supercharged investor rights would ‘create a chilling effect that will have negative consequences for the overall economy of the country.’"
Real the full article here.
Photo: Mikey G Ottawa/flickr