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An SIA analysis of the Investment Chapter in the EU-Canada Comprehensive Economic and Trade Agreement (CETA)

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  • Prud'homme, Dan

Abstract

This study is a section from the Sustainability Impact Assessment (SIA), commissioned by the European Commission, on the impacts of the Investment Chapter in the EU-Canada Comprehensive Economic and Trade Agreement (CETA). The Investment Chapter in CETA could encourage economic benefits including trade-stimulating effects and fostering intangible business linkages in Canada, although the significance of these will likely be minor to notable at most; impacts in the EU will likely follow these trends but on an even lower level of significance. Positive environmental impacts would result from increased investment in green technologies, yet negative impacts would likely result from increased FDI in the oil sands and mining sectors in Canada. Various social impacts are expected, but all relatively minimal in scale. The majority of the study is devoted to investigating the costs vs. the benefits of including controversial NAFTA-style investor-state dispute settlement (ISDS) provisions in CETA. It find that there is no solid evidence to suggest that ISDS will maximise economic benefits in CETA beyond simply serving as one form of an enforcement mechanism, just as state-state dispute settlement is also an enforcement mechanism. And the policy space reductions caused by ISDS allowances in CETA, while less significant than foreseen by some parties, would be enough to cast doubt on its contribution to net sustainability benefits. As such, the study’s assessment suggests that a well-crafted state-state dispute settlement mechanism might be a more appropriate enforcement mechanism in CETA than ISDS.

Suggested Citation

  • Prud'homme, Dan, 2011. "An SIA analysis of the Investment Chapter in the EU-Canada Comprehensive Economic and Trade Agreement (CETA)," MPRA Paper 44014, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44014
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    References listed on IDEAS

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    More about this item

    Keywords

    Comprehensive Economic and Trade Agreement; investment chapter CETA; investor-state dispute settlement; cost benefit analysis of investor-state dispute settlement; ISDS; economic impacts of EU trade agreements; SIA analysis;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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