Landmark Canada/EU trade agreement could have major implications for miners – by Kip Keen (Mineweb.com – October 23, 2013)

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If mining doesn’t seem to factor large in CETA, there are still major implications for the sector when the investor protection elements are considered.

HALIFAX, NS (MINEWEB) – A major trade agreement between Canada and Europe could provide significant protection from expropriation, among other things, to Canadian companies investing in Europe and vice versa.

Probably the most significant development in the Comprehensive Economic and Trade Agreement (CETA) for miners on both sides of the Atlantic is the inclusion of an investor-state provision that, in practice, ensures foreign companies a process to recoup damages in cases of expropriation or instances where political process is grossly discriminatory against a foreign company.

“From what we know this is a remarkable agreement,” said Riyaz Dattu, a lawyer with the firm Osler, Hoskin & Harcourt who specializes in international trade law. “It’s going to be like what we already have with the United States and Mexico under NAFTA (North American Free Trade Agreement), but it is broader in the sense that it covers all the European Union countries.

And the fact that there is an investor-state mechanism in this agreement is one step further towards having a [more global] multi-lateral agreement in investment.”

CETA IN NAFTA

It is to NAFTA that CETA is being heavily compared especially as regards investor protection. NAFTA includes such a provision, one that has certainly not gathered dust over the years.

In recent interviews with legal experts about the Canada-EU trade agreement NAFTA examples often came up to illustrate the significance a similar investor-state clause might have under CETA. The most frequently cited example, a Canadian one, was the recent expropriation of forestry assets from US-based Abitibi Bowater by the province of Newfoundland.

Back in 2008, the Newfoundland government, reeling from the news Abitibi Bowater was closing a mill, passed legislation that stripped the forestry conglomerate of assets in an otherwise complex story of environmental liability and political manoeuvering.

Newfoundland’s right to expropriate the assets was never in question, but thanks to NAFTA, neither was Abitibi Bowater’s clear path to sue Canada over it. Abitibi Bowater did sue, for $500 million in damages, and won a $130 million settlement.

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