In the wake of the heated talks on the CETA signing, Naomi Klein, at a short online meeting with her readers in Vilnius, Lithuania, brings about some radical perspective on how such trade deals can harm. To reassure her East European readers, she is also dissing centralized socialist/communist economies, stating that the green leap ahead is essentially decentralized and community empowering.
Canada is a little bit of a laboratory for this as we signed the first free trade deal of this kind with the United States in the mid ‘80s. Actually, the first free trade agreement was signed in 1988 and it, was extended into NAFTA (The North American Free Trade Agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America) in 1993. So Canada is the most sued nation in the world – based on free trade agreements. Just because we have been in this for a long time and we have been in it with the biggest bully, what we know in Canada is that these deals are very dangerous. They give tools to multinational corporations to sue national governments when they interfere with these companies’ beliefs that they have the right to earn maximum profits.
There are a couple of examples that we have experienced in Canada: first, the province of Quebec after much of citizens’ pressure was one of the first jurisdictions to ban fracking or to have a moratorium on fracking. And after that happened, a gas company that was actually Canadian registered in the US so that it could sue Canada – because under NAFTA a foreign company is able to sue the Government. CETA is very similar to NAFTA. So this gas company says that this fracking ban interferes with their right to frack for gas under the St. Lawrence River.
Lone Pine Resources Inc. vs. Quebec
The Lone Pine Resources investor-state challenge is proceeding. In September 2013, oil and gas company Lone Pine Resources filed a $250-million North American Free Trade Agreement (NAFTA) lawsuit against Canada over Quebec’s moratorium on fracking for oil and gas underneath the St. Lawrence River. A tribunal was constituted in a case brought by Lone Pine Resources, Inc. under Chapter 11 the NAFTA.
Lone Pine Resources, which is based in Calgary, is using its incorporation in Delaware to access the investor rights chapter of NAFTA to challenge the Quebec moratorium in front of a paid, largely unaccountable investment tribunal.
Second, in the state of Ontario, the government introduced during the financial crisis of 2009 a piece of quite good climate legislation, which did bring together the need for jobs, the need for economic stimulus and the need to act on climate change into a holistic piece of policy. They got the trade unions on board with the environmentalists and that is hard to do. The piece of legislation had a feed-in tariff much like the German model, but it also had a requirement that whomever wanted to take advantage of the rates under the feed-in tariff in producing renewable energy, had to produce between 40 and 60% of their green technology in Ontario. So they had to be producing a certain percentage of the, say, solar panels and turbines in Ontario in order to stimulate the manufacturing sector, which at that time was suffering huge job losses. Ontario is dependent on a lot of automobile manufacturing and the auto sector, if you remember, in the financial crisis of 2008 declared bankruptcy (three of the main American auto producers).
Many of the laid-off autoworkers in Ontario, not because of climate policy, but because of mismanagement, were suddenly getting jobs making solar panels. A solar company actually opened up in closed down auto parts shop. So this is what we want, shift from a fossil fuel economy to green economy and bring the workers with us. And get out of this ‘jobs vs. the environment’ endless battle. And then, when there were created 31,000 jobs, which is very good for a state of the size of Ontario, we were taken to the World Trade Organization by Japan and the European Union. It was claimed that the requirement of making green technology in Ontario was a protectionist rule.
Ontario vs. WTO
The World Trade Organization has ruled in November 2012 that a critical component of Ontario’s green energy program breaches international trade law. WTO ruled it is not favorable to the domestic content requirements contained in Ontario’s so-called feed-in tariff program, the centerpiece of the green energy program that provides solar, wind and other renewable energy companies with long-term guaranteed revenue contracts.
Japan and the European Union filed complaints against Ontario, saying the province’s program broke international trade law by unfairly pressuring producers of clean energy to buy hardware and services from companies located in the province. Ontario’s Green Energy Act was $27-billion (EUR19 billion) worth of investment and created over 30,000 jobs. Currently Ontario is phasing out all its coal-fired power plants.
This is how these trade deals are penalizing governments for doing the right thing. It is also challenging in the US that has similar cases against China and India for their support for renewables. This impedes these massive emerging economies to leapfrog as quick as possible over fossil fuels and go straight into green tech. And this should be supported and not thwarted.
Is the answer lying in more government regulation, nationalizations, and planned economy? This brings up unpleasant memories in Eastern Europe. What is the alternative, not communist, but democratic?
There is a much more decentralized system that I am talking about, economically and politically. The exciting fact about green technology is that it leans itself towards decentralization in a way that is very different from fossil fuels. It is also a function of how these energies are. Fossil fuels are concentrated in specific locations- where the coal is, where the oil is, where the gas is. It is extremely expensive to get it out, it is expensive to transport it, also to refine it. And so, a system like that lends itself to a few monopolistic players leading to a huge amount of political corruption. We all know how oil and coal industries interfere with the political sphere. If we needed any further evidence of this, I would urge you to look at the new Secretary of State of the US. CEO of Exxon, I mean, we reached the complete integration between powerful concentrated industry and government. Their influence is outsized compared to their role in the economy.
In Canada, fossil fuel income is small percentage of our national GDP, but because fossil fuel industry has the largest companies in the country, they have a massive influence over our political process. So the point about renewables is that wind, sun, wave power is very very decentralized. I mean, there is sun everywhere, wind is all over, so we can design this energy system more properly, build in democratic economy, community control like on a commons model, as opposed to big state companies. We do not need them as they are needed for fossil fuels.
So there is an opportunity to build a more democratic economy than what it was under state socialism or state communism or capitalism/ corporatism, which is going on right now.
Together with trade unions and 220 groups such as Greenpeace, OXFAM or Black Lives Matter we created the Leap Manifesto that offers a bit of blueprint in matters of sustainable development. It has got 15 policy demands and they can easily be exported to Eastern Europe. It shows that it is possible to bring together the labor movement with the climate movement and human rights movement. It is not state communism that we are advocating, but it is a post-extractive economy that is based on the necessity to care for both humans and the Earth.