Abstract

This article purports to assess the impact of CPTPP and CETA investment chapters on the regulatory space of government in Canada. As one of the most experienced developed country with investor-State dispute settlement (ISDS), Canada joined these mega-regional negotiations with a clear understanding of the commitments it was ready to make. The result is puzzling since the regulatory space left to the federal and provincial governments varies, sometimes in significant ways, from the Pacific to the Atlantic economic areas. A comparison of CPTPP and CETA investment chapters will be conducted, with past Canadian treaty practice in the backdrop. Of particular importance are the extent of the right of admission granted to foreign investors and the carving out of specific sensitive policy areas. Curtailment of MFN treatment, clarification of fair and equitable treatment (FET) and indirect expropriation are also prominent features of all new international investment agreements, and CPTPP and CETA address those issues differently. Coverage of provincial measures relating to investment is a typically Canadian issue, due to constitutional reasons, and once again, the two chapters differ in that regard. Various innovations in ISDS are also added, compared to past Canadian treaty practice. If CPTPP is mostly a reproduction of earlier US treaty practice, CETA brings new features in the international investment law landscape. Finally, the systemic issue of legal articulation between CPTPP, CETA and past Canadian treaties adds an unprecedented layer of complexity to the matter at hand. Given the fact that these mega-regional agreements include countries from which investments will flow into Canada, the impact of both agreements on the regulatory space of government is a pressing issue. It is argued that discrepancies in the international obligations of Canada are likely to create confusion for both regulators and arbitrators, while investors might simply make the best out of it. 

This paper will be part of the TDM Special Issue on "Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)". More information here https://www.transnational-dispute-management.com/news.asp?key=1621