Thanks very much to the committee on behalf of the Canadian Centre for Policy Alternatives. I appreciate the chance to comment on a possible free trade deal with Equador. While I will focus my comments on the possibility that a future deal includes an investor-state dispute settlement process, I would like to stress up front that I do not think these negotiations should proceed at all under the current civil emergency in Ecuador.

It would be opportunistic for Canada to exploit the current crisis and to fast-track a contentious free trade deal that Ecuadorian civil society groups know nothing about and will almost certainly not be consulted about over the course.

The recently passed China-Ecuador trade deal was condemned by a large section of Ecuadorian civil society, including the country's Confederation of Indigenous Nationalities, for the threats it poses to the environment and the rights of indigenous peoples, especially from mining and the expansion of monoculture commodities such as cacao, banana and oil palm, which are responsible for significant amounts of deforestation in the country. These groups were not adequately consulted on the China agreement, and they have not been consulted, as far as I know, on the possible Canadian FTA.

In public statements, Canadian and Ecuadorian officials have said that they want to pursue an inclusive trade agenda, as was just mentioned, that benefits workers, indigenous peoples and sustainable development. That will not be possible under the current circumstances in Ecuador, and will not be possible under Canada's standard negotiating approach.

Coming back to investment, there would be no chance of an inclusive trade deal if it includes a standard Canadian-style investment protection chapter and ISDS. A recent UN report states that the ISDS regime “is not fit for purpose in the twenty-first century because it prioritizes the interests of foreign investors over the rights of States, human rights and the environment”.

Our own government cited these same risks as the reason it excluded ISDS from the renegotiated Canada-U.S.-Mexico agreement.

The Ecuadorian ambassador to Canada, a year ago, told The Hill Times that he hopes a possible Canadian FTA includes ISDS, since he said this would attract more Canadian mining and related infrastructure, such as the roads and power that go along with that.

Negotiating new investment treaty protections with Ecuador would be a terrible idea, given Ecuador's traumatic experience with ISDS, including several infamous cases from Canadian mining companies over the past two decades, and considering the brave decision of previous governments in Ecuador to pull the country out of the ISDS regime altogether, after it found the risks far outweighed the benefits.

As proof of this finding, in fact, the termination of Canada's investment treaty with Ecuador in 2017 has not affected Canadian investment flows into the country. Canada is currently the largest foreign investor in Equador, and that's without having treaty protections in place.

The option of disputing government decisions at ISDS tribunals instead of in domestic courts does not make projects more likely to move forward, but it can and frequently does undermine access to justice for local communities impacted by foreign investment. Their voices and their rights, under international human rights, indigenous and environmental treaties, tend to be ignored by ISDS tribunals, even where countries raise them in their own defence.

Large, and growing, ISDS awards into the billions of dollars can drain government funds from public services in extreme cases, as in Colombia, where money was moved from public services to pay for expensive ISDS claims.

Because of Ecuador's terrible experience under ISDS, the constitution in that country prohibits the government from ratifying international treaties that incorporate investment arbitration. However, this didn't stop the previous Ecuadorian government from including ISDS in a free trade deal with Costa Rica. That deal is currently in limbo, because the court declared it unconstitutional as a result of this constitutional ban on arbitration.

In conclusion, Canada should not launch negotiations with Ecuador until it is clear that the Ecuadorian government has a social mandate to do so, in particular from indigenous peoples and groups who are most impacted by foreign investment. There can be no inclusive trade deal with Ecuador if these voices are excluded from the discussion.

Finally, ISDS should be a non-starter in any future negotiations. It contradicts the statements from the UN, it contradicts the government's own policy and it may in fact be illegal under Ecuador's constitution.

Thank you.

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