Commentary to the Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA)

This report provides a critical commentary on the February 2013 draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). The author argues that the draft largely ignores concerns from the European Parliament and civil society, particularly regarding the inclusion of investor-state dispute settlement (ISDS) and the use of broad, open-ended definitions that may limit the policy space of governments to regulate in the public interest.

• The draft CETA uses an open-ended, asset-based definition of investment, which the author argues is unpredictable and risks an expansive interpretation by tribunals, potentially covering assets not intended for protection.
• Canada proposes expanding the definition of 'investor' to include those seeking to make an investment, which extends treaty coverage to the pre-establishment phase and increases the risk of ISDS claims.
• The agreement includes absolute market access commitments and a prohibition on performance requirements, which the author claims reduces the flexibility of states to use economic policy tools.
• The Most-Favoured-Nation (MFN) provision is criticized for not sufficiently preventing investors from importing substantive guarantees from other treaties, which could nullify efforts to modernize investment law.
• There is a conflict between Canada and the EU regarding 'fair and equitable treatment' (FET); Canada prefers a closed list of unacceptable treatments, while the EU proposes open-ended elements like 'legitimate expectations' and 'effective transparency'.
• The EU proposes an 'umbrella clause' that would allow investors to elevate contractual breaches to treaty violations, which the author argues creates a parallel forum for litigating contract disputes.
• Canada and the EU have diverging views on indirect expropriation: Canada proposes carving out non-discriminatory public welfare measures, while the EU suggests a 'necessity' and 'proportionality' test.
• The author argues that the proposed general exceptions clauses in the draft provide 'false comfort' and will not adequately safeguard government policy space.
• The draft adopts a 'negative list' approach for reservations, meaning any measure not explicitly listed as non-conforming will be subject to the treaty's obligations.

APA

Bernasconi-Osterwalder, N. (2013). Commentary to the Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/commentary_investment_chapter_CETA.pdf

Chicago

Bernasconi-Osterwalder, Nathalie. Commentary to the Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). International Institute for Sustainable Development, 2013. https://www.iisd.org/system/files/publications/commentary_investment_chapter_CETA.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |title=Commentary to the Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) |publisher=International Institute for Sustainable Development |date=May 2013 |url=https://www.iisd.org/system/files/publications/commentary_investment_chapter_CETA.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2013commentary, author = {Bernasconi-Osterwalder, Nathalie}, title = {{Commentary to the Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement (CETA)}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = may, url = {https://www.iisd.org/system/files/publications/commentary_investment_chapter_CETA.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }