It risks becoming the forgotten trade deal.
Canada and the 28-country European Union announced back in September, 2014, that they had wrapped up negotiations on a massive trade agreement. At the time, officials insisted that all that remained was a bit of legal "scrubbing" to make sure the 1,600-plus pages of final text reflected what was actually negotiated. That was supposed to take a few months, clearing the way for a formal signing and eventually ratification in both Canada and Europe this year.
Surely, the pages are wearing thin from all the scrubbing. The deadline for implementing the deal looks like it will slip to next year or even 2018.
Brussels, we have a problem. The investment chapter, which establishes the right of investors to directly sue governments, has become a major sticking point for the Europeans. It's not clear that buffing and polishing will fix it.
The time has come to bleach the chapter right out of existence. If Prime Minister Justin Trudeau is serious about getting the deal done he should immediately tell the Europeans he's willing to drop the chapter.
The investor chapter was never an essential part of the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA. For Canada, it's all about getting preferential access to a market of 500-million people and $18-trillion in economic output before the United States does.
A little history: Coming into the CETA negotiations, it was Europe that pushed aggressively for a special dispute-settlement system that allows foreign investors to sue governments if they believe they've been treated unfairly compared to domestic ones.
Canada, on the other hand, with a decade of experience with dispute-settlement under the North American free-trade agreement (NAFTA) was understandably gun-shy. Canada has been sued 35 times – more than either the U.S. or Mexico – while losing a handful of cases. The U.S. has never lost.
Eager to fix perceived flaws in the NAFTA investor-state rules, Canada demanded strict limitations in CETA on when and how arbitration could be used.
But the ground has shifted dramatically. Public opinion in Europe has turned against investor rights. Critics worry that lawsuits will be used to undermine national health, social and environmental policies.
Without changes to the investor chapter, the European Parliament and perhaps some member countries would almost certainly reject the final deal.
"There might be some legal adjustments that would be necessary to the clause and we have indications from both sides that there's willingness to do this," Marie-Anne Coninsx, the EU's ambassador to Canada, told CBC News recently.
Both sides won't admit it publicly. But they are now quietly renegotiating key parts of the investment chapter, trying to find a way to appease critics.
Even if they're successful, there is no guarantee that what they agree on will be enough to appease European critics, who worry the chapter will become a model for U.S.-Europe trade negotiations and eventually expose EU countries to a wave of lawsuits from litigious U.S. companies.
Some European politicians are even pushing for an independent investment court to bring consistency and independence to arbitration decisions – identified by many critics as a key weakness of the NAFTA process.
A soon-to-be-published research paper by Osgoode Hall Law School Associate Professor Gus Van Harten found "potential systemic bias" based on an analysis of 142 international investor-state cases, including arbitrators favouring the United States as well as arbitrators more generally favouring investors over governments.
The research is a wake-up call for governments, Prof. Van Harten argued. "They need to do more work, to do comprehensive studies of how arbitrators are using their power," he said in an interview.
With suspicions and conspiracy theories running wild, CETA has become the battleground for the much larger trade deal with the United States.
A wise course for Canada would be to scrap the chapter, and let the Europeans and the U.S. duke it out later.
Canada already has investment-protection agreements with some individual EU countries, and in others, credible domestic courts provide ample protection for Canadian investors.
Besides, European companies are much more invested in Canada than vice versa. As a net capital importer, Canada is much more likely to be a target of future CETA lawsuits.
So why waste so much effort on the scrubbing when a little bleach would do the trick?