Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and investor-state dispute settlement mechanisms (Canada): November 2023

Dear Constituent,

Thank you for contacting me about investor-state dispute settlement (ISDS) mechanisms.

The inclusion of investment protection provisions and associated ISDS mechanisms in trade agreements protects UK investors, both large and small, from discriminatory or unfair treatment by a state. These kind of provisions are already in place within over 90 bilateral investment treaties between the UK and other countries, helping to safeguard the interests of UK investors across the world including those of pensioners through pension funds and SMEs.

There has never been a successful ISDS claim made against the UK and nor has the threat of potential disputes affected the Government’s legislative programme. No ISDS court could force any change to UK law or overturn a decision of Parliament. I can also assure you that where ISDS is included in any new trade agreement, the UK will seek to ensure fair outcome and high ethical standards for arbitrators.

Where the UK and treaty partners agree deals containing ISDS mechanisms, they retain the right to regulate in the public interest, including for environmental and public health purposes. The right to regulate is recognised in international law.

Canada is one of the UK's closest allies and top trading partners. Our trading relationship was worth over £21 billion in 2021. That being so, ministers at the Department for Business and Trade are working hard to take our trading relationship with Canada even further.

The UK-Canada Trade Continuity Agreement was signed in December 2020 and came into force in April 2021. This is a continuity agreement, replicating the arrangements in place while the UK was a member of the EU. It committed both parties to enter negotiations on a bespoke trade deal by April 2022.

The Government has now conducted four rounds of trade negotiations with Canada.  The most recent round, which concluded last December, saw the first full chapter agreed in principle, transparency, and the parties provisionally identified candidates for closure in the next rounds. I am told that the negotiations continued to make steady progress and agree text where there was clear alignment, including in Innovation, Small and Medium-sized Enterprises, Technical Barriers to Trade, Anti-Corruption and Financial Services.

In addition, the negotiations continue to reflect our shared ambition to secure a progressive deal which looks to build on the UK-Canada Trade Continuity Agreement, and strengthens our existing trading relationship. Indeed, before any new deal with Canada can take effect, it will of course be subject to Parliamentary scrutiny in the usual ways. Naturally, the Government will not agree one that does not reflect our country's best interests.

Thank you again for taking the time to contact me.