Having said in my previous post that there are times one must stop reading the news, I find myself thinking about exactly that this morning. As many interests in Congress try now to fast track the TPP, most Americans are barely aware of it if at all. But the repercussions could be terrifying, continuing to widen the gap between super wealthy and poor, and locking in a government that is virtually controlled by multi-national profiteering. We used to have labor unions, anti-trust laws, industry and jobs. What is evoving is a corporate "aristocracy" - which is ironic, considering the beginning of this country. Among other things, this "partnership" will enable corporate entities to sue a state, or the country, for "lost income", such as, for example, labeling of foods that are genetically modified.
Investor-state resolution has been a common
component of U.S.-negotiated pacts with individual nations since the
North American Free Trade Agreement in 1994. But such resolution is not
currently permitted in disputes with the U.S. and EU, which are governed
by the WTO. All trade deals feature some kind of international
resolution for disputes, but the direct empowerment of corporations to
unilaterally bring trade cases against sovereign countries is not part
of WTO treaties. Under WTO rules, a company must persuade a sovereign
nation that it has been wronged, leaving the decision to bring a trade
case before the WTO in the hands of elected governments.
Traditionally, this proposed political empowerment for corporations has
been defended as a way to protect companies from arbitrary governments
or weakened court systems in developing countries. But the expansion of
the practice to first-world relations exposes that rationale as
disingenuous. Rule of law in the U.S. and EU is considered strong; the
court systems are among the most sophisticated and expert in the world.
Most cases brought against the United States under NAFTA have been
dismissed or abandoned before an international court issued a ruling.
As this rightly points out, investor-state dispute resolution mechanisms
were brought in for agreements with countries where the rule of law
could not be depended upon. That makes no sense in the case of the US
and EU, both of whose legal systems are highly developed (some might say
overly so.) The Huffington Post article quotes Lori Wallach, director
of Public Citizen's Global Trade Watch, who explains what she thinks is
really going on here:
"The dirty little secret about [the negotiation] is that
it is not mainly about trade, but rather would target for elimination
the strongest consumer, health, safety, privacy, environmental and other
public interest policies on either side of the Atlantic," said Lori
Wallach, director of Public Citizen's Global Trade Watch. "The starkest
evidence ... is the plan for it to include the infamous investor-state
system that empowers individual corporations and investors to skirt
domestic courts and laws and drag signatory governments to foreign
tribunals."
One recent example of the kind of thing that might become increasingly
common if investor-state dispute resolution is included in TAFTA and TPP
is provided by Eli Lilly and Company. As Techdirt reported earlier this
year, the pharma giant is demanding $100 million as compensation for
what it calls "
expropriation"
by Canada, simply because the latter's courts refused to grant Eli
Lilly a drug patent on the grounds that it didn't satisfy the conditions
set down in law for doing so.
A new
report (pdf) from the UN Conference for Trade and Development (UNCTAD), pointed out to us by
IP Watch, reveals just
how widespread the use of investor-state dispute resolution mechanisms has already become:
The Issues Note reveals that 62 new cases were
initiated in 2012, which constitutes the highest number of known ISDS
[investor-state dispute settlement] claims ever filed in one year and
confirms that foreign investors are increasingly resorting to
investor-State arbitration.
…
By the end of 2012, the total number of known cases reached 518, and the
total number of countries that have responded to one or more ISDS
claims increased to 95. The overall number of concluded cases reached
244. Out of these, approximately 42 per cent were decided in favour of
the State and 31 per cent in favour of the investor. Approximately 27
per cent of the cases were settled.
Although that suggests that states are winning more often than
investors, the cost of doing so is a drain on public finances, and
ignores cases that never come to arbitration because governments simply
give in. And when states lose, the fines can be enormous: the report
notes that 2012 saw the highest monetary award in the history of
investor-state dispute resolution:
$1.77 billion to Occidental, in a
dispute with Ecuador.
As
an accompanying press release from UNCTAD points out, this growing recourse to international arbitration
amplif[ies] the need for public debate about
the efficacy of the investor-State dispute settlement (ISDS) mechanism
and ways to reform it
Unfortunately, against a background of almost total lack of awareness by
the public that supra-national structures are being put in place that
allow their governments to be overruled, and their laws to be ignored,
it is highly unlikely we will get that debate.
