Trade Agreements Rigged to Protect Capital From Democracy

Trade Agreements Rigged to Protect Capital From Democracy

Thursday, 12 March 2015 00:00
By Park MacDougald, Truthout | News Analysis


Barack Obama, like his Democratic predecessor in the White House, has gone all in for free trade. On January 20, the president used his sixth State of the Union address to ask Congress to pass a legal procedure (trade promotion authority) that would enable him to "protect American workers with strong new trade deals," a reference to two mammoth agreements currently in negotiation: the Trans-Pacific Partnership (TPP), with 11 partners in the Pacific Rim; and the Transatlantic Trade and Investment Partnership (TTIP), with the European Union. The deals would, two decades after the North American Free Trade Agreement (NAFTA), create the largest and second-largest free trade zones in the world.

Opposition to the trade deals is refreshingly widespread. In addition to criticism from the left, bolstered by the perennial trade-related concerns about wages and bargaining, the TPP and TTIP have provoked much suspicion, even among those who might normally be amenable to trade. They are secretive - most of our information comes from WikiLeaks - and, predictably, written in close collaboration with well-heeled corporate lobbyists. What we do know features, among other things, draconian rent-seeking from US copyright holders, threats to public health courtesy of US pharma giants, backdoor efforts to undermine Europe's fledgling efforts at data protection and significant problems for the environment. However, in recent months, as Obama's trade agenda has come increasingly to the fore, the headline-grabber of the trade agreements has been clause in the prospective treaties that was until recently an obscure bit of trade law: ISDS, or investor-state dispute settlement, which has dominated discussion, earning high-profile criticism from Elizabeth Warren and coverage in the mainstream media.

In the byzantine, technocratic and often boring world of international trade rules, its rare that a bit of legal machinery can inspire even passing attention from nonspecialists. Yet, ISDS - a legal instrument for settling disputes between investors and states - is something of a rock star. Nominally intended to provide a neutral arbitration forum to protect foreign investors from capricious state action, ISDS has been christened "corporate sovereignty" by opponents because of how it allows international investors to use trade tribunals to circumvent domestic legal systems - leading Greg Grandin to compare it unfavorably with another modish four-letter acronym.

In essence, ISDS provisions in treaties - traditionally, bilateral investment treaties (BITs), but more recently, expansive multilateral trade deals such as NAFTA or the upcoming TPP and TTIP - allow foreign investors who feel that their "investments" have been "expropriated" (both terms are rather vague and contentious concepts in trade law, hence the scare quotes) to bring the case before an independent tribunal, usually made up of three trade lawyers and administered by the World Bank-affiliated International Centre for Settlement of Investment Disputes (ICSID). ....................(more)

http://truth-out.org/news/item/29595-trade-agreements-rigged-to-protect-capital-from-democracy