Wonder how American tobacco companies can sue countries for antismoking campaigns? DU'ers Know!

That ol devil ISDS....

By Julia Gray

Last week, the New York Times revealed in a pair of articles that the American Chamber of Commerce is fighting countries that try to reduce smoking. The tool that the Chamber is using in its battles is a treaty section called an “investor-state dispute settlement provision,” or ISDS. Obama’s administration is currently working to negotiate at least one new deal that so far includes an ISDS provision: the Trans-Pacific Partnership, or TPP, designed to further liberalize trade among the U.S., Canada and several countries in Asia and Latin America. The ISDS provision is proving controversial; Elizabeth Warren spoke out against it, as have others.

But the ISDS issue goes beyond the TPP itself. As the Chamber’s fight on behalf of tobacco companies illustrates, even if the TPP stalls or if that provision falls out of the agreement, international companies can still sue countries, right now, under existing international agreements.

Many heads of state tend to rush to sign international agreements, which often have ISDS provisions, either to improve their nation’s reputation or to advance their own domestic agendas. The number of those agreements has increased dramatically in recent years. Many of these agreements potentially allow firms to “treaty-shop” by incorporating their firms in nations that have ISDS provisions that they’d like to use.

How does this work? Suppose a U.S.-based company invests abroad — say, in Venezuela — and subsequently wants to sue the host country for failing to protect its investment. If the country were Venezuela, for instance, U.S. firms suffered substantial losses when former President Hugo Chavez nationalized foreign firms, in particular energy companies. Traditionally, an aggrieved firm would have legal recourse only if its home country had an agreement with an ISDS provision with Venezuela (or whatever the host country might have been). If not — and the U.S. does not have such an agreement with Venezuela — the firm’s options would be limited.



more
http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/07/08/wonder-how-american-tobacco-companies-can-sue-countries-for-antismoking-campaigns/