If You Thought Corporate Personhood Was Bad, Wait Until You See Corporate Nationhood in the New Trade Treaty
by Scott Klinger, 4/30/2015
The government of El Salvador was so concerned that its water was so fouled by mining companies that it passed a moratorium on new mines in 2008. Oceana Gold, an Australian corporation, didn’t like the law, so it sued El Salvador for $301 million, the amount the company said the policy cost it in lost profits.
The case was not heard in a Salvadoran court, but rather by a special, secretive corporate tribunal based in the United States and overseen by a panel of three judges, all corporate lawyers. If the tribunal rules in favor of the mining company, El Salvador has no right to appeal.
Corporations suing governments sounds like fiction, but it's all too real.
The El Salvador case is unfortunately not a bad science fiction story. Thanks to something known as the investor-state dispute settlement process (ISDS), which is part of the Central American Free Trade Agreement, corporations can sue if they think their interests are negatively impacted by the host country’s laws. And this is only one of a number of international trade agreements that grant corporations these special rights. To date, more than 500 suits have been filed against sovereign national governments by aggrieved corporations claiming that national laws and regulations have constrained their ability to realize the profits they counted on.
Now the push is on to approve the next big "trade" agreement – with no real public debate.
The Obama administration has just concluded negotiations of a new global treaty called the Trans-Pacific Partnership, or TPP, covering a dozen nations bordering the Pacific Ocean. These nations collectively control 40 percent of the world’s economy, making it the largest global trade treaty ever negotiated.
The TPP now must be approved by the U.S. Congress and the national legislatures of each of the other nations involved in the treaty.
The treaty is extremely controversial in part because it has been negotiated under cover of secrecy. Hundreds of U.S. corporations have been involved in the negotiations, while civil society groups – labor unions, environmental organizations, and human rights advocates – have been largely excluded. What we do know about the secret deal was leaked by a few conscientious participants in the negotiations. Documents associated with the trade deal are classified for four years after negotiations end, meaning that those who leaked the documents did so at the risk of large fines or jail time.
If the terms of the deal were made public, opposition would be so great that it would almost certainly fail, so the Obama administration is asking Congress to pass special rules called “fast track authority” that give Congress just 60 days to digest the terms of the complicated deal and then to vote it up or down – without amendment or filibuster. The clock is already ticking, and Congress is expected to vote on the fast track issue within the next few weeks. The alternative to fast track would be open, public debate over the agreement and a fair amendment process that would allow members of Congress to alter or strike offensive provisions.
The Trans-Pacific Partnership creates special rights for corporations and threatens standards that protect our families and communities.
There are 29 chapters in the proposed treaty; just five of them deal with traditional trade issues. The other two dozen chapters convey a vast array of new political and economic rights to corporations, including the type of "corporate nationhood" that allowed the Australian mining company to sue El Salvador. Individual people have no such rights.
The Center for Effective Government has joined the AFL-CIO, 43 major environmental organizations, and a dozen womens’ rights groups in opposing fast track authority for the TPP. Here are just seven reasons why this trade deal is a lose-lose for the American people:
- The treaty negotiations have violated all standards of transparency. For the last five years, hundreds of corporations and industry lobbyists have been intimately involved in the secret negotiations, but the public has learned very little about the agreement.
- The treaty would grant foreign corporations the same rights as foreign nations in challenging rules deemed unfair to trade. This would give corporations the ability to sue the United States for damages if standards and safeguards impeded money-making opportunities. These cases are heard in special, secretive corporate trade courts overseen by a panel of three judges, all of whom are corporate attorneys. These proceedings are biased against public protections from the start.
- The TPP itself undermines our right to know about the products we buy and the food we eat. It would become illegal to label products “non-GMO”, or even to provide country-of-origin labels on meat and seafood.
- It would be illegal to pass a financial transaction tax under the TPP. A financial transaction tax, or Wall Street Sales Tax, is a small fee placed on the purchase and sale of stocks, bonds, derivatives, and other financial vehicles. In addition to raising hundreds of billions of dollars annually to support public investment, it also would rein in risky speculative activity on Wall Street while having little effect on long-term investors.
- Health care costs will rise. Drug firms would gain rights to extend patents, making cheaper generics harder to get. In addition, doctors discovering new surgical procedures would be able to patent their discoveries and charge a fee anytime another surgeon used them anywhere in the world.
- The TPP will accelerate U.S. job losses and shift more positions overseas. The TPP bans our government from implementing Buy American provisions in taxpayer-financed contracts. This would also mean that when public services are privatized, offshore employers would have to be considered on equal terms with those seeking to hire American workers. Thus, should the Social Security Administration outsource some of its call center functions, beneficiaries could end up talking to someone in Vietnam, China, or Singapore.
- It encourages businesses to move their operations to nations with few environmental or labor standards. Weak labor and environmental standards in some of the TPP signatory nations could create pressure to reduce U.S. public protections.
It's time to act.
Congress is expected to vote on the fast track provision of the Trans-Pacific Partnership before the end of May. Make your voice heard today!