"No" to Fast Track – Secret, Undemocratic Trade Deals Are Not About Trade
by Scott Klinger, 6/3/2015
These Deals Are About Giving Big Corporations New Tools to Circumvent National, State, and Local Protections
A decade ago, U.S. trade negotiators began to discuss a sweeping international agreement between the United States, China, Japan, and nine other Asian nations. The Trans-Pacific Partnership (TPP) will establish the rules that govern 40 percent of the world’s economy. It is commonly referred to as a trade deal, but trade is a small portion of the pact. Trade rules constitute just five of the treaty’s 29 chapters.
The TPP, like many treaties before it, embraces the Investor-State Dispute Settlement process (ISDS), which allows corporate actors to sue sovereign nations to seek compensation for rules or regulations that impede the corporation’s ability to maximize profits. Unlike national courts that commonly allow corporations to sue to recoup actual investments, ISDS insists that corporations be compensated for expected profits, sometimes profits they anticipate decades into the future.
The ISDS process is one-sided and undemocratic. Corporate claims against sovereign states are heard in special courts overseen by a handful of judges, most of whom are corporate lawyers. Once the ISDS panel issues a decision, it cannot be appealed.
Today, there are about 3,000 international treaties that allow aggrieved corporations to seek redress under ISDS. About 90 percent of these are bilateral investment treaties; the rest are trade treaties. Since 1990, 100 nations have been sued by corporations more than 550 times, according to research conducted by George Washington University Professor Henry Farrell. In cases that have been decided, corporations won 31 percent of the time, corporate claims were dismissed 34 percent of the time, and cases were settled in the remaining third of the cases. This means a corporation has only a one in three chance of losing a lawsuit.
The ISDS process is undemocratic. It’s overseen by unaccountable corporate lawyers and favors corporate interests over public protections.
The ISDS tribunals lack any of the common protections afforded by national judicial systems. “Just 15 arbitrators, nearly all from Europe, the U.S. or Canada, have decided 55% of all-known treaty disputes. This small group of lawyers…..sit on the same arbitration panels, act as both arbitrators and counsels and even call on each other as witnesses in arbitration cases,” according to Profiting from Injustice, a 2012 report by the Transnational Institute and the Corporate Europe Observatory. The report goes on to note that three top international corporate law firms were involved in 130 investment treaty cases in 2011.
The National Conference of State Legislators, a membership organization representing legislators in all 50 states, wrote in an open letter to trade negotiators: “We …. urge the U.S Trade Representative to remove any Investor-State dispute settlement clause from further consideration for inclusion in the TPP…..It interferes with our capacity and responsibility as state legislators to enact and enforce fair, nondiscriminatory rules that protect the public health, safety and welfare, assure worker health and safety, and protect the environment.”
More than 100 U.S. law professors signed a letter to members of Congress and the U.S. Trade Representative opposing ISDS provisions in the TPP and urging the parties to “protect the rule of law and the nation’s sovereignty.”
ISDS undermines government’s ability to protect the public.
Disclosing the text of the Trans-Pacific Partnership is considered a crime against national security.
The text of the Trans-Pacific Partnership Treaty is a closely guarded state secret. Members of Congress who wish to view the treaty they are voting on are required to go to a soundproof, secure room in the basement of the Capitol to read it. They are not permitted to take cell phones, cameras, or notepads into the room, and they may not have any aides present. And when they emerge, they are prohibited from telling anyone, including their staffs, what they have read. Violating these secrecy restrictions could land them in jail.
These levels of secrecy are unprecedented. Even in closed-door hearings on national security, legislators are permitted to take notes and to discuss what they’ve heard with their staffs who possess proper security clearances.
While members of Congress can go to their secure basement room to read the treaty, members of state legislatures have been entirely excluded from the negotiating process, even though ISDS also threatens to undermine state and local laws and regulations.
The National Conference of State Legislators warns, “The lack of transparency of the treaty negotiation process, and the failure of negotiators to meaningfully consult with states on the far-reaching impact of trade agreements on state and local laws, even when binding on our states, is of grave concern to us.”
If the House passes Fast Track, President Obama and potentially the next two administrations would have the authority to negotiate and present trade treaties that Congress could vote up or down, but not amend or filibuster. Fast Track authority would extend for six years, covering the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership (TTIP) expected to be voted on within the next year, and potentially many other future treaties.
Why is “free trade” so shrouded in secrecy and an utter disregard for transparency? Because the president and members of Congress know that if the terms of the deal were open to public inspection, it wouldn’t stand a chance of passing.
Rulemaking negotiated in secret and disputes settled by unelected judges in private courts are unacceptable in a functioning democracy. Members of Congress should reject it. Trade treaties should be openly and publicly debated. Those that are in the interests of the people will be kept, and those that subject people to the unchecked power of special interests would be rejected.
Call your representative today at 1-888-804-8311 and let him or her know what you think about allowing corporations to sue your city, state, and federal government to overturn laws adopted to protect you, your family, and your community.
Image in teaser from flickr user Backbone Campaign, used under a Creative Commons license.