“Corporate sovereignty” — in which foreign companies get to sue the government to penalize it for passing environmental and labor laws that undercut profits — is the one of the most controversial elements of the TAFTA/TTIP trade agreement the EU is negotiating with the US.
EU establishment figures who defend corporate sovereignty point out that many EU states already have corporate sovereignty clauses in their trade pacts (mostly former Soviet states whom the US arm-twisted into the deal as a condition of helping them escape Russia’s orbit). What they don’t mention is how much claims under these treaties cost the EU: at least €30 billion is sought in the 127 known corporate sovereignty cases the EU has seen (exact figures are impossible to get, because corporate sovereignty settlements are usually arrived at in secret, ensuring that citizens don’t know how much their governments are paying for foreign companies).
If there is a corporate sovereignty chapter in TAFTA/TTIP, more than 14,000 American firms that own more than 50,000 subsidiaries in EU countries will have the ability to sue the EU (pdf) — 95% of them for the first time. Moreover, they will be able to do that for all their existing investments in Europe, not just new ones, as the following section in the EU negotiating mandate makes clear (pdf):
the investment protection chapter of the Agreement should cover a broad range of investors and their investments, intellectual property rights included, whether the investment is made before or after the entry into force of the Agreement.
That clearly exposes EU member states — and their citizens — to the threat of an even greater level of claims than the €30 billion currently in play. Indeed, it is not fanciful to expect that figure at least to quadruple if ISDS is included in TTIP. That would mean claims — not necessarily successful, of course — of around €120 billion.
The True Cost Of Corporate Sovereignty For The EU: €3.5bn Already Paid, €30bn Demanded – Even Before TAFTA/TTIP [Glyn Moody/Techdirt]
(Image: Buy’n’Large from Wall-E, Pixar/Disney)