Gus Van Harten is a law professor at York University’s Osgoode Hall and a well-respected expert on trade law; he’s published a damning report on the Trans Pacific Partnership deal.
Van Harten focuses on the TPP’s “Investor State Dispute Settlement” (ISDS, previously) provisions, which allow corporations to sue governments in closed, secret proceedings to repeal environmental, labor and safety regulations that undermine their expected profits.
Defenders of ISDSes say that they help the “little guy” who might be clobbered by foreign governments with regulations that are just disguised protectionism. But Van Harten’s look at the track-record of actual ISDS proceedings paints a very different picture. The primary users of ISDSes are giant corporations (>$1B/year in turnover) or the super rich (>$100M net worth), and they prevail 71% of the time. By contrast, small companies that try to use ISDSes only succeed 42% of the time. ISDSes aren’t about leveling the playing field: they’re about tilting it in the favour of the rich and powerful.
This leads Van Harten to call TPP a “threat to democracy and to regulation.”
TPP has been written in such a way that the public always gets the worst of both worlds. Van Harten’s chilling summary of the corporate sovereignty provisions in TPP is worth quoting in full:
The TPP would take us in the wrong direction and be very difficult to reverse. It would expand the transfer of power to ISDS arbitrators from legislatures, governments, and courts. The arbitrators would not be accountable like a legislature. They would not be capable of regulating like a government. They would not be independent or fair like a court.
At the core of the TPP’s threat to democracy and regulation is the uncertain and potentially huge price tag that its ISDS process would put on any law or regulation that is opposed by a large multinational company or a billionaire investor. The problem is not that foreign investors would be too big to fail; it is that the TPP would make the biggest and richest ones too risky to regulate.
The TPP was an opportunity for countries to step back from and reform the flawed system of foreign investor rights and ISDS. Instead, the TPP would expand the system massively. That decision is reason enough to reject the TPP in order to protect the established institutions of democracy, sovereignty, and the rule of law in TPP countries.
Foreign investor protections
in the Trans-Pacific
Partnership [Gus Van Harten/Canadian Center for Policy Alternatives]
TPP’s Corporate Sovereignty Chapter A ‘Threat To Democracy And Regulation’
[Glyn Moody/Techdirt]