[CTC] Senators Call For Global Super Court To Be Removed From TPP

Thu Sep 29 13:24:56 PDT 2016

https://www.buzzfeed.com/chrishamby/senators-call-for-global-super-court-to-be-removed-from-tpp?utm_term=.xeOjRMZdD#.pae10jb7B <https://www.buzzfeed.com/chrishamby/senators-call-for-global-super-court-to-be-removed-from-tpp?utm_term=.xeOjRMZdD#.pae10jb7B>
Senators Call For Global Super Court To Be Removed From TPP

BuzzFeed News’s investigation of investor-state dispute settlement provokes a call for change on Capitol Hill.

posted on Sept. 29, 2016, at 11:56 a.m.

Chris Hamby <https://www.buzzfeed.com/chrishamby?language=en>
Citing a BuzzFeed News investigation <https://www.buzzfeed.com/chrishamby/super-court?utm_term=.srOLbB9e1#.ur59VqYvb>, a dozen senators urged President Obama to remove a controversial element of the Trans-Pacific Partnership, the massive trade deal that the administration is pushing Congress to ratify in the coming months.

The senators — including Sherrod Brown, Bernie Sanders, and Elizabeth Warren — highlighted a private legal system contained in the deal that would empower foreign companies to sue the US government before a panel of arbitrators, often drawn from the ranks of corporate lawyers. Including this provision in the deal “means our country’s own public health, worker safety, and environmental standards, among others, are vulnerable to corporate challenges,” the senators wrote.

This legal system — a global super court known as investor-state dispute settlement, or ISDS — was the subject of a recent 18-month BuzzFeed investigation. ISDS is already enshrined in a network of trade and investment treaties around the world. It has become a lightning rod for criticism as more and more companies have used it to undermine democratically enacted policies or even criminal convictions <https://www.buzzfeed.com/chrishamby/super-court>.

The senators cited in their letter some of the key findings of BuzzFeed News’ four-part series. “Recent investigative reporting by BuzzFeed reveals the extent to which ISDS has become an integral part of profit-maximizing strategies for corporations,” they wrote. “ISDS challenges, and even mere threats of ISDS challenges <https://www.buzzfeed.com/chrishamby/the-billion-dollar-ultimatum?utm_term=.bjBmJP7By#.ya5eoB7bV>, have been used to secure extractive permits over community objections, toget executives out of criminal convictions <https://www.buzzfeed.com/chrishamby/super-court?utm_term=.srOLbB9e1#.avvmNwZv6>, and to exonerate managers connected to a factory’s lead poisoning of children <https://www.youtube.com/watch?v=nO4k2lLXiT8>.”

“Such a corporate handout does not belong in our trade agreements,” they concluded.

The senators also disputed the administration’s claims that TPP would bolster national security.

“Empowering multinational corporations, who have allegiance to no country, through ISDS will actually weaken the ability of our TPP partners to govern,” the senators wrote. “Meaningful government engagement and relationship-building with our allies will advance U.S. national security interests in the Asia Pacific far more effectively than a trade agreement that promotes the interests of corporations at the expense of citizens.”

And the senators again cited ISDS to undercut the administration’s frequent claim <http://thehill.com/policy/finance/263754-obama-puts-tpp-at-top-of-2016-agenda> that TPP is “the most progressive trade deal in history.”

“It is simply not accurate to call an agreement progressive if it does not require trading partners to ban trade in goods made with forced labor or includes a special court for corporations to challenge legitimate, democratically developed public policies,” the senators wrote.

Lawyers and arbitrators who handle ISDS cases, along with some business groups such as the National Association of Manufacturers, have argued that ISDS is simply a way to ensure businesses receive fair treatment when they operate in other countries. The system traces its origins to the 1950s and was designed primarily to reassure foreign companies that they could turn to a fair legal system if the country where they invested seized their property or blatantly discriminated against them.

But BuzzFeed News found that, during the past two decades, creative lawyers at top firms, primarily in the US and Western Europe, have devised creative ways to broaden the system’s reach dramatically and turn it into a lucrative area of practice. Companies and executives accused or convicted of crimes have used ISDS to avoid punishment; businesses have used the system to gut environmental laws; big banks and financiers have turned the system into an engine of profit, often at the expense of poor nations or those in crisis; and the US is surprisingly vulnerable to claims from foreign companies.

The potential risk to the US would increase significantly <https://www.buzzfeed.com/chrishamby/homegrown-disaster?utm_term=.jmY5nJN3q#.qp8qJYROM> if TPP is ratified. The administration said it has included new safeguards in the deal that would, among other things, ensure governments have plenty of leeway to regulate in the public interest, increase transparency, and quickly weed out frivolous claims. Some scholars and activists, however, have said these changes are mere tweaks around the margins that leave in place most of the problematic aspects of the system.

The senators’ letter went on to cite other parts of TPP —including provisions on labor, currency manipulation, and the automotive supply chain. But they said their concerns over ISDS were “first and foremost.”

The other senators who signed the letter are Brian Schatz and Mazie Hirono of Hawaii, Jeff Merkley of Oregon, Al Franken of Minnesota, Bob Casey of Pennsylvania, Richard Blumenthal of Connecticut, Sheldon Whitehouse of Rhode Island, Ed Markey of Massachusetts, and Tammy Baldwin of Wisconsin.

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Full text of the letter:

Dear President Obama:

We write to underscore the fundamental flaws of the Trans-Pacific Partnership (TPP) agreement.  Until these provisions are fixed through renegotiation, it is not appropriate for Congress to consider this trade agreement.  Passing the TPP in its current form will perpetuate a trade policy that advantages corporations at the expense of American workers. 

First and foremost, the agreement includes investor-state dispute settlement (ISDS), which means our country’s own public health, worker safety, and environmental standards, among others, are vulnerable to corporate challenges.  Recent investigative reporting by BuzzFeed reveals the extent to which ISDS has become an integral part of profit-maximizing strategies for corporations.  ISDS challenges, and even mere threats of ISDS challenges, have been used to secure extractive permits over community objections, to get executives out of criminal convictions, and to exonerate managers connected to a factory’s lead poisoning of children.  Such a corporate handout does not belong in our trade agreements. 

The TPP labor provisions are also unacceptable.  The text does not ban trade in goods made with forced or child labor; it simply requires each party to discourage, in whatever manner it considers appropriate, the importation of goods produced by forced or compulsory child labor.  And the language on acceptable conditions of work with respect to minimum wages will be enforced only in export processing zones, which leaves TPP parties free to reduce worker safety protections and minimum wages provided they do so economy-wide.  The consistency plans for Vietnam, Malaysia and Brunei are inadequate and will not ensure full compliance with international labor rights before the TPP enters into force.  Vietnam, for example, will not have to allow free and independent unions at any level greater than a single enterprise for the first five years of the agreement.  And Mexico, which refused to negotiate a consistency plan, has made promises of improvement but presently has no credible plan for protecting workers’ rights once TPP is implemented. 

The TPP countries’ joint declaration on currency is similarly insignificant.  It established a forum for TPP partners to discuss currency manipulation, but there is no enforcement mechanism to ensure our trading partners do not manipulate their exchange rates for export advantages.  The forum will meet annually to consider exchange rate policies and their impact on TPP countries.  They will issue only a report on their findings, leaving U.S. workers and manufacturers, including those in the auto sector, without any recourse if a TPP trading partner intervenes in its currency for economic benefit.

The U.S. auto sector will also be hurt by TPP’s rules of origin for autos, which will undermine the North American Free Trade Agreement’s rules of origin.  Under TPP’s rules of origin, non-TPP countries can contribute more than half the value of a TPP-traded car.  Overnight, the North American supply chain will be changed.  TPP’s weak rules of origin will threaten the hundreds of thousands of American jobs in the U.S. auto supply chain because the components they produce can now be sourced from China or other countries without losing the agreement’s tariff benefits. 

We also want to respond to claims that TPP is important for U.S. national security.  We fear that the agreement would further erode American manufacturing and our defense industrial base.  Empowering multinational corporations, who have allegiance to no country, through ISDS will actually weaken the ability of our TPP partners to govern.  Meaningful government engagement and relationship-building with our allies will advance U.S. national security interests in the Asia Pacific far more effectively than a trade agreement that promotes the interests of corporations at the expense of citizens.

This list of TPP flaws is not exhaustive, but it signifies some of the provisions that need to be renegotiated before the agreement is considered by Congress.  It is simply not accurate to call an agreement progressive if it does not require trading partners to ban trade in goods made with forced labor or includes a special court for corporations to challenge legitimate, democratically developed public policies.  Passing TPP before these and other provisions are fixed will hasten the erosion of U.S. manufacturing and middle class jobs, and accelerate the corporate race to the bottom.  

We urge you to work with our TPP partners to negotiate a trade agreement that stands up for American workers and grows our middle class.

Sincerely,

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