Unpacking the ISDS: Why the ISDS actually is a threat to us here [View all]

[cali]

I initially posted this in May, 2015

The first in a series I'll post: I try not to make these posts too long as I suspect that long posts are too often not read in detail.

First let me stipulate that the US has never lost an ISDS case. 17 have been brought. The US has prevailed in 13. 4 are pending. The TPP will significantly increase the volume of cases because many more corporations will have the right to bring ISDS cases.


Let's begin with a brief history:

The first ISDS was included in a trade agreement between Pakistan and Germany in 1959 to protect investors from unfair government actions and a court system that couldn't be trusted to rule equitably. The U.S. has about 50 trade agreements with ISDS provisions.

The most common claim echoed here at DU is about how the ISDS is nothing to get upset about because the U.S. has never lost an ISDS case- as mentioned above

A nation's laws cannot be changed by ISDS: True. An ISDS tribunal cannot alter the laws of a nation. But they can order restitution- and these can be large. That in turn can and does place pressure on countries, states and municipalities to not pass laws that they fear will result in being challenged by an investor. Such rewards also place pressure on a government to repeal laws. The former has already happened. One example is that several countries have put off plain packaging for cigarettes due to the WTO ISDS cases Philip Morris brought against Australia and Uruguay:



In 2011, Australia passed a tobacco-control law to discourage smoking. It required cigarettes to be sold in plain packages with prominent warnings, with brand information relegated to the bottom of the box. Touted as “one of the most momentous public health measures in Australia’s history” by the country’s health minister, the law was meant to deter a habit that will ultimately kill 1.8 million current Australian smokers, according to a recent study. After the country’s highest court upheld the constitutionality of the anti-smoking law, tobacco giant Philip Morris claimed that it violated the company’s corporate rights and launched a suit using a little-known provision called investor-state dispute settlement (ISDS). The case is pending, as is a similar case against Uruguay. A similar tobacco-control measure in New Zealand is on hold pending the outcome of these cases.

How can this happen? In each case, Philip Morris is empowered to sue because of investment treaties. Many treaties and trade agreements enshrine the rights of corporations to claim that a country’s right to regulate public health interferes with profits and to sue states to protect them. And the cases, heard in special tribunals, often protect corporate profits at the expense of the health and welfare of citizens.

What’s happening in these cases should serve as a cautionary tale for Americans, as President Barack Obama’s administration pushes through the final stages of negotiating the Trans-Pacific Partnership (TPP). The signature trade deal would open the United States to more suits just like these. Although the deal is being sold as a trade equalizer that would benefit U.S. citizens and companies, it could instead make it more difficult and more costly for the United States to protect its own people.

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http://foreignpolicy.com/2015/05/04/in-pro-corporate-tribunals-we-trust/