Another Word For It Patrick Durusau on Topic Maps and Semantic Diversity

How the TPP Amounts to a Corporate Takeover by Joseph Stiglitz.

From the post:

The United States and the world are engaged in a great debate about new trade agreements. Such pacts used to be called “free-trade agreements”; in fact, they were managed trade agreements, tailored to corporate interests, largely in the US and the European Union. Today, such deals are more often referred to as “partnerships,”as in the Trans-Pacific Partnership(TPP). But they are not partnerships of equals: the US effectively dictates the terms. Fortunately, America’s “partners” are becoming increasingly resistant.

It is not hard to see why. These agreements go well beyond trade, governing investment and intellectual property as well, imposing fundamental changes to countries’ legal, judicial, and regulatory frameworks, without input or accountability through democratic institutions.

Perhaps the most invidious – and most dishonest – part of such agreements concerns investor protection. Of course, investors have to be protected against the risk that rogue governments will seize their property. But that is not what these provisions are about. There have been very few expropriations in recent decades, and investors who want to protect themselves can buy insurance from the Multilateral Investment Guarantee Agency, a World Bank affiliate (the US and other governments provide similar insurance). Nonetheless, the US is demanding such provisions in the TPP, even though many of its “partners” have property protections and judicial systems that are as good as its own.

The real intent of these provisions is to impede health, environmental, safety, and, yes, even financial regulations meant to protect America’s own economy and citizens. Companies can sue governments for full compensation for any reduction in their future expected profits resulting from regulatory changes.
…

Assuming that the effort to declassify the TPP succeeds, it will be interesting to compare all the provisions of TPP with the reassurances offered while the text was still secret.

Elizabeth Warren makes a compelling case against the Trans-Pacific Partnership in The Trans-Pacific Partnership clause everyone should oppose, where she says:

…
ISDS [Investor-State Dispute Settlement] would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages.

If that seems shocking, buckle your seat belt. ISDS could lead to gigantic fines, but it wouldn’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Maybe that makes sense in an arbitration between two corporations, but not in cases between corporations and governments. If you’re a lawyer looking to maintain or attract high-paying corporate clients, how likely are you to rule against those corporations when it’s your turn in the judge’s seat?

…
The use of ISDS is on the rise around the globe. From 1959 to 2002, there were fewer than 100 ISDS claims worldwide. But in 2012 alone, there were 58 cases. Recent cases include a French company that sued Egypt because Egypt raised its minimum wage, a Swedish company that sued Germany because Germany decided to phase out nuclear power after Japan’s Fukushima disaster, and a Dutch company that sued the Czech Republic because the Czechs didn’t bail out a bank that the company partially owned. U.S. corporations have also gotten in on the action: Philip Morris is trying to use ISDS to stop Uruguay from implementing new tobacco regulations intended to cut smoking rates.
…

I understand Senator Warren’s focus on the United States, but it diverts her from a darker issue raised by the TPP.

The TPP gives international investors sovereignty equivalent to national governments.

Without the TPP and similar agreements, an international investor with a dispute with Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, Peru, Singapore,United States, Vietnam, or New Zealand, has to sue in the courts of that country.

With the TPP, international investors being equal sovereigns with those countries, can use Investor-State Dispute Settlement (ISDS) to bring a national government before privately selected arbiters, in possibly secret proceedings, because of laws or regulations they find objectionable.

Is that scare mongering?

Why don’t you ask:

Australia. Phillip Morris is suing Australia over legislation to regulate tobacco packaging. The Australian government has assembled all the public documents from that process at: Tobacco plain packaging—investor-state arbitration. The proceedings are based on: (Hong Kong – Australia treaty) (I have read predatory agreements before but nothing on this scale. There are no limits on the rights of investors. None at all.)

Or,

Uruguay. Phillip Morris is suing Uruguay because of laws that has been reducing smoking by 4.3% a year.
(Philip Morris Sues Uruguay Over Graphic Cigarette Packaging) Not in court, a Investor-State Dispute Settlement (ISDS) proceeding. This proceeding is based on: (The Swiss Confederation – Uruguay Bilateral Trade Agreement)

The Uruguay agreement provides in part:

…
Article 2 Promotion, admission

(1) Each Contracting Party shall in its territory promote as far as possible investments by investors of the other Contracting Party and admit such investments in accordance with its law. The Contracting Parties recognize each other’s right not to allow economic activities for reasons of public security and order, public health or morality, as well as activities which are by law reserved to their own investors.
…

That sounds like a public health exception to me.

If the United States and the other countries are daft enough to confer sovereignty on international investors, are there any limits to their rights?

From the TPP:

…
3 (b) Non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations, except in rare circumstances. [TPP Annex II-B]

I don’t know what “rare circumstances” might mean in this context so I wrote to the Office of the United States Trade Representative at: correspondence@ustr.eop.gov, on March 28, 2015, saying:

I am trying to follow the discussion of the Trans-Pacific Partnership agreement 
and have a question about Annex 11-B paragraph 3, sub-point (b), which reads:

*****
Non-discriminatory regulatory actions by a Party that are designed and applied
to protect legitimate public welfare objectives, such as public health, safety, 
and the environment, do not constitute indirect expropriations, except in rare
circumstances.
*****

My question is: Have there been any cases of "rare circumstances?"

I assume from the wording not many but that it is mentioned at all 
implies it isn't unknown.

Is there are source for decisions that would include those "rare 
circumstances" that is available online?

Or other sources though those would be difficult for me to consult 
since I don't travel. Perhaps I could request copies of such decisions.

Thanks! 

I can quote the response of the Office of the United States Trade Representative in full:

That’s right, no response at all.

The Phillip Morris cases are concrete evidence of how investment treaties as used in fact to over turn public health laws passed by a sovereign government.

Why should the United States, or any other country need confer sovereignty on international investors, so they can have a very private court between themselves and nation states?

The United States has fine courts open for litigation. The Second Circuit Court of Appeals recently ruled the NSA bulk collection of domestic calling records to be unconstitutional. I don’t think anyone can truthfully say that the U.S. government has an unfair advantage in U.S. courts.

As a matter of fact, there is a free trade agreement with Australia Section 11 Investment, that has no Investor-State Dispute Settlement (ISDS) language at all.

The most it says is found in Article 11.5 Minimum Standard of Treatment, 2. (a):

“fair and equitable treatment” includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world; and

If investors from either country has a problem, they can sue in the courts of the other country. That was at the instigation of Australia as I understand the back story on that agreement.

Adoption of the TPP will mean that six hundred and forty five million (645) people (estimates for 2015), who produce forty (40%) percent of the world GDP, will be ruled over by their governments and an unknown number of unelected international investors.

Other resources to consult:

United Nations Conference on Trade and Agreement

Investor-state dispute settlement: A sequel (UNCTAD Series on Issues in International Investment Agreements II)

At page 52 it comments on non-discriminatory regulations (public health for example), saying:

…
IIAs’ substantive obligations can be delineated by general exceptions. The latter allow States to derogate from the IIA obligations when such derogation pursues a policy objective included in the general-exceptions clause. Such policy may include public health and safety, national security, environmental protection and some others. A number of treaties now contain general exceptions, but how they will work in practice is yet to be tested.
…

Claims by TPP supporters that the TPP will not impact national laws is at best disingenuous and at worse an outright lie. No one really knows how far sovereignty granted to international investors will go under the TPP language.

Issues in International Investment Agreements (First series)UNCTAD

Thirty five (35) documents that cover investment agreements in great detail. This is part of the second series referenced in Investor-state dispute settlement: A sequel (UNCTAD Series on Issues in International Investment Agreements II).

One volume of particular interest: Expropriation, at pages 57-109.

…
II. Establishing An Indirect Exprorpriation and Distinguishing It From Noncompensable Regulation.

The matter of establishing an indirect expropriation without impeding the right of States to regulate in the public interest has been one of the more challenging problems in recent years. This section aims to review the relevant treaty and arbitral practice and contribute to the development of an appropriate analytical framework.

Section A examines the factors used to evaluate whether an indirect expropriation has occurred. These include assessing the impact on the investment, interference with investor’s legitimate expectations and the characteristics of the measure at stake.

Section B discusses how IIAs have singled out noncompensable regulatory measures and distinguishes them from cases of indirect expropriation. Such measures do not require compensation even where they produce a significant negative effect on an investment.

Section C concludes the preceding discussion by providing a framework for analysis of whether a certain governmental measure constitutes an indirect expropriation.
…

I lack the author’s confidence that the police powers of the state will be respected, particularly in light of the “practice” of international investors as shown by Phillip Morris.

International Investment Agreements Navigator A very useful resource for finding international investment agreements.

Republic, Lost v2 released by Lawrence Lessig.

Lessig announces a new version of Republic, Lost.

From the Amazon page:

In an era when special interests funnel huge amounts of money into our government-driven by shifts in campaign-finance rules and brought to new levels by the Supreme Court in Citizens United v. Federal Election Commission-trust in our government has reached an all-time low. More than ever before, Americans believe that money buys results in Congress, and that business interests wield control over our legislature.

With heartfelt urgency and a keen desire for righting wrongs, Harvard law professor Lawrence Lessig takes a clear-eyed look at how we arrived at this crisis: how fundamentally good people, with good intentions, have allowed our democracy to be co-opted by outside interests, and how this exploitation has become entrenched in the system. Rejecting simple labels and reductive logic-and instead using examples that resonate as powerfully on the Right as on the Left-Lessig seeks out the root causes of our situation. He plumbs the issues of campaign financing and corporate lobbying, revealing the human faces and follies that have allowed corruption to take such a foothold in our system. He puts the issues in terms that nonwonks can understand, using real-world analogies and real human stories. And ultimately he calls for widespread mobilization and a new Constitutional Convention, presenting achievable solutions for regaining control of our corrupted-but redeemable-representational system. In this way, Lessig plots a roadmap for returning our republic to its intended greatness.

While America may be divided, Lessig vividly champions the idea that we can succeed if we accept that corruption is our common enemy and that we must find a way to fight against it. In REPUBLIC, LOST, he not only makes this need palpable and clear-he gives us the practical and intellectual tools to do something about it.

Ahem,

…have allowed our democracy to be co-opted by outside interests, and how this exploitation has become entrenched in the system.

Really?

I’m sure Republic, Lost v2 is a great read but I can say without reading it that “our democracy” hasn’t been “co-opted by outside interests,” as a matter of historical fact.

If you recall even a little American history, representation for offices in the House of Representatives counted slaves as three-fifths of a person.

Section 2 of Article 1, United States Constitution:

Representatives and direct taxes shall be apportioned among the several states . . . by adding to the whole number of free persons, including those bound to service for a term of years, and excluding Indians not taxed, three-fifths of all other persons.

Moreover, “our democracy” has restricted the right to vote on the basis of land ownership, race, gender and a variety of other means. Winning the Vote: A History of Voting Rights.

Truth be told, calling the United States a democracy and/or a republic is a distortion beyond recognition of either word.

Lessig wants to create a new vision of rights and obligations in a democracy but let’s not pretend it is a correction of the present system.

The present system was designed, part and parcel to favor property owners over all other classes and wealthy property owners over the less well to do. Those advantages are baked into the present constitution and law.

Changing those advantages will require a new Constitutional Convention. But let’s remember how the last one turned out. All “rights” will be in play, not just the ones Lessig would redefine.

What if state and local governments become liable for “lost anticipated profits” because of health or regulatory activities? Could happen. The TPP has language to that effect right now.

What if the rights of criminal defendants are curtailed? What if “hate speech” is banned in the new Constitution?

And for that matter, what is to prevent corporations and the wealthy from buying influence at a new constitutional convention? Are delegates going to magically become incorruptible and civic minded?

If you have that cure, why not distributed to elected officials now?

Corrupt institutions are corrupt because people with the power to corrupt them like it that way.

Think long and hard before you give corrupt people a shot at re-writing all the rules.