The True Cost Of Corporate Sovereignty For The EU: €3.5bn Already Paid, €30bn Demanded - Even Before TAFTA/TTIP
from the and-guess-who-foots-the-bill? dept
While the debate about the inclusion of a corporate sovereignty chapter in TAFTA/TTIP continues to rage in the EU, the European Commission insists there's nothing to worry about here. In a recent article published in the Frankfurter Allgemeine Zeitung (original in German), the new European Commissioner for Trade, Cecilia Malmström, wrote that EU member states have signed 1400 agreements with other nations that included corporate sovereignty provisions -- implying that such investor-state dispute settlement (ISDS) elements are perfectly normal, don't cause problems, and won't cause problems.
But there are two flaws with this logic. First, only nine of those 1400 agreements are with the US, and on the other side were Bulgaria, Croatia, Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania and Slovak Republic. In other words, all countries keen to escape from Russia's influence after the break up of the Soviet Union, and therefore willing to sign up to more or less anything -- even treaties with ISDS -- that might help them do that. Most of those 1400 agreements are with small, developing nations with few investments in the EU. That naturally means there are few opportunities to bring cases under ISDS.
The other flaw with the European Commission's implied logic that ISDS hasn't been a problem in the past, and thus won't be in the future, is that even that isn't true, as an important new piece of research by Friends of Earth Europe, entitled "The Hidden Cost of EU Trade Deals" demonstrates. For the first time, it gathers together all the corporate sovereignty cases that have been brought so far against EU countries, and comes up with the following statistics:
127 known ISDS cases have been brought against 20 EU member states since 1994.
That figure is almost certainly an underestimate: thanks to the shocking lack of transparency in ISDS cases, details about the often very large payments are not always made public, which means that we don't have access to information about all awards made against EU nations. Moreover:
The total amount awarded to foreign investors -- inclusive of known interest, arbitration fees, and other expenses and fees, as well as the only known settlement payment made by an EU member state -- was publicly available for 14 out of the 127 cases (11%) and amounts to €3.5 billion.Details of the compensation sought by foreign investors was publicly available for only 62 out of the 127 cases (48%). The compensation sought for in these 62 cases amounts to almost €30 billion.
Again, that figure of €30 billion is almost certainly an underestimate of the true value of total claims against EU governments -- and hence against the EU public, which ultimately foots the bill in the event of tribunals making awards to companies. What makes that €30 billion figure so disturbing is that it represents a lower bound for ISDS cases in a situation where few US companies were able to bring claims, because of their limited investment in Eastern European countries.
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.
That's exactly the maximum expected boost to the EU's economy that the European Commission claims would be provided by TTIP by 2027 (pdf). In other words, even if the most optimistic forecasts for TAFTA/TTIP in EU were realized, a big chunk of that benefit could be wiped out by a wave of ISDS cases brought by US companies. Exactly the same is true with the roles reversed: much of TAFTA's claimed benefits for the US economy are likely to be cancelled out by claims from 3,000 European firms owning more than 24,000 subsidiaries in the US that would suddenly be able to bring corporate sovereignty cases against the US government. On the basis of what is already happening, including ISDS in TAFTA/TTIP looks almost certain to nullify most of the claimed benefits of signing any treaty, and on both sides.
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Filed Under: corporate sovereignty, eu, investor state dispute settlement, isds, tafta, tpp, ttip
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Re:
sincerely,
a citizen of a EU country
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FUNNY?
normal??
normal only means it has been done before. It also means the other nations have little or NO MEANS to bring a lawsuit and have little in the means of Copyrights or IP..
Unless you want to include TETRIS...
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So in summary:
Small wonder the big countries are all for it. Their economies benefit more than what the government gets to pay out.
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Re: So in summary:
FIFY
We don't see any of that money.
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Re:
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Refusing to pay?
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Re: Refusing to pay?
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Re: Re: Refusing to pay?
Anywho, the fact that any increased earnings will go directly to lawyers is actually the entire reason for the treaty. This is lawyers making more work for more lawyers. Gotta keep the kids fed somehow. These treaties give the next generation of lawyers work. It will be up to them to come up with a scam to make work for the generation after them.
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Re: Refusing to pay?
That's without even considering what the East India Trading Company managed to do long ago.
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Economic warfare by corporate stockholders on citizens & taxpayers.
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NOW LISTEN UP
All we need is to read these laws very carefully, learn how to abuse the system and get a few well trained lawyers to spend all their time helping us to profit in the billions.
I am sure after American government was forced to pay a trillion dollars in one year to all those business interests they do not like they will remove any corporate sovereignty rules.
Just as long as they only remove those laws after they have settled with those that have brought cases against the government.
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Re: NOW LISTEN UP
How's about we just BLOW THEIR FSCKIN HEADS OFF INSTEAD?!? Seems a much simpler solution.
Not feeling very tolerant atm.
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How To Fleece An Entire Continent
Institutionalized robbery on a massive scale.
And as a final insult the victims are not even allowed to know how much this constant theft actually costs them. Sure they will feel the effects; lowered pensions, higher costs and reduced quality of social services, because there will not be much left for the taxpayer after thousands of hungry corporate mouths rips into the public treasury to fill their bellies.
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This is not correct for Croatia, which was never part of the Soviet union, the Warshaw pact or under control of Moscou/Russia/Soviet Union. See the history of Yugoslavia.
I think you should change the text
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