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US Says 'No' To EU Plan For New Corporate Sovereignty Courts: So What Happens Now With TAFTA/TTIP?

from the what's-plan-b,-again? dept

Tue, Aug 11th 2015 11:08pm — Glyn Moody

Back in May, we wrote about the European Commission's attempt to put lipstick on the corporate sovereignty pig. Its attempt to "reform" the investor-state dispute settlement (ISDS) system was largely driven by the massive rejection of the whole approach by respondents to the Commission's consultation on the subject last year. Of the 150,000 people who took the trouble to respond, 145,000 said they did not want corporate sovereignty provisions of any kind. Even the European Commission could not spin that as a mandate for business as usual, and so it came up with what it called a "path for reform" (pdf). By promising to solve the all-too evident "problems" of corporate sovereignty by coming up with something it claimed was better, its evident plan was to include this re-branded ISDS as part of the TAFTA/TTIP negotiations with the US.

The "path for reform" starts from some tinkering with a few elements of the basic ISDS approach that leaves the basic idea untouched, and moves towards something slightly more radical -- a permanent court for settling investor-state disputes:

The EU should pursue the creation of one permanent court. This court would apply to multiple agreements and between different trading partners, also on the basis of an opt-in system. The objective would be to multilateralise the court either as a self-standing international body or by embedding it into an existing multilateral organization. Work has already begun on how to start this process, in particular on aspects such as architecture, organisation, costs and participation of other partners.

The European Commission probably thought this was a pretty clever move: head off objections to ISDS and its ad-hoc tribunals by recasting it as a permanent court of a more traditional kind. There's just one slight problem with this idea: according to the respected German newspaper Die Welt, the US rejects it completely (original in German): There's no question of such a [judicial] authority. The US will not tolerate interference in its national sovereignty.
That's a rather ironic viewpoint, given that ISDS already interferes with national sovereignty. Assuming that Die Welt's source is trustworthy, the US attitude may well arise from the fact that it has never lost an ISDS case, and perhaps believes, somewhat naively, that it never will. That seems unlikely: if TAFTA/TTIP includes corporate sovereignty, more than 3,400 parent corporations in EU nations, owning more than 24,200 subsidiaries in the US, will suddenly gain the right to sue the US government using the mechanism, in connection with any of their past, present or future investments there.

Whatever its reasoning, a refusal by the US to countenance the creation of a new permanent court dealing with investment disputes leaves the European Commission's TTIP strategy on this point in tatters. It will be interesting to see whether it now begins to row back from the idea of creating a completely new court, and starts extolling the virtues of a slightly "reformed" ISDS instead.

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Filed Under: corporate sovereignty, eu, international court, isds, national sovereignty, tafta, ttip, us

32 Comments

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That One Guy (profile), 11 Aug 2015 @ 9:24pm

That's easy enough to answer
What happens now? Simple enough, now that their attempt failed, they'll go back to trying to slip corporate sovereignty through anyway, completely ignoring all protests to the contrary, like good little employees.

They've been paid, or 'paid', to get corporate sovereignty in place everywhere it can be, a trifle like 'the overwhelming majority of the public is against it' isn't going to even slow them down, barring some ACTA protests-level opposition.
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Anonymous Coward, 12 Aug 2015 @ 12:22am

"There's no question of such a [judicial] authority. The US will not tolerate interference in its national sovereignty."

This made me vomit a bit.
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Anonymous Coward, 12 Aug 2015 @ 12:39am

Re:
Freedom must be protected at all times or else the terrorists will steal it!!!!1
Yeah it would be funny if the US had any sovereignty left. Now its all about corporations and Israel.
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David, 12 Aug 2015 @ 12:43am

Re:
The US will not tolerate interference in its national sovereignty.

Does that mean that they are going to shut down their sham elections, too? After all, it makes the hoi polloi interfere with national sovereignty, even if mostly on a nominal level.
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That One Guy (profile), 12 Aug 2015 @ 1:13am

Slip of the tongue?
Just noticed, the USG rejected the idea of independent courts, and the 'weakening' of corporate sovereignty by saying that 'The US will not tolerate interference in its national sovereignty.'

What exactly does corporate sovereignty have to do with US national sovereignty? Are not the corporate sovereignty 'courts' supposed to be independent of any country, favoring none above the others?

Their little slip-up would seem to confirm even more than before that the USG believes corporate sovereignty is meant to benefit only US corporations, and has nothing to do with helping the corporations in other countries except purely as a side-effect.

The USG sees corporate sovereignty as a way to place (US) corporations on a higher footing than national governments, just not the US government, as that would be 'interference in it's national sovereignty'. As if there really needed to be any more evidence to support the fact that the US would never honor a corporate sovereignty ruling against it. The process is meant purely to be used against non-US governments, and those governments need to realize this.
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Anonymous Coward, 12 Aug 2015 @ 1:28am

Re: Slip of the tongue?
IT's not a slip of the tongue. That's the way the corporations in the US want it. That's because the US is a corporatocracy.
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Sag Ichnicht, 12 Aug 2015 @ 1:52am

Re: That's easy enough to answer
The Commission might very well try that but don't forget that TTIP will go nowhere without a majority in the European Parliament. And as ACTA has shown already, the European Parliament is both, responsive to pressure from the civil society and ready to vote big treaties down as a consequence.
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That One Guy (profile), 12 Aug 2015 @ 2:02am

Re: Re: Slip of the tongue?
Yes, but they've been lying and pretending that corporate sovereignty is meant to benefit all the signatories, not just the US corporations. The rebuttal to the EU's idea here seems to make it clear that lies or not, the USG sees corporate sovereignty as something to benefit the USG first and foremost.
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Anonymous Howard (profile), 12 Aug 2015 @ 2:56am

Re:
Ironically they see no problem when it comes to interfering in other countries sovereignty...
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Richard (profile), 12 Aug 2015 @ 2:56am

Re: Re: That's easy enough to answer
The European parliament has one huge advantage over national parliaments. It can never be controlled by a single party. This means that the lobbyists have a much bigger job controlling it than they do for (say) the UK parliament.

To make matters worse the elections to theEuropean parliament are generally not synchronised with any national elections and hence a disproportionate number of "protest party" candidates are usually elected.
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Richard (profile), 12 Aug 2015 @ 2:58am

Re:
"The US will not tolerate interference in its INTERnational sovereignty."

FTFY
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Ninja (profile), 12 Aug 2015 @ 3:19am

Re: That's easy enough to answer
Or try to brute force it through other agreements, deals etc...
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Richard (profile), 12 Aug 2015 @ 3:29am

BP
The US needs to think about what would have happened had this treaty been in place when Deepwater Horizon went up. The decisions of US courts on compensation would surely have been subject to some kind of review under ISDS and I am sure that BP would have had to accept far less liability than they actually did in the end. Of course one could argue that this would have been a good thing - since what BP ended up paying was well over the top - especially when compared with the relatively light treatment received by Haliburton (who were after all much more directly to blame).
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Anonymous Coward, 12 Aug 2015 @ 4:11am

'The US will not tolerate interference in its national sovereignty'

but the US expects to interfere with every other nations 'National Sovereignty'! in fact the US expects to be able to dictate everything that can or cannot be done everywhere! if other nations, especially those members of the EU have got any sense at all, considering what the US wants to be able to do, they will tell the US to shove everything right up it's shit chute and go fuck itself!!
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Anonymous Coward, 12 Aug 2015 @ 4:25am

Seems to me you just need a bunch of well funded European corporations threatening to sue the U.S.for lack of gun control. Maybe something about the number of guns intimidating European workers. Or maybe an European pharmaceutical company suing over laws restricting access to abortion drugs.

The U.S. Might reconsider then.
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sinsi (profile), 12 Aug 2015 @ 4:46am

All together now,

will not tolerate interference in its national sovereignty.
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Anonymous Coward, 12 Aug 2015 @ 6:51am

Re: Re: That's easy enough to answer
The European Parliament is more responsive to civil society concerns than the commission. In the case of ACTA, the process was completely controlled by the commissions constant fight for their work and several politicians keeps denying the publics objections as misinformed to this day. TTIP is ACTA version 2 and with several pitfalls in lowered standards and a general acceptance of ISDS as a good idea ("We can always change it if it creates problems" is a common response, but in reality that is not really true in political zero sum games.). Even with a public outcry I don't expect ALDE to go against another trade deal. Going against the lobbyists again is just too costly on more important issues.
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A. Lauridsen, 12 Aug 2015 @ 7:21am

Re: Re: Re: That's easy enough to answer
In order for TTIP to pass, it needs to be accepted by each memberstate, in some countries this will require a referendum.

On top of that it is doubfull if ISDS as it stands will be accepted by Germany and possibly France.

On top of that it needs to be approved by the European Parliament, which at this point looks a bit iffy.
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Anonymous Coward, 12 Aug 2015 @ 7:50am

Re: Slip of the tongue?
We saw the same thing with the International Criminal Court, which the US, together with Israel and Sudan withdrew from in 2002.
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Anonymous Coward, 12 Aug 2015 @ 8:23am

Re:
Its not a secret nor a surprise and dont expect any american to give a shit. Just look at the NSA spying on everyone on the planet. Spyin on innocent americans? Biggest thing ever. Spying on non-americans? Well they are spies, so what?
There is a reason why more and more people become "anti-american", mainly in europe (the rest of the world alredy hates the US so it cant get much worse there).
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Anonymous Coward, 12 Aug 2015 @ 8:23am

Re: Re: Re: That's easy enough to answer
so what you are saying we just need to make the corruption bigger to stay in control...

That is shockingly easy enough.
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tqk (profile), 12 Aug 2015 @ 8:31am

Re: Re: Re: Re: That's easy enough to answer
In order for TTIP to pass, it needs to be accepted by each memberstate, in some countries this will require a referendum.

Here in Canada, we're holding national elections in Oct. All three lead parties (out of ca. four possibles) support TPP.
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tqk (profile), 12 Aug 2015 @ 8:38am

Re: Re: Re: Slip of the tongue?
... the USG sees corporate sovereignty as something to benefit the USG first and foremost.

Yes. This is just what warfare played out by trade representatives and bureaucrats and consulates and spies looks like. It's always been going on. Just more of the sort of stuff Manning leaked. Diplomatic Reality TV.
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tqk (profile), 12 Aug 2015 @ 8:42am

Re: BP
That story's not over yet. With several lakes of submerged, pressurized hydrocarbons lying at the bottom of the Gulf of Mexico, I supect we'll be hearing about that for quite some time.
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David, 12 Aug 2015 @ 8:55am

Re: Slip of the tongue?
What exactly does corporate sovereignty have to do with US national sovereignty?

Title to the latter has been bought by the former. It's still named "US national sovereignty" since the name has a certain market value but the corporations have bought a controlling interest in Congress. "The People" are minority stakeholders at best.

It's sort of like Caldera Corp buying the rights to the name "SCO", renaming itself into "SCO group", then making claims about how much injustice the good old "SCO" had to endure by companies making Linux behave like UNIX. Of which Caldera was once an important one...

So yes. US national sovereignty.
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Uriel-238 (profile), 12 Aug 2015 @ 11:37am

During the late middle ages / Renaissance...
We went through a pretty nifty transition of establishing nations. See, in the olden days of yore, one wasn't a citizen of (say) France but a subject of the King. And every time a king died of pox or backstabs or drunken boar hunting, the heir had to gather up all his subjects and have them re-swear their oath of loyalty as he got coronated by the Archbishop.

Same same, for all his vassals and their subjects. Someone was always dying and the new heir having to make sure his peasants were still loyal.

This is where we made the transition to nations. Instead of fealty to a king, everyone hailed the flag and the land, and transition of new regents could happen more smoothly. Also the people of one province or another could concede that they were still part of the same nation, even though their respective lords were different, and were united by national patriotism.

(Just in time for religious wars.)

Corporate sovereignty seems to be a step back, putting power and law back in the hands of individual warlords, just ones with logos and boards of directors and shareholders.
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Arthur Moore (profile), 12 Aug 2015 @ 12:30pm

Re:
Good one. They'd probably fire back about most European countries not having the free speech protections the US does.

Honestly, the US would ignore it. Given that those are two of the largest hot button issues here that's the best result. Manage to annoy the conservatives enough and you might see a minor trade war.
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Richard (profile), 13 Aug 2015 @ 5:06am

Re: During the late middle ages / Renaissance...
Good point - but you missed a trick or two here.

Actually the Romans had already made the step forward and the concept of being a Roman Citizen already meant something similar to the modern concept of nationhood. In fact it went beyond that - you could be a Jew AND a Roman Citizen (as St Paul was). The founding fathers of the US seem to have leant heavily on the Roman concept of citizenship in order to accommodate a plurality of traditions within one nation.

Now the Roman traditions did in fact continue for quite a while - principally (until 1453) in what we now refer to as the Byzantine Empire (although everyone at the time still called it the Roman empire).

The situation you describe with warlords, kings etc came about gradually as a result of the disintegration of the Roman empire in the West - so the move away from the Empire to warlords was associated with a breakdown of civilisation - not a comfortable analogy with what corporations are doing now but probably a good one.

Seeing corporations as the modern equivalents of Goths, Huns, Vikings and Vandals might be a good way to inform public policy!
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Cerberus (profile), 13 Aug 2015 @ 3:47pm

Re: Re: Re: Re: Re: That's easy enough to answer
Really? And which party does not support TPP? And how about CETA, do they all support that too?
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Cerberus (profile), 13 Aug 2015 @ 3:52pm

Re: Re:
To be fair, it *is* worse if you spy on your own people compared to spying on people in foreign countries. I'd rather have e.g. China spy on me than my own government, since China has no real power over ordinary citizens in other countries. Being spied upon by an "ally", like America, is in between (I'm Dutch).
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Anonymous Coward, 14 Aug 2015 @ 1:12am

The reason for the US's rejection of the court system seem rather obvious to me. If the US recognizes the court's legal legitimacy. The US will then be bound by the laws that court hands down through rulings.

The US wants to make the laws, not have someone else make them. Laws are nothing more than rules. The US wants to make the rules (laws).
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Cerberus (profile), 14 Aug 2015 @ 4:04pm

Re:
That is true, but then why doesn't America see ISDS as a court that makes binding rulings for them?
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