Financial Times Editorial: Time To 'Ditch' Corporate Sovereignty In Trade Deals
from the more-trouble-than-it's-worth dept
The European Union's top court has just handed down an important ruling about an otherwise minor trade deal between the EU and Singapore. The two sides initialled the text of the agreement in September 2013, and since then it has been waiting for the Court of Justice of the European Union (CJEU) to hand down its judgment. The issue is who gets to sign off on the deal: is it just the European Union, or do all 28 Member States of the EU need to agree too? There's clearly a big difference there, because in the latter case, there are 28 opportunities for the deal to be blocked, whereas in the former situation, the EU can simply wave it through on its own. The CJEU ruling (pdf) is fairly straightforward: the EU can sign and conclude trade deals covering most areas, but not for a few that must involve the EU Member States. Of most significance is the following:
The regime governing dispute settlement between investors and States also falls within a competence shared between the EU and the Member States. Such a regime, which removes disputes from the jurisdiction of the courts of the Member States, cannot be established without the Member States’ consent.
That is, the thorny area of corporate sovereignty, also known as investor-state dispute settlement (ISDS), is one of the few that requires the approval of all Member States. There's an interesting corollary to that ruling: if the EU wants to agree trade deals as quickly as possible, without the risk of Member States vetoing them -- as Wallonia did with CETA -- it should not include a corporate sovereignty chapter.
If it seems hopelessly naïve to think that might ever happen, here's an editorial in a ruthlessly hard-headed newspaper, the Financial Times (FT), recommending that it should (paywall):
[The CJEU's ruling] would be an excellent opportunity for the EU to go further, and reverse one of its bigger recent errors in trade policy. It should ditch the whole idea of having rules on investment, or at least rules allowing companies to sue a government directly, in FTAs. Such "investor-state" provisions have attracted intense opposition, not just from the Walloons but also from anti-corporate campaigners.
Removing these rules would ease the way for future deals. As they do not seem to encourage foreign direct investment, they are more trouble than they are worth. Freed from this unnecessary encumbrance, the EU would find it easier to sustain with its quiet run of closing bilateral trade pacts.
When Techdirt first started writing about corporate sovereignty, four years ago, it was an obscure area of trade policy that few knew about. The insiders who were familiar with the mechanism assumed it was a fixed and indispensable part of free trade deals. Now we have one of the most influential business newspapers calling it an "error" that should be "ditched," since ISDS chapters are "more trouble than they are worth." We've come a long way.
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Filed Under: corporate sovereignty, isds, trade agreements
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Off Topic, but...
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Re: Off Topic, but...
North Korea already won. They've successfully launched two satellites, confirmed by several countries. Kwangmyŏngsŏng-3 Unit 2, and Kwangmyŏngsŏng-4.
Iran too. After hitching rides on Russian and Chinese launchers, Iran has successfully launched three satellites using it's own Safir launcher. Their larger Simorgh launcher has had a suborbital test flight.
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Something occurred to me recently about ISDS...
Possibly run it as a non-profit, that stockholders buy one share of stock in, then pay a subscription fee annually. Every year, the interest on that fee is paid out as a share of profits to every stockholder.
The corporation exists to file lawsuits and ISDS actions on the part of stockholders, when their rights are violated, with no other purpose. In any year where it must pay to file lawsuits or ISDS actions, it will naturally have reduced payouts to stockholders.
This means it can truthfully claim that a stockholder's rights being violated diminish its profits, and ask an ISDS tribunal to overturn any legislation that does such a thing.
This would effectively allow someone to sue the United States in an ISDS tribunal to overturn the Patriot Act.
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Re: Something occurred to me recently about ISDS...
- Any pre-existing legislation - like the Patriot Act - would be exempt from ISDS lawsuits. It's only when new legislation is enacted that you can claim that it targets your investment.
- Being "extra-national" is only a matter registering a company. Canadian companies have created US subsidiaries - pretty much on paper only - to launch ISDS lawsuits against Canada.
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There's no doctrine of precedence, human rights defenses are limited, there's (obviously, it's arbitration) almost no transparency.
Not to mention ISDS is rarely ever used for its intended purpose (which is stopping states from creating unfair rules targeting foreign businesses).
http://unctad.org/en/PublicationsLibrary/webdiaepcb2013d3_en.pdf
https://piie.com/publica tions/chapters_preview/7137/11iie7137.pdf
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https://www.ft.com/comment/ft-view
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remove
REMOVE all the RIGHTS of Citizens, States and nations..
So a corp MESSES UP, and what can be done?? NOTHING..
After the last few oil spills I found a document that mentioned something interesting..THAT of all the WORST spills NONE match the amounts spilled Every year, AT--The Oil rigs, Pipe lines, Tankers when FILLING and UNLOADING.. Just traveling across the ocean they leave a trail..
ANYONE old enough to remember WHY we have pollution laws in this country??(most are now gone) for ALL the words they USE, CARBON, CO2, and other fun words, it all comes to 1 thing...POLLUTION..why point at 1 thing?? ONLY TO MAKE MONEY..they will always find another problem, and forget the REAL one..
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Re: Re: Something occurred to me recently about ISDS...
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i will be dammed
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Re: Re: Re: Something occurred to me recently about ISDS...
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"You stole our trademark, this means war!
This coupled with the draft will be their downfall.
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Re: Re: Off Topic, but...
And Rocket Lab is hoping to launch the Electron rocket from New Zealand this week. <https://spaceflightnow.com/2017/05/23/rocket-lab-delays-debut-of-new-launcher-to-dodge-bad-weath er/>
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The golden age of corporate armies already came and went. The British East India Company for example.
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Great reference. Soooo many contemporary corollaries to draw from the EIC.
Although it's technically true that there's no modern corporate equivalent to EIC's private army (btw - an army that was heavily supported by the British regular military as required; at taxpayer expense), it's important to understand how today's corporations regularly utilize the military in pursuit of their business interests.
One of my favorite descriptions of how this all works was provided by a high ranking US Marine who did their bidding for most of his career and then apparently had a sort of crisis of conscious (or maybe just didn't like seeing the way his country's brave soldiers were getting used; basically being reduced to corporate raiders).
Major General Smedley Butler
War Is A Racket
In War Is A Racket (1935), Butler points to a variety of examples, mostly from World War I, where industrialists, whose operations were subsidized by public funding, were able to generate substantial profits, making money from mass human suffering.
The work is divided into five chapters:
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Re: Off Topic, but...
Technique #3 - 'TOPIC DILUTION'
Topic dilution is not only effective in forum sliding it is also very useful in keeping the forum readers on unrelated and non-productive issues. This is a critical and useful technique to cause a 'RESOURCE BURN.' By implementing continual and non-related postings that distract and disrupt (trolling ) the forum readers they are more effectively stopped from anything of any real productivity. If the intensity of gradual dilution is intense enough, the readers will effectively stop researching and simply slip into a 'gossip mode.' In this state they can be more easily misdirected away from facts towards uninformed conjecture and opinion. The less informed they are the more effective and easy it becomes to control the entire group in the direction that you would desire the group to go in. It must be stressed that a proper assessment of the psychological capabilities and levels of education is first determined of the group to determine at what level to 'drive in the wedge.' By being too far off topic too quickly it may trigger censorship by a forum moderator.
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This is what Halliburton/KBR was doing in Iraq. Charge the government 15 million dollars to build a cement factory, then pay an Iraqi firm $80,000 (using Saddam's confiscated funds) to build the factory. Entire cargo pallets of money missing.
Vice President Cheney was the former CEO of Halliburton/KBR, and still owned considerable stock in it. His war made him and his friends very rich indeed. Small wonder the war lasted longer than WWII.
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On a side note, I've noticed that the more readily observable direct private profits (public costs) of war profiteering get the lion's share of publicity/criticism. But I find it more interesting/relevant to consider such profiteering as just one aspect of the broader "for profit" ploy.
Other key aspects being...
1. Supporting regimes submissive to the financial/power interests of the militarily dominant nation's big business.
2. Subverting regimes not submissive to the financial/power interests of the militarily dominant nation's big business.
3. Generally subverting regimes that put their plutocrats/oligarch's financial/power interests (or heaven forbid, The People's) ahead of those of the militarily dominant nation's big business.
I find the narrative that's wrapped around all this - highly immoral - private-profit/public-cost cluster-f##k in order to "sell" it to the public is like a scene inspired from the movie, The Matrix.
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Citation....?
If they're not charged in the first place, he has no power to pardon them.
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Right. Getting them to ditch corporate sovereignty provisions for ethical reasons is a worthy goal, but not a realistic one. Getting them to ditch it for reasons of expediency is not ideal, but it's the best we're likely to get.
Course, given that ethics aren't their concern, it means we still need to turn a sketpical eye to anything they do support.
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Allow me a moment to get in my time machine and go back and replace the offending line with, "Given the audacity of the obvious profiteering/malfeasance that took place during the Iraq war, I would have expected Obama to do more to pursue the prosecution the perpetrators."
...and now that I've atoned for my sin, did you have any other response to the remainder of that comment?
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Heck, I've seen politicians even on the left say that the military-industrial complex can't be defunded and dismantled on the grounds that it's a major employer. Basically, a large chunk of our economies run on war. Peace would put a lot of people on the dole. There's your problem. Until we have reset our moral compasses, this will continue.
ISDS plays into the moral relativism game by making a moral issue over keeping one's word. Veolia V Egypt was all about Egypt breaking TOS by "doing something that impacted on Veolia's running costs," as the ISDS supporters are wont to advise. Therefore, as they explain, it wasn't about Egypt raising the minimum wage as such, it was about Egypt's failure to reimburse them after raising the minimum wage. Whatever; this means that legislation needs to be checked against contractual agreements to see if it might impact on the companies' running costs, i.e. it chills legislation. The point is, ISDS is being framed as a moral issue in order to justify it.
We need to figure out what morality actually means, stat.
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