European Commission Admits Defeat In Trying To Improve Corporate Sovereignty Chapter In CETA

from the now-what? dept

The excitement over the mad dash to finish TPP -- and the failure to do so -- has rather obscured the other so-called trade deals currently being negotiated, such as TAFTA/TTIP and the one between the EU and Canada, CETA. As Techdirt has reported, CETA is even further along than TPP, in what is known as the "legal scrub" phase when the lawyers tweak the agreed text in an attempt to catch drafting errors or other infelicities. Back in June, the EU commissioner responsible for trade and trade agreements, Cecilia Malmström, told Politico.eu that CETA "could be done by the end of July". That obviously didn't happen, or we would presumably have heard about it by now. The Politico.eu article gives a clue as to why not:

Malmström acknowledged that the most delicate part of the legal scrubbing, the clauses about the investor state dispute settlement, also referred to as ISDS, still remain. "We haven't started with that yet," she said, arguing that only three pages of the treaty deals with the sensitive issue, whereas "there are 1597 pages talking about other things."

So the festering wound that is corporate sovereignty, formally "investor-state dispute settlement" (ISDS), could well be the problem here. Back in March of this year, on the subject of corporate sovereignty in CETA, Malmström said:

We will propose any further changes [in ISDS] we collectively agree on in TTIP to the Canadian government.

This promise seems to have been based on the optimistic idea that the European Commission would actually be able to come up with some improvements to ISDS in the wake of its massive rejection by the public in the Commission's consultation on the subject. It's true that Malmström went on to present some very vague ideas about ways in which corporate sovereignty could be "improved", but so far these have not been turned into concrete proposals that could be discussed with the Canadian government.

Given that failure, it should perhaps come as no surprise that Zeit Online is reporting (original in German) that Malmström now has no plans to try to change CETA for the better before it is signed, merely saying that afterwards there will be a "check" on the ISDS mechanism -- a worthless promise, since at that point Canada will have zero reason to make any concessions.

But signing CETA with the current corporate sovereignty chapter is a big problem. CETA's ISDS is actually worse than previous approaches, despite repeated claims to the contrary by the European Commission. But by way of consolation, leaving it untouched may also make getting CETA passed much harder. As we wrote in February, there are some indications that German's Chancellor, Angela Merkel, is not happy about the current ISDS chapter in CETA, while the French government has said that if the ISDS chapter is not re-written, France will not ratify the treaty.

Similarly, in a non-binding but significant set of recommendations to the European Commission regarding TTIP, the European Parliament said that ISDS must be replaced with "a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny" -- hinting that, without such a new system, it would vote against TTIP. If that is its position on TTIP, it would make no sense not to apply it to CETA, too: since US companies will be able to use their Canadian subsidiaries to sue the EU by invoking CETA's corporate sovereignty chapter, a bad ISDS in CETA would undermine a "better" one in TTIP.

Of course, politicians are notoriously fickle, so it's by no means certain that national governments and the European Parliament will stick to these stated positions when it comes to the actual votes for CETA and TAFTA/TTIP. But there's no doubt that the European Commission's failure to come up with even the mildest of face-saving changes to CETA's corporate sovereignty provisions has just made the task of pushing the deals through a little bit harder.

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Filed Under: ceclia malmstrom, ceta, corporate sovereignty, eu, isds, tafta, tpp, ttip

Tobacco Industry's Interest In Trade Negotiations? Totally Redacted

from the public-interest? dept

The folks at Corporate Europe Observatory (CEO) sent a freedom of information request to the EU Commission, asking for details of meetings that trade officials held with the tobacco industry. This matters, because the tobacco industry is one of the major abusers of trade agreements, repeatedly making use of the "corporate sovereignty" ISDS provisions to effectively sue any country passing anti-smoking health laws -- as was covered a few months back by John Oliver: So, as new trade agreements are being negotiated -- especially since the powers that be tell us these agreements are designed to protect the health and well being of the public -- it seems that Big Tobacco's efforts in these negotiations is pretty relevant. After numerous delays and confusing responses, CEO finally received a response. And it's [redacted]. Well, not entirely, but basically anything useful is blacked out. Such as this lovely document, which is oh so revealing: Democracy in action!

Filed Under: corporate sovereignty, isds, redacted, tafta, tobacco, trade deals, transparency, ttip
Companies: ceo, philip morris

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

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

Australia's Legal Bill For Fighting Philip Morris Corporate Sovereignty Case: $35 million -- So Far

from the heads-you-win,-tails-I-lose dept

Back in 2012, we wrote about Philip Morris using corporate sovereignty provisions in trade agreements to sue Australia and Uruguay over their attempts to reduce the number of deaths from smoking through plain packaging and other health measures. Since then, the case has become a textbook example of all that is wrong with investor-state dispute settlement (ISDS).

For example, even though Philip Morris lost its battle in the Australian High Court to stop the introduction of plain packaging, it did not simply accept the ruling, but sought to use ISDS to nullify the court's decision. The natural instrument would be the trade agreement between the US and Australia, but the Australian government had wisely refused to accept a corporate sovereignty chapter there. So Philip Morris used an obscure 1993 trade agreement between Australia and Hong Kong, which did have ISDS, claiming that its business activities in the latter territory gave it the right to invoke the treaty -- a classic example of "treaty shopping".

Since those events from a few years back, we've heard nothing about how the Philip Morris ISDS case is proceeding -- until now, since The West Australian newspaper has discovered the following fact:

More than [AU]$50 million [about US$35 million] of taxpayer money is expected to go up in smoke defending cigarette plain packaging in a secretive international tribunal in Singapore.

But costs will pile much higher if Australia loses on its first defence that Philip Morris indulged in cynical "venue shopping" by shifting its headquarters to Hong Kong to sue Australia.

That's because the hearing will move on to the main issues, summarized here on the official Australian government Web page for the case:

Philip Morris Asia is arguing that Australia's tobacco plain packaging measure constitutes an expropriation of its Australian investments in breach of Article 6 of the Hong Kong Agreement. Philip Morris Asia further argues that Australia's tobacco plain packaging measure is in breach of its commitment under Article 2(2) of the Hong Kong Agreement to accord fair and equitable treatment to Philip Morris Asia's investments. Philip Morris Asia further asserts that tobacco plain packaging constitutes an unreasonable and discriminatory measure and that Philip Morris Asia's investments have been deprived of full protection and security in breach of Article 2(2) of the Hong Kong Agreement.

The information obtained by The West Australian is significant, because it reveals the scale of the costs that a government must contemplate when defending itself against a corporate sovereignty claim. Given that background, it's easy to see why governments in these cases may choose to settle quickly, and to give the companies what they want, rather than risk mounting costs and a huge fine.

It's that fact that gives the lie to the claim that ISDS cannot force a government to change its laws. While that's true in theory, in practice governments are very likely to choose capitulation as the cheaper and easier option, recognizing that the whole process is biased against them. After all, unlike companies, a government can never win an ISDS case: the best it can hope for is not to lose.

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Filed Under: australia, corporate sovereignty, hong kong, isds, plain packs, trade agreements
Companies: philip morris

EU Proposes To Reform Corporate Sovereignty Slightly; US Think Tank Goes Into Panic Mode

from the who's-afraid-of-a-little-rebranding? dept

Back in May, we wrote about the European Commission's sharing "concerns" about corporate sovereignty chapters in trade agreements. The Commissioner responsible for trade, Cecilia Malmström, even went so far as to say that the present investor-state dispute settlement (ISDS) system was "not fit for purpose in the 21st century." But rather than removing something that is unnecessary between two economic blocs with highly-developed and fair legal systems, she instead proposed to "reform" it, and to start working towards an international investment court.

That idea was dismissed almost immediately by the US Undersecretary for International Trade at the Commerce Department, Stefan Selig. Despite that, the EU seems set on replacing today's corporate sovereignty with some kind of court. In a non-binding but important set of recommendations to the European Commission regarding TTIP, the European Parliament called for the following:

to ensure that foreign investors are treated in a non-discriminatory fashion, while benefiting from no greater rights than domestic investors, and to replace the ISDS system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected, and where private interests cannot undermine public policy objectives;

The wording is extremely vague, and leaves plenty of room for a kind of ISDS-Lite to be agreed between the EU and US in TAFA/TTIP. Many in Europe regard the proposal as little more than a face-saving compromise that allows the opponents of ISDS to claim that "this is the end of ISDS in trade deals," while allowing supporters to maintain that it has merely been re-branded, rather than removed.

We don't know what the US government thinks of the idea, but we do have a fascinating post on the proposal from The Heritage Foundation, which describes its mission as "to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense." Its views on the EU's corporate sovereignty reforms are quite clear:

The EU's proposal, backed by a vote of the European Parliament on July 8 -- that the TTIP should establish a permanent investment court, not an ISDS mechanism -- is a bad solution in search of a non-existent problem. ISDS mechanisms work well to secure basic legal protections for a signatory state's nationals abroad. The U.S. should firmly reject the EU's proposal and insist that TTIP establish an ISDS.

The rest of the post provides rare insights into the thinking of the pro-ISDS, pro-big business camp in the US. Bizarrely, it describes corporate sovereignty tribunals as:

designed to safeguard fair, unbiased, and transparent legal processes by providing independent and impartial arbitration.

That's an odd description of processes that take place in secret, with no case law to guide decisions, no limits to damages, no right to appeal, and where the tribunal members are corporate lawyers who can also act for the same companies that appear before them in other cases, because there are no rules governing conflicts of interest. But more interesting than this topsy-turvy view of reality is the following revealing comment:

because any case inside the EU can ultimately reach the European Court of Justice (ECJ), and the ECJ is mandated to make decisions that promote deeper European integration, it is not clear how the U.S. can rely on the ECJ to rule fairly when the EU seeks to promote integration in ways that discriminate against the U.S.

Essentially, then, The Heritage Foundation objects to Europe's highest court doing its job of strengthening the European Union, and wants supranational corporate sovereignty tribunals as an option to overrule its judgements -- confirming critics' worst fears about ISDS undermining democracy. The post then goes on to list a number of problems that the Foundation sees with the EU's proposed international investment court, many of which again display a curious inversion of reality. For example:

[an investment court] would have limited accountability and few checks and balances.

That is precisely the situation with corporate sovereignty tribunals, which have no checks or balances, and no limits to their power, as clearly shown by the $50 billion award made against the Russian government last year. The post concludes:

The EU is advancing this proposal in a futile and wrong-headed effort to win over critics who are fundamentally skeptical about freer trade. These critics had not previously raised any objections to the many ISDS mechanisms to which EU nations are already party: They began to complain only when the U.S. became involved.

That's true, because previous trade agreements incorporated ISDS as a mechanism for rich Western countries -- including those in the EU -- to use to sue poor, developing countries. Since the latter had few, if any, investments in the Western countries, there was little or no risk that they would use corporate sovereignty against the richer nations. TAFTA/TTIP changes that situation dramatically. Both the US and EU have huge investments in each other: the European Commission estimates them as more than $1.75 trillion dollars in both directions -- a clear demonstration ISDS is not needed in order to encourage investors. If there is a corporate sovereignty chapter in TTIP, tens of thousands of companies on both sides of the Atlantic will gain the power to sue governments over policies they claim could impact their future profits adversely.

That is why critics have raised the issue now, and partly why the EU has proposed moving away from such a manifestly flawed approach. Given that it believes in "a strong national defense," it's curious that The Heritage Foundation is desperate to preserve a system that gives foreign investors such a powerful weapon to use against America.

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Filed Under: corporate sovereignty, eu, europe, european commission, isds
Companies: heritage foundation

CETA Isn't Dead, But Its Corporate Sovereignty Chapter Is Still A Huge, Unresolved Problem

from the and-let's-not-mention-TTIP dept

It's been a while since we last wrote about CETA, the trade deal between Canada and the European Union. Back in March, we noted that the French Secretary of State for External Commerce, Matthias Fekl, said that France would not ratify CETA unless the corporate sovereignty, or investor-state dispute settlement (ISDS), provisions were removed or replaced by something completely different. Of course, it's hard not to be sceptical about these statements, since politicians like to grandstand, and are happy to change their positions every few months. But not, it seems, Matthias Fekl. According to a report on the French site Le Devoir (original in French), he's still of the same opinion:

For the Secretary of State for Foreign Trade, Matthias Fekl, who expresses the official position of France, it is not only a question of principle but a fact of life today. If negotiators do not rewrite Article 33 of the [CETA] Treaty which deals with dispute resolution, there will be no ratification.

And it's not just France that has a problem here. According to the article, Fekl said:

Look, this [refusal to accept the corporate sovereignty provisions in CETA] will also be the case in other countries. This isn't meant as a threat. But as far as this chapter is concerned, things must definitely move.

The EU Commissioner for trade, Cecilia Malmström, is well aware of the issues here -- not least because 145,000 people told her in the ISDS consultation last year -- and has presented a concept paper entitled "Investment in TTIP and beyond – the path for reform" (pdf). These are quite similar to proposals made by Fekl for the creation of a new European court to settle trade disputes. But there are two big problems with following that path.

First, the European Commission (and Fekl) have only just begun to sketch out how that reform might look. It is likely to take some time to come up with alternatives like entirely new courts. There is no way that something will be agreed for CETA, which may be ready for ratification quite soon. There's also the problem of TAFTA/TTIP. Given that Malmström has admitted that the current ISDS is unsatisfactory, and that she is trying to come up with something better, it will be hard for her to include it in TAFTA/TTIP in its current form. But the US side has made it clear that it is not happy with dropping corporate sovereignty completely, which leads once more to the problem of time-scales, since a serious replacement for ISDS may not be available even for TTIP. It will be interesting to see how Malmström deals with this key issue for both CETA and TAFTA/TTIP.

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Filed Under: ceta, corporate sovereignty, eu, france, isds

Fast Track Moves Forward And Now The Fight Is On TPP Directly

from the well-that-sucks dept

As noted last week, Congress played some games last week and was able to move forward on fast track authority (Trade Promotion Authority -- or TPA) in the House by decoupling it from Trade Adjustment Assistance (TAA). Before that, everyone had said that TPA couldn't move forward in the Senate without TAA, but it did move forward with exactly 60 votes (the minimum it needed). That means fast track is going to the President's desk, and of course he'll sign it. Previously, the President had promised that he wouldn't sign TPA without TAA, so I'm still at a loss as to how that's happening, since the House hasn't approved TAA yet and theoretically could block Obama from signing TPA by rejecting TAA -- if (and it's a big if) President Obama actually stands by that promise. However, the way everyone's talking about this, it seems pretty clear that Congress is just going to cave, and will pass TAA as well.

And, effectively, that means this is a done deal. As bizarre as it sounds, Republicans in Congress (with the help of a small group of Democrats) have given up their own Constitutional powers to regulate international commerce, and handed it to the President of an opposing party, while the majority of Democrats fought to keep their own President (and the next President...) from having such powers.

In the end, this means that the Trans Pacific Partnership (TPP) agreement is pretty much a done deal. Negotiators have more or less said that it's ready to go, but thanks to having fast track, our own Congress will not be able to call out any of the problems in the agreement -- or ask for any changes. It can only vote thumbs up or thumbs down on the agreement. And that means that the very dangerous corporate giveaways on intellectual property laws -- locking us into extended copyrights, weakening the ability to make and sell cheap drugs -- and corporate sovereignty provisions -- allowing companies to sue for taxpayer funds over "lost profits" due to regulatory changes, is about to expand massively.

At this point, about the only way I can see that the TPP doesn't make it across the finish line is if there's a huge public outcry, making it totally toxic to Congress, but that seems like a very big long shot. So, thanks, Congress, for selling out the American public to a few big corporations today. It's going to do real harm, and you'll pretend you didn't realize that down the road. What a sham.

Filed Under: congress, corporate sovereignty, fast track, isds, president obama, taa, tpa, tpp, trade agreements

Will Corporate Sovereignty Disputes Lead To Wars One Day?

from the even-if-they-don't,-they-hardly-promote-peace dept

Last August, we wrote about the most egregious corporate sovereignty award (so far): $50 billion against Russia, under a treaty that it never even ratified, in favor of the major shareholders of the Yukos oil company. Of course, as everyone pointed out, being awarded $50 billion was one thing, collecting it, quite another. Most people probably assumed that it would be practically impossible to squeeze that money out of a recalcitrant Russia, but we now learn that some serious steps towards that goal have recently been taken, as reported by Der Spiegel (original in German). In Belgium, the bank accounts of the Russian embassy were frozen, as were those of Russia's EU and NATO missions, while in France, something similar happened, with Russian accounts blocked at 40 banks.

Understandably, this did not go down well with the Russian government. The country's deputy foreign minister warned, "whoever dares to do that must understand that it will lead to reprisals," something his boss, Sergei Lavrov echoed. Meanwhile, Lavrov's own boss, Vladimir Putin, was also well aware of the situation, and was quoted as saying: "we will defend our interests using legal means."

A story on France 24 reports that Russia has already threatened to retaliate against state-linked foreign firms operating in the country, so that's one way that things could escalate. But more seriously, the relations between Russia and EU nations are extremely strained over the conflict in eastern Ukraine; the last thing the situation needs is additional tension caused by arguments over a massive fine. Even if corporate sovereignty doesn't actually cause a war -- well, let's hope not -- the Yukos award may turn into a hindrance to resolving an existing conflict. That's yet another reason to get rid of the whole deeply-flawed system before it causes more serious damage.

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Filed Under: belgium, corporate sovereignty, france, frozen assets, isds, russia, trade wars, vladimir putin, war
Companies: yukos

House Votes To Change Law Due To Trade Agreement, While Insisting That Trade Agreements Don't Change Laws

from the do-they-even-understand dept

Two weeks ago, the House Agriculture Committee voted 38-6 to repeal country-of-origin-labeling. (COOL), and now it's the full House's turn. In a 300-131 vote yesterday the "country of Origin Labeling Amendments Act" (HR 2393) passed with the support of a significant number of Democrats as well as the majority of Republicans.

The bill's prompting and passage came after the World Trade Organisation ruled in favor of Canadian farmers, who sued claiming it was "discriminatory" and thus in violation of Free Trade Agreements. The problem? Cattle bought from abroad would have to be segregated from domestic cattle, increasing costs and making imports less desirable.

With Fast Track coming up for a vote -- perhaps even today -- it's curious to see this snippet in the Associated Press report on the vote by the Speaker of the House:

House Speaker John Boehner, R-Ohio, said after the vote that the last thing American farmers need "is for Congress to sit idly by as international bureaucrats seek to punish them through retaliatory trade policies that could devastate agriculture as well as other industries."

That is, of course, the same John Boehner that has been encouraging the President to get more support for Fast Track, in order to pass more of these "Free Trade" deals that impose more international bureaucrats and will almost certainly lead to more disputes that "require" Congress to "not sit idly by."

Meanwhile, remember what President Obama said at the Nike Plant just a few weeks ago:

[TPP] critics warn that parts of this deal would undermine American regulation -- food safety, worker safety, even financial regulations. They're making this stuff up. (Applause.) This is just not true. No trade agreement is going to force us to change our laws.

Less than one month on, and we have exactly what he claimed 'is not true' happening. A trade agreement forcing a law change, and having what some would claim is an impact on food safety. And it's happening a day or so before the House is voting to create even more such situations while claiming that it won't do this. Do they not even recognize what it is they're voting on?

Filed Under: congress, corporate sovereignty, fast track, house, isds, john boehner, nafta, tpp, trade agreements, trade promotion authority, ttip

Analysis Shows European Commission's 'Improved' Corporate Sovereignty Model Would Actually Make Things Much Worse

from the institutionalized-regulatory-chill dept

Last year, the controversy around corporate sovereignty was such that the European Commission felt obliged to slam the brakes on this particular part of the TAFTA/TTIP negotiations in order to try to defuse the situation. The ostensible reason for that unexpected pause was to hold a public consultation on the "investor-state dispute settlement" (ISDS) mechanism. It turned out to be of a very limited kind. Rather than asking whether people wanted corporate tribunals passing judgment on their laws and regulations, the European Commission instead presented the ISDS chapter of another agreement, that with Canada, and posed some rather technical questions about the subtle changes it incorporated.

The Comprehensive Economic and Trade Agreement (CETA) is nominally finished, and is currently undergoing what is known as "legal scrubbing", during which it is checked and polished for final ratification by Canada and the EU, although that's looking much more problematic now than it did a year ago. In the consultation, CETA's ISDS chapter was offered as a kind of template for TAFTA/TTIP. The Commission's argument was that it incorporated many improvements over traditional corporate sovereignty chapters -- which even the EU admitted were flawed -- and could be tweaked further to produce an even better solution for the US-EU negotiations.

Techdirt has already written about one detailed analysis of the claimed improvements in CETA's ISDS that found them seriously wanting. Confirming that view is a new paper from Gus Van Harten, who is Associate Professor of Law at York University in Toronto, Canada. He has taken advantage of the fact that we now have two recent EU free trade agreements with corporate sovereignty chapters: the one with Canada, plus a less well-known deal with Singapore. Van Harten's paper looks at both of them in order to explore to what extent the European Commission's new model for ISDS represents an advance over previous versions, and is therefore something that might usefully form the basis for a possible corporate sovereignty chapter in TTIP. Here's his concluding summary:

The CETA and [EU-Singapore] FTA demonstrate the Commission's willingness to accept ISDS -- based on the model long pushed by Western European countries for developing and transition countries -- that is flawed due to its lack of independence, fairness, and balance. The Commission's approach to ISDS, as represented by the CETA and FTA, does not ensure basic safeguards of judicial independence and procedural fairness. It does not affirm clearly the state's right to regulate. It does not introduce actionable responsibilities for foreign investors or even require foreign investors to resort to domestic courts unless they have been shown not to offer justice. The only notable improvement in the CETA and FTA approach to ISDS, compared to the historical Western European model, is its greater provision for openness.

…

By including ISDS in the CETA and FTA, as forerunners of a TTIP, the Commission would make the problems of ISDS much worse. The Commission aims to expand and lock in a deeply flawed system of dispute resolution -- premised on the special privileging and subsidizing of large companies and very wealthy individuals, with lucrative returns also for ISDS lawyers and arbitrators -- so that it covers most of the world economy.

Although that is pretty unequivocal, it's worth reading the whole paper to understand why Van Harten is so dismissive. It contains many insights along the way, including the following astonishing fact:

The CETA's provision on the arbitrators' power to award damages to foreign investors includes a clause that I have not seen in any investment treaty. The clause says that, in calculating monetary damages, the arbitrators shall reduce the damages to account for "any... repeal or modification of the measure". Thus, the CETA appears to establish an incentive for states to change their decisions in order to appease a foreign investor (who has brought an ISDS claim) as a means to limit the state's exposure to potentially massive liability at the hands of the arbitrators. Put differently, this clause in the CETA appears to institutionalize the ISDS dynamic of "regulatory chill".

So much for the idea that corporate sovereignty "does not and cannot require countries to change any law or regulation": not only does the CETA text admit it can happen, it even provides a strong incentive to do so.

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Filed Under: canada, ceta, corporate sovereignty, eu, isds, tafta, tpp, ttip