During the years that the Trans Pacific Partnership agreement was negotiated in secret, opponents raised alarms about another jobs-killing, money off-shoring “NAFTA-on-steroids” trade agreement. based on leaked documents through Wikileaks and peeks by legislators in carefully controlled settings. Now that TPP has been finalized and revealed, opponents say it is even worse than feared.
Opponents lost the initial battle over Fast Track, in which Congress signed away its ability to amend the agreement in any way.
Now the clock is ticking: the US is expected to sign the Trans Pacific Partnership (TPP) treaty in a ceremony in New Zealand on February 4 with the 11 other countries that are signatories. President Obama, who has championed this agreement as the foundation for 21st century trade and which will encompass 40% of the world’s economy, can sign it at any time, then send it to Congress which would have 90 days to deliver a simple up/down vote, thanks to the Fast Track Authority they gave Obama. They cannot modify a comma without the rest of the signatories’ agreement.
Opponents to the Trans Pacific Partnership agreement – mostly progressives, environmentalists, labor advocates and interestingly, the Tea Party caucus that sees any international agreement as weakening US supremacy and sovereignty – are marshaling their forces to try to beat back this trade agreement.
There is so much that is wrong with TPP – that it will accelerate off-shoring of jobs, cause drug prices to rise, end GMO labeling and “Made in USA/Buy American” campaigns – but the gravest threat, upon which everything else rests, is the provision for Investor-State Dispute Settlement (ISDS) system. This is a tribunal – essentially a corporate court – that can force municipalities to pony up the cost of “lost profits” when a corporation is denied some commercial activity because of environmental, public safety, consumer protection, labor law or building codes.
“I think the worst aspect of the TPP is the tribunal, since it can lead to overturning the laws we have passed for our own protection,” Lisa Oldendorp, LI Regional Organizer for MoveOn.org and Host Team member, Global TPP Team, explained. “The tribunal itself cannot overturn the laws, but the fines levied will become so burdensome that a country will change its laws rather than pay the fine.”
It’s not only the challenge to existing law, but the likelihood that the mere threat will cause lawmakers to alter their policy.
“It will also have a chilling effect on future laws in that legislators will always have to consider whether this law could stand up to a foreign corporation’s lawsuit in a tribunal,” Oldendorp said. “If there is doubt (think anti-fracking laws, anti-pollution laws, anti-‘bomb train’ laws), they will withdraw the bill rather than risk a future lawsuit. The ISDS undercuts a country’s ability to make laws to protect its citizens and establishes an ‘extra-national’ judicial system, run by 3 corporate lawyers. The decisions cannot be appealed and all nations must conform their laws to the decision or pay millions or billions of taxpayer-funded fines. This violates our national sovereignty and the sovereignty of all nations.”
How the ISDS provision of TPP could put corporate interests over national, state or local law is already playing out. It was on view when Phillip-Morris sued Australia, Tobago and Uruguay over requirements to label the dangers of cigarette smoking on packages, Canada was challenged and lost on pesticides and toxic fuel additives; Mexico was sued for trying to block a toxic waste dump and had to pay out $17 million in penalty. Peru was sued for $800 million by a US investor over being required to remediate a smelter that created one of the most toxic sites in the world. And now the US is being sued over its rejection of the Keystone XL pipeline.
“The reality that trade agreements like the TPP undermine US democracy has also been shown in recent months,” stated PopularResistance.org. “Last week the United States was sued by TranCanada for $15 billion for deciding in the public interest to not build the northern portion of the Keystone XL pipeline. Whatever decision is made by this corporate trade tribunal cannot be reviewed by US federal courts.
“Two previous trade tribunal decisions have led to the repeal of the Country of Origin Labeling Act, requiring labeling of meat; and the dolphin safe tuna labeling. Under the TPP US courts and Congress are less powerful than corporations.”
Congress also recently overturned the 40-year old ban on crude oil exports under threat of being sued for inhibiting profits.
“For the first time in history—foreign corporations can sue countries directly if they feel that a country’s laws interfere with their ‘right to make a profit.’ Domestic corporations do not have this right. A small U.S. corporation does not have the same rights and advantages as the huge, multi-national (foreign) corporation. Eventually it will be forced out of business, unable to compete. In addition, ISDS settlements (unaccountable to anyone or any country and to which there is no appeal) can lead to privatization of heretofore publicly owned utilities. The ISDS also creates even more incentives for U.S. firms to offshore jobs to foreign countries where they can exploit low-wage labor under privileged “foreign-investor” status. It also opens the door wide for global corporations to attack US laws,” Oldendorp wrote Congressman Peter King, urging him to oppose TPP.
“Worse, the TPP would expand U.S. ISDS liability by widening the scope of domestic policies and government actions that could be challenged. For the first time in any US free trade agreement, the provision used in most successful investor compensation demands would be extended to challenges of financial regulatory policies,” states a letter signed by 100s of organizations including Citizens Trade Campaign, 350.org and 31 pages more of organizations.
This means that financial firms could challenge policies as violating investors’ “expectations” of how they should be treated.
This is only the tip of the iceberg of lawsuits that could be brought under the TPP. Already, there are some 9,200 foreign-owned firms operating in the United States that could bring suits under ISDS, which could double under TPP, according to Public Citizens Global Trade Watch.
The ISDS provision could also hurt the labor market and employment in the US, even beyond the likelihood of more companies going overseas to take advantage of cheap labor. But, Oldendorp points out, “When the U.S. taxpayers are on the hook for paying billions in lawsuits (not to mention the price of elite lawyers to defend the cases), our ability to have disposable income is threatened. Taxpayer money that should be going to provide for the common welfare of the people will be used to defend lawsuits against corporations hungry to make greater and greater profits, no matter what the American citizen-consumer thinks. As a matter of fact, the ISDS proceedings are secret, the citizens have no input, and there is no appeal of the decision. Is this what we want for America, our democracy, the land of the free and home of the brave? ISDS makes a mockery of our Constitution!.” Cases cannot be challenged, even by the Supreme Court,
Indeed, rather than be a boon to American jobs – as Obama, Commerce Secretary Pritzker and TPP proponents insist – TPP will give multinational corporations a further incentive (beyond tax inversions that let companies like Pfizer purchase a foreign corporation and nominally “relocate” its headquarters in order to evade US taxes) to move to a TPP-signatory country, just to have the ability to be effectively immune from US law and have the ability to sue. This is exactly what an Australian tobacco company did – it “relocated” its nominal headquarters to Hong Kong in order to take advantage of a treaty between the two countries, then sued Australia for lost profits when Australia tried to impose warning labels on cigarette packages.
What to do? After the agreement is signed (likely February 4), it then will go to President Obama who will determine when to send it to Congress for approval, which will have 90 days to vote. Because of Fast Track, Congress can only vote up or down; it cannot make any changes, not a dash or a comma. It is unlikely that Obama will send it to Congress before he believes he has the votes, which some believe might be around Memorial Day or during the lameduck session at the end of the year (and depending upon who wins the Presidential election).
The focus now is on lobbying Congressional representatives to vote against TPP – Congressman Steve Israel (who is retiring) even advancing candidates to challenge representatives like Kathleen Rice (who switched her vote from opposing to supporting TPP).
Also, signing petitions, holding rallies, sending letters to the editor and personal letters to Congressional representatives; 1,500 organizations signed a letter urging that the TPP not be ratified. Submit comments to the U.S.T.R. on the government website www.regulations.gov
Protests are building against the TPP: Nearly 20 cities had signed on to protest on February 4, the day the TPP was to be signed, and more protests were scheduled during Presidents Week when Congress goes back to their districts. The movement is already planning an escalation of protests in April.
Amazingly, progressive activists are making common cause with Tea Party caucus who oppose all international agreements that weaken US sovereignty and self-determination.
But there is more that can be done.
TPP should be challenged in the Supreme Court as unconstitutional because, under ISDS, the President is essentially ceding away powers that belong to states and localities, and are not the President’s to give away. Who would have standing (since apparently “We the People” do not)? The Governors Associations, State legislators’ associations, the Council of Mayors, and so on. They could argue that TPP strips them of their ability to fulfill their constitutional oath to protect their citizens’ public health, safety and security and exposes their constituencies to ruinous financial liability.
Also, localities could pass their own referendums opposing TPP, even preemptively withdrawing, as they did in signing on to Kyoto when the Republicans refused to sign on to that climate action treaty. Syracuse’s City Council has already done this. Sierra Club and Food & Water Watch and other organizations that oppose could petition their local governments to pass such resolutions or referendums. (This would have the added benefit of generating press coverage).
See more information at www.foodandwaterwatch.org and PublicCitizen.org.
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