Sacrificing our Sovereignty in the name of Free Trade

Written By: - Date published: 1:24 pm, January 15th, 2015 - 30 comments
Categories: capitalism, john key, national - Tags:

It appears that like New Zealand the United Kingdom is also negotiating with the United States for improved trade access under the benign sounding Transatlantic Trade and Investment Partnership negotiations.  But they are facing the same issues that New Zealand is facing, including the suggested provision of investor-state dispute resolution procedures, where private corporations or individuals could seek compensation from a private arbitration panel if a State acting in the best interests of its citizens adversely affects their expectation of profit.

George Monbiot has written about the subject recently in that clear precise way that characterises his writing.  From the Guardian:

If a government proposes to abandon one of the fundamental principles of justice, there had better be a powerful reason. Equality before the law is not ditched lightly. Surely? Well, read this and judge for yourself. The UK government, like that of the US and 13 other EU members, wants to set up a separate judicial system, exclusively for the use of corporations. While the rest of us must take our chances in the courts, corporations across the EU and US will be allowed to sue governments before a tribunal of corporate lawyers. They will be able to challenge the laws they don’t like, and seek massive compensation if these are deemed to affect their “future anticipated profits”.

I’m talking about the proposed Transatlantic Trade and Investment Partnership (TTIP) and its provisions for “investor-state dispute settlement”. If this sounds incomprehensible, that’s mission accomplished: public understanding is lethal to this attempted corporate coup.

The TTIP is widely described as a trade agreement. But while in the past trade agreements sought to address protectionism, now they seek to address protection. In other words, once they promoted free trade by removing trade taxes (tariffs); now they promote the interests of transnational capital by downgrading the defence of human health, the natural world, labour rights, and the poor and vulnerable from predatory corporate practices.

This debate has also been occurring in New Zealand.  Why should we create the possibility that an arbitration panel beyond our control could order the payment of damages because corporate interests were affected by action taken in the public good?

Monbiot is deeply concerned at the potential effect the TTIP may have on UK’s democratic structures.

The proposed treaty has been described by the eminent professor of governance Colin Crouch as “post-democracy in its purest form”. Post-democracy refers to our neutron-bomb politics, in which the old structures, such as elections and parliaments, remain standing, but are uninhabited by political power. Power has shifted to other forums, unamenable to public challenge: “small, private circles where political elites do deals with corporate lobbies”.

Investor-state dispute settlement – ISDS – means allowing corporations to sue governments over laws that might affect their profits. The tobacco company Philip Morris is currently suing Australia and Uruguay, under similar treaties, for their attempts to discourage smoking. It describes the UK’s proposed rules on plain packaging as “unlawful”: if TTIP goes ahead, expect a challenge.

Corporations can use the courts to defend their interests. But under current treaties, ISDS lets them apply instead to offshore tribunals operating in secret, without such basic safeguards as judicial review and rights of appeal. As Crouch notes, this is not just post-democracy, but “post-law”.

He rightfully questions the need for a separate judicial system and wonders why the United Kingdom Courts are not able to handle any disputes.

There is only one possible justification for a separate judicial system: a failure by existing courts to fairly arbitrate businesses’ legal claims. So which judicial systems in the US or EU treat corporations unfairly?

I have asked this question (via Twitter) to the business secretary, Vince Cable; his deputy, Lord Livingston; and the Conservative leader in the European parliament, Syed Kamall. Resounding silence. I have asked it in this column, three times. Nothing. I have asked the business department by phone. After an attempt by its spokesman to suggest that there could be something wrong with the US system, and a subsequent failure to explain what this might be; he sent me this statement: “Investor protection is needed as domestic courts are not the typical route for investors to seek redress.” Not the typical route? That’s it?

It appears that John Key is relaxed at the potential of private arbitration making binding decisions affecting the New Zealand state.  He was questioned about this in Parliament by Metiria Turei two years ago and asked if New Zealand was opening itself up to litigation from firms based in the Trans-Pacific Partnership countries if it signed up to the investor-State dispute settlement procedures.  He responded:

… I do not think that is of concern because investor-State dispute settlement procedures allow a safeguard for New Zealand. New Zealand has already signed two free-trade agreements that include investor-State dispute settlement procedures. They were done under a Labour Government. They were the China free-trade agreement and the ASEAN-Australia-New Zealand Free Trade Agreement. They include the very safeguards that would protect New Zealand under those provisions. They also, I might add, protect New Zealand companies when they invest overseas. That is the very purpose of the investor-State dispute settlement procedure requirements.

Key’s response is similar to that adopted by UK Prime Minister David Cameron.  Again according to Monbiot:

At the G20 summit last year [Cameron] said: “We’ve signed trade deal after trade deal and there has never been a problem in the past.” It’s the dangerous driver’s defence: I’ve done 100mph loads of times, and I’m still alive, aren’t I?

Yes, we’ve been lucky so far; luckier than other nations in Europe, which so far have been sued 127 times under investor-state clauses in other treaties. The Czech Republic, Slovakia and Poland have had to pay out enough money to have employed 380,000 nurses for a year. Investor-state cases are escalating rapidly: as corporations begin to understand the power they’ve been granted, they will turn their attention from the weak nations to the strong ones.

No one will provide a justification because no one can. To protect transnational capital from a non-existent risk, our governments are recklessly abandoning the principle of equality before the law.

Monbiot urges a call to action through petitions, protests and believes that at least in the UK they can win the argument.  I will leave the final words to him.

In an age of ecocide, food banks and financial collapse, do we need more protection from predatory corporate practices, or less? This is a reckless, unjustified destruction of our rights. We can defeat it.

30 comments on “Sacrificing our Sovereignty in the name of Free Trade ”

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  1. CJess 1
    15 January 2015 at 1:35 pm

    There is a bigger democratic deficit issue in the TTIP in that it is not being negotiated by the Governments of the EU, but by the EU Commission on behalf of the Member States. This is particularly concerning in the UK for those who would like to see the National Health Service protected from (further) privitisation and corporate control. While the UK government has the right to contribute to the negotiating stances generally, it’s not clear how much impact each individual MS can have on the final negotiating stance. Cameron’s Government has (obviously) also refused to carve out the NHS from the negotiations, in the same way as the French have carved out their film industry from it.

    The Commission has, however, published some information on the negotiating stances it is taking with the USA, which is a step towards transparency which Key seems unlikely to follow. See – http://trade.ec.europa.eu/doclib/press/index.cfm?id=1230

    • Colonial Rawshark 1.1
      15 January 2015 at 1:45 pm

      bigger democratic deficit issue in the TTIP in that it is not being negotiated by the Governments of the EU, but by the EU Commission on behalf of the Member States

      Good point. A smaller number of officials to sway, arm twist and if necessary, pay off.

  3. Naturesong 3
    15 January 2015 at 2:04 pm

    The Green party opposed the Chinese FTA citing investor-State dispute settlement procedures as one of the reasons.

    Had a search but seem unable to find the minority report Keith Locke submitted.

    • aerobubble 3.1
      15 January 2015 at 3:50 pm

      So a company win some huge compensation from the govt, and consumers hearing that the Nats have rigged the system for big corp… …those corps take a consumer backlash, along with politicians who dont dump the trade agreements…

      Look I agree, its not a free market when risks are managed, since the
      whole point of an invisible hand is it surprises us. A state controlled market
      did not work, so why would a privately controlled one. Without nation states
      interceeding and directing activity there can be no free market or even freedom.

      Anyway whats to stop Greenpeace becoming incorporated, and its members demanding standing with respect to loses. My council ould sue for river
      pollution and does, so why cant Greenpeace sue the Japanese govt.
      Why cant unions sue foreign govts for unsafe work practices in Chinese
      competition companies…

      So yeah its important theres appeals, there are open transparency, and we can all form corps and sue all large global companies.

      • Naturesong 3.1.1
        15 January 2015 at 4:36 pm

        First, what on earth has TPPA or any FTA for that matter got to with that mythical unicorn “free market”.
        A market by definition is bound by the rules and norms of that market, whether it be drugs, sex, people or a house.

        Removing constraints to markets, alter their function in very predictable ways (and create the potential for those markets to fail in predictable ways).

        Second:
        Sophistry: the use of clever but false arguments, especially with the intention of deceiving.

        “Anyway what’s to stop Greenpeace becoming incorporated, and its members demanding standing with respect to loses”
        – Please explain how this would work to prevent sovereign counties from polluting their waters and lands to the detriment and cost of its citizens and neighbours?

        “We can all form corps and sue all large corporations”
        – No, you need time, expertise and shit load of money.

        We already see our Government scared to legislate against tobacco packaging citing Australias current dispute. How does Greenpeace, or any citizen counter that?

        • aerobubble 3.1.1.1
          17 January 2015 at 4:17 pm

          Risks cannot be managed, as neoliberals contend. Its god of the gaps stuff.
          There will always be needed outside intervention, aka us constitutional cry
          for revolution should the state become unworthy. All systems grind to
          a halt, Thatcherism began that malaise and delivered us 2008.

          If the question is how are companies to get redress when existing courts take too long, haven’t the expertize, and governments won’t be morally, ethically or fiscally bankrupt then sure. But the fact that the trade court has come out of
          a hidden process, involving the US, where lobbiests rule congress, does make the
          whole system suspect.

          Though i return to my point a unconsciable system would be easily removed,
          as legally speaking it would not merit authenticity. Certainly a global corporate
          that sues a government and has the effect of allowing pollution of world
          citizens, with deletrious effects, is a PR disaster worthy to serious question
          wtf KEy is up to.

          But the point is there will be political interferance in nation courts and so
          some process will be required So it behoves you to provide that alternative,
          speak to why these trade courts are needed and how safeguards can be attached added at futire date, since they obviously as all new systems bed in.

          So ant trade court system strapped to trade agreements that does not
          allow for appeals, reworking in light of obvious mistaken judgments.
          i.e pollution of citizens by mega corps who can hold govts hostage
          via these new courts.

        • Colonial Rawshark 3.1.1.2
          17 January 2015 at 8:41 pm

          Removing constraints to markets, alter their function in very predictable ways (and create the potential for those markets to fail in predictable ways).

          I think you are being way to generous here.

          Take lowering the drinking age to 18.

          Our MPs were convinced that was going to help resolve underage and youth drinking in this country.

          Nek minnit…

      • Tracey 3.1.2
        15 January 2015 at 5:02 pm

        because they cost of suing is something that fortune 500 companies can manage not charities and unions.

        • aerobubble 3.1.2.1
          17 January 2015 at 4:21 pm

          I disagree. A billion shareholder company, each shareholder with a dollar to spare, and intelligent selection of stances taken to court on percieved future loses would be lovely.

          • Naturesong 3.1.2.1.1
            17 January 2015 at 7:43 pm

            Got any anecdata. Anything at all?

            Perhaps a study?
            No?

            A Masters or Phd thesis?
            The unlikelihood of the scenario you describe would surely have masters and Phd students lining up to choose that subject as their thesis.

            No, nothing?

            Really?
            I thought there would be dozens of examples given that these courts have been running for a while – NAFTA was signed 2 decades ago.

            I suspect* if I hold my breathe, I’ll turn blue and fall over.

            * Actually, I’m certain, unless your better at searching the web than me.

            • aerobubble 3.1.2.1.1.1
              19 January 2015 at 3:26 pm

              If you have money you can buy a company with standing, and crowd sourcing has just appeared, so who knows, maybe a crowd source will buy into a water provider down stream of a s.america polluter… and sue the govt for not enforcing basic env protections.

              • Naturesong …
                19 January 2015 at 6:48 pm

                Ahh, so your solution is that communities have to crowdsource and buy up all the means of production?

                At which point they can sue their own government to force them to act as a sovereign entity?

                But only in that particular instance. And only if it has caused a business harm that can be easily costed?

                You’ve clearly thought this through.

      • Murray Rawshark 3.1.3
        16 January 2015 at 1:43 am

        Suing only works when it can be enforced by force. Funnily enough, the two words may even have a common root. Not even Sea Shepherd, with all its militancy, could sue a country and get something. You must be on Planet FJK, Aerobubble.

        • aerobubble 3.1.3.1
          17 January 2015 at 4:25 pm

          Sorry, last time I looked our army was made up of citizens like you and me.
          And I find the notion that is regardly peddled by neolibs are based on how
          we as citizens do not give up, or have any, percieved future loses when it
          will be us and our children who will be called up to fight and lose life.

          Percieved future loses is not just a open cheque book for big corp, its
          a call that we all have potential future loses that matter.

  4. Tracey 4
    15 January 2015 at 2:18 pm

    Jane Kelsey wrote this in reply to a question I asked her a few months ago

    Q.. how many of them (FTA) contain provisions for foreign corps to sue nz govt, councils for decisions they contend impact their profits?

    A. “All of them except the investment protocol to the CER agreement with Australia and the P4 (NZ, Chile, Singapore and Brunei) have a version of investor-state enforcement. There is also a bilateral investment treaty with Hong Kong and an (arguably) superseded one with China.

    The TPPA is of greater concern because (a) the US is a party and they are second to the EU in the most frequent users of this process and (b) the scope of the obligations in the TPPA will be much broader than in previous FTAs. ”

    Now, Mr Mapp frequently rolls out the old chestnut that Kelsey never supported a single FTA and somehow this diminishes her credibility. Apart from the corollary which is he never opposed a single FTA therefore has diminished credibility (which gets us nowhere but doesnt stop him stating it as though it does mean something), she gives very coherent reasons for her disagreement with it. Dr Mapp says he has never seen the agreement but is happy to agree to it. Happy to subject us to being sued by corporations and those disputes being determined by a small group of arbitrators, not appointed by governments or by a process but appointed privately and almost all, if not all, to be international lawyers with particular interest in corporate interests.

    Here is what Kelsey says about FTA and the TPPA and her motivation as told to the Sunday Star Times

    ” It is these regulatory provisions which concern Kelsey.

    “I’m not interested in trade agreements, certainly not in the old-fashioned commodity part of them,” she says.

    Her concern is that international trade deals include clauses that affect how governments can regulate their countries’ affairs, particularly because she sees them as entrenching right-wing economic policy.

    Her views were sparked in 1990 when she went to a meeting in Brussels while the city was hosting ministerial talks for a World Trade Organisation agreement known as the Uruguay Round.
    concern is that international trade deals include clauses that affect how governments can regulate their countries’ affairs, particularly because she sees them as entrenching right-wing economic policy.

    Her views were sparked in 1990 when she went to a meeting in Brussels while the city was hosting ministerial talks for a World Trade Organisation agreement known as the Uruguay Round.

    “I saw that there was this agreement on services, and I looked at what was happening at home with the battles we were having around corporatisation . . . and I said ‘this is the embedding mechanism for what’s happening at home. This is going to make it really hard to reverse, and it’s going to make it formalised’.”

    Since then Kelsey has argued and lobbied and published books about the fish hooks in every trade deal.

    “Every select committee submission I make says ‘you’re looking only at the trade parts, you need to understand the regulatory frameworks’. When they become enforceable not only by other states but by foreign investors you have big issues.

    “So for me the TPPA is the granddaddy of all of those agreements.””

    Also of interest, to those who care about open debate and freedom of speech is the revelation that Kelsey has been spied on, seemingly because f her opposition, on strong legal basis, to the regulatory aspects of FTA and the TPPA. Dr Mapp, Law Commissioner ought to have been an outspoken critic of that, a fellow lawyer, academic, and believer int he law… but he wasn’t. He isn’t.

    http://www.stuff.co.nz/national/education/2736200/Concern-over-SIS-spying-on-academics

    Kelsey writes in more detail about her experiences trying to get her file from the SIS here

    http://www.converge.org.nz/watchdog/22/07.htm
    (this one is a very good read for those interested in freedom of speech, academics, spying etc)

  5. Chch_Chiquita 5
    15 January 2015 at 2:29 pm

    Is there anything that our PM think IS a concern?
    There is nothing free about this TPPA and nothing to gain, only a lot to lose. That our PM think there is no concern about an agreement that is not only negotiated secretly but its details will remain secretive for years after it is signed and obligating is simply mind blowing.

    In the US, Senator Sanders is demanding to see the negotiation documents, and if turned down, to know the legal basis for the denial – http://www.sanders.senate.gov/newsroom/recent-business/sanders-seeks-trade-deal-details

    • Tracey 5.1
      15 January 2015 at 2:37 pm

      They keep diverting attention from what is really the downside like a magician using slight of hand. They say trade is good, trade will benefit, why hate against trade when the main objection is that

      and dispute will not be heard by an international court, by people appointed by agreement from governments but will be referred to a private arbitration service, which chooses its own decision-makers and appoints international lawyers friendly to corporations. This is the elephant in the room. And we are seeing examples of it from EU, US and Canadian companies holding governments to ransom. Australia is being sued for deciding as a health and political issue that branding of cigarettes is not acceptable…

      The following link discusses the dispute resolution “process” simply

      http://triplecrisis.com/tppa-when-foreign-investors-sue-the-state/

      • Chch_Chiquita 5.1.1
        15 January 2015 at 3:50 pm

        Well, trade is good. But what are we trading here? Is there anything we are not trading already? I know, we MIGHT be trading dairy. That might is so tiny it is almost a fiction of the imagination.

    • Draco T Bastard 5.2
      15 January 2015 at 3:19 pm

      Is there anything that our PM think IS a concern?

      He does seem to be concerned about the people actually having a say in the running of our country.

  6. coaster 6
    15 January 2015 at 4:28 pm

    Would we have able to put any legislation inplace, or future rules regarding the sale of legal highs?. Putting additional taxes on petrol reduces amount of petrol sold, so the oil companys could take legal action. Oil companys could sue over any changes to carbon emmissions in cars.

    surely a government could opt out of one these trade deals at any time?

  7. Paul 7
    15 January 2015 at 4:40 pm

    ‘surely a government could opt out of one these trade deals at any time?’

    These are meant to be binding.
    It’s a trap.

  8. Jan Rivers 8
    15 January 2015 at 5:27 pm

    Interestingly people in the EU have had two oppotunities to provide input into the process and 150000 did whereas the only NZ Consultation took place when the Tppa was just 4 countries back in 2007 or 8. The latest EU consultation is described here. http://www.martinmep.com/ttipisds I have hard Tim Groser say on a number of occasions that thon tonere has been widespread consultation n. Perhaps he means that there have been non-public opportunities for NZ corporates to contribute to shaping the text. Otherwise his commemts are somewhat mysterious..

  9. saveNZ 9
    16 January 2015 at 9:20 am

    If we or the UK sign any of these ‘trade deals’ we’re fucked.

    Instead of governments running the countries, we will have corporations running them by proxy.

    Instead of democracy we will have kangaroo courts whereby the whole meaning of human existance is measured in exploitation.

  10. Andrew Welsh 10
    17 January 2015 at 9:01 am

    Monbiot is more left than most who write opinion pieces on this site, so of course his view is used to support MS’ s view. Fair enough, but the debate needs views from across the political spectrum so the debate should includes the views of Obama who supports the TPP. Of course Obama has faded from the lefts Christmas card list hasn’t he….

    • Colonial Rawshark 10.1
      17 January 2015 at 8:38 pm

      Andrew Welsh, the corporate lobbyists who have access to the TPP documents, while us citizens are denied them, are most welcome to make their case here at The Standard.

      However, the canard you raise about this being about the “political spectrum” is of course full of shit in that the TPP is primarily about strengthening corporate power and corporate profits.

      You can only regard the TPP as being about politics in so far as a kind of politics which no longer represents the interests of the citizens, but instead represents the interests of trans-national capital.

  11. A Voter 11
    18 January 2015 at 2:43 pm

    Maybe Sir JESUS Jerry can strap on his six guns and win our country back like Tama tried to tell the country it needed to do but got raided
    TPPA is bend over and take it u insignificant little island in the south pacific
    were still here and we are still the the boss signed the US govt
    This is not the freedom that Nzers fought for in the past
    Sticking our nose into the middle east now south east asia in the past all for a bullshit idea of what democracy is
    People who fight now believe they are right in WW2 it was obvious why there was a need to fight
    let the middle east sort out its own shit the less notice we take of Israel the fuckin better and have a look at the real problem in OIL and who owns what Dick Cheney’s head should be on a spike in Baghdad
    Fuck the US foreign policy we want our country back no more fast food international Wall st crime we arent here to balance their books
    And sorry Phil and Betty its all over we just cant afford you anymore