Did TransCanada Just Kill the Trans Pacific Partnership?

Democracy is a precious thing. It is easy to see that throughout history, autocrats of all types have attempted to end or limit government by the people whenever possible. Corporations are not different in this respect. They often and quite publicly prefer the autocratic and the certain over the will of the people and its variability.

As time has gone by the United States has entered into treaties like NAFTA, the North American Free Trade Agreement. This agreement like many other trade agreements limits the sovereignty of participating nation states and gives power to international tribunals that are not answerable to the people.

These tribunals have not gained a great deal of public attention. That’s probably wise. The idea that a band of unknown bureaucrats can contradict the will of the people as a community, a county, a state or even a nation is a wonderful selling point if you’re a corporation but probably less than persuasive for the citizens who don’t realize that a big chunk of democracy (control over their lives) just went away.

One of the big chunks of democratic power that was given away was the right of governments to be not be sued by foreign corporations.

And while this has not been well known, it is about to be. You see, TransCanada had a stake in the building of the Keystone Pipeline and since the United States government said no, they are suing for more than fifteen billion dollars.

That will put the rest of us on notice that we can be sued if we obstruct international corporate profit making.

This is unlikely to make passage of the Trans Pacific Partnership easier for once people realize that even mundane decisions in the public interest can be reversed and penalized with money damages, they may decide that free trade agreements carry too high a price.

You may think at this point that I’m being an alarmist. TransCanada has yet to win any money and perhaps you don’t even believe that these international tribunals every really sue anybody. Well, what about Australia?

Let’s say you are a tobacco company and you don’t want people to regulate your product. You can use “free trade agreements” on your behalf. (This is from the Huffington Post –

Absent state intervention on their behalf, tobacco companies found a new way to fight efforts to regulate tobacco marketing. They take advantage of an “investor-state” dispute options being built into more free trade agreements between countries, which allows companies to directly challenge regulations they believe discriminate against foreign products. Unlike fighting laws in domestic legislatures or through WTO disputes, which are more formal and predictable, investor-state conflicts are decided by a panel of international arbitrators with no appeal, making them more attractive to multinational corporations.

So when Australia tried to put limits on how cigarettes were sold, the tobacco companies used the free trade agreements and used them well. –

(Further down in the same article -)

PMI has used that tactic to challenge Australia’s proposed “plain” packaging rules, which would eliminate bright colors and branding on packs and cartons, and Uruguay’s plan to require 80% of cigarette packs be covered in warning labels. The company argues that these restrictions on its trademarks and branding are akin to expropriation (which would require the country to pay the restricted company for selling its product unbranded) and violate trade deals between Australia and Hong Kong, where PMI has a subsidiary, and Switzerland and Uruguay.

What kind of democratic decisions could be challenged in the United States under these agreements and who could bring these law suits? Any decision that could affect profitability could be challenged. That would include things as mundane as zoning laws all the way up to federal legislation. Any corporation or citizen of a nation participating in the TPP could sue should they believe their operations are being damaged.

For example, Fayetteville, Arkansas could re-zone an area residential. If property there was owned by a foreign corporation say, one from Vietnam, an international tribunal might very well find that this act amounts to an expropriation of the company’s property and force the community to re-zone and pay damages for its “illegal” act.

Over time as the number and complexities of these “free trade agreements” grows, the city will have to become increasingly lawyered up to stay aware of the effect of city decisions on possible litigants all over the world.

Sound good? If you don’t like what you’re hearing, maybe you should do something to let your representatives from the President down to local government know that maybe we shouldn’t be weakening democracy to protect the profitability of foreign corporations.

James Pilant

Here is an excerpt from an article from the Guardian –

For many, the Keystone XL pipeline was a catalyst for environmental action, and when the State Department denied developer TransCanada’s permit application in November, it was a signal that the environmental movement had triumphed over corporate and fossil fuel interests. So when the tar sands company announced this week that it was filing a claim against the United States for $15 billion, under provisions in the North American Free Trade Agreement (NAFTA), many were outraged.

But TransCanada’s heavy-handed use of the Clinton-era agreement might be the rallying point activists need to stop another, perhaps even more far-reaching, federal action: the pending Trans-Pacific Partnership. The TPP is a massive, Pacific Rim trade agreement that would apply NAFTA-like provisions — including prohibitions on interfering with private investment — to the relationships between the United States and 11 other countries, including Japan, Malaysia, and Vietnam.

It might be the rallying point activists need to stop another, perhaps even more far-reaching, federal action: the pending Trans-Pacific Partnership. The TPP is a massive, Pacific Rim trade agreement that would apply NAFTA-like provisions — including prohibitions on interfering with private investment — to the relationships between the United States and 11 other countries, including Japan, Malaysia, and Vietnam.