They are mechanisms by which rich, powerful nations get poor, weaker nations to open their borders to trade on their terms enriching the large corporations, a small elite and, if you’re very lucky, a few in the middle as well whilst driving those at the bottom off the land and into the sweatshops.
However every now and again something comes along that’s a little different.
The Transatlantic Trade and Investment Partnership is a free trade deal between two trading blocks, Europe and the USA, neither or which are particularly poor and which have very few trade barriers.
So what’s going on?
THE RACE TO THE BOTTOM
What there is between Europe and the USA is a different of regulations. Europe has a lot of faults – an awful lot of faults – but they have been pretty good in passing laws that try to make the world fairer, safer and touch greener. Usually these rules were passed over the kicking and screaming objections of the British delegation, but passed they were.
So there is the Water Policy Framework, the Habitats Directive, the Birds Directive, the REACH Directive on chemicals, the 2020 Climate Goals and so on and so on. You can be cynical – I frequently am – but you won’t find an international body with anything better.
In the USA meanwhile they have, well, nothing much that is very effective.
So whilst negotiations over TTIP may take in the French subsidising their own film industry or the US ban on haggis , but I rather suspect the issue of environmental regulations will take up more time.
So what happens if we get TTIP and a corporation takes exception to the EU objecting to the Genetically Modified growth hormones in its milk causing cancer or the pesticides sprayed on its fruit wiping out the bees?
The answer is that the affronted company seeks redress via the investor-to-state dispute settlement.
Now ISDSs do have a place in the world. They allow companies to do business in parts of the world where the rule of law is not the norm, as if the local warlord decides to nick the plant they will get compensation. However this is very unlikely to happen in Luxembourg or even, nowadays, in Leeds.
We live in a world in which governments have largely failed to regulate the activities of powerful corporations, but ISDSs go one better than this and actually allow corporations to sue governments.
What constitutes a ‘dispute’ is not defined, so anything that upsets the company is fair game, and being stopped from dumping your toxic crap wherever you want would do.
A Stitch Up?
An ISDS is resolved by a panel of three people. That’s not very many for such a big decsision, but it gets worse. One panel member is chosen by each side and the third by mutual agreement. Sounds fair enough, but wait.
Let’s assume we win and the government bans fracking. A US based oil company objects and we get a ISDS. Who does the government pick? Well, not someone who opposes fracking anyway. If the government has been forced to do something it doesn’t want to by those pesky voters the ISDS gives it a get out of jail free card. They can hold up their hands and say, don’t blame us?
We can’t very well prove it, but this sort of thing is rumoured to go on all the time. Environmentalists get a corporation to bring in less destructive practises, thereby threatening the bottom line of a useful party donor. Solution? Easy, just get some friendly corporation to call in an ISDS. Donor happy, party treasurer happy, environment fucked.
But surely that wouldn’t happen here?
Well, the Canadian state of Quebec doesn’t think that.
Quebec is a region of Canada that takes self government seriously, so when concerns arose about fracking under the St Lawrence river their parliament imposed a moratorium whilst they tried to figure out if this was safe. The experts didn’t get a chance to submit their report though before the oil and gas company Lone Pine Resources Inc. landed them with a $250 million lawsuit.
They were using the ISDS mechanism of the North American Free Trade agreement. Pretty much
everyone agrees this is a bad thing, but the suit still stands. Nor is this case a one off. in 1997 Canada banned the chemical MMT as it a dangerous toxin. They were sued by Ethyl Corporation and the ban was reversed. The $13 million compensation payment was more than the annual Environment Canada budget for enforcement and compliance and the agency even issued a statement saying MMT was safe, which they almost certainly didn’t believe.
You may not think of Canada as a poor county able to be bullied by corporation or its southern neighbour, but that is what appears to be happening. If Canada can’t stand up to NAFTA and the USA, who in Europe could?
My biggest fear for the anti-fracking movement used to be that we’d put in all the hard work trying to get fracking banned, only to find it wasn’t commercially viable anyway. Now my main worry is that even if we get the government to listen to the people and ban fracking, TTIP will override democracy.
What would happen then is anyone’s guess, but I suspect in that case Russell Brand would not be the only one calling for a revolution.