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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Comments on “US Says 'No' To EU Plan For New Corporate Sovereignty Courts: So What Happens Now With TAFTA/TTIP?”

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32 Comments
That One Guy (profile) says:

That's easy enough to answer

What happens now? Simple enough, now that their attempt failed, they’ll go back to trying to slip corporate sovereignty through anyway, completely ignoring all protests to the contrary, like good little employees.

They’ve been paid, or ‘paid’, to get corporate sovereignty in place everywhere it can be, a trifle like ‘the overwhelming majority of the public is against it’ isn’t going to even slow them down, barring some ACTA protests-level opposition.

Sag Ichnicht says:

Re: That's easy enough to answer

The Commission might very well try that but don’t forget that TTIP will go nowhere without a majority in the European Parliament. And as ACTA has shown already, the European Parliament is both, responsive to pressure from the civil society and ready to vote big treaties down as a consequence.

Richard (profile) says:

Re: Re: That's easy enough to answer

The European parliament has one huge advantage over national parliaments. It can never be controlled by a single party. This means that the lobbyists have a much bigger job controlling it than they do for (say) the UK parliament.

To make matters worse the elections to theEuropean parliament are generally not synchronised with any national elections and hence a disproportionate number of “protest party” candidates are usually elected.

Anonymous Coward says:

Re: Re: That's easy enough to answer

The European Parliament is more responsive to civil society concerns than the commission. In the case of ACTA, the process was completely controlled by the commissions constant fight for their work and several politicians keeps denying the publics objections as misinformed to this day. TTIP is ACTA version 2 and with several pitfalls in lowered standards and a general acceptance of ISDS as a good idea (“We can always change it if it creates problems” is a common response, but in reality that is not really true in political zero sum games.). Even with a public outcry I don’t expect ALDE to go against another trade deal. Going against the lobbyists again is just too costly on more important issues.

A. Lauridsen says:

Re: Re: Re: That's easy enough to answer

In order for TTIP to pass, it needs to be accepted by each memberstate, in some countries this will require a referendum.

On top of that it is doubfull if ISDS as it stands will be accepted by Germany and possibly France.

On top of that it needs to be approved by the European Parliament, which at this point looks a bit iffy.

That One Guy (profile) says:

Slip of the tongue?

Just noticed, the USG rejected the idea of independent courts, and the ‘weakening’ of corporate sovereignty by saying that ‘The US will not tolerate interference in its national sovereignty.

What exactly does corporate sovereignty have to do with US national sovereignty? Are not the corporate sovereignty ‘courts’ supposed to be independent of any country, favoring none above the others?

Their little slip-up would seem to confirm even more than before that the USG believes corporate sovereignty is meant to benefit only US corporations, and has nothing to do with helping the corporations in other countries except purely as a side-effect.

The USG sees corporate sovereignty as a way to place (US) corporations on a higher footing than national governments, just not the US government, as that would be ‘interference in it’s national sovereignty’. As if there really needed to be any more evidence to support the fact that the US would never honor a corporate sovereignty ruling against it. The process is meant purely to be used against non-US governments, and those governments need to realize this.

That One Guy (profile) says:

Re: Re: Slip of the tongue?

Yes, but they’ve been lying and pretending that corporate sovereignty is meant to benefit all the signatories, not just the US corporations. The rebuttal to the EU’s idea here seems to make it clear that lies or not, the USG sees corporate sovereignty as something to benefit the USG first and foremost.

David says:

Re: Slip of the tongue?

What exactly does corporate sovereignty have to do with US national sovereignty?

Title to the latter has been bought by the former. It’s still named “US national sovereignty” since the name has a certain market value but the corporations have bought a controlling interest in Congress. “The People” are minority stakeholders at best.

It’s sort of like Caldera Corp buying the rights to the name “SCO”, renaming itself into “SCO group”, then making claims about how much injustice the good old “SCO” had to endure by companies making Linux behave like UNIX. Of which Caldera was once an important one…

So yes. US national sovereignty.

Richard (profile) says:

BP

The US needs to think about what would have happened had this treaty been in place when Deepwater Horizon went up. The decisions of US courts on compensation would surely have been subject to some kind of review under ISDS and I am sure that BP would have had to accept far less liability than they actually did in the end. Of course one could argue that this would have been a good thing – since what BP ended up paying was well over the top – especially when compared with the relatively light treatment received by Haliburton (who were after all much more directly to blame).

Anonymous Coward says:

‘The US will not tolerate interference in its national sovereignty’

but the US expects to interfere with every other nations ‘National Sovereignty’! in fact the US expects to be able to dictate everything that can or cannot be done everywhere! if other nations, especially those members of the EU have got any sense at all, considering what the US wants to be able to do, they will tell the US to shove everything right up it’s shit chute and go fuck itself!!

Anonymous Coward says:

Re: Re:

Its not a secret nor a surprise and dont expect any american to give a shit. Just look at the NSA spying on everyone on the planet. Spyin on innocent americans? Biggest thing ever. Spying on non-americans? Well they are spies, so what?
There is a reason why more and more people become “anti-american”, mainly in europe (the rest of the world alredy hates the US so it cant get much worse there).

Anonymous Coward says:

Seems to me you just need a bunch of well funded European corporations threatening to sue the U.S.for lack of gun control. Maybe something about the number of guns intimidating European workers. Or maybe an European pharmaceutical company suing over laws restricting access to abortion drugs.

The U.S. Might reconsider then.

Uriel-238 (profile) says:

During the late middle ages / Renaissance...

We went through a pretty nifty transition of establishing nations. See, in the olden days of yore, one wasn’t a citizen of (say) France but a subject of the King. And every time a king died of pox or backstabs or drunken boar hunting, the heir had to gather up all his subjects and have them re-swear their oath of loyalty as he got coronated by the Archbishop.

Same same, for all his vassals and their subjects. Someone was always dying and the new heir having to make sure his peasants were still loyal.

This is where we made the transition to nations. Instead of fealty to a king, everyone hailed the flag and the land, and transition of new regents could happen more smoothly. Also the people of one province or another could concede that they were still part of the same nation, even though their respective lords were different, and were united by national patriotism.

(Just in time for religious wars.)

Corporate sovereignty seems to be a step back, putting power and law back in the hands of individual warlords, just ones with logos and boards of directors and shareholders.

Richard (profile) says:

Re: During the late middle ages / Renaissance...

Good point – but you missed a trick or two here.

Actually the Romans had already made the step forward and the concept of being a Roman Citizen already meant something similar to the modern concept of nationhood. In fact it went beyond that – you could be a Jew AND a Roman Citizen (as St Paul was). The founding fathers of the US seem to have leant heavily on the Roman concept of citizenship in order to accommodate a plurality of traditions within one nation.

Now the Roman traditions did in fact continue for quite a while – principally (until 1453) in what we now refer to as the Byzantine Empire (although everyone at the time still called it the Roman empire).

The situation you describe with warlords, kings etc came about gradually as a result of the disintegration of the Roman empire in the West – so the move away from the Empire to warlords was associated with a breakdown of civilisation – not a comfortable analogy with what corporations are doing now but probably a good one.

Seeing corporations as the modern equivalents of Goths, Huns, Vikings and Vandals might be a good way to inform public policy!

Anonymous Coward says:

The reason for the US’s rejection of the court system seem rather obvious to me. If the US recognizes the court’s legal legitimacy. The US will then be bound by the laws that court hands down through rulings.

The US wants to make the laws, not have someone else make them. Laws are nothing more than rules. The US wants to make the rules (laws).

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