EU Proposes To Reform Corporate Sovereignty Slightly; US Think Tank Goes Into Panic Mode
from the who's-afraid-of-a-little-rebranding? dept
Back in May, we wrote about the European Commission’s sharing “concerns” about corporate sovereignty chapters in trade agreements. The Commissioner responsible for trade, Cecilia Malmström, even went so far as to say that the present investor-state dispute settlement (ISDS) system was “not fit for purpose in the 21st century.” But rather than removing something that is unnecessary between two economic blocs with highly-developed and fair legal systems, she instead proposed to “reform” it, and to start working towards an international investment court.
That idea was dismissed almost immediately by the US Undersecretary for International Trade at the Commerce Department, Stefan Selig. Despite that, the EU seems set on replacing today’s corporate sovereignty with some kind of court. In a non-binding but important set of recommendations to the European Commission regarding TTIP, the European Parliament called for the following:
to ensure that foreign investors are treated in a non-discriminatory fashion, while benefiting from no greater rights than domestic investors, and to replace the ISDS system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected, and where private interests cannot undermine public policy objectives;
The wording is extremely vague, and leaves plenty of room for a kind of ISDS-Lite to be agreed between the EU and US in TAFA/TTIP. Many in Europe regard the proposal as little more than a face-saving compromise that allows the opponents of ISDS to claim that “this is the end of ISDS in trade deals,” while allowing supporters to maintain that it has merely been re-branded, rather than removed.
We don’t know what the US government thinks of the idea, but we do have a fascinating post on the proposal from The Heritage Foundation, which describes its mission as “to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.” Its views on the EU’s corporate sovereignty reforms are quite clear:
The EU’s proposal, backed by a vote of the European Parliament on July 8 — that the TTIP should establish a permanent investment court, not an ISDS mechanism — is a bad solution in search of a non-existent problem. ISDS mechanisms work well to secure basic legal protections for a signatory state’s nationals abroad. The U.S. should firmly reject the EU’s proposal and insist that TTIP establish an ISDS.
The rest of the post provides rare insights into the thinking of the pro-ISDS, pro-big business camp in the US. Bizarrely, it describes corporate sovereignty tribunals as:
designed to safeguard fair, unbiased, and transparent legal processes by providing independent and impartial arbitration.
That’s an odd description of processes that take place in secret, with no case law to guide decisions, no limits to damages, no right to appeal, and where the tribunal members are corporate lawyers who can also act for the same companies that appear before them in other cases, because there are no rules governing conflicts of interest. But more interesting than this topsy-turvy view of reality is the following revealing comment:
because any case inside the EU can ultimately reach the European Court of Justice (ECJ), and the ECJ is mandated to make decisions that promote deeper European integration, it is not clear how the U.S. can rely on the ECJ to rule fairly when the EU seeks to promote integration in ways that discriminate against the U.S.
Essentially, then, The Heritage Foundation objects to Europe’s highest court doing its job of strengthening the European Union, and wants supranational corporate sovereignty tribunals as an option to overrule its judgements — confirming critics’ worst fears about ISDS undermining democracy. The post then goes on to list a number of problems that the Foundation sees with the EU’s proposed international investment court, many of which again display a curious inversion of reality. For example:
[an investment court] would have limited accountability and few checks and balances.
That is precisely the situation with corporate sovereignty tribunals, which have no checks or balances, and no limits to their power, as clearly shown by the $50 billion award made against the Russian government last year.
The post concludes:
The EU is advancing this proposal in a futile and wrong-headed effort to win over critics who are fundamentally skeptical about freer trade. These critics had not previously raised any objections to the many ISDS mechanisms to which EU nations are already party: They began to complain only when the U.S. became involved.
That’s true, because previous trade agreements incorporated ISDS as a mechanism for rich Western countries — including those in the EU — to use to sue poor, developing countries. Since the latter had few, if any, investments in the Western countries, there was little or no risk that they would use corporate sovereignty against the richer nations. TAFTA/TTIP changes that situation dramatically. Both the US and EU have huge investments in each other: the European Commission estimates them as more than $1.75 trillion dollars in both directions — a clear demonstration ISDS is not needed in order to encourage investors. If there is a corporate sovereignty chapter in TTIP, tens of thousands of companies on both sides of the Atlantic will gain the power to sue governments over policies they claim could impact their future profits adversely.
That is why critics have raised the issue now, and partly why the EU has proposed moving away from such a manifestly flawed approach. Given that it believes in “a strong national defense,” it’s curious that The Heritage Foundation is desperate to preserve a system that gives foreign investors such a powerful weapon to use against America.
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Filed Under: corporate sovereignty, eu, europe, european commission, isds
Companies: heritage foundation
Comments on “EU Proposes To Reform Corporate Sovereignty Slightly; US Think Tank Goes Into Panic Mode”
The only good corporate sovereignty clause is a removed one
Instead of ‘reforming’ corporate sovereignty, they need to kill it entirely. The very idea that private corporations should have equal if not greater power to influence and set the laws of a country as the government and representatives of it is beyond absurd, and it’s an idea that needs to die, and keep being killed every time some corporation pushes for it.
Companies do not have the right to ‘guaranteed’ profits, and countries should have the right to make and change laws based upon what’s best for the public, not what best suits private corporations. Both of these are in direct opposition to the very core ideas behind corporate sovereignty clauses, and as such such clauses need to be gutted from any ‘treaty’ or ‘agreement’ that they’re included in, whether past, present or future.
U.S. really should reject
I agree, the U.S. really should firmly reject the EU’s proposal and insist that TTIP establish an ISDS. That really gonne be best for all parts no matter who´s looking.
Re: U.S. really should reject
Why yes , lets start a war. You know that is inevitable.
Re: U.S. really should reject
I couldn’t agree more. US demanding ISDS is the fasted way to get the EU to abandon TTIP completely.
ISDS have very little to do with trade, and a hell of a lot to do with which emperors court dominates the world.
Re: Re:
Actually, it’s all about cutting out the emperors (our elected governments) leaving corporations in charge.
Frying pan, or fire? Decisions, decisions.
Re: Re: Re:
That is what I meant, which Emperors rule, those supposedly representing the people, or those who run the corporations. Same type of people ascend to power in both situations.
Not adressing the issue
quote:
When read carefully, this response in no way adresses the raised concern: The EU wants to protect their nations and the lobbyists’ response is that this does not protect the interests of their corporations. Typical.
The Heritage Foundation are also the guys that wanted a “stronger Patriot Act” and other such draconian things during the 2011 Republican primary debates.
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Heritage Foundation = Neocons
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Heritage Foundation has for a long time been pretty far outside human reach. I wouldn’t base much on them anymore. Since 2000 they have gone more and more autrary with a president calling hispanics and blacks lesser intelligent and calling for immigrants IQ be considered in immigration policy! They have also moved towards using methodology changing by political stance and completely wrong data to further their points in the 2010s. In 2013 the republican party even loosened their ties with them.
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Doesnt Mexico require immigrants to show they are capable of being a productive citizen? Not too different than asking for an IQ test.
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Even then, IQ testing is still a very small subset of that. The same guy blamed IQ of blacks and hispanics for bad integration. We are talking a very extreme stance bordering racial profiling based on an extremely vague measure called IQ. We are getting pretty close to eugenics here.
US
it’s curious that The Heritage Foundation is desperate to preserve a system that gives foreign investors such a powerful weapon to use against America.
Except that – on past form – the US will simply ignore any ruling it believes to be against its interests.
The history of EU/US trade relations suggests that the EU will do likewise.
In fact no major country will ever follow the court/tribunal if it feels it can get away with it. In those cases where nations do end up following the judgements the court/tribunal amounts to no more than a formalisation of the mechanisms of international diplomatic pressure that would have applied anyway.
Neither the new “court” nor any ISDS mechanism will have any impact at all – part from the money wasted in paying for the people, buildings etc involved.
Re: US
Treaties are for little people.
Re: US
I don’t see much negative in that compared to the current ISDS.
While it may be another absurd laughing stock, it at least provides transparency in the hypocricy as opposed to hypocricy in the transparency we see today.
…where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism.
That gave me a good laugh. It’s impossible for a treaty that is almost the exact opposite in every way imaginable to do any such thing.
Re: Re:
It seems government has given up on the idea of democracy. The people no longer matter. The only thing we are voting for is which politician will represent corporate and their own interests. Elections are simply a short seasonal formality where a broken system simply chooses which candidate predestined and previously intent on acting in their own and corporate interests can do the best job of conning the public into thinking that they will change the government for the better by acting in the public interest and then, once elected, they act in their own interests against what they promised the public. It’s just the way for a broken undemocratic system to determine which candidate is best suited to serve it by using their ability to best con the public during elections as a metric. None of the candidates having a chance to win were ever intent on following through with their promise to act in the public interest, they see elections as a test to determine which candidate is most worthy to personally benefit from a position of power.
Re: Re: A return to dictatorship and tyranny is to be expected.
James Madison and Thomas Jefferson both predicted this to be the case without a certain degree of vigilance from the people (which failed like any other tragedy-of-the-commons). Jefferson felt that revolution, likely blood-soaked violent ones would be necessary to return power to the people.
This is the expected end of our first iteration of democracies, and until we figure out successful mechanisms to stave off regulatory capture and systemic corruption, it will remain so.
For now, we hold on to the current system so long as we can tolerate it, because revolutions are pretty arbitrary in how they decimate the population, and we like to rely on the infrastructures that a big nation with big government provides. You can’t do that once the state fails.
Re: Re: Re:
and representative democracy is, in some cases, a poor rationalization against a more direct democracy. While it may not be perfect (no system is perfect, especially our current one) many rationalizations (and fear mongering) against direct democracy are just an attempt to rationalize imposing a law against me that I would never vote in favor of without giving me the opportunity to vote for said law myself. If I didn’t directly have an opportunity to vote for the laws that I’m being subject to that’s oppression, not democracy, and the government has no moral right whatsoever to enforce those laws on me.
Perhaps we should elect politicians to introduce bills to the public to be voted on by the public. The burden shouldn’t be on the public to get a new bill directly through via starting a petition and signing up so many people just to get it on a voting ballot for everyone to vote on the burden should be on the politician to get any bill they want through via introducing it to the public and getting a minimal number of people to come vote on it. If, say, more than ten percent (or whatever) of the voting population comes and votes and a majority votes in favor of a bill then it should pass. If not even ten percent of the voting population can be bothered to attend to vote on a bill then the bill is obviously not important enough to the public for consideration and should be rejected on that ground.
For immediate, short term, needs perhaps a solution is that we can elect a body of representatives that can pass a temporary bill. The bill can optionally be set to expire in a year or so. Within that time the representatives can then rally the population to vote on the bill directly. If a substantial quantity of voters show up and vote (both must occur) then the bill can continue on. If not then it’s not that important and it should automatically be negated.
At a specific date every five or ten years or so every bill in place (voted in favor of in the past by the population at the time) that has been in place for over five or ten years or so should be up to a revote. All existing bills in place should be presented on the Internet for everyone to read with a unique identifying code to identify the bill, paragraph numbers to identify every paragraph, and sentence numbers to identify every sentence within each paragraph. Since these bills are already in effect they shouldn’t require a minimal threshold of voters to be accepted for continuation. Continuation should be the default. However if a minimal amount of people (say ten percent) show up and it gets a two thirds majority denial rate (people can write in a specific bill and provision they wish to reject) then the bill should be rejected. If a higher minimal amount of voters show up (say twenty percent) and it only gets a 55 percent rejection majority (or whatever) then it should also be rejected. The model should generally follow a statistical model. If we can statistically show that about 60 percent of the population, with high confidence (80% or more) no longer wants this bill to stay in effect then it should no longer stay in effect. Granted there is the fact that statistical models aren’t perfect because those that show up to vote may hold a bias but those that didn’t show up are probably not that determined to keep the bill in effect and are therefore not a very interested voter, they had the same opportunity as everyone else to show up and vote and if enough people that care about an issue enough to show up to vote on it do show up such that they can skew the statistics as a whole against those that are too apathetic to show up then perhaps the determination of those that show up should be heard, and no statistical model is going to be statistically perfect with no bias (it’s not like our current election model is statistically perfect either). A bill already in effect being voted on should reflect a reasonably high degree of probability that the population as a whole shares the same rejection sentiment to thwart any bias in who shows up. Voting booths should also be open for a week in case someone has work or something and therefore can’t show up during a specific time frame so that voters can have good flexibility to help ensure that all interested voters are represented.
In this way any immediate pressing matters, like disaster relief or whatever or immediate threats, can be dealt with quickly. Any long term bills that the population as a whole feels is important enough to get through will get through in the long term. Any long term bills that a future population strongly feels is no longer needed can easily be rejected.
Granted the corrupt ruling class and corporations that are against a more direct democracy will naturally point to potential flaws in such a system. It’s not a perfect system. But it’s a whole lot better than what we have now, a system that is purely bought and paid for by those same corporations that are against direct democracy. and yes, such a system will make it more difficult for certain bills to get passed and it will be bad for the minority of those that rule against the majority interest in so many aspects of our lives. Big corporations will complain about this. Bought politicians will complain about it. How is any bill (that they want) going to ever get passed. It’s the same exact argument that they use to engage in secretive meetings with politicians. If the public got involved these bills will be harder to pass. Direct democracy is mob rule because it doesn’t allow a small minority to disproportionately control the majority against their interests in the interests of that small minority. But under a direct democracy, just like under a more transparent negotiating system, bills will get passed (and bills have been passed more transparently in the past) just not the bills that big corporations want. Which is exactly the point. Attempts to rationalize away a much more direct approach to democracy are just attempts to ensure that corporations write the laws. The whole point of having a person or group of people write laws is so that a small group of interests, a minority, can undemocratically dictate the laws disproportionately against what the public wants. Voting for representatives often doesn’t matter since politicians can just change their minds afterwards without repercussions. Politicians know this and corporations know this which is why they push for such centralized systems of power. We need a more direct approach to democracy. Let those who want a bill passed convince the public that it should be passed more directly.
Re: Re: Re: Re:
and this whole concept of ‘representative democracy’ with so little direct input is just a red herring. It’s just a way to make people more accepting of a corrupt system intent on giving a small minority disproportional power to pass laws against the public that they would never agree to given the opportunity to vote for them more directly. The burden should be on those introducing a bill to prove to voters that it should be passed, not the other way around.
I just thought of an improvement to the above system. Perhaps instead of the previous method of introducing new bills it should be that at the aforementioned date that every bill is introduced to the public for possible rejection all new bills that haven’t been formally accepted by the public (but voted for by elected officials) should be introduced to the public for acceptance. New bills that aren’t accepted get rejected. That way there is a single voting time frame that everyone can vote for or against everything all at once so we don’t all get voter fatigued. This could be the same time frame (elections should last more than just a day, they should last perhaps a week to give more people an opportunity to vote) that representatives are voted for. Having fewer, more meaningful, elections instead of having a plethora of less meaningful ones makes it easier for people to participate in a wider variety of issues. In this way voter bias can be reduced from the statistics.
Re: Re: Re: Re:
The USA is not a representative democracy when less than half of the eligible voters vote – unless one clarifies who is being represented (corporations).
Re: Re: Re:2 Re:
Statistical analysis doesn’t necessarily need such a large sample size to predict what a larger sample or the population as a whole would look like with a high degree of certainty.
Re: Re: Re:3 Re:
And which legislative body uses such statistical analysis to determine how to cast their vote on matters such that they are representing their constituents?
None? – Yeah that’s what I thought.
You see, all one needs to do in order to win an election is to ensure your opponents do not get to vote. Disenfranchisement has been the go to weapon for many decades and it has seen a resurgence lately even though they have been told they are violating the constitution that they hold so dear.
And then when they are give office based upon winning a majority of less than half the eligible voters they claim to have been given a mandate to do their dirt work which only a few rich assholes want – screw the little people because it is so much fun. And this is a representative form of government?
Re: Re: Re:4 Re:
“And which legislative body uses such statistical analysis to determine how to cast their vote on matters such that they are representing their constituents?
None? – Yeah that’s what I thought.”
Which was exactly my point.
isds can be used to sue governments to reduce rules on food safety,
and eg increase patent lengths on drugs,
it,,ll increase drug medical costs for all eu countrys ,reduce grey imports,
eg us can imports cheap drugs from canada .
us companys can sue if they want to bring fracking ,
most eu countrys theres no fracking ,we have higher environmental standards than the us.
imagine a eu company sueing a us state ,
detroit etc cant afford large legal bills ,
They ,ll
do what the eu company wants,
eg countrys are being sued over cigarette packaging ,
look at record companys sueing jamie thomas for 1 million dollars ,
imagine this happening x 10,oooo .
companys can sue cos a new law might reduce their profits ,
so big oil companys , drug companys will control
all new health ,patent evironmental law in the eu.
this is a direct attack on eu rule of law and democracy .
russia may ignore a us court order ,
but france ,the uk
don,t have that choice .
isds is the worst idea since software patents ,
its a gift to lawyers ,big corporations ,
it routes around eu health and safety regulations .
the eu needs to reject isds completely .
If The Heritage Foundation doesn’t like then it’s a good thing.
If the Heritage Foundation’s mission is “to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense,” why in the world does it support ISDS, which does none of that?
Enterprise is not free if there’s a tollbooth on it or foreign actors can get preferential treatment under threat of lawsuits.
“Limited government” only makes sense if you take it to mean “limited to enforcing our will against the people’s.”
“Individual freedom” is being limited by increased surveillance to uphold failing business models.
Are these really traditional American values?
Re: Re:
“to formulate and promote … free enterprise…” why in the world does it support ISDS, which does none of that?
What it supports is “Free Enterprise” as in the “Herald of Free Enterprise”
In other words a disregard for proper safety practices for commercial advantage leading to many deaths amongst members of the public. ISDS certainly does promote that.
Re: Re: Re:
Now that I believe!
why not ignore everything, let the USA do what it wants, ie, RULE THE WORLD and when it has completely fucked it up, then bring out the sensible suggestions!!
Re: Re:
At what point will you be ready to say, “Okay, it’s effed up enough.”? Because it’s in a pretty bad state now.
I get why the US is pushing these “trade” agreements since the government is in the pocket of the corporations, but why the hell would any other government even think of signing these things? Especially poorer countries where the various provisions will make things worse? What do they get out of it that they don’t have already?
Re: Re:
Ability to export goods to USA. If you don’t have access to EUs and USAs markets, your economy is pretty locked. Most older trade agreements would be to reduce tariffs. Today the terms of trade agreements will ensure that the companies who benefitted from the tariff reduction can get more benefit. The ecosystem of trade barriers has moved from weakening direct economic protectionism to reducing the costs associated with differing legal frameworks. It has moved away from a beneficial agreement for both nations to a national zero-sum game with commercial interests calling the shots, since the calculation of losses from different legal frameworks by the commerces is the benefit the nations are seeking to achieve…
Re: Re:
the US has become a fucking bully, that is why.
You like most of the public has no idea just how far American businesses go to get what they want.
An American business will happily take an immediate loss to secure huge gains in the future, so be aware, politicians are damn sure being purchased for this to go through.
Re: Re: Re:
I am willing to bet you’re from a nation that has done worse than you know
Re: Re: Re: Worse than you know
There are no gays in Iran.
I would agree with most of the tpp if we got rid of corporate sovereignty and the making available provisions
And bullets that only kill bad people.
For those of you also flummoxed by the above links, the article is here.
Again, with the magical unicorn keys. No one has explained to me yet how they plan on making the backdoor that can differentiate between a good actor and a bad actor. Especially so, given how much care and respect for fourth-amendment rights law enforcement has utilized Stingray phone-spoofing technology.
I still say if we’re going to decide by fiat that a backdoor that admits only good players is possible, then encryption that is useable only by good players is just as possible, and saves us a step.
The Stingray situation is actually a good place for a field test. Were I king, I’d suggest to Stingray that they make their cell-spoofing technology impossible to be used in violation of Fourth Amendment rights. When this is done we’ll renew our look into crypto that can only be used for good.
Re: And bullets that only kill bad people.
…aaaaand I posted this in the wrong window.
Blargh.
And I have no time to correct it now.
They're removing TTIP's Brain!
The European Parliament proposal, in a nutshell, is the negation of every broad goal of the TTIP ISDS agreement; which was designed to exclude democratic principles, exclude public scrutiny, encourage ISDS bias and inconsistency in favor of US corporations, to ensure those biased decisions were absolutely final, and override inconvenient public policy objectives.
It’s like the EU has proposed cutting a out TTIP’s brain and replacing it with a lump of coal. It’s no wonder the think tank is in a panic. EU Parliament saw through them.
Re: They're removing TTIP's Brain!
Yeah, but it’s still ISDS lite. We’re better off without any of it.