Recently, we looked at how corporate sovereignty provisions undermine democracy by irrevocably binding future governments. The analysis was framed in terms of the UK's situation, but applied more generally to any country that signs up to investor-state dispute (ISDS) mechanisms in trade agreements. In particular, it applies to the US. And yet in President Obama's (in)famous TPP speech at Nike a few weeks ago -- the one where he claimed some of his "dearest friends" were wrong -- he said the following:
[TPP] critics warn that parts of this deal would undermine American regulation -- food safety, worker safety, even financial regulations. They're making this stuff up. (Applause.) This is just not true. No trade agreement is going to force us to change our laws.
The House Agriculture Committee voted 38-6 to repeal in its entirety country-of-origin-labeling (COOL) for beef, pork and poultry. The House vote came in response to a May 18 ruling by the World Trade Organization (WTO) that the U.S. had violated global trade rules by requiring supermarket labels on beef and pork to indicate where livestock was born, raised and slaughtered.
Congress has not repealed it because of overwhelming public support for COOL -- 90% of Americans support such a measure, according to Consumer Reports. Needless to say, civil society including farm, ranch, consumer, labor and other groups, won't sit quietly. But the fact is that the U.S. has to change COOL or face trade sanctions (though how significant is unclear). The USTR has already indicated it will encourage Congress to revise COOL.
As that makes clear, alongside the fact that it is quite possible that the US will indeed modify its laws here because of a trade agreement, this would be happening even though the laws in question enjoy huge support among the US public. Which shows that trade agreements can not only force laws to be changed, but can do so with absolutely no regard to what the people in whose name they are supposedly negotiated, actually want.
Techdirt has been at the forefront of pointing out the dangers of including investor-state dispute settlement (ISDS) in so-called trade agreements. Indeed, we even helped come up with a new term -- corporate sovereignty -- to make clear that ISDS is really about placing corporations on the same level as entire nations, and giving them a unique power to sue a country for alleged harms before special tribunals. But there's an additional aspect to this, which is explored in an insightful article by Sam Fowles on The Conversation.
He points out that although we don't know in detail what the US-EU TAFTA/TTIP agreement will contain, we do have the text for the one between Canada and the EU, the Comprehensive Economic and Trade Agreement (pdf), known as CETA. The European Commission has said many times that it aims to build on the corporate sovereignty chapter in CETA when it comes to negotiating TTIP. One feature of ISDS in CETA is the following:
In the event that the present Agreement is terminated, the provisions of [Chapter X Investment] shall continue to be effective for a further period of 20 years from that date in respect of investments made before the date of termination of the present Agreement.
That is, even if a party pulls out of CETA, it will still be bound by the corporate sovereignty provisions for another 20 years, whether it likes it or not. Since we know that the US model investment treaty (pdf) also requires parties to continue allowing ISDS claims for ten years, it seems likely that TAFTA/TTIP, if it includes corporate sovereignty, will also have such a clause, for at least ten years, maybe more. Fowles explains why that is a problem -- he talks about the UK Parliament, but it applies equally to the US:
Parliament represents the will of the people. Therefore it can make or unmake any law it wants. But there’s a caveat: parliament can’t make a law that would bind future parliaments. To do so would be undemocratic. The laws of one generation are often inappropriate for the next. Parliament must embody the will of the people at the time. When two ordinary laws conflict, the courts will always apply the one passed most recently.
But the 10/20-year extension of ISDS interferes with that. It says that whatever the views of government in power, it must still respect the ISDS chapter signed by one of its predecessors. One implication is that for a decade or two, any major policy changes could be subject to billion-dollar cases before corporate sovereignty tribunals -- a strong disincentive to bring them in, whatever the public might want. The implication is clear. As Fowles writes:
If democracy is to remain the fundamental tenet of our constitution then TTIP must not be ratified. At the very least we must derogate from the 20-year clause. Living under a government you don’t like is the risk you take in a democracy, but being forced to live by rules agreed 20 years ago is fundamentally undemocratic.
As Techdirt explained last year, Canada has already signed a trade agreement with China that will take precedence over Canada's constitution for 31 years. Let's hope the US and EU aren't foolish enough to follow suit by allowing corporate sovereignty to reign over them even after TAFTA/TTIP is terminated.
We've covered how Senator Wyden has been pressing the administration on ACTA and TPP concerning the process behind both agreements. The State Department has now responded by admitting that ACTA is, in fact, binding on the United States.
Under international law, the ACTA is a legally binding international agreement. By its terms, the ACTA enters into force when at least six parties have deposited instruments indicating their consent to be bound. Accordingly, once in force for the United States, the ACTA will impose obligations on the United States that are governed by international law. As in the case of other international agreements, it is possible that Congress could enact subsequent changes in U.S. law that are inconsistent with U.S. international obligations.
That's interesting, because it's what many people had assumed (and what other signatories to ACTA have been saying), but actually contradicts earlier statements from the USTR suggesting that we can ignore parts of the agreement that we don't like or which conflict with existing US law. It also means that, as we've been warning, ACTA dangerously restricts Congress from passing new laws that could push back on some of the worst aspects of copyright law. Sure, Congress could ignore ACTA, but there would be substantial problems if it were to do so. In other words, ACTA is binding on the US under international law... but not under US law. Of course, international law trumps US law here, so that's kind of meaningless.
And yet, the administration still insists that it can pass and ratify ACTA without Congressional approval. In the same letter, the State Department says that it doesn't see any problem in having the President approve ACTA without Senate ratification, because it doesn't require any changes today. First of all, it's not entirely clear if that's true, and there are some areas where it is believed current ACTA provisions likely come into conflict with US law (though the USTR squeezes around this by saying that all depends on how you interpret the phrases in ACTA -- which seems like an issue of piss poor drafting of the agreement by the USTR).
Either way, the claim that this does not need Senate ratification appears to be incorrect. The fact that it is restricting Congress's ability to act on an issue which is Congress's mandate (not the administration's) suggests that there is simply no way that the President can sign ACTA without it being ratified by Congress. Even if it doesn't force Congress to change laws today, it does unquestionably hinder Congress' ability to change laws in the future.
Perhaps even more ridiculous is that earlier today, USTR Ron Kirk appeared before a Senate committee on trade issues, where Senator Wyden was able to ask Kirk about both ACTA and TPP. The answers were quite disturbing, and show the rather imperialistic attitude that the administration and Kirk in particular have taken on this issue:
After repeating what the State Department said about it being binding, the discussion on TPP is downright ridiculous. Kirk insists that the USTR has been super-transparent on TPP. That's interesting, considering that no documents have been released, no efforts to discuss the document with the public are planned and, in fact, the USTR has planned to keep all background documents on TPP secret until four years after the agreement is ratified.
Wyden points out that the public is clearly up in arms over intellectual property issues, as seen by the response to SOPA and PIPA -- and notes that, currently, the USTR is requiring people to have security clearance to see TPP. He questions what's wrong with having the USTR publicly display what its own proposals are for TPP. He's not saying they should reveal trade secrets or proposals from others -- but make the US's own proposals public. Kirk insists that it's unfair to compare TPP to SOPA and PIPA. That would be a lot more convincing if we could actually see the details, but we can't, since we don't have security clearance and we haven't been "chosen" by the USTR.
In response to the request to put the proposals up publicly on the internet, Kirk insists that if we do that, we'll "never be able to negotiate another trade agreement again" because others wouldn't come to the table. Kirk made this identical argument about ACTA. Of course, later, after the secret documents leaked, we found out that most of the other negotiators wanted the documents public... but it was the US and Ron Kirk who wanted them secret. So I'm sorry, but his claims that others would leave the table and wouldn't negotiate just don't make any sense at all.
Wyden points out, again, that "the norm" for how the public views intellectual property changed on January 18th -- and the public needs to be involved in these debates. He asks Kirk to "throw open the doors" to the USTR so that the TPP negotiation info is a lot more public. Kirk's response is quite bizarre. He talks about the importance of democracy and elections, and letting the elected officials represent the public's interest.
Forgive me for asking, but when did we elect Ron Kirk to head the USTR? He's an appointee, not an elected official. He doesn't represent the public. At all. And that needs to change.
Michael Scott points us to a discussion noting that famed circuit court judge Richard Posner has admitted that when he recently took out a mortgage, he didn't bother reading the legal language, which leads to stories of many other lawyers admitting they don't bother reading the legal language of many of the things they sign. And yet... those things are still considered binding. I think most people realize that the language of such things will almost never actually matter, but of course, when it does matter, it really does matter. And, of course, that leads to a general question: why do we even bother with all this ridiculous legal language if no one's really agreeing to it?