Friday, May 15, 2015

It's the left thing to do!

Oxen moving lumber down skid road in Mendocino County before the railway. As non-fast a track as you'd want to see. Mendocino Coast Model Railroad and Historical Society.
I think I may be able to figure out what's stopping me from joining in on the hate for TPP, and spread it out in a clear enough fashion that somebody can explain to me why I'm wrong; it doesn't start so much with what's in the treaty—what do I know about trade policy?—as with the language the opponents are using, which sounds to me a lot like propaganda, for example with Senator Warren at NPR on Tuesday on the subject of the provision that upsets her the most, the Investor-State Dispute Settlement (ISDS) mechanism:
Look, I have three objections. The first is that the president is asking us to vote to grease the skids on a trade deal that has largely been negotiated, but that is still held in secret.

The second is that we know that corporations under this deal are going to get to sue countries for regulations they don't like and that the decisions are not going to be made by courts, they're going to be made by private lawyers.

And the third problem is that he wants us to vote on a six-year, grease-the-skids deal.
Well, there you go, that's two, two-and-a-half tops. But she knows very well that the deal is not exactly secret from her (she's been allowed to read it, though apparently not to take notes), and will not have been secret from anybody for at least 60 days by the time she actually does get to vote on it, up to 90 if the Senate behaves according to coffee-cooling tradition. And when it gets there she can vote against it, as can the other 99 Senators. The skids may be greased, but no sled can get through a brick wall, even if it has six years to do it with.

And then the thing about the private lawyers, which she repeated about five times in the course of the interview, sometimes calling them "corporate" lawyers, making it sound as if every time a corporation sues a national government over a disagreement under the TPP the case is going to go to a Koch Brothers shyster for $8 million per billable minute to show up and issue a more or less arbitrary ruling. That's really not exactly how it works under the 3,200 treaties under which Investor-State Dispute Settlements are currently being resolved.
Each case is judged by a panel of three arbitrators, selected by the government and the investor involved in the case from a small pool of specialist lawyers. The tribunals can meet anywhere convenient to the parties, with decisions based on the wording of treaties rather than national laws.
They aren't "private lawyers", they are arbitration tribunals formed by mutual consent of the parties,
and almost all are filed with an international organization especially set up for the purpose:
Of the 58 new disputes [filed in 2012], 39 were filed with the International Centre for Settlement of Investment Disputes (ICSID) (of which seven cases are under the ICSID Additional Facility rules), seven under the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) and another five under the Stockholm Chamber of Commerce (SCC). The International Chamber of Commerce (ICC) and the Cairo Regional Centre for International Commercial Arbitration (CRCICA) received one new case each.
Leaving six that are not clear to the authors of that report, but still.

What really annoys me, though, is the idea that ISDS will (as if it didn't exist already) threaten US national sovereignty, as Warren put it in an op-ed last February in the Washington Post:
Agreeing to ISDS in this enormous new treaty would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty.

ISDS would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court.
Because it appeals shamelessly to USA fuck-yeah jingoism, in the first place, and then because it actually, if you read around, doesn't seem to be at all the case, based on experience with the things so far.

In the first place because, to date, big corporations basically don't sue the US at all under the provision. EU companies don't ever, and the large majority of ISDS actions are taken against developing countries and the new EU members from eastern Europe, where legal systems are not felt to be up to the challenge of hearing a huge case. And the outcome is generally a settlement or a victory for the government: the corporate claimant rarely wins, per Demystifying Investor-State Dispute Settlement by Roderick Abbott, Fredrik Erixon, and Martina Francesca Ferracane, ECIPE:
Twice as many cases that end with a tribunal ruling are won by the state than the investor. The number of known ISDS cases in the past ten years that ended with a tribunal ruling in favour of the investor is no more than 16. 


With Argentina and Venezuela as the most frequent respondents, while companies from the US and the Netherlands lead, by far, in making complaints:

And it's very rare for a claimant to get as much as 80% of the claim.


(Much richer data and specific cases for the 2012 year alone are discussed here.)

Second, the most abusive cases, always cited by opponents, the suits of Philip Morris against Uruguay and Australia for their rules on cigarette packaging, haven't yet been decided, five years on, but no such case has yet found against the government. Meanwhile, Uruguay has gone ahead to implement its anti-smoking programs.  That's why the opponents keep talking about what the TPP provisions "will" do, because they can't say anything about what similar provisions have done in the past.

Then again, there's poverty-stricken Togo, which gave in and dropped its anti-smoking program, understandably, to blackmail when Philip Morris threatened them with an ISDS suit (thanks to John Oliver they have been internationally exposed, bullies as well as poisoners, and will perhaps be shamed into dropping their threats—art often does a better job than courts); there's no telling whether PM would have won that suit either, but the Togolese government didn't feel it could afford the fight. This proves that Philip Morris is a very evil company, and that some mechanism is needed to protect poor countries from this kind of abuse.

As a matter of fact, my third point is that the writing of ISDS agreements has improved over the years in such a way as to combat this:
Commissioner [for Trade of the EU Cecilia Malmström] pointed out the changes already made in the EU-Canada trade deal, which she said will not be reopened.
That includes for the first time ever a reference to the right to regulate, which reaffirms the right of the EU and Canada to pursue legitimate public policy objectives such as the protection of health, safety or the environment.
“We gave governments, not arbitrators, the ultimate control over interpretation of the rules,” she insisted.
TTIP would go even further, according to what the Commissioner disclosed to MEPs. The Commission is thinking of “a clause that would say that investment protection rules offer no guarantee for investors that the legal regime under which they have invested will stay the same”.
So you don't need to trust Obama on this, because other people are talking about it: national sovereignty is being read explicitly into these agreements in a way that ought to meet Warren's fears.

But I don't think the US needs the same level of protection as Togo, and I don't like the kind of American exceptionalism argument that says our laws are just so great that nobody can challenge them. Honestly they aren't that great, in particular on financial issues, as Elizabeth Warren can tell you.

I don't think ISDS is an ideal resolution to the problems it's aimed at; the panels are too expensive, and they often take too long, and there's no appeal process. What we ought to have, perhaps, is an International Investment Court instead, maybe in Brussels, where all the cases could be heard. Guess what: somebody's thought of that.
Brussels is also looking into another idea: nominating a limited list of trustworthy arbitrators who would decide on all TTIP investment cases. To get on the list of arbitrators, worthy candidates need to be qualified and/or be judges in their home country.
A third possibility is to create an appeal mechanism system, which at the moment does not exist in ISDS tribunals.
“This is a concern that united business and NGOs,” Malmström said.  An appeal body with permanent members directly within TTIP would be considered an embryonic step towards a permanent multilateral court.
Well, it's hard to imagine Americans putting up with that, given the way we reject everything from the Law of the Sea Treaty to a fair Status of Forces Agreement with Iraq because Our Guys can never be held responsible for anything they've done. We can't join the International Criminal Court because they'd allow Americans to get busted. We can't sign the Ottawa Treaty to ban landmines or the Convention on Cluster Munitions because we're so fucking special. I'm an internationalist! I'm against that! And I feel the same way about the International Investment Court? Well, maybe a little less emotional, I guess.

What we have now in the 3,200 treaties with ISDS provisions and will have in the TTP and TTIP if they ever become law is to that sort of solution as Obamacare is to a normal socialized medicine system, not ideal, but hopefully getting more of the job done than not having it would do. If we ever get a chance at starting an International Investment Court, I hope Elizabeth Warren will be on board with it. In the meantime she could stop fighting so hard against second best.

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