Robin Broad and John Cavanagh

As the Obama administration negotiates new trade agreements with European and Pacific nations, a battle has emerged over the agreements’ egregious rules that grant giant corporations unreasonable powers to subvert democracy. These rules, dubbed “investor rights” by the corporations, allow firms to sue governments over actions—including public interest regulations—that reduce the value of their investments.

Oxfam, the Institute for Policy Studies, and four other non-profits are releasing a new study that explains why these rules are so dangerous to democracy and the environment. We are among the co-authors of this study, titled “Debunking Eight Falsehoods by Pacific Rim Mining/OceanaGold in El Salvador.” The report offers a powerful case study of everything that is wrong with this corporate assault on democracy.

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Martin Khor

Originally published in The Star (Malaysia).

If you or some family members or friends suffer from cancer, hepatitis, AIDS, asthma or other serious ailments, it’s worth your while to follow the Trans Pacific Partnership Agreement (TPPA) negotiations, now going on in Singapore.

It’s really a matter of life and death. For the TPPA can cut off the potential supply of cheaper generic life-saving medicines, especially when the branded products are priced so sky-high that very few can afford them.

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Robin Broad

This post is drawn from a new article regular TCB contributor Robin Broad wrote with John Cavanagh, “A Strategic Fight Against Corporate Rule,” The Nation, February 3, 2014.

Over the past several decades, multinational corporate Goliaths have helped to write and rewrite hundreds of rules skewing tax, trade, investment and other policies in their favor. The extraordinary damage these policies have caused has become increasingly apparent to the communities and governments most directly affected by them. This, in turn, has strengthened the potential of a movement that’s emerging to try to reverse the momentum. But just like David with his slingshot, the local, environmental and government leaders seeking to revise rules to favor communities and the planet must pick their battles carefully.

We have come to believe strongly that one of the most promising of these battles takes aim at an egregious set of agreements that allow corporations to sue national governments. Until three decades ago, governments could pass laws to protect consumers, workers, health, the environment and domestic firms with little threat of outside legal challenge from corporations. All that changed when corporations started acquiring the “right” to sue governments over actions—including public-interest regulations—that reduce the value of their investments. These rights first appeared in little-known bilateral investment treaties. Twenty years ago, corporate lawyers embedded them in the North American Free Trade Agreement (NAFTA). Today, more than 3,000 trade and investment agreements and even some national investment laws grant foreign investors these powers.

The Obama administration is attempting to insert similar anti-democratic investor protections in new trade and investment agreements with countries that border the Pacific and with the European Union. Hoping to expedite the so-called Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), in early 2014, U.S. congressional leaders introduced fast-track trade promotion legislation that would severely limit Congress’s ability to amend such agreements. The widely anticipated move set off a storm of protest from unions, environmentalists, liberal members of Congress and others, and will likely remain a high-profile fight in the United States in the coming months.

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Timothy A. Wise

Cross-posted from Global Post.

Mexico’s largest agribusiness associated invited me to Aguascalientes to participate in its annual forum in October. The theme for this year’s gathering was “New Perspectives on the Challenge of Feeding the World.”

But it was unclear why Mexico, which now imports 42 percent of its food, would be worried about feeding the world. It wasn’t doing so well feeding its own people.

In part, you can thank the North American Free Trade Agreement (NAFTA) for that. Twenty years ago, on January 1, 1994, NAFTA took effect, and Mexico was the poster child for the wonders of free trade. The promises seemed endless.

Mexico would enter the “First World” of developed countries on the crest of rising trade and foreign investment. Its dynamic manufacturing sector would create so many jobs it would not only end the U.S.  immigration problem but absorb millions of peasant farmers freed from their unproductive toil in the fields. Mexico could import cheap corn and export electronics.

So much for promises.

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Timothy A. Wise

Re-published from the Global Post.

BALI, Indonesia — A tense and acrimonious four-day standoff ended Saturday morning at the World Trade Organization meeting in Bali.

A last-minute objection by Cuba and three Latin American allies held up the agreement Friday night, with Cuba objecting to the hypocrisy of a “trade facilitation” agreement – one part of the so-called Bali package – that ignored the United States’ discriminatory treatment of the island nation under the US trade embargo.

Overnight, text was added to reflect Cuba’s concern even if it did nothing to resolve the issue. Call it the story of the WTO.

Leading up to this week’s meeting, the US and other rich countries had attempted to declare India’s food security program in violation of the WTO’s archaic and biased rules and sought to discipline the program as “trade distorting.”

India and other developing countries fended off the challenge to these programs, which support small farmers and help feed the hungry. But the final agreement is no green light.

Countries considering such programs would not be protected by the “peace clause” that will shield India and some others for the next four years. And onerous reporting requirements put the onus on the developing country to prove that its stock-holding program is not “trade distorting.”

In return for the modest protections for food security programs, and a vague package of reforms for the least developed countries, developing countries also agreed here to a trade facilitation package that could benefit some of them but might demand more than they can give.

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Timothy A. Wise

A top ten list of hypocritical US statements on India’s food security program

I ended a recent article on the US government’s objections to the food security proposal of India and other developing countries at the World Trade Organization meetings in Bali with the provocative statement that what the WTO needs is not a “Peace Clause” – a four-year cease fire on WTO suits – but a “Hypocrisy Clause” – an agreement to reduce or eliminate the trade-distorting hypocrisy that is preventing a Bali agreement. I called for immediate reductions by the “most developed hypocrites.”

In a subsequent talk, I was asked to elaborate. I offered my “top ten” examples of the US government’s most trade-distorting hypocrisy:

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Martin Khor

Originally published at Third World Economics.

The investor-state dispute system, whereby foreign investors can sue the host-country government in an international tribunal, is one of the issues being negotiated in the Trans-Pacific Partnership Agreement.

In the public debate surrounding the Trans-Pacific Partnership Agreement (TPPA), an issue that seems to stand out is the investor-state dispute settlement (ISDS) system. It would enable foreign investors of TPPA countries to directly sue the host government in an international tribunal.

In most US free trade agreements (FTAs) with investor-state dispute provisions, the tribunal most mentioned is the International Centre for Settlement of Investment Disputes (ICSID), an arbitration court hosted by the World Bank in Washington.

ISDS would be a powerful system for enforcing the rules of the TPPA, which is currently being negotiated by the US and 11 other Pacific Rim countries. Any foreign investor from TPPA countries can take up a case claiming that the government has not met its relevant TPPA obligations.

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Martin Khor

More on the TPPA negotiations from Triple Crisis contributor Martin Khor. Cross posted from Third World Network.

The winds of change are blowing, bringing shifts in perceived wisdom and the old order, especially in the Asian region. The recent APEC summit and associated meetings in Bali were marked not so much by results but by perceptions. In fact, the lack of results, rather than results, was the main story.

This lack was not so much in the APEC itself, but in the Trans Pacific Partnership Agreement (TPPA).

The leaders of TPPA countries met in a separate venue away from the APEC summit. The Indonesians were the host of APEC and not the TPPA, which they are not involved in, and were unhappy that the TPPA threatened to take away the limelight from the main event.

But that was the secondary story. The main news was that U.S. President Barack Obama had to give a miss, not only to his scheduled visits to Malaysia and Indonesia, but to the APEC Summit itself.

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Martin Khor

Cross-posted from the South Centre’s October 2013 South Bulletin.

The negotiations for the Trans Pacific Partnership Agreement (TPPA) have been proceeding at full speed in recent months, giving rise to a lot of interest worldwide.

The stated goal is to conclude the negotiations by the end of 2013. However these is only a slim prospect for this, as there are still many contentions issues to resolve. (The countries participating in the TPPA negotiations are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.)

Not much is known about the TPPA drafts.  But with some of its chapters leaked and available on the internet, and since much of the TPPA is likely to be similar to bilateral FTAs that the United States has already signed, we can have a good idea of its main points.

As can be expected, there are many contentious issues to consider, especially for developing countries.
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From the editors: This piece by Triple Crisis blogger Kevin Gallagher appeared previously on the Institute for New Economic Thinking blog.

Kevin Gallagher

World leaders who are gathering for the APEC summit next week had hoped to be signing the Trans-Pacific Partnership Agreement (TPP). The pact would bring together key Pacific-rim countries into a trading bloc that the United States hopes could counter China’s growing influence in the region.

But talks remain stalled. Among other sticking points, the U.S. is insisting that its TPP trading partners dismantle regulations for cross-border finance. Many TPP nations will have none of it, and for good reason. The U.S. stands on the wrong side of experience, economic theory, and guidelines issued by the International Monetary Fund.

Indeed, it’s the U.S. that could learn a few lessons from the TPP countries when it comes to overseeing cross-border finance.

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