Time To Get Rid Of Corporate Sovereignty? USTR Robert Lighthizer Seems To Think So
from the you-either-are-in-the-market,-or-you're-not-in-the-market dept
As we noted a couple of months ago, the topic of corporate sovereignty — also known as investor-state dispute settlement (ISDS) — has rather dropped out of the public eye. One post on the subject from earlier this year pointed out that an editorial in the Financial Times had called for ISDS to be “ditched“. That was welcome but surprising. At the time, it seemed like an outlier, but it now looks more as if it was simply ahead of the field, as many more have started to call for the same. For example 230 law and economics professors are urging President Trump to remove corporate sovereignty from NAFTA and other trade deals (pdf). From a rather different viewpoint, here’s Dan Ikenson, a director at the Cato Institute, calling for ISDS to be absent from a re-negotiated NAFTA:
U.S. negotiators should offer to drop their rules-of-origin and sunset provision demands in exchange for agreement to expunge the controversial dispute settlement provisions under Chapters 11 and 19. These provisions are unnecessary, raise fundamental questions about sovereignty and constitutionality, and fuel trade agreement opposition on both the political left and right.
It’s all very well for professors and pundits to call for corporate sovereignty to go, but what do the people who have the power — the politicians — think? Well, here’s the newly-elected prime minister of New Zealand, Jacinda Ardern, speaking on the topic:
We remain determined to do our utmost to amend the ISDS provisions of TPP. In addition, Cabinet has today instructed trade negotiation officials to oppose ISDS in any future free trade agreements.
Finally, and arguably most importantly, this is what the US Trade Representative, Robert Lighthizer, said recently (reported on Forbes):
It’s always odd to me when the business people come around and say, ‘Oh, we just want our investments protected.’ ? I mean, don’t we all? I would love to have my investments guaranteed. But unfortunately, it doesn’t work that way in the market. ? I’ve had people come in and say, literally, to me: ‘Oh, but you can’t do this: you can’t change ISDS. ? You can’t do that because we wouldn’t have made the investment otherwise.’ I?m thinking, ‘Well, then why is it a good policy of the United States government to encourage investment in Mexico?’ ? The bottom line is, business says: ‘We want to make decisions and have markets decide. But! We would like to have political risk insurance paid for by the United States’ government.’ And to me that’s absurd. You either are in the market, or you’re not in the market.
Whether that extraordinarily sensible analysis is ultimately converted into action remains to be seen: there will be plenty of lobbying against the idea. But the fact that so many are now making the call for corporate sovereignty to be dropped from existing and future trade deals does, at least, make it much more likely that it will happen soon.
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Filed Under: corporate sovereignty, isds, nafta, robert lighthizer, ustr
Comments on “Time To Get Rid Of Corporate Sovereignty? USTR Robert Lighthizer Seems To Think So”
get rid of it? it should never have been allowed to exist in the first place! it has done nothing to aid anyone other than specific companies and industries that were too bone friggin idle to compete on an even footing with others and couldn’t handle being in the position to put profits over the health, safety and well-being of the public, of their own customers and often their own workers as well as governments and whole countries! those who propagated this need to be arrested and taken to court, found guilty and jailed for a very long time!!
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Not to mention the whole need for it doesn’t make sense in most trade deals.
ISDS were created for use in 3rd world countries with a history of a corrupt government that might have a history of just deciding to seize a business’s property in their country just because they can. The 3rd world countries agree to ISDS because without it literally no one will invest money in their country.
The countries in a deal like NAFTA include much better off countries then that. And none of the US/Canada/Mexico has a history of corrupt behavior like that, none of them have problems where foreign investors refuse to invest in those countries out of fear of a corrupt government seizing their assets.
Using ISDS in every trade deal, for every country is like inventing crutches for someone with a broken leg, and then requiring everyone use crutches to get around, even if both their legs work perfectly fine. Why would anyone do such a stupid thing?
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“Why would anyone do such a stupid thing?”
Why won’t these 3rd world countries stop running off civilized society and investors? People just cannot stop sabotaging themselves… that’s why.
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“running off civilized society and investors”
Hahaha – you mean those carpet baggers?
Why won’t these multinational companies stop raping and pillaging the assets of 3rd world countries? Investors need their payout that’s why and corporations are psychopaths…. or is that corporations management?
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So, you’re saying that it’s better for countries with no industry and a massive poverty rate to not be paid for the resources they have or the work needed to extract them, because that exploits them somehow?
You donate money to PETA animal shelters too, don’t you.
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Poster may have been implying that people dislike being raped, pillaged and generally fucked over and murdered by the invading armies of foreign “investors”.
Get yer asses off my resources you poverty stricken hobos
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peta…ha. nope never. Can I assume that was your version of an ad hominem attack?
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Just for laughs, name two countries where the foreign investors changed that. I don’t think you can: mostly what foreign investors bring third world countries is crushing debt, deeper poverty, public health problems, dictatorship and a government coup. And, of course, a lack of resources due to their having been extracted.
See that’s what this ISDS nonsense is really about, aversion to risk. But only risk to the company; the company still wants to sell lots of risk to everyone else. It just doesn’t want any risk for itself.
Take Enron as a poster child. What it did for third world countries was sell them an enormous debt they risked not being able to pay, an industrial infrastructure that they risked not being able to maintain, huge health risks for their people, a risk of government collapse, and the risk of the resources Enron took not being compensated.
That should not be surprising because the company was also selling risk to its investors, risk to the banks that lent it money, and risk to other companies. Basically, Enron was in the business of selling a flood of risk and taking none itself. Not just small, managed risks either: extinction-event level risks. And it would still be in business if the blinkety-blank banks hadn’t stopped buying risk.
If Enron were still around, it would be a prime lobbyist in favor of ISDS. And then it would sue the banks for not buying more risk.
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