Corporate Sovereignty On The Wane, As Governments Realize It's More Trouble Than It's Worth
from the but-not-dead-yet dept
A few years ago, corporate sovereignty — officially known as “investor-state dispute settlement” (ISDS) — was an indispensable and important element of trade deals. As a result, it would crop up on Techdirt quite often. But the world is finally moving on, and old-style corporate sovereignty is losing its appeal. As we reported last year, the US Trade Representative, Robert Lighthizer, hinted that the US might not support ISDS in future trade deals, but it was not clear what that might mean in practice. The Canadian Broadcasting Corporation (CBC) site has an interesting article that explores the new contours of corporate sovereignty:
The preliminary trade agreement the U.S. recently reached with Mexico may offer a glimpse of what could happen with NAFTA’s Chapter 11 [governing ISDS].
A U.S. official said the two countries wanted ISDS to be “limited” to cases of expropriation, bias against foreign companies or failure to treat all trading partners equally.
The new US thinking places Canada in a tricky position because the latter is involved in several trade deals, which take different approaches to corporate sovereignty. As well as the US-dominated NAFTA, there is CETA, the trade deal with Europe. For that, Canada is acquiescing to the EU’s request to replace ISDS with the new Investment Court System (ICS). In TPP, however — still lumbering on, despite the US withdrawal — Canada seems to be going along with the traditional corporate sovereignty approach.
A willingness to move on from traditional ISDS can be seen in the often overlooked, but important, Regional Comprehensive Economic Partnership (RCEP) trade deal. India’s Business Standard reports:
Despite treading diametrically opposite paths on tariffs and market access, India and China, along with other nations, have hit it off on talks regarding investment norms in the proposed Regional Comprehensive Economic Partnership (RCEP) pact.
In a bid to fast-track the deal, most nations have agreed to ease the investor-state-dispute settlement (ISDS) clauses.
As with NAFTA and CETA, it seems that the nations involved in RCEP no longer regard corporate sovereignty as a priority, and are willing to weaken its powers in order to reach agreement on other areas. Once the principle has been established that ISDS can be watered down, there’s nothing to stop nations proposing that it should be dropped altogether. Given the astonishing awards and abuses that corporate sovereignty has led to in the past, that’s a welcome development.
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Filed Under: ceta, corporate sovereignty, isds, nafta, rcep, trade agreements, ustr
Comments on “Corporate Sovereignty On The Wane, As Governments Realize It's More Trouble Than It's Worth”
Always nice to see good news
In many important ways ISDS could have moved the world towards a point where corporations held too much power over government (pretty much the plotline of most of the 80’s & 90’s dystopian movies).
Re: Corporatocracy
Omni Consumer Products (Robocop movie franchise)
Re: Always nice to see good news
could have??
LMFTFY
really did
Guess we do not need trade deals if we are not going to trade.
Corporate sovereignty is a real turn in the soup. Let’s hope it gets flushed permanently and isn’t a persistent floater.
Greedy overreach squandering potential
ISDS type could have some use technically but they would have to be sharply limited. Not “theft of a right to profits that never existed” but outright appropriation without compensation or other wrongdoing. Losing your oil well after you cause an oil spill is fair game. As is finding your asbestos mine inoperable or nonviable after increased health and safety regulations. But having say oil production outlawed except for state industries not being protected. Essentially only protection from outright theft. Granted said upsides would probably not do much good given how expropriation is a move that already leads to being sanctioned to oblivion at best.
Who needs "corporate" sovereignty?
Corporations are people, so people have sovereignity.