Today It’s Brussels’ Turn to Tighten the Noose on EU Citizens

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

After months of wrangling and horse trading, the European Parliament finally passed a resolution on the secretly negotiated EU-US trade deal, the Transatlantic Trade and Investment Partnership (TTIP). The reason it had taken so long was that the President of the European Parliament, Martin Schulz, decided at the last minute and in time-honored fashion to postpone the original vote, scheduled for June 10, when it became apparent that a majority of MEPs might actually reject the bill (read: Democracy on Hold: President of European Parliament Suspends Vote on Secretive U.S.-EU Trade Pact as Tide Turns Against It).

The biggest thorn of contention is the Investor State Dispute Settlement (ISDS) clause, which would effectively allow corporations to bypass national court systems and sue governments in private arbitration panels if they felt that a particular law or regulation threatened their bottom line. Put simply, it is what gives trade treaties their razor-sharp claws and canine teeth.

Although ISDS has been in existence since the 1950s, it has only been in the last 15 or so years that corporations have really begun making the most of it. As the United Nations Conference on Trade and Development (UNCTAD) notes, foreign investors have mostly used ISDS claims to challenge measures adopted by States in the public interest (for example, policies to promote social equity, foster environmental protection or protect public health):

Questions have been raised whether three individuals (i.e. the private arbitrators), appointed on an ad hoc basis [DQ: usually representing a small handful of the world’s largest international law firms], can be seen by the public at large as having sufficient legitimacy to assess the validity of States’ acts, particularly if the dispute involves sensitive public policy issues.

Host countries have faced ISDS claims of up to $114 billion (DQ: in the case of the shareholders of the Yukos oil company versus the Russian government) and awards of up to $1.77 billion (DQ: Occidental Petroleum Corporation versus the people of Ecuador). Although in most cases, the amounts claimed and awarded are lower than that, they can still exert significant pressures on public finances and create potential disincentives for public-interest regulation, posing obstacles to countries’ sustainable economic development.

Judging by the scale and intensity of the public response in Europe, ISDS is hardly welcome. As Corporate Europe Observatory reports, its opponents include small and medium size businesses, in particular in Germany and France; local and regional government; academic experts in trade and investment law, EU law, international law and human rights, constitutional law and political economy; trade unions, public interest groups and half of the Commission’s own advisors.

Last year, the Commission, seized by a rare and inexplicable fit of public accountability, launched a public consultation on the issue. However, when 97% of the 150,000 respondents expressed intense opposition to the inclusion of ISDS, the Commission reverted to type, making clear that it would not drop the controversial provisions from the negotiations.

Instead, it would “reform” the system. The result of that process is Amendment 117, which was presented to Parliament by Schulz today. According to some accounts, to get the new bill passed Schulz bent certain key procedural rules – rules that he himself is charged with defending. This sparked outrage from MEPs, including among members of his own S&D bloc, at what they perceived to be manipulation of voting procedures to ensure that no anti-ISDS amendment would be voted on.

Amendment 117 was passed by 448 votes to 247, with the conservatives, social democrats and liberals providing most of the ammunition. Already dubbed ISDS-lite, the bill ensures that:

…Foreign investors are treated in a non-discriminatory fashion while benefiting from no greater rights than domestic investors, and to replace the ISDS-system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected and where private interests cannot undermine public policy objectives.

In other words, the bureaucrats of Brussels seek to enshrine a perfectly transparent, perfectly accountable, perfectly democratic international court that will provide overseas corporations and investors privileged access to a significantly more favorable legal system than the rest of society. Corporations will still be able to sue governments, while governments at best will only be able to avoid losing, rather than winning, while of course racking up huge legal fees along the way.

And who better to set up such a fair, transparent, accountable system of international investor protection than the European Commission (which, lest we forget, is still yet to have an independent audit this century)?

According to Schulz, the people of Europe had spoken and parliament had listened. “What citizens reject is that as a result of a trade agreement, legally and democratically adopted laws and binding standards could be undermined by arbitration,” he said in a news conference ahead of the vote.

As Cecil Toubeau of Transport and Environment writes in Euractiv, behind the new language little has changed:

The circus act’s pièce de résistance is the Socialists’ conceit that this is not an ISDS system. But this daring gambit is hampered by their own compromise text, which says the new system would resolve “disputes between investors and states.” This being Brussels, they may even devise a new acronym – but the text exposes how the nature of this system has not changed.

Now, instead of the prospect of having three private arbitrators (i.e. corporate attorneys) decide how many billions in taxpayer funds elected governments should pay out in compensation for daring to put the rights and interests of national citizens before the rights and interest of overseas corporations and investors, we can have a whole new, ridiculously expensive international court system, paid for by global taxpayers, dedicated to doing exactly the same thing. What could possibly go wrong? By Don Quijones, Raging Bull-Shit.

And now WikiLeaks got its hands on part of the secret trade pact for services. Read…  LEAKED: How the Biggest Banks Are Conspiring to Rip Up Financial Regulations around the World

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  2 comments for “Today It’s Brussels’ Turn to Tighten the Noose on EU Citizens

  1. michael says:

    All governments are cancer. It can only be treated by cutting it out.

    • Vespa P200E says:

      Bureaucrats (often appointed and not voted) and their bankster handlers – what can go wrong?

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