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Warren writes: "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."

Senator Elizabeth Warren. (photo: Rick Friedman/Corbis)
Senator Elizabeth Warren. (photo: Rick Friedman/Corbis)

The Trans-Pacific Partnership Clause Everyone Should Oppose

By Elizabeth Warren, The Washington Post

26 February 15


he United States is in the final stages of negotiating the Trans-Pacific Partnership (TPP), a massive free-trade agreement with Mexico, Canada, Japan, Singapore and seven other countries. Who will benefit from the TPP? American workers? Consumers? Small businesses? Taxpayers? Or the biggest multinational corporations in the world?

One strong hint is buried in the fine print of the closely guarded draft. The provision, an increasingly common feature of trade agreements, is called “Investor-State Dispute Settlement,” or ISDS. The name may sound mild, but don’t be fooled. 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. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages.

If that seems shocking, buckle your seat belt. ISDS could lead to gigantic fines, but it wouldn’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Maybe that makes sense in an arbitration between two corporations, but not in cases between corporations and governments. If you’re a lawyer looking to maintain or attract high-paying corporate clients, how likely are you to rule against those corporations when it’s your turn in the judge’s seat?

If the tilt toward giant corporations wasn’t clear enough, consider who would get to use this special court: only international investors, which are, by and large, big corporations. So if a Vietnamese company with U.S. operations wanted to challenge an increase in the U.S. minimum wage, it could use ISDS. But if an American labor union believed Vietnam was allowing Vietnamese companies to pay slave wages in violation of trade commitments, the union would have to make its case in the Vietnamese courts.

Why create these rigged, pseudo-courts at all? What’s so wrong with the U.S. judicial system? Nothing, actually. But after World War II, some investors worried about plunking down their money in developing countries, where the legal systems were not as dependable. They were concerned that a corporation might build a plant one day only to watch a dictator confiscate it the next. To encourage foreign investment in countries with weak legal systems, the United States and other nations began to include ISDS in trade agreements.

Those justifications don’t make sense anymore, if they ever did. Countries in the TPP are hardly emerging economies with weak legal systems. Australia and Japan have well-developed, well-respected legal systems, and multinational corporations navigate those systems every day, but ISDS would preempt their courts too. And to the extent there are countries that are riskier politically, market competition can solve the problem. Countries that respect property rights and the rule of law — such as the United States — should be more competitive, and if a company wants to invest in a country with a weak legal system, then it should buy political-risk insurance.

The use of ISDS is on the rise around the globe. From 1959 to 2002, there were fewer than 100 ISDS claims worldwide. But in 2012 alone, there were 58 cases. Recent cases include a French company that sued Egypt because Egypt raised its minimum wage, a Swedish company that sued Germany because Germany decided to phase out nuclear power after Japan’s Fukushima disaster, and a Dutch company that sued the Czech Republic because the Czechs didn’t bail out a bank that the company partially owned. U.S. corporations have also gotten in on the action: Philip Morris is trying to use ISDS to stop Uruguay from implementing new tobacco regulations intended to cut smoking rates.

ISDS advocates point out that, so far, this process hasn’t harmed the United States. And our negotiators, who refuse to share the text of the TPP publicly, assure us that it will include a bigger, better version of ISDS that will protect our ability to regulate in the public interest. But with the number of ISDS cases exploding and more and more multinational corporations headquartered abroad, it is only a matter of time before such a challenge does serious damage here. Replacing the U.S. legal system with a complex and unnecessary alternative — on the assumption that nothing could possibly go wrong — seems like a really bad idea.

This isn’t a partisan issue. Conservatives who believe in U.S. sovereignty should be outraged that ISDS would shift power from American courts, whose authority is derived from our Constitution, to unaccountable international tribunals. Libertarians should be offended that ISDS effectively would offer a free taxpayer subsidy to countries with weak legal systems. And progressives should oppose ISDS because it would allow big multinationals to weaken labor and environmental rules.

Giving foreign corporations special rights to challenge our laws outside of our legal system would be a bad deal. If a final TPP agreement includes Investor-State Dispute Settlement, the only winners will be multinational corporations. your social media marketing partner


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+80 # PeacefulGarden 2015-02-26 16:59
All through out history, the history of man crawling around this planet, ever since the first days of large cities being lead by god-kings with a society based upon agriculture; the god-kings and their high priests and army generals have played tricks on the bottom 99%.

Because we are an agricultural society we must all line up like rows of corn and wheat, we must be like cattle and pigs for slaughter, all at the behest of our benevolent overlords, our god kings.

We don't sacrifice humans at the alter (to the god of corn) anymore, we just sacrifice our humanity year after year after year, silently until there is nothing left of our rights to control the world we live in.

When will the pharohs stop!
+11 # Merlin 2015-02-27 03:32
Beautifully said!

P.S. You have my apology on the previous thread in case you did not see it.
+29 # Inspired Citizen 2015-02-27 06:10
Pharoh Obama is fully exposed as the corporate tool he has been all along with this "trade" pact.

Warren is going to have to walk the walk on this raw deal and filibuster Trade Promotion Authority (fast-track) if and when the vote is taken. Ditto for the three treaties coming: TPP, TTIP and TISA.

Next Wed. is national call-in day to tell Congress to vote "No" on fast-track. 877-852-4710 to reach your Reps and Senators.

There is no greater priority in the coming months than stopping ObamaTrade and the corporate take-over of the world.
+24 # Saberoff 2015-02-27 10:41
"There is no greater priority..."

Priorities: yes, Citizen.

For us, here in Wisconsin, one day it's dismantling U.of W./K - 12, and by the end of the week it's Right to Work!

This from our goggle-eyed homunculus ((Very Little Man)) who yesterday, assuring America of his foreign policy prowess, says he learned all about ISIS through Wisconsin's demonstrations against Act 10.

Keeping us off-balance with a barrage of atrocities is part of the plan. And they learned that from none other than the Third Reich.

Yes, we must fight hard, as though our lives depend, on this battle.
+3 # PeacefulGarden 2015-02-28 08:14
Since the Third Reich? Try thousands of years back, back, and back more. We have been at the will of the god-kings for thousands and thousands of years.

We constantly elect pharohs. Why? Who knows?
+28 # wantrealdemocracy 2015-02-27 09:39
The Pharohs will stop when the people rise up and shout, "NO MORE!"

Elizabeth is concerned about ONE PHRASE of the TPP. She is correct in that signing away the sovereignty of our nation is really bad. We don't want some corporately appointed Tribunal to have the power to erase any law or regulation passed in any city, state or at the federal level that MIGHT effect the EXPECTED profits of some foreign nation.

Haven't we learned since NAFTA that globalization means job loss and depression in our nation?
+16 # HowardMH 2015-02-27 10:28
Haven't we learned since NAFTA that globalization means job loss and depression in our nation?

Noooooo and Nooooo. Stupid is as stupid does and there is a whole lot of stupid out there just waiting the be screwed some more and they to dumb to even know it.
+2 # PeacefulGarden 2015-02-28 08:18
They mow us down like cattle when we say "NO MORE". They kill us by telling another one of us to kill the other one, with a promise of being just like them.

No one is safe if the god-kings (queens) are not safe. I say queen, because you know who is going to win the next presidential election. And shesh, is she a pharoh. She will lay down at the alter of money and worship the balance budget numbers like no one we have ever seen.
+7 # HowardMH 2015-02-27 13:26
Watch this: then:

The American Spring will start when there are thousands of really, really pissed off people at the Capital all at the same time raising some serious hell against the Lunatics, and idiots absolutely nothing is ever, ever going to happen to these totally bought and paid for by the richest 50 people in the world that are becoming more and more powerful with each passing rigged election thanks to the stupid people.

So, scream, yell, chant, stomp your feet, threaten to hold your breath, and beat your drums so the media can show it on the evening news, while all of those who can actually do anything about it are home counting their donation money and laughing all the way to the bank.
Yes there is still hope for the America we used to know, but I agree it is fading fast.
+60 # Moxa 2015-02-26 22:29
Apart from all the disastrous effects that will accrue from the corporations being given yet more power to control the world, there is the brazen hypocrisy of politicians, ostensibly looking out for America's interests, falling over themselves to allow our own laws to be trumped by a court run by and for corporations. This is, on its face, UNPATRIOTIC, a word no politician would want to stamped with. But what else can you call it? I hope there is some way to make that association with the politicians who support the TPP. In other words, call it by its real name, so that politicians, out of sheer self-preservati on, will drop their support of it.
+49 # kenny-ji 2015-02-27 00:07
Quoting Moxa:
".... This is, on its face, UNPATRIOTIC, a word no politician would want to stamped with. "

UNPATRIOTIC is too mild a word here. TRAITOROUS is more accurate.
+2 # Jim Young 2015-03-01 08:24
Quoting kenny-ji:
Quoting Moxa:
".... This is, on its face, UNPATRIOTIC, a word no politician would want to stamped with. "

UNPATRIOTIC is too mild a word here. TRAITOROUS is more accurate.

I'll have to change my suggested name from "Transnational" Piratizing Profiteers to "Traitorous" Piratizing Profiteers. It really is more like ALEC abetted, Quisling traitorship, selling us out to sovereignty sucking corporatists that place themselves above all nations (and the states rights they raged on about, until they wamted to supercede them on their terms).
+13 # Radscal 2015-02-27 13:09
But my Senator, Ms. Feinstein said TPP is a job creator.

She failed to mention those jobs will be in Chinese prison labor camps.
+3 # Hey There 2015-02-26 23:50
+28 # futhark 2015-02-27 02:43
Democracy Now's Exposure of the TPP:

"TPP is...really enforcable corporate global government..."

Members of congress have been excluded from information. The negotiations have been conducted by corporate lobbyists under total secrecy according to Lori Wallach of

"Fast track negortiations" have no proper place in a nation where the government is supposedly by, for, and of the People.
+4 # Merlin 2015-02-27 06:10
Hey There,
Thanks for the link.
+46 # WilliamPHalll 2015-02-26 23:51
I'm an Australian. Elizabeth Warren is not wrong here. Many of us on the other side of the Pacific see this situation exactly the same way.

It is yet another money grab by the 0.1 percenters who own the global multinationals.

Not only are our jobs threatened in the same way as are American's, but Australians are particularly concerned to retain our Pharmaceutical Benefits Scheme that ensures that even ordinary Australians, and even those who may be on hard times can afford their life-saving prescription medicines, where many Americans may be left with no option but to die... because they cannot afford them. From our point of view it is that bad. We also have strong food safety and labeling laws that might be threatened by the TPP Agreement.

Like America, we also have our politicians beholden to their paymasters (not us....) who are trying to force this inequitous treaty on a largely unsuspecting population.

Let's vote those who represent the super rich on both sides of the Pacific out of office, and elect people who actually represent ordinary, decent people.
+8 # Texas Aggie 2015-02-27 15:42
"that might be threatened by the TPP Agreement."

That MIGHT be threatened??? NAFTA has a similar clause in it and because of that, a law that we used to have that mandated the source of the meat be on each package had to be repealed. Foreign meat importers objected to the "constraint" on their ability to sell meat in the US because people were dubious of their meat inspection.
+30 # itchyvet 2015-02-27 01:27
As WilliamPHall, I too am an Australian and VERY concerned with this crappy agreement that the majority of Australians HAVE NEVER EVEN HEARD OF. The fact that our so called MSM can only rave on, day after day about our useless PM and his side kicks as if that is the ONLY news around, Australians have long ago ditched any belief in the crowd in Canberra as obstentially looking after OUR interests.
It's rather sinister, that according to our MSM, you be forgiven to even think there is such a thing as the TPP as there is NEVER a mention to it anywhere.
Does this suggest our politicians have already signed the bottom line ?
+34 # RoseM 2015-02-27 01:45
Law by big business, for big business and definitely not for the American people!,,, NO to TPP!
+20 # punditalia 2015-02-27 05:30
"Giving foreign corporations special rights to challenge our laws outside of our legal system would be a bad deal." It's not a bad deal. It's nothing less than a Corporate Fascist coup d'etat! Or put in another way,treason, and its proponents should be seen and treated as conspirators in a plot to commit treason.
+12 # ericlipps 2015-02-27 06:08
ISDS advocates point out that, so far, this process hasn’t harmed the United States.
"So far." How reassuring.
+22 # RnR 2015-02-27 06:19
Let's not redefine opposition to the trans pacific partnership as merely opposition to one clause. It's the entire idea and implementation of it.

+8 # bingers 2015-02-27 07:51
Amen RnR!
+2 # Allanfearn 2015-02-27 10:33
Yes, yes, but only if both of these imperialist treaties will apply the provision vice versa. I don't think the US should be able to challenge even the last independent scraps of UK law, or even EC law without having to step into a court of the jurisdiction it or its citizens are challenging either. Globalization isn't a free gift to the US. Oddly enough, that's one of the underlying issues behind anti-Americanis m almost everywhere the Administration is trying to find friends against it enemies. Pull your horns in and start behaving like citizens of the world.
+9 # Radscal 2015-02-27 13:14
At issue are the trans-national corporations which are taking control of the governments of all countries. Yes, many of those corporations have their roots in the U.S., but the British Banking Industry has been behind this "globalization" process for at least two centuries.
+11 # randrjwr 2015-02-27 11:29
Others have said or suggested it, but I will add my voice here anyway.

To support TPP in any way is TREASON!!
+12 # Vardoz 2015-02-27 11:31
I have called and called my reps and repeatedly emailed and called the Obama hot line 202-456-1111 - I told Obama how could he do something so damaging to the American people- This would be a tragedy beyond words. I told him over and over Corporations don't care about people and they have demonstrated that over and over. Why would he support something that would not have protections, oversight, checks and balances and accountability! !!! this TPP agreement is suicide.
+11 # Radscal 2015-02-27 13:17
I'm afraid you haven't been telling Obama anything he doesn't already know. But I appreciate your effort. Political offices typically keep records of the number of contacts they get in support of or opposed to their actions.
+12 # Merlin 2015-02-27 14:11
What I find encouraging is the powerful responses here on this issue. Prior to the WikiLeaks revelation, The TPP was almost unknown and sailing right along toward automatic enactment.

The people are becoming aware. I only hope it is fast enough to prevent the One World Order that has been the goal of the corporatists forever. With these treaties we are damn close to that happening.
+9 # Radscal 2015-02-27 15:18
I'm glad to see you use the term, "One World Order."

There are individuals who see this corporate takeover through many different lenses. These perspectives vary from Bircher-style anti-Communism to Christian-based anti-Illuminate .

If we are to succeed in stopping it, I think it best to unite on the common ground.
+11 # Texas Aggie 2015-02-27 15:36
In TX the mobs are in uproar because the Alamo was named a World Heritage Site
which they somehow think means that the UN is taking over the Alamo. Other nitwits are all bent out of shape whenever a bike track is built because somehow that means the UN is taking over. The dingbat contingent is losing control of its sphincters because somehow they think that regulating international trade in weaponry is going to allow the Blue Helmets to take their guns.

And yet when a real problem with international control of US policy comes along, they couldn't care less. They don't realize that if this goes through, some company who wants their land for a factory or a pipeline can force them to give it up or else pay the company what it would have made otherwise. How is it possible that people can be so stupid???
+6 # Radscal 2015-02-27 20:17
We are all victims of PR/Propaganda aimed at us. Effective propaganda is often quite obvious to those outside the target audience, but essentially invisible to the target.

Can you find a way to frame TPP as the One World Government takeover of U.S. sovereignty?

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