I’ve been thinking about how corporations are suing countries.

I’ve been thinking a lot lately about transnational corporations suing countries. The fancy name for this is Investor State Dispute Settlement (ISDS) and it happens in free trade. ISDS is on my mind a whole bunch as Germany speaks out about the inclusion of ISDS in the soon to be announced CAN-EU CETA deal.

https://www.flickr.com/photos/campact/sets/72157647398779707/ 

ISDS was first employed in NAFTA , the North American Free Trade Agreement. Some say this deal, circa 1994, was the first New Generation deal partly because of its use of Investor State. ISDS is a trade legal mechanism for how the pacts are enforced. It affords corporations the opportunity to sue nation states if the profits they expected from the opening of specific sectors in a free trade deal are diminished because the country has laws or policies that prevent earnings. Ethyl Corporation was the first to successfully sue Canada in the mid nineties, for approximately 16 million, when Canada attempted to bar its gasoline additives. Researchers in Canada believed their additives could be carcinogenic. Ethyl won on the grounds that profits expected as a result of NAFTA were lost. There have been hundreds of cases administered through trade tribunals since and the number of cases launched is on the incline every year. Through leaked texts in German news and other places, critics of CETA have said that corporations will be able to sue countries when municipalities use public money for various buy-local initiatives, municipal procurement, and protection of local public management, but no ones knows for certain as the text has not been shared publicly. 

Let’s talk trade that works. Opening borders to gastronomic delights! to expertise in regions that most benefit! How about encouraging the growth of sale in specialty items (like fair trade bananas) that could give economic stability to a struggling country? But when you get into lawsuits waged in a one way direction from corporations to countries, it feels like we are no longer talking about trade. The conversations turns a whole lotta dark. People don’t like it. Investor State creates an Investor’s State superimposed on a Nation State. This is the kind of trade that makes people uncomfortable. It’s the kind of design that will sink itself. 

People from Canada, Germany, France, and many other locales in between are bidding Investor State Adieu. Adios. Au Revoir. 

We are entering a new era — one of critical trade justice understanding that will not tolerate excessive corporate rights at the expense of family and community well being — whether or not we call them new generation free trade, CETA, or we@#$@#lkflskdjfls investor state ding-a-ling.

Jennifer Chesnut 
Trade Justice Chair

Originally published on September 21, 2014 at
http://newgenerationtrade.com/2014/09/21/ive-been-thinking-about-corporations-sueing-countries/