In Europe, opposition to the Transatlantic Trade and Investment Treaty is rising. The primary cause of concern, both among the general public and certain national governments, is the proposed inclusion of the Investor-State Dispute Settlement (ISDS).

As I previously reported, this rather innocuous-sounding provision is what gives the new generation of bilateral and multilateral trade agreements their sharpened claws and canine teeth, by allowing private companies and investors to sue entire nations if they feel that a law lost them money on an investment. As even The Economist now admits, while the original intention of ISDS was to encourage foreign investment by protecting them from discrimination or expropriation, their implementation has proven disastrous:

Multinationals have exploited woolly definitions of expropriation to claim compensation for changes in government policy that happen to have harmed their business…

Companies have learnt how to exploit ISDS clauses, even going as far as buying firms in jurisdictions where they apply simply to gain access to them. Arbitrators are paid $600-700 an hour, giving them little incentive to dismiss cases out of hand; the secretive nature of the arbitration process and the lack of any requirement to consider precedent allows plenty of scope for creative adjudications.

A New World Disorder

In effect, ISDS is about delineating and setting in stone just where sovereignty lies and who gets to call the shots in the New World Economic Order (or better put, Disorder). If allowed to take universal effect, the system will impose upon our governments a rigid framework of international corporate law designed to exclusively protect the interests of corporations, relieving them of financial risk and social and environmental responsibility.

According to Gus Van Harten of Osgoode Law School, Toronto, the international system of investment arbitration used to decide the outcome of ISDS cases is not only patently unfair, it is woefully unbalanced:

Only the companies [DQ: and at that, only very large companies] can sue governments. It’s a game in which the governments only get to play defense… These processes are not independent; they are not open and they are not procedurally fair. Nor are they balanced or democratically accountable.

Any government that signs ISDS clauses will effectively be abandoning any remaining pretense that they represent or are responsive to the interests and needs of their voters. It would be the ultimate betrayal, a wholesale sellout of the sovereign people to an opaque, unaccountable and deeply compromised system of corporate justice. Just consider the following words from Spanish arbitrator Juan Fernandez Armesto:

It never ceases to amaze me that sovereign states have agreed to investment arbitration at all. Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.

“With U.S. or Against U.S”

Leading the way in the mass sellout of its citizenry is the country with the largest number of multinational corporations, and which has by far the most to lose from the emergence of a fairer, more multilateral global economic system: the United States of America. According to Jeffrey Scott of the Peterson Institute, America’s insistence on an arbitration clause in its deal with the EU does not stem from any real concern about the strength of property rights in Europe. Rather, it is a marker for future negotiations for a bilateral trade deal with China.

“America wants to set a precedent for China by creating a world-class template for trade agreements,” he says. As I wrote a few weeks ago, the aim of the game is clear: either get China to join the new “Free” Trade Club on the West’s terms or revoke its membership altogether.

Naturally, the U.S. is joined in its endeavors by its “Five-Eye” partners: the UK, Canada, New Zealand and Australia. Also firmly on board are 14 EU member states, whose trade ministers recently wrote a letter to the new European Commission President Jean Claude Juncker reminding him that ISDS was included in the negotiating mandate that all 27 member states gave to the Commission last year. Those 14 EU member states are: the UK, Spain, Portugal, Lithuania, Ireland, Croatia, Malta, Estonia, Cyprus, Poland, the Czech Republic and, perhaps most surprising of all, the bastions of European social democracy, Sweden, Finland and Denmark.

On the other side of the European divide are such countries as Germany, France and Italy, the euro zone’s three largest – albeit faltering – economies. As the FT reports, the opposition from social democrats in Germany, the country where ISDS was ironically invented, has put ISDS on the front-burner politically, and Juncker – urged on, officials say, by his powerful chief of staff, German lawyer Martin Selmayr – has clearly sided with the skeptics.

It’s not just in Europe where ISDS is meeting resistance. The South American giant Brazil continues to receive lots of foreign investment despite its long-standing refusal to sign any treaty with an ISDS component. Fellow BRICS nation South Africa says it will withdraw from treaties with ISDS clauses and India is considering doing the same. Indonesia plans to let such treaties lapse when they come up for renewal.

Resistance From the Least Likely of Quarters

Even Singapore, the world’s second most globalized economy and global investors’ preferred market of choice these days, is getting cold feet. In its ongoing negotiations on a bilateral trade agreement with the European Commission, Singapore’s government has repeatedly demanded that the goods and services part of the trade pact be separated from the investment part.

Interestingly, the Commission does not appear to share its views. “We have agreed with Singapore that the investment protection chapter is an integral part of our trade agreement and that’s why we want to present it as a single package”, said EU Trade spokesman Wojtek Talko.

Which begs the question: is the new Commission, filled to the rafters with former lobbyists, speaking out of both sides of its mouth? Is it openly talking down the prospects of ISDS inclusion in the TTIP just to keep civil opposition temporarily at bay, while simultaneously lobbying for its inclusion in all its other bilateral trade agreements? More to the point, is its ultimate goal to quietly slip in ISDS into the final TTIP text when no one’s looking?

We will soon find out, but one thing that is growing abundantly clear is that resistance to the TTIP is on the rise, albeit slowly and quietly. What’s more, that resistance appears to be coming from not only certain quarters of the largely disenfranchised general public but also national governments.

Perhaps the greatest irony is that the one country that is arguably doing the most to thwart the designs of the Global Corporatocracy – first, by rejecting the outright monetization of European debt, to the constant consternation of international financiers like George Soros; and second by blocking the EU’s free trade agreements with the U.S. and Canada – is the same country that is most often blamed for Europe’s economic ills: Germany. As for the nations that have demanded the inclusion of ISDS in the US-EU trade treaty, perhaps it’s time their citizens began asking just who it is their public representatives actually represent. By Don Quijones. An exclusive for Wolf Street.

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7 comments for “Who’s Tripping up the Designs of the Global Corporatocracy?”

Petunia

Nov 2, 2014 at 6:10 am

After NAFTA Americans will not support another international trade agreement of any kind. Not only did the congress sell us out but they didn’t even realize what they were doing. They still don’t understand that they are giving away their power to a supra board of corporate players. They have sold themselves and us out cheaply.

The Transatlantic Treaty was written in secret by corporate lawyers from 600 corporations. Some of the provisions are “classified”. It will never be passed in America.

Perot was right and vindicated by what America has become.

Realist

Nov 2, 2014 at 7:51 am

“After NAFTA Americans will not support another international trade agreement of any kind.”

Silly rabbit, tricks are for kids. The American citizens vehemently oppose both the flood of illegals and Am-Nasty, but whether Dear Leader Obamesiah decrees it from on-high or the corruptocRATs in congress (both RINO and libcult) do what their paymasters demand and pass “comprehensive” Am-Nasty, the Ruling Class WILL have their Am-Nasty or they will die trying.

Retired

Nov 2, 2014 at 9:17 am

They will die trying!
As a result of all of these schemes the smart guys will crash the economy & commit financial suicide in the process!

Retired

Nov 2, 2014 at 9:11 am

The problems that many of the bankers & oligarchs have are insurmountable,they can’t survive in a consumer economy if they kill the consumers.Extreme financial repression,which is now the norm,is pauperizing the middle class in the industrial world.The middle class makes up the bulk of the worlds consumers.If they are broke & out of credit they can’t buy anything from Big Business!
If these fools have their way the consuming public will be pushed into financial & economic peonage.Peon & Serfs can’t maintain modern societies!
It is my belief that the key to much of their problems lie in the development of the PC & the W.W.W Internet & the free flow of information,outside of the establishment authorized disseminators of information( misinformation?). I further believe that the Internet & free access to unfiltered information will do to the financial elites & their Keynesian voodoo economics what the Gutenberg Bible did to the Church in Rome.Neither can ever go back!
when all of this crazy nonsense destroys the Global Consumer Economy it will kill the western Welfare States.I read of an interesting idea years ago to the effect that since the FDR era in America the public has increasingly become “entitlement addicts”,the same holds true for most of the industrialized world.What will happen to these hundreds of millions of welfare junkies when the entitlements are curtailed or even ended?Anarchy & chaos will ensue as the mobs start to burn down “Main Street”.
As far as putting the economic squeeze on China,Russia & some of the other states outside of the western financial/political bloc,it can’t be done!China & Russia are nations with authoritarian cultures,they will not meekly bow down to the schemes of the Central Bankers & Oligarchs.They will revert to their totalitarian roots & maintain themselves by stealing the wealth from their weaker neighbors,they will wage war!
My greatest fear is not that these greedy sociopaths will succeed,I can’t see how they can.I fear what will come after them.The Four Horsemen?

sharonsj

Nov 3, 2014 at 5:04 pm

You are discounting the large number of right-wing web sites that push their crazy propaganda on delusional followers who are happy to be told what they want to hear. For them, facts mean nothing. They are so stupid that they will go on line to repeat whatever they’ve heard on Fox News or Rush Limbaugh and won’t take five minutes to use that same computer to find out the truth.

Owatica

Nov 2, 2014 at 1:03 pm

Pardon me but… hahahahahahahaha… China and Russia can drop the U.S… China’s newest colony btw…the U.K and Europe’s economies like a hot rock whenever they like; the U.S. has almost zero leverage. The Chinese already have between 20-30,000 Tonnes of Gold and he who has the gold makes the rules. Certainly they are still buying both gold itself and busily converting worthless Treasuries into land… the Chinese already hold a third of Manhatten real estate and millions of acres of land and businesses across the U.S. and Europe; Italians are literally begging the Chinese to buy them out. The Bank of England couldn’t wait to put out a Chinese Yuan bond and over 135 countries have formally agreed to end use of the dollar in international trade. There’s a lot of ‘lip service’ going on but in the end Germany will follow the New Silk Road and maintain it’s trading partners in Russia; Europe will follow Germany, then the rest will join the new Eurasian bloc; game over….