TPP leak: states give companies the right to repeal nations' laws
boingboing.net
boingboing.net
Australia enacts a law on cigarette labeling,
requiring warnings on the package.
Tobacco companies sues Australia under a
Hong Kong - Australia trade agreement, to
get them to revert the labeling law.
(this isn't hypothetical, it's already happening)
I'm definitely a big champion of capitalism, but these investor-state dispute settlements seems really wrongheaded.
Also, I cannot understand why these negotiations are secret? All in favor of trade-deals as long as they remove/reduce tariffs and tolls, but they should be conducted in the open.
A nice explanation of the realpolitik of the TPP, in comic form:
> I'm definitely a big champion of capitalism, but these investor-state dispute settlements seems really wrongheaded
Why? Can you at least see the underlying motivation for them?
As it happens I don't like tobacco companies at all. I'm very sympathetic to what Australia is doing and think other countries should adopt the same idea. Nonetheless, I'm OK with the idea of Australia paying compensation to Phillip Morris and other cigarette companies in this case, even though these companies are quite loathsome. The reason is the higher principle might still be worth it.
The rationale for ISDS is simple: politicians answer to citizens, citizens want jobs and a growing economy. Period. They want that more than anything else. In hard times "the economy" is always at the top of voters concerns. Politicians know this and will do almost anything to juice the economy e.g. quantitative easing. One of the ways to boost the economy is to increase trade, it's classical economics and it seems to work. Hence there's always some free trade agreements being worked on somewhere.
Free trade is a great idea. However in the developed world most of the easy, low hanging fruit has already been picked. Tariffs are mostly gone. The remaining bottlenecks to trade are often things like differing technical standards or different regulations, which are hard to fix.
One bottleneck is that business values a stable and predictable business environment nearly as much as citizens value jobs, however "stable and predictable" is obviously in tension with the desire politicians have to change things around at a moments notice in order to try and win votes. In particular, businesses fear sudden and arbitrary banning of their business model or sudden seizure of their assets.
This holds back trade: company executives say to themselves things like, "our factory is in the USA and lots of our customers are in the EU so we have high shipping costs. We could set up a factory in the EU but that will take five years and be a very expensive and complex project. If we do it and after seven years the laws change such that it's no longer economic for us to do that, we're screwed. And we don't trust the politicians over there not to screw with us, so maybe we'll just stay as we are". Result: Europeans have fewer jobs so are less happy, they pay more for the imports so are less happy, the company doesn't expand so it's also less happy.
With ISDS maybe the decision looks like this instead: "we should set up a factory in the EU, because even if the laws there change and suddenly our factory can't operate or doesn't make sense any more, we'll be compensated and can use the compensation money to smoothly transition our business somewhere else ..... so let's do it".
So by agreeing to compensate companies for changes in the political environment, the hope is that there will be more trade, more investment, more jobs and thus more happy wage-earning citizens.
Of course, politically this is a hard sell because people like to think that if their elected politicians start whacking a foreign company doing business in their country it's because the dirty foreigners are immoral and nasty and generally deserve it .... and not, say, because their votes are easily bought by a bit of crafty populism. But then again, they really want the jobs too. So we'll have to see how this works out.
What nonsense.
That said, I try and assume the best in people. I really doubt there's some moustachioued cigar smoking trade negotiator explicitly demanding secrecy because otherwise the plebs might realise how much they're getting screwed. Seems more likely it's done for their own convenience. People always like to shield themselves from criticism by invoking secrecy, it's an easy "fix".
The negotiations are being conducted solely by national representatives because the TPP is an agreement between nations. When the national representatives think they have a deal, they will present the proposed deal to their governments for ratification. In the case of the U.S. that will mean a Congressional vote.
Similarly:
Corporate deals are negotiated in private by company staff, and then presented to shareholders for ratification.
Domestic legislation is negotiated in private by Congressional staff, and then presented for consideration by the appropriate Congressional committee.
Etc.
National negotiators do seek input from their citizens who might be affected by the TPP. From the USTR site:
"On Wednesday, March 6, negotiators from the 11 Trans-Pacific Partnership Countries paused talks to meet with more than 300 global stakeholders at an engagement event hosted by the Government of Singapore. Representatives from academia, labor unions, the private sector, and non-governmental organizations from around the world spoke with and heard from negotiating teams about priorities for and progress on the pending trade agreement. The negotiators also had the opportunity to listen to 60 lecture-style stakeholder presentations."
https://ustr.gov/trade-agreements/free-trade-agreements/tran...
edit: speling
In fact cigarette companies are claiming that by prohibiting them from using their branding, Australia expropriated their intellectual property. NO ONE expects the cigarette companies to actually win, and as such they will not be entitled to any compensation.
There is a huge number of misconceptions about ISDSs and the TPP in this thread.
That's often a fairly thin distinction. Unless a country literally has a law that says the government can seize any property at the whim of any bureaucrat for no reason at all, the way governments expropriate property is usually to pass a new law, tax, or to creatively reinterpret existing laws to allow them to do that.
> NO ONE expects the cigarette companies to actually win, and as such they will not be entitled to any compensation.
Obviously they think they have a chance otherwise they wouldn't waste time on trying. Brands are assets, they are bought, owned and sold and some are clearly more valuable than others. If your brand is suddenly made worthless by a change in the law then arguably that property is if not expropriated then at least destroyed.
The whole ISDS arbitration procedure seems vague and informal enough that the outcome could be anything, really. Without real courts and a well developed process I'm not sure how you can say whether they'd win or not. Seems like it'd rest on whether the arbitrators can be convinced that this action would fall under the relevant clauses or not.
In addition, US & Europe are already very business friendly[1], which is great! This is the reason EU/US are comparatively prosperous already.
ISDS is about lobbying and regulatory capture (wrapped in the veil of property rights).
I understand in practical terms why it's good to keep draft legislation under wraps while it's being negotiated, but it's pretty clear with TPP that the secrecy is being done to large extent to mitigate the fact that so many in the public would be completely opposed to parts of it.
Of course, this is to be expected in diplomacy and trade agreements, right? We give a little, they give a little, and no one gets everything they want. The only problem is that we're not negotiating against China or Japan or Australia - our chief adversaries in these negotiations are Phillip Morris, Monsanto, and other non-nation states that have insinuated themselves into diplomatic discourse and have gamed the system for their advantage. Our own national negotiators are working against us and our interests. It's not a matter of compromise - its a matter of being completely raked over by multinationals under threat of lost jobs and an even further deteriorated standard of living.
This is a slightly better discussion of the problem in the recently leaked draft.
edit:
I guess they aren't bothering to even pretend this is would be anything other than a show trial:
"...the tribunals would be staffed by private sector lawyers unaccountable
to any electorate, system of precedent or substantive appeal. Many of those
involved rotate between acting as “judges” and as advocates for the investors
launching cases against governments. Such dual roles would be deemed
unethical in most legal systems."
Most democracies do not create laws which scare away multinationals. There really is absolutely no incentive for it. Even corrupt politicians don't want to scare away multinationals because the bribes from those companies are their largest source of income.
This law effectively neutralizes democracy. It's also hilarious in a macabre way to see supposedly nationalist Americans railing against Agenda 21 which is non-binding, while treaties such as TPP which allow an international tribunal which override national laws to be pushed forward by their govt.
Taxation, even if just nominal, is one of the most powerful proven mechanisms to control human behavior. This is effectively a tax on changing legislation, thus impeding the democratic process.
Effectively this says that the rights of the stock holders to profits are more valuable than the rights of the citizens. Which is a rule that has been historically enforced in various countries time and again.
No wonder this is secret. Everyone who gets most of their livelihood through labor and not capital investment are the unwilling benefactors.
International trade can be very beneficial for all countries involved. But they should be entered into force like all other treaties and laws. They should be publicly known and subject to public debate.
Worst part of secret trade agreements is that it is isn't fair to the future of workers affected by agreements.
If your business or career is going to be affected, knowing about this as it happens is good to prepare and make a change. No doubt there is no changing what capital, corporations and wealth want to do but at least give the little guy a heads up.
In secret, all you are doing is harming people and then when it affects them in the end it will be too late or put them in a bind.
In an age of information and being smart about careers and futures, a secret trade agreement is feudal in nature and only for the kings.
Sure, western capitalism especially in anglosaxon countries has always been neck to neck with foreign policy and had been able to leverage considerable national resources (including military) to the benefit of their shareholders. So this is a continuation of that tradition.
I understand bilateral treaties where USA has considerable leverage but this... this is so many countries unanimously lowering their pants expectantly to wallstreet. What the fuck. Sure, most of the corporations that benefit from this have issued stocks so in a way 'everyone can benefit' but what I do not understand is this: why are so many countries passing away their sovereignty to companies. Or, to look this in another way, enable companies to tax countries for legislation that is incompatible for their nexy quarter strategy.
Make no bones about this, it is a play for total fascism to take over. A new era of civilization will be in play - it will only take 5 years of this act to be compelled by the societies-at-large which it seeks to destroy - and this new age will be basically this: a trademarked boot, stomping hard on a human face.
Fight this now, or watch your children devolve into a state of lesser being. What we enjoy now will not be possible in 5 - maybe 10 - years from now. The world is devolving, it is not getting better. Modern civilization is the perpetual fight against those who would bring us - all of us, not just a few at a time - down.
I've known about the TPP for a while. I tried to discuss it with people and no one had even heard of it.
What if we had a Github-esque site where all of our legislation (and all revisions) are readily available with annotations. Would society be more interested in participating in the creation of our laws? I know I would be.
[0] http://www.ted.com/talks/clay_shirky_how_the_internet_will_o...
On a related note, I remember somebody qualified in the field, who wrote here on HN how a version control tool would not be an appropriate tool to develop laws (since they are not developed like software), but unfortunately I can't find the thread.
If the government were properly incentivized to bring transparency to our legislative process, why would this be stored in a private repo?
Even if it were, every revision to every line would be stored and traced back to an individual author.
In this case, the contents of TPP will be made public 4 years after executing the agreement. At that time, anyone would be able to scrutinize who wrote what when. This could be the proper incentive to House/Senate members to work in favor of their constituents. Politics is a career today - they don't want to screw that gravy train up.
The biggest missing piece is the United States Code Annotated. It has notes showing for each provision the public laws that changed it (like svn log). Unfortunately, this information is collected and maintained by West and Lexis in proprietary databases. But everything else is out there and web-accessible.
As the classic goes, if my mother can't find it and use it without assistance it's not ready.
A modern example:
The rationale for the PATRIOT act was to fight terrorism. The rationale for copyright extension was ... well, there was some gooblydock. But the courts never seem to reference that when they actually apply these laws.
In that case, the comments are entertainment.
We are not the users of this system. We are its input/output.
They do look at the history of legislation, yes. But the rationale ("commit message") does not appear there.
What would be necessary is some form of compiler or preprocessor to sort through legislation - and regulation, unless one has a civil code, e.g., Louisiana or Québec, one need consider regulation, and precedent - and pump out warnings and errors re contradictions, inconsistencies, edge cases, etc.
Yes, there is a degree of "all bugs are shallow" if the legs and regs, etc., are in a system with full histories, diffs, etc., and some form of PR support, but that would be insufficient, given the sheer bulk of the body of law.
This is a major reason why budget bills, e.g., take so long to enact: A simple mandate might be easily stated in a clear, clean, crisp English-language sentence, but now that statement needs to parsed and assessed in the context of hundreds of interrelated legs and regs.
Humans do that now and it is long, dreary labour for well-trained professionals who know how the body of law works and know, to a degree, what can be ignored, left unstated, or need be stated very clearly indeed.
Now we want to add thousands of untrained folk like you and I? Hmm, we'll need a really good compiler, and we'll need a Linus or a Theo or two, semi-benevolent highly-opinionated gatekeepers to manage our promotion from the equivalent of low hanging fruit utilities (minor changes to clearly-defined administrative regulations, e.g.) through to the equivalent of kernel space (major social programs, drug legalization, etc., etc.).
The Bitcoin community is starting to explore the idea of formalised software contracts, but they're all very basic and it's all very early days.
The idea is a very simple one that has been echoed by many due to how straightforward it is. Laws under a collaborative software hosting site.
The most likely outcome is that it'll end up a purely symbolic manifestation of "open government" much like whitehouse.gov is. It'll be flooded with queries and discussion that are red herrings.
The fast pace at which laws end up being revised will prove difficult for parties to catch up with. Yet if the pace is too slow and the focus too selective or narrow, then it will be deemed inefficient. Besides, the sheer complexity of the legal codex will mean most people will be unable to participate to begin with.
It would be attacked with a DDOS from China and ordinary citizens shut out of the legislative process anyway.
Then again, disincentivizing the creation of such laws in the first place more or less has the same outcome as repealing them after they have been passed and may even be more surreptitious as the public may never learn how the law would have looked like without that kind of pressure.
They may nonetheless choose to pay the fines because they feel the overall framework is generally beneficial even if they chose to feel the pain in that specific case. Namely, their citizens want jobs and a growing economy, and companies want a predictable and stable business environment. In particular one thing they do NOT want is to spend years building a business in a country and then discover that some politicians have decided to try and grab a few quick votes by quickly passing some badly thought out "anti-Foo" law. See: UK and their new set of "anti Google" laws.
That's the fundamental idea behind all this: countries and their trade negotiators know that their political masters are seen as flaky and unreliable by CEOs, which discourages trade and investment. So tribunals where companies could get compensated seems like one way to try and tackle that problem.
Corporations have got media clout/ownership, threats of capital flight, lobbyists and so on.
Really, corporations have no power at all. They have the power to speak and maybe to leave. Whereas governments can do whatever they like.
Capital flight is a very powerful tool.
See e.g. war in Iraq. TPP itself. Also TTIP.
Don't play the fool - this is heinous, totalitarian fascism, at its finest. The TPP represents a far greater thread to modern civilized society than, for example, the ISIS/Daesh 'threat'. These treaties - which must be fought on a regular basis - are being pushed onto the world by ideologues and extremists whose fundamental desire is the suppression of us all.
Fight this, at all costs. Or watch your children grow in a society far more degraded than the one you live in, and enjoy, today. This is not a pro-survival proposition; it is absolutely the end of civilization as we know it.
Donated money to wikileaks.