Are you working on state legislation to label genetically modified foods? Or are you working to pass a local ban on fracking? If you are, you’ll want to know what the TPP has in store for you, according to recently uncovered documents.
This week, Wikileaks released the long-secret investment provisions of the Trans-Pacific Partnership (TPP) that revealed the trade deal would give big business the ability to sue governments for protecting the public interest – confirming our worst fears about the trade deal being pushed by the business community, Republican leadership and the Obama administration.
Senator Elizabeth Warren highlighted the risks of these so-called investor-to-state suits in a Washington Post opinion piece last month, but the release of a current draft of the TPP investment chapter brings these legitimate concerns into sharper focus. These TPP investment provisions provide a new and powerful avenue for foreign corporations to attack commonsense public health, environmental and consumer safeguards as well as effectively rollback any local or state legislation or ordinances that threaten their bottom lines.
The TPP investment language allows foreign companies to challenge federal, state and local laws and regulations that the companies claim “indirectly expropriate” their “reasonable investment-backed expectations.” International investment rules were originally designed to prevent other countries from seizing private property without compensating the owner (by building a highway through a company’s land or nationalizing a factory). But the TPP’s indirect expropriation language expands that idea to allow corporations to sue (for financial damages) over rules and regulations that curb dangerous or abusive business practices (like pollution or financial fraud) or even require companies to provide sensible disclosure (like food labels).
So far, the United States has been sued but not faced a penalty under these investment cases, but that is because our trade deals have been primarily with countries in the developing world with few investments in the United States. The TPP would empower major companies from New Zealand, Australia and Japan with new rights to attack federal and local laws. If the companies prevail in these suits, the government defendants (either national or local) could be forced to pay damages for harming expected earnings. Already international trade tribunals have already awarded $3.6 billion to foreign investors that brought successful investor-to-state corporate lawsuits under NAFTA and other U.S. trade deals, according to Public Citizen.
A measure to prevent pollution (like a local fracking ban) would indirectly expropriate the anticipated future profits from fracking, so a foreign drilling firm could sue for damages. One natural gas company has already challenged a fracking moratorium in the Canadian province of Quebec under NAFTA’s investment provisions. These corporate lawsuits have an especially chilling effect on communities that want to protect their citizenry but lack the resources to defend against a colossal corporate lawsuit, including the more than 250 localities (including New York state) that have banned or imposed moratoriums on fracking.
The leaked investment text highlights the total lack of transparency in the TPP negotiations. It even includes a provision that keeps the investment chapter confidential until four years after the TPP goes into effect. If these special rights for corporate interests are so beneficial, why keep it classified?