Sunday, January 31, 2016

What is usurpation? Ask the lawyers behind the TPP

If there was any enthusiasm in Congress for the Trans Pacific Partnership last year, we're not seeing it this year. The Washington Post reported in December that Senate Majority Leader Mitch McConnell has already made it clear that we're not likely to see a vote on it before the next president takes office. Apparently, many Senators are concerned about possible backlash from passage of one of the largest trade deals ever considered. It's interesting that not only do they seek to avoid voting on it just before the primaries. They want to push it back beyond the next election to next year.

From the same report we find that Obama has identified the TPP as central to his economic agenda. I find this ironic considering that most economists agree that there is little economic benefit to the deal. The consensus estimate is that the TPP, despite is enormous volume and breadth, will contribute about 0.13 percent of GDP per yer by 2025, once fully implemented. This is less than a rounding error. Such a small increase could easily be washed out by the noise in the economic data. I find it hard to believe that such a tiny bump could be central to any economic agenda, liberal, conservative or bipartisan.

In this article, Naked Capitalism seems to have identified the essence of the appeal of the TPP, despite rancorous and fierce opposition from conservatives and liberals alike. After reading the article at Naked Capitalism, I believe that best phrase to describe the appeal of the deal to the elites is "corporate usurpation". That is to say, the TPP will play a central role in putting corporations above the governments that serve the people in terms of hierarchy.

There is something else that they noticed over there at Naked Capitalism. The Investor State Dispute System (ISDS) provides an opportunity for businesses to challenge governments that enact laws or regulations that could threaten their future profits. We already have this in the North American Free Trade Agreement. It is a rather interesting miracle that the US has never had to pay any business anything under the ISDS provisions under NAFTA.

But as the folks at Naked Capitalism have noticed, corporations can challenge governments under the treaty, but governments cannot challenge corporations. Furthermore, the "just-us" system provided in the ISDS system under TPP has led some people to describe the TPP as NAFTA on steroids. ISDS complaints under TPP will be ruled by a panel of judges that are just lawyers. Public Citizen has shared the following observations on the ISDS provision of the TPP:
The tribunals are staffed by private lawyers who are not accountable to any electorate, system of legal precedent or meaningful conflict of interest rules. Their rulings cannot be appealed on the merits. Many ISDS lawyers rotate between roles – serving both as “judges” and suing governments for corporations, creating an inherent conflict of interest.
As if binding arbitration isn't enough in America, lawyers would like to create a cozy little bubble with boatloads of compensation and very little accountability in the TPP. Say, didn't I mention that the reason we got started with this ISDS stuff was because American industrialists wanted to exploit natural resources in other countries without fear of national appropriation? What kind of countries would they be? I thought ISDS was only for Banana Republics.

The TPP is just another Trojan horse for the usurpation of the power of the people. No one that I have read or followed has ever come up with a really good reason for the treaty (if you know of someone that has one, do tell). Even the White House is still harping on how many jobs it will create when the evidence is scant. They have said very little about the changes to intellectual property laws, how the internet will operate or the impact on labor laws around the world. So far the big deal for them is creating jobs.

But the people know that something is up, and it looks like corporate usurpation.
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