December 2013        

A stealth treaty to further erode national rights

We are all familiar with stealth taxes and how they effect they have on us. However, there are stealth treaties that are potentially more damaging and far-reaching than any piece of tax legislation.
      The Transatlantic Trade and Investment Partnership, now under negotiation between the United States and the European Union, is one such stealth treaty. When agreed, it will effectually create a single market between the two economic zones, resulting in a further erosion of citizens’ rights and prosperity.
      Readers of Socialist Voice may recall Enda Kenny making glowing references to this treaty as he congratulated himself and his coalition government on having secured “agreement on a mandate for the start of negotiations . . .” and described the the TTIP as “one of the major achievements of our Presidency [of the EU in early 2013] and one of genuinely historic potential.”
      The treaty is indeed of historic significance, but how aware are the Irish people and people in other EU states of the ramifications of these negotiations and how this will almost certainly affect us detrimentally?
      What is in store for us is not a mutually beneficial agreement to remove unnecessary impediments to the exchange of goods and services between EU member-states and the United States. The working out of this pact will be something altogether more damaging to working people and corrupting of democracy.
      Whether the Taoiseach understands the implications of the treaty or not (and nobody knows how much his guardians let him know), the fact is that this deal will remove regulatory trading differences between the United States and EU states. In practice this will cause EU member-countries to be bound in large part by “business-friendly” trade rules and regulations, the adjudication of which will be overseen by unelected and largely unaccountable legal persons.
      These agreements always include a number of stringent free-market provisions that guarantee companies the right, for example, to avoid capital controls; the right to equal treatment with state-run agencies, opening the way to unrestricted privatisation; and the right to avoid performance indicators, such as R&D commitments that would provide long-term local sustainability.
      Writing recently about this treaty in the Guardian (London), George Monbiot pointed out “the remarkable ability it would grant big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of Parliament and destroy our legal protections . . .”
      The settlement mechanism Monbiot refers to is usually provided through the insertion of a clause in bilateral trade agreements that bind both parties to this particular method of dispute resolution. Rather than resorting to the domestic legal systems of participating countries, signatories must therefore accept “third-party” or external arbitration. The body most widely used for this process—and greatly favoured by large corporations—is the International Centre for Settlement of Investment Disputes, an institution established by the World Bank in 1966.
      These tribunals are presided over by international lawyers, many of whom come from corporate legal backgrounds. In the light of their career experience and ambition, it can reasonably be argued that their impartiality is at least questionable. A recent report from the Transnational Institute* states that “just 15 arbitrators, nearly all from Europe, the US and Canada, have decided 55 per cent of all known investment treaty disputes.” The report continues by pointing out that, worryingly, some wealthy law firms with special arbitration departments actively encourage cases under these procedures against governments in crisis.
      Let us examine two cases that have involved “investor-state dispute settlement” procedures to illustrate the effect that this type of legislation might well have on Ireland.
      Look first at how in the late 1990s the World Bank forced Bolivia to privatise the water system in one of its largest cities by selling distribution rights to the American transnational company Bechtel. When city-dwellers rioted after a steep increase in water prices, the government attempted to reverse the privatisation. Using its high-powered legal team, Bechtel sued, using the provision in a bilateral trade agreement, and demanded compensation of $50 million for an original investment of only $1 million. Only enormous global pressure forced the transnational company to back off, giving a very rare victory to the common people.
      Should anyone ask what relevance this case might have in Ireland, consider the Irish government’s well-advertised plan to introduce water charges in 2014. Think then of the distinct possibility that the newly formed Uisce Éireann or Irish Water will be privatised as soon as the government has established a water-metering infrastructure. We could then lose control over our greatest natural resource: water.
      The second case to consider occurs in Canada, where Lone Pine Resources Inc. is suing the Québec regional government for $250 million as a result of a moratorium on fracking introduced by the regional parliament in 2012. The mining company is claiming that under the terms of a trade agreement between the United States and Canada the Québec government’s moratorium is an “arbitrary, capricious and illegal revocation of its valuable right to mine for oil and gas.”
      This case has an obvious message for Ireland, north and south, where fracking is of significant concern. The Australian energy firm Tamboran has already declared its intention to begin the process of extracting shale gas in Co. Fermanagh early next year.
      These two cases are far from isolated incidents. Study after study has recorded in detail how transnational companies with deep pockets use “investor-state dispute settlement” to intimidate national governments. The Irish people are already at a serious disadvantage as a result of having to adhere to the European Union’s neo-liberal agenda. In spite of the pro-treaty “Endahype,” it is plainly irrational to inflict a still greater handicap on our ability to contain the rapaciousness of profit-seeking transnationals.
      Of course we may not have any choice in the matter, embedded as we are in the European Union and bound by decisions made by its real power-brokers in boardroom and bourse. Nevertheless, it is important to make people aware of decisions and options that are being taken out of our hands, and by whom.
      Under the circumstances, it is disappointing that our national broadcasting and print media do not put as much energy into investigating this question as they do into guessing how Gerry Adams used to spend his summer holidays.
[TMK]

*www.tni.org/briefing/profiting-injustice

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