George Monbiot in The Guardian, in his usual hyperbolic and specious way, describes the proposed U.S.-EU trade agreement’s purpose as to attack national sovereignty through a secret plot by big businesses and corporate lawyers to sue governments and overturn nations’ laws.
Monbiot starts his diatribe by asking a set of rhetorical questions. A bit irritating, but maybe that’s his way of getting readers involved. Then comes his first substantive sentence: “The purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the U.S. and European nations.”
That is a misstatement. TTIP’s purpose is to promote freer trade between two of the largest trading blocs in the world by removing tariffs, addressing non-tariff barriers, and attempting to streamline differing regulatory schemes that impede trade. Through reducing or eliminating trade barriers, the overarching purpose is to increase economic growth and create new jobs on both sides of the Atlantic.
But Monbiot ignores those purposes, of course. Instead, he focuses on the nefarious goal of big business — “to kill regulations protecting people and the living planet” through promoting investor-state dispute settlement in TTIP. And Monbiot says that this mechanism is powerful, subtle, and secretive:
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.
What Monbiot is referring to are investment treaties or provisions between countries that attempt to attract investment in those countries through providing clear and non-discrimatory rules for how one country treats investors from another country. Those investor-state rules obviously have to incorporate provisions dealing with disputes, that is, when an investor from another country believes his property has been expropriated or reduced in value by the other country’s actions. When that occurs, the dispute would be arbitrated, generally by an international panel.
Again, that approach makes sense. If the dispute were decided by the domestic courts of law, varying legal systems would complicate the process. Plus, there would be a greater likelihood of discriminatory treatment against the foreign country.
Monbiot probably doesn’t realize that the European Union’s member states currently have 1,200 Bilateral Investment Treaties (BITs) with non-EU countries, and most of those include alternative dispute settlement mechanisms, sometimes through international arbitration panels. Under the Lisbon Treaty (2009), the European Union alone now has the power to enter into investment agreements with non-EU countries, but those earlier 1200 treaties will be recognized.
Last year, the European Commission prepared a draft text that would deal with how investor-state dispute settlement would be handled in EU investment treaties going forward.
The U.S. has about 40 bilateral investment treaties in force and also includes investment provisions as part of free trade agreements. Last year too, the U.S. issued a model BIT. According to the U.S. Department of State:
The BIT program’s basic aims are to:
- Protect investment abroad in those countries where investors’ rights are not already protected through existing agreements (such as modern treaties of friendship, commerce and navigation, or FTAs);
- Encourage the adoption of market-oriented domestic policies that treat private investment in an open, transparent, and non-discriminatory way; and
- Support the development of international law standards consistent with these objectives.
Those goals seem to make sense, but not in Monbiot’s eyes. He strays even further from the truth in this charge:
Investor-state rules could be used to smash any attempt to save the NHS from corporate control, to re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways, to leave fossil fuels in the ground. These rules shut down democratic alternatives. They outlaw leftwing politics.
Essentially, he is saying that, because of investment treaties, countries will not be able to legislate – because those laws would get struck down by the shadowy conspiracy of big business and corporate lawyers.
Hogwash! Monbiot ignores the fact that those investor-state rules protect private property rights. The foreign investor would receive compensation if it were found that his investment in country A was confiscated by that country.
Investor-state treaties can be a thorny issue that can stimulate informed debate. For example, do investor-state provisions belong in trade agreements or are they better dealt with in separate investment treaties? But Monbiot’s rant does nothing to enlighten his readers; instead, he seeks to enflame his sycophantic followers to believe in his conspiracy theories.