Many are upset about proposed dispute resolution regime ('suing'), but is it much different from how WTO works? AFAIK in WTO countries sue other countries on behalf of their corporations [0]. BTW, your first citation is an opinion piece by Elizabeth Warren who is far from impartial in this debate.

[0] https://www.wto.org/english/tratop_e/dispu_e/dispu_by_countr...

Possibly not that different, but I (and I think a lot of other people) aren't very happy with those rules either. And TPP undeniably expands the scope / makes it more likely these kind of judgements would be made.

The WTO would function as the court of appeal for decisions made under the TPP's ISDS provisions. It would also be the body permitting sanctions (i.e. a return to pre-TPP tariff levels on trade with the offending country) in the event of non-cooperation.

In what sense is a ISDS a "secret" court? Their decision are published, right? (Your link [1] complains that "Could she protest on the courthouse steps? Arrange for a rally in a nearby town?", but the US supreme court also doesn't allow for protests on the courthouse steps, it doesn't seem like a crucial distinction.)

The difference being the Supreme Court is one of the most vital cornerstones of our democracy; the ISDS was an idea thought up by companies for their own advantage.

Pretty sure it was thought up by unstable countries to generate investment interests.

0. What if the nation discriminates against that company, freezing funds or denying access to courts? This shit is important for increasing investor confidence in countries with nascent court systems and political systems used to corruption and nepotism.

1. Any decision that you think has resolved unfairly?

2. Agreed, but redistribution and retraining are domestic issues such as NAFTA-TAA.

> This shit is important for increasing investor confidence in countries with nascent court systems and political systems used to corruption and nepotism.

Isn't it up to a country to make itself attractive to investors, i.e. by not pulling all that shit?

Every country's leader will tell foreign investors that there is no chance that their business will be regulated differently than their nephew's competing in the same space. Investors can trust them a lot more if the country's continued enjoyment of increased foreign demand for their exports lies in the balance.

"Isn't it up to a country to make itself attractive to investors, i.e. by not pulling all that shit?"

Yes, but it would defeat the purpose of a trade agreement.

Moreover, if country ABC signs the agreement, indicating 'they won'd do this BS' - and then they actually do do it - then they get access to other markets while cheating.

The agreement is supposed to prevent countries from cheating.

It has a side effect of preventing governments from doing things they ought to do - for example, punishing international companies from polluting etc..

It's a tricky problem.

There should be clauses that allow governments to make laws to stop companies from polluting etc.

0: When my nation decides to reduce smoking in the population by significantly increasing the taxes on cigarettes, companies in other countries that want to sell cigarettes here can go get stuffed.

Why should a foreign company decide what is and isn't legal in my country? Why should a democratic country, whose government is beholden to the people, have to kneel before a corporation, beholden to foreign wealth? Why does a corporation have rights that override the democratically-determined laws of a foreign country?

Not to mention your spin doctoring - 'investor confidence' is the good guys, and 'court systems and political systems' are just corruption and nepotism (because as we know, corps don't have either of those in abundance...)

>When my nation decides to reduce smoking in the population by significantly increasing the taxes on cigarettes, companies in other countries that want to sell cigarettes here can go get stuffed.

Cool. You and the TPP are in agreement then.

>Why should a foreign company decide what is and isn't legal in my country?

It shouldn't, beyond the general representation it's due. I'm not sure where you're getting this idea that corporations would have carte blanche to dictate laws from. Certainly not from reading the actual agreement.

What is covered by the mechanism is pretty simple. You can't regulate foreign owned companies differently from domestic ones. You can't appropriate funds or capital or freeze accounts without due process. You can't deny access to local courts.

And that's about it. What's more, your suit can be thrown out if there is a public health, art, indigenous culture or a number of other concerns (this is dependent on country). Tobacco companies are banned wholesale.

Yes, tobacco is explicitly excluded because it was foreseen what would happen if they weren't. People went to the mat to exclude it specifically. Why would tobacco companies have to be specifically excluded if the TPP didn't offer a mechanism for such abuse? What prevents other industries from using those mechanisms?

You are indeed correct in that I haven't read the 2700-page document. And to be frank, I highly doubt your own claims that you read it twice. I also doubt the characterisation of this extraordinarily lengthy document argued between multiple countries for the better part of a decade as "pretty simple".

95% of the bulk of the document is endless tariff elimination tables. I hope you'll forgive me that I glossed over them. If you're concerned about the ISDS mechanism the relevant parts are in Chapter 9, with some exceptions listed in Chapter 29.

Regarding the tobacco exclusions, it seems punitive to me, they were definitely being bad actors under previous ISDS mechanisms. You're right, though, the public health interest carveouts in the TPP's ISDS implementation (based on a recent Canadian BIT) would provide sufficient tools to allow unfettered regulation without needing to ban them wholesale. These carveouts were not present in the BIT in the PM vs Australia case, for example.

So why were tobacco bad actors? In the Australian case, they launched a suit claiming that by enforcing plain packaging Australia was in essence, appropriating their brand, packaging and associated goodwill. You may think they shouldn't win this argument, I may think they shouldn't win this argument, but regardless, they deserved to have their case heard fairly. They of course lost with costs.

The problem was that PM also quite likely believed that they wouldn't win, and was instead using the process to delay plain packaging legislation in other countries such as Ireland who were waiting on the case results. This would be a clear cut case of abuse, and participating in poor faith.

As per what would prevent other companies from attempting the same thing? Fear that the same thing would happen to them. Because of likely abuse of the ISDS system, tobacco would now have no international recourse whatsoever if governments flat out nationalize their factories.

> This shit is important for increasing investor confidence in countries with nascent court systems and political systems used to corruption and nepotism.

while this is true there are already mechanisms built to counter this uncertainty, i.e. you can get insurance for operating in "dangerous" countries.

How much insurance would Apple require to cover an eventual nationalization and forced shutdown of all of its plants in China? (Purely as an example)

Without a body that can invoke broad sanctions, countries can play chicken with each other. Regimes can simply decide to seize company assets, and hope the offending parties don't cause enough of a real ruckus.

Of course this lowers investor confidence long-term. But governments that do that are rarely interested in this. They're more interested in lining their own pockets with personal wealth.

These sort of trade frameworks build a mutually-assured-destruction setup, so that any BS can get swiftly acted upon by a "neutral" party. And at the end of the day, it allows for stronger rule of law, which is better for most parties. The ones that end up the worst off are the kleptocrats.

Airliners can buy insurance for plane crashes. But most of them would rather planes just not crash.

And yet there were plenty of plants in China before it joined the WTO, right? The uncertainty just gets factored into business.

Sure, ISDS can help a country build more trust, and lower the cost of foreign investments, but it's not a panacea.

Plus, countries would still play chicken with each other. If China decides to seize Apple's plants, what should the US do, declare war? Should France and EU terminate all foreign deals with Egypt due to it not wanting to pay for the Veolia ISDS decision?

because you have the WTO, the US can declare retaliatory tariffs within a generally accepted framework.

There's less debate and uncertainty about the legitimacy of the retaliation, and its better understood than the advanced kremlinology required to decipher some other things.

Not many things are panacea, but things like the WTO have been pretty useful at avoiding trade wars IMO.

Apple doesn't need that insurance (not that anyone could cover it anyway). They have $200B in liquid funds, which they can use to set up shop elsewhere.

> Regimes can simply decide to seize company assets

And they can ignore the provisions in a treaty they sign, too. If a country is willing to start seizing assets and taking the usual penalties in business for doing so, the TPP isn't going to mean much.

Treaties are only as powerful as their ability to be enforced (whether that's militarily, politically, or economically). Have a look at the state of the 19th C treaties between the USA and various Indian nations for a crystal-clear example of this.

Such insurances simply spread the risk of losses due to this kind of corruption among multiple entities. They don't provide incentives to the country to reduce the risk itself, which is the key differentiator.

Of course they do, because they increase the cost of doing business there.

And it does it with a far lower cost to sovereignty.

>Of course they do, because they increase the cost of doing business there.

This misunderstands what incentives are at play for politicians with low accountability in developing countries. The cost of corruption is borne by these investors and domestic consumers, but the benefit of it is entirely concentrated in the political class. Therefore the opposite incentive exists, and the system becomes more resistant to any changes towards more inclusive institutions.

>sovereignty.

Meaningless buzzword. If a nation no longer favours the basket of benefits and obligations, it is entirely free to leave.

> I'm not ok with private companies suing sovereign nations

Do you think government agencies and leaders should be above the law in general, or only with respect to companies?

The OP has given a brief description, which you have chosen to interpret so as to ignore the real issue.

ISDR (investor state dispute resolution) is usually arranged as a private arbitration, with arbitrators who conspicuously do not meet conflict of interest or probity rules of even a hicksville kangaroo court. ISDR has the power to force judgements which are strongly not in the public interest, under the pretence of 'market interference'. The most obvious case is the tobacco lobby trying to prevent plain packaging legislation.

This idea that trade deals can guarantee commercial justice for large multinationals in authoritarian countries, but we shouldn't expect any such improvement for citizens, is quite abhorrent.

> but we shouldn't expect any such improvement for citizens

Why shouldn't we? Does TPP prohibit that? No. Are you saying that countries with poor rule of law should not make any improvement to the Trent tho for the rule of law unless it does it all completely in one go? Are incremental improvements undesirable or actively bad? That's a pretty extreme absolutist position to take.

Great misquote! Slick.

At the moment governments are pressured by other governments and multinationals to have stronger rule of law. The cost of capital is higher in more corrupt countries. The threat of capital flight is a significant disincentive to government crackdowns on democratic movements -- building stops, bond returns skyrocket, lines of credit disappear, arms sales stumble.

TPP is the promise that your foreign capital is safe, even though locals are screwed. Even better, companies sue governments for raising the minimum wage, or enforcing OH&S.

This isn't 'give a little, get a little', this is 'we're taking your rights'.

The concern with ISDS-style arrangements is usually not that a government might become above the law, but that a company might, in the sense that a government changing the law might be forced to pay compensation to any company that lost out as a result.

In particular, a government that changed the law because certain behaviour was found to be harmful would potentially be required to pay huge amounts of compensation to a company whose business model relied on doing those harmful things. This is particularly relevant in fields like public health, environmental protection and sustainable exploitation of natural resources.

The problem with this is that the same governments that might genuinely legislate to, say, protect public health by banning smoking in restaurants or protect the environment by banning diesel-powered vehicles with unacceptable levels of particulate emissions can also legislate for protectionist purposes in ways that really do screw over foreign companies. This makes countries with such governments, or the fear that their government go down this path, much less attractive for foreign investors. And so those investors look for safeguards that will ensure governments can't arbitrarily take advantage of them once they've put their money in.

Which brings us back to step 1 in the case of foreign investors whose investments turn out to be in harmful things, whether or not anyone realised that in advance, and so the cycle continues.

This fear is based on a few failed attempts to do this in previous trade deals. It's 99% FUD. In reality, it's extremely unlikely. Further, if ISDS ever tried to impose an outrageous judgment that outweighed the benefits of the partnership, the loser could opt to not comply and drop out of the deal.

Exactly, all this guff about overriding elected governments is rubbish. Each government is still sovereign and free to withdraw from the treaty, negotiate changes to it or change its laws as it sees fit. As it happens the US is doing exactly that by withdrawing from the treaty, which they could hVe done after ratifying it just as well as before. So has TPP restricted the sovereignty of the US? Er, no. Could it have? Same answer.

The point of ISDS isn't that it magically constrains the governments in question. It's that the price of choosing not to comply with a ruling is so high (typically, abandoning the entire free trade agreement and reverting to WTO rules) that it's a serious barrier to a government actually doing that.

That doesn't mean we should fear the bogeyman, since in reality such provisions have not been unusual in previous free trade agreements and the most notable ISDS cases were ultimately failures for plaintiffs like Big Tobacco. But even though results have usually gone the right way in the past, they have still cost the governments involved a lot of time and money to fight the case, and that alone is grounds for asking whether the ISDS provisions are a good idea.

Government agencies and leaders are subject to the law and congress is subject to the ballot box.

No foreign nation or individual should be able to override what a country has decided to do via the democratic process. There is no absolute higher authority to appeal to in a true democracy.

Trade dispute resolutions are not legally binding. The judgements are to be implemented or ignored by the sovereign governments that are party to the agreement. If the US Congress ratifies a trade deal, they are saying they will abide by whatever type of dispute resolution is in the deal. If a judgement is made against them, they can comply in the interest of remaining party to the deal or reneg on the whole thing and lose the costs and benefits. Same as signing a peace deal with anither country. We can start shooting again whenever we want but it just means they will shoot back. Sovereignty is at never violating.

"Do you think government agencies and leaders should be above the law"

In this case - it's not about suing the government for doing anything outside the law.

Company ABC decides to extract tons from freshwater from country XYZ.

Country ZYZ realizes this is damaging the environment, and puts in some regulations.

Company ABC can now sue country XYZ - just for having good governance.

There are many reasons that company ABC should be able to sue country XYZ ... but the it's so broad that it can lead to problems.

I'd like you to substantiate this claim. The ISDS mechanism in the TPP would allow nothing of the sort.

Canada is the #1 sued country in NAFTA and the majority of the lawsuits are related to Canada getting sued for trying to protect it's environment.

https://www.pressprogress.ca/5_times_canada_got_sued_under_n...

http://www.huffingtonpost.ca/2015/01/14/canada-sued-investor...

I'm familiar with the Ethyl Corp case, which is an interesting case to dive into.

Canada banned a fuel additive that was only used by one company (foreign) called Ethyl Corp on the basis of health reasons. Ethyl Corp sued, saying the additive was actually banned for political reasons rather than on any scientific grounds, and the Canadian government chose to settle - paying them some $20 million dollars and withdrawing the law they were implementing.

On the face of it, it seems like Ethyl Corp was the bad guy and the Canadian government was pursuing legitimate policy in the public interest, and this is certainly how it was played out in the media. In actual fact, Ethyl Corp presented the Canadian governments own documents coming from the Health and Environmental departments, dating to about a year prior that unequivocally stated that there was absolutely zero danger from using the additive in fuel. In fact, the party that tried to get the law through had had strong historical links with the domestic companies competing with Ethyl Corp.

In all the papers, it was portrayed as 'Company sues government over environmental protections/health protections', and that's how all ISDS cases get presented in mainstream newspapers. 'Company screwing with our laws' sells way more papers than 'company disputes unfair government policies', I guess. I don't know about you, but I don't think it's fair that foreign investors should be unfairly discriminated against in this way. ISDS prevents political parties from favouring their contributors over foreigners by enacting biased laws such as these. Why should Joe Public lose out because one of the parties is trying to cozy up to their largest donors, and why is it fair that international investors get screwed just because they're foreigners? In actual fact, ISDS is a great way of keeping governments accountable by limiting the political favours they can hand out whilst in office.

Regulations aren't grounds for an ISDS suit, unless they're implemented discriminatorily.

[0] http://www.economia-snci.gob.mx/sic_php/pages/importa/sol_co... (p.4 onwards)

"Regulations aren't grounds for an ISDS suit, unless they're implemented discriminatorily."

If a company believes they can sue, and convince a judge ... well, they'll sue.

I get that it's nuanced, but it's a problem, is my point.

I mean explicitly, you only have a valid claim under most implementations of ISDS if you have been treated differently than a domestic company.

And its their right to have their case heard if that's the case, no?

The actual problem is companies being above the law. The TPP would enable them to petition an unelected panel of lawyers for the right to ignore laws that inconvenience them, and to sue governments for damages that arise from those laws.

Or withdraw from the agreement. This is no different from any other treaty with an arbitration or oversight element, which itself is a law once ratified by a nations legislature. You agree not to do certain things and do others. One of these things in this case is not to pass certain other kinds of laws. So it's simple. Either don't pass those kinds of laws, or withdraw from the treaty. No loss of sovereignty involved.

You seem to have got that backwards. What was meant is that it is not okay when companies are above the law, and sue whole nations for compensation when they are not allowed to run their business in violation of national regulations.