TransCanada's $15 billion lawsuit against Obama illustrates one of the dangers of signing off on the Trans-Pacific Partnership
It’s unfortunate that most Americans and Canadians alike, know very little about economics and the trade deals that are signed in their name. When it comes to the Trans-Pacific Partnership (TPP), separate polls found that 64% of Americans and 75% of Canadians were unfamiliar with the trade deal.
As I first reported back in 2012, just as the Occupy Movement was bringing to light the massive influence that corporations have over us, corporate lobbyists were at the same time meeting in secret to write the language of the TPP.
The TPP has been criticized repeatedly for its secrecy over the years. But from the information that is available, critics have condemned everything from the copyright term expansion, to the projected increased costs of medicine to the way it will increase income inequality.
The twelve countries involved agreed to the terms of the Trans-Pacific Partnership back in October and some are now only a month away from signing on. Still, an overwhelming majority of people are unaware of the most bullish, blow to our sovereignty that the deal has to offer.
The TPP contains an investor-state dispute settlement (ISDS) mechanism similar to NAFTA’s chapter 11 which grants investors the right to sue foreign governments without first pursuing legal action in the country’s court systems, in order to protect foreign investors from discrimination.
In other words, a corporation can sue a government if it feels said government is preventing the company from profiting, say by passing an environmental law. If NAFTA has taught us anything about free-trade agreements like the TPP, it’s the danger they pose to our national sovereignty and our ability to write our own laws.
Since January of last year, there have been 77 known NAFTA investor-state dispute settlement claims. In the last ten years, Canada has become the most sued country in the world under free trade tribunals having faced 70% of the lawsuits.
Under NAFTA, Mexico has lost five cases and has paid out $204 million while Canada has lost six cases totaling $170 million. It is clear that the countries that are more social in nature and have more protected industries have the most to lose. It shouldn’t come as a surprise then that the United States has never lost a case, which leads me to my main point.
Any environmentally conscious person or follower of American or Canadian politics has heard by now about TransCanada’s Keystone XL Pipeline. If built, the pipeline would have delivered bitumen oil from Alberta to Texas. However, after years of delay, the Obama Administration rejected Keystone this past autumn on grounds that it “will not serve the national interests of the United States.”
This past week TransCanada took exception to Obama’s rejection and is now suing his administration for a whopping $15 billion dollars. Twice the estimated cost of the project. Some legal experts say the TransCanada doesn’t have a chance, some say they may very well win. Either way, a three-judge tribunal will issue a ruling, which can’t be appealed to any national court.
For one, it is ironic that Barack Obama now has defend itself against TransCanada’s lawsuit while arguing that such lawsuits won’t be a threat to U.S. policies under the TPP deal. A deal he got fast tracked through congress months before he rejected Keystone XL. $15 billion is a lot of money, even for the United States.
Second, speaking as a Canadian, it strikes me as a little irrational that the Canadian government, already number one at getting sued, would want even more of the same with the TPP. I for one can’t think of anything worse than paying taxes that go directly into the coffers of foreign corporations with literally nothing to show for it.
The good news is presidential candidates like Bernie Sanders and Martin O’Malley are using TransCanada’s lawsuit to demonstrate why trade deals such as the Trans-Pacific Partnership are a bad idea. Similarly, environmentalists are using the lawsuit to reveal just how these deals prevent our government from protecting the place we live.
I know, economics is boring, trade deals are boring, the system is rigged, these free trade deals are, in Noam Chomsky’s words “designed to carry forward the neoliberal project to maximise profit and domination, and to set the working people in the world in competition with one another so as to lower wages to increase insecurity.”
All the more reason to read and talk about them, protest them so they stop getting away with it. I really hate to say it, but given that the United States has never lost a case under NAFTA’s chapter 11, the best thing that can happen is for Obama to lose. The pipeline still won’t be built and Americans might turn their attention to the perils related to the TPP. If Obama wins, no one will even know.
As for my fellow Canadians, it’s time to wake up.