A Trump trade deal could multiply the threat from ‘corporate courts’

By: Heidi Chow
Date: 3 December 2019
Campaigns: Trade

The US has insisted on the most extreme version of corporate courts in US trade talks – just like in TTIP, the EU-US trade deal we stopped in 2016.

The leaked trade documents from secret meetings between the US and UK reveal that US corporations could get massive new powers to secretly sue the British government in ‘corporate courts.’ Investor-state dispute settlement (ISDS), or corporate courts, allow foreign corporations to sue governments in secret courts outside of the national legal system.

Governments the world over have been challenged by big business on policies such as health warnings on cigarette packages, introducing a fracking moratorium, sugary drinks tax and environmental concerns on mining. There is currently a case being threatened over the plans of the Dutch government to phase out fossil fuels in response to the climate crisis.

If big business win their cases, governments are forced to cough up millions (sometimes billions) of taxpayers’ money in compensation. Often the threat of a case alone can cause a government to retreat from policies that protect the public and the environment – in fear of being sued in corporate courts.

The leaked trade papers reveal that the US would like to include corporate courts in a US-UK trade deal. It also shows they like the ‘chilling effect’ that the threat of a case can have on a government considering policies that support the public interest:

“There is value in including ISDS in an investment chapter. The causality is not provable, but even if disputes do not proceed to claims, the presence of a backstop is invaluable in resolving things – including the possibility of Posts reminding a host state of their obligations.” [1]

And the US goes even further by rejecting even moderate reforms of the corporate court system proposed by the EU (known as the Multilateral Investment Court, MIC) which would include more transparency into the process and guarantee the right for governments to appeal. US negotiators say that: “adopting such an approach in a future UK-US FTA is ‘untenable with US preferences'” [2] in other words, the US is pushing the UK to adopt the most extreme version of corporate courts.

This is emphasised further by the US, that anything less than the most extreme, pro-business  version of corporate courts would be a “high level concern’ for USTR [US Trade Representative] and Ambassador Lighthizer personally” [3]. And that if the UK were to support the reformed version in a UN forum, the trade deal might be off:

“The US continued to have severe concerns with respect to the EU’s proposals for a Multilateral Investment Court (MIC) and reiterated previous statements that the US Government would be very concerned at any indication that the UK was in favour of a MIC, they were clear that this would undermine the ability of the US to work with the UK in other forums including in the context of the FTA.” [4]

The inclusion of corporate courts in a US trade deal would threaten the ability of future UK governments to legislate and make policy decisions in the interests of the public and the environment. It would have far-reaching implications on our ability to tackle the climate emergency or to prevent the NHS from being further privatised. Ultimately, the system of corporate courts is a giant transfer of power into the hands of big business. The US government has clearly set out that they see the inclusion of the most extreme version of corporate courts as a deal breaker.

We need to expose this agenda and say no to this toxic trade deal.

Notes:

[1] p98 https://issuu.com/wdmuk/docs/4_official_20sensitive_20fourth_20uk-us_20trade_20/1?ff

[2] p30 https://issuu.com/wdmuk/docs/5_official_20sensitive_20fifth_20uk-us_20trade_20a/1?ff

[3] p30 https://issuu.com/wdmuk/docs/5_official_20sensitive_20fifth_20uk-us_20trade_20a/1?ff

[4] p35 https://issuu.com/wdmuk/docs/5_official_20sensitive_20fifth_20uk-us_20trade_20a/1?ff