FOIA reveals government’s assessment of TTIP’s corporate courts – “lots of risks and no benefit”
Date: 25 April 2016
As the thirteenth round of negotiations of the free trade deal between the EU and the USA start in New York, a Freedom of Information Access (FOIA) request released today by campaign group Global Justice Now reveals that the only assessment that the government has carried out on the risk of introducing secret corporate courts under TTIP shows lots of risks and almost no benefit.
The corporate court system, or ‘investor protection’, has proven to be the most controversial aspect of TTIP. There’s been extensive documentation as to how similar investor protection provision in other trade deals has incurred multi-billion lawsuits for governments around the world.
In February a FOIA request was made of the Department for Business Industry and Skills (BIS) asking them what risk assessments had been carried out of the UK government facing such lawsuits if TTIP were to come into effect.
The response from BIS was that the only such assessment that had been carried out was a 2013 study commissioned from the London School of Economics that concluded:
- There is little reason to think that an EU-US investment chapter will provide the UK with significant economic benefits.
- There is little reason to think that an EU-US investment chapter will provide the UK with significant political benefits.
- There is some reason to expect an EU-US investment chapter will impose meaningful economic costs on the UK. Based on Canada’s experience under NAFTA, we would expect an EU-US investment chapter to be regularly invoked by US investors against the UK for governmental actions that would normally not be challengeable under UK law.
[The Investment Chapter of TTIP is the part of the trade deal that covers investor protection.]
The response from BIS also revealed that no risk assessment had been carried out for the inclusion of investor protection in CETA – the free trade deal between Canada and EU that is even further down the process of approval than TTIP.
Nick Dearden, the director of Global Justice Now said:
Introducing a system of secret corporate courts under TTIP would be a fundamental shift in trade and legal policies, so it’s staggering that the government is pushing us into it with almost no assessment of what the risks are for our policy makers or the tax payer. What’s even worse is that the one assessment that the government has commissioned shows that there are lots of risks and no benefit. Yet again this toxic trade deal is exposed as being full of harmful consequences for ordinary people, and new powers and privileges for corporate elites.
Court cases brought against governments under investor protection in other trade deals include:
- Tobacco giant Philip Morris has sued Australia for introducing plain packaging on cigarettes.
- Philip Morris also sued Uruguay for printing a health warning on cigarette packets.
- Waste and energy company Veolia sued Egypt for introducing a minimum wage
- Argentina was sued for freezing energy prices to protect consumers following the country’s financial collapse.
The FOIA request was made by the organisation Request Initiative acting on behalf of Global Justice Now.
Page 9 of this report lays out some of Canada’s experience of investor protection under NAFTA and why that could be very similar to what would happen to the UK under TTIP