'TPP implies a form of absolute rule, a tyranny as James Madison would have understood the term'

[marmar]

The TPP: Toward Absolutist Capitalism

Posted on April 20, 2015
By Lambert Strether of Corrente.


There are many excellent arguments against the Trans-Pacific Partnership (TPP), two of which — local zoning over-rides, and loss of national sovereignty — I’ll briefly review as stepping stones to the main topic of the post: Absolutist Capitalism, for which I make two claims:

1) The TPP implies a form of absolute rule, a tyranny as James Madison would have understood the term, and

2) The TPP enshrines capitalization as a principle of jurisprudence.

Zoning over-rides and lost of national sovereignty may seem controversial to the political class, but these two last points may seem controversial even to NC readers. However, I hope to show both points follow easily from the arguments with which we are already familiar. Both flow from the Investor-State Dispute Settlement (ISDS) mechanism, of which I will now give two examples.

TPP’s ISDS and Local Zoning

I’m starting with local zoning because I think it’s an issue where “strange bedfellows” on left and right can work together (and so letter writing campaigns and visits to Congressional offices can be organized accordingly). I think it will be very hard to find find a constituency for a foreign corporation determining local land use, and easy to find constituencies against it.

.....(snip).....

In other words, TPP elevates capitalization — the expectation of profit — as a principle to the principles of, say, the Bill of Rights, or the Declaration of the Rights of Man. And then, government, when it provides concrete material benefits to its citizens, must “compensate” capitalists whenever their calculated, immaterial expectations — capitalization — have been “expropriated.” What a racket! TPP is the biggest enclosure in the history of the world! .................(more)

http://www.nakedcapitalism.com/2015/04/tpp-toward-absolutist-capitalism.html

[Omaha Steve]

1. Great post

K&R!

[DirkGently]

2. KNR. N/t

[AzDar]

3. K & R

[Buns_of_Fire]

4. Excellent article. I can't wait to see the "Enforcement" chapter of this monstrosity.

Exactly what happens when a country, state, or town tells the Almighty ISDS Tribunal to "stuff it -- we ain't paying"? Are the signatory governments obligated to enforce the settlements? And what if THEY refuse?

No one can be told that, of course. It's a surprise. "Trust us, you'll love it! Think of all the JOBS!"

Why the President is pushing this, I can't imagine. Well, yes, I CAN imagine, but I really don't want to think that of him.

[Auggie]

5. Kicked and Recommended. Thanks for posting ...

will share on Facebook.

[appalachiablue]

6. K & R !

[Hoyt]

7. That would be bad if someone could show one case similar to those at link in over 2500 trade

agreements including major ones like NAFTA, KORUS, trade agreements in the European Union, and hundreds more since they were first included in agreements in 1959.


I do agree that the TPP should include very precise definitions of what constitutes expropriation, to avoid anyone attempting to exploit the long-standing intent of these trade dispute resolution provisions.

[okaawhatever]

11. Most folks aren't concerned with reality in opposing the TPP. Naked Capitalism is a joke of a site

anyway. Perhaps the readers should investigate who owns it.

[marmar]

14. Actually it's from Corrente, reposted at Naked Capitalism......

...... If you're going to try to kill the messenger, at least identify the right messenger.

[Feron]

12. John Oliver explains..

[appal_jack]

13. Lots of ominous cases already documented, Hoyt.

http://www.citizen.org/documents/investor-state-chart.pdf

For example:

From 2011, St Mary's VCNA, settled for $275 million:

A Brazilian company with a U.S. subsidiary that in turn owns a Canadian company sought to engage in rock quarrying activities in Canada. The investor complained that various subfederal government actions slowed the permitting process, resulting in a “substantial deprivation of its interest in the Quarry Site.” Though the company’s claim to be able to access NAFTA as a U.S.-based company was under dispute (given an apparent lack of substantial business activities in the U.S.), Canadian officials announced in 2013 that the government would settle with the company, paying it $15 million.

&

Ethyl, from 1997, for $13 million:

Ethyl, a U.S. chemical company, launched an investor-state case over the Canadian ban of MMT, a toxic gasoline additive used to improve engine performance. MMT contains manganese − a known human neurotoxin. Canadian legislators, concerned about the public health and environmental risk of MMT emissions, and about MMT’s interference with emission-control systems, banned MMT’s transport and import in 1997, despite Ethyl’s explicit threat that it would respond with a NAFTA challenge. MMT is not used in most countries outside Canada, and is banned by the U.S. Environmental Protection Agency in reformulated gasoline. Making good on its threat, Ethyl initiated a NAFTA claim against the toxics ban, arguing that it constituted a NAFTA-forbidden indirect expropriation of its assets.
Though Canada argued that Ethyl did not have standing under NAFTA to bring the challenge, a NAFTA tribunal rejected Canada’s objections in a June 1998 jurisdictional decision that paved the way for a ruling on the substance of the case. Less than a month after losing the jurisdictional ruling, the Canadian government announced that it would settle with Ethyl. The terms of that settlement required the government to pay the firm $13 million in damages and legal fees, post advertising saying MMT was safe and reverse the ban on MMT.10 Today Canada depends largely on voluntary restrictions to reduce the presence of MMT in gasoline.

&

1996 Metalclad

Metalclad, a U.S. waste management corporation, challenged the decision of Guadalcazar, a Mexican municipality, not to grant a construction permit for a toxic waste facility unless the firm cleaned up existing toxic waste problems. The same decision had been made for the Mexican firm from which Metalclad acquired the facility. Metalclad also challenged the establishment of an ecological preserve on the site by a Mexican state government. Metalclad argued that the continuing decision to deny a permit amounted to expropriation without compensation, and a denial of fair and equitable treatment.
The tribunal ruled that the denial of the construction permit and the creation of an ecological reserve were tantamount to an “indirect” expropriation and that Mexico violated NAFTA’s obligation to provide foreign investors with a “minimum standard of treatment,” because the firm was not granted a “clear and predictable” regulatory environment. The decision has been described as creating a duty for the Mexican government to walk Metalclad through the complexities of Mexican municipal, state and federal law and ensure that officials at different levels never give different advice.
When the Mexican government challenged the NAFTA ruling in Canadian court, alleging arbitral error, a Canadian judge ruled that the tribunal erred in part by importing transparency requirements from NAFTA Chapter 18 into NAFTA Chapter 11 and reduced the award by $1 million. The Mexican federal government’s effort to hold the involved state government financially responsible for the award failed in the Mexican Supreme Court.

-app

[Hoyt]

15. Not one of those is similar to the BS in link. And despite those, Canada and Mexico still value TPP

enough to have asked to be included.

I'm not going to address each case, but they all have factors not included in your summaries. For example in Ethyl Corp. v. Government of Canada, a Canadian court found the act used against Ethyl to be invalid under Canadian law.

These countries agree to the dispute resolution because they want companies to bring investment, jobs, etc., to their country. They know that without the resolution mechanism, companies would say, "no thanks, we'll go elsewhere."



Oh, I did look at the Metalclad case is a laugher. Mexico enticed Metalclad to come in and clean up a land fill where the previous Mexican company had dumped a bunch of toxic stuff. The federal government pretty much agreed that Metalclad could open an operation if they cleaned up the mess, but some local officials denied a permit when it came time (my guess is Metalclad wouldn't provide them girls, drugs, or money or something). So they were awarded some money to compensate for what they had invested so far. But, in the end, Metalclad still didn't get to operate its facility -- so sovereignty was not impacted.

[appal_jack]

19. So you favor corporate attorneys' opinions about toxicology over actual scientists? Got it.

Look, all three cases I excerpted (from a much more extensive list) show how the ISDS tribunals are over-ruling local permitting processes, allowing for toxins to enter signatory nations' boundaries in violation of established law, and otherwise undermining democracy. You can split hairs all you want, but your weave is less convincing than Rand Paul's.

And your arrogant condescension toward the Mexican authorities who objected to the Metalclad case is noted. I know that every country has issues of corruption, and too much of Mexico is closer to a failed state than its citizens want or deserve, but in the Metalclad case the authorities were doing the right thing. Your presumption (without any evidence) that the case hinged upon "girls, drugs, or money or something" comes very close to paternalistic racism. Better to let the (mostly) white guys in bespoke suits run the show from New York: is that what you're saying Hoyt?

-app

[Hoyt]

21. I favor a process when there is a trade dispute where each side selects and arbiter and then one

Last edited Mon Apr 20, 2015, 06:51 PM - Edit history (1)

other agreed to by both sides. I think that is about as fair as one can make it.

The countries, including the USA, agree to it because they want foreign investment and it's worth the risk of a few law suits going against them.

In the Metalclad case, Metalclad still didn't get to open its waste disposal operation. It merely got some relatively minor damages for believing the Mexican officials and spending a bunch of money cleaning up the Mexican company's pollution.

I'll be glad to compare my beliefs (as evidenced by posts right here) on racism, bigotry, etc., to yours any day, if you want to go there.

[Dont call me Shirley]

8. Money for nothin'. This is Fascism plain and simple.

"In other words, TPP elevates capitalization — the expectation of profit — as a principle to the principles of, say, the Bill of Rights, or the Declaration of the Rights of Man. And then, government, when it provides concrete material benefits to its citizens, must “compensate” capitalists whenever their calculated, immaterial expectations — capitalization — have been “expropriated.” What a racket! TPP is the biggest enclosure in the history of the world!"

Basically the ISDS portion of the TPP could legalize slavery as a "tangible or intangible property"?
Would this be a correct interpretation?

[jwirr]

9. USA, USA, USA - oh wait a minute - What USA?

[Orsino]

10. A nation not of men, or of laws, but of money. n/t

[KoKo]

16. Watching Bloomberg Business and it is Non-Stop...."TPP Good for the Country, Business, Global Trade"

Bloomberg's Peter Cook reported: "Even though Republicans are for the most part on board it will be important for President Obama's Legacy getting this through with so many Democrats objecting. He also said that Wyden went along even with tremendous pressure from protesters in Oregon because he thinks it will be good for Oregon's trade with the Pacific.

Not one mention that it's not a "TRADE DEAL" but a give away to Wall Street and Silicon Valley and a threat to our national sovereignty.
They claim the Petersen Foundation did the numbers about how good it would be for the country...but gave no other group who had run the numbers who shows that it isn't good for the country and since most of it is secret (which was not mentioned at all) the Bloomberg viewer is to just assume if the "Petersen Foundation" ran the numbers ....then it is good for the country.

[MisterP]

17. "To His Ridicuousness, George the Third"

"sorry about all the times I used the word 'despot'"

[appalachiablue]

20. Sic Semper Tyrannis

[FollowtheDough]

18. You Guys Don't Understand at all

This is Chess not Checkers, the long game, play the long game.

ucks at rotten fruit being thrown:

[Art_from_Ark]

23. Not just chess

but eleventy-dimensional chess

[FiveGoodMen]

22. And THIS SITE defends and promotes its proponents!

The one in the White House now, and the one that may be next.

Tell me, is this really just a branch site of Free Republic?

[pampango]

24. "Tell me, is this really just a branch site of Free Republic?"

Freepers in particular (and the republican base in general) are very much against the TPP. "Tell me, is this really just a branch site of Free Republic?"

[Mnpaul]

25. James Madison should know

Our country was founded in protest against trade agreements by the government that enforced absolute rule. Our state is currently in violation of a trade agreement by requiring that all US flags sold in the state be made in America. If we continue down this path, "Made in America" may be banned from our products.

Screw that.