The New York Times reported earlier this week on a crucial detail in the Trans-Pacific Partnership free-trade agreement now being hammered out. The Investor-State Dispute Settlement (ISDS) provision would allow foreign companies to sue over the United States over regulatory policies that hurt the corporations' bottom line. From NYT:
An ambitious 12-nation trade accord pushed by President Obama would allow foreign corporations to sue the United States government for actions that undermine their investment “expectations” and hurt their business, according to a classified document.
The Trans-Pacific Partnership — a cornerstone of Mr. Obama’s remaining economic agenda — would grant broad powers to multinational companies operating in North America, South America and Asia. Under the accord, still under negotiation but nearing completion, companies and investors would be empowered to challenge regulations, rules, government actions and court rulings — federal, state or local — before tribunals organized under the World Bank or the United Nations.
Backers of the emerging trade accord, which is supported by a wide variety of business groups and favored by most Republicans, say that it is in line with previous agreements that contain similar provisions. But critics, including many Democrats in Congress, argue that the planned deal widens the opening for multinationals to sue in the United States and elsewhere, giving greater priority to protecting corporate interests than promoting free trade and competition that benefits consumers.
Southern Arizona Congressman Raul Grijalva (D-AZ) joined with his Congressional Progressive Caucus co-chair Keith Ellison (D-MN) today to criticize the "investment chapter" provision:
“The text of the Investment Chapter of the Trans-Pacific Partnership validates concerns repeatedly raised by the Progressive Caucus about one of the biggest trade deals in history. Expanding ISDS increases foreign corporations’ ability to challenge U.S. policies outside of the U.S. court system, and demand monetary compensation for the loss of their ‘expected future profits.’ This erodes the power of Congress to establish vital health and environmental protections that protect consumers.
“The United States is leading a global race to the bottom that isn’t good for families anywhere. Good trade deals should not expose our consumer protections to legal attacks by foreign corporations.”