Law Professors Oppose Trans-Pacific Partnership, Say It Creates Unaccountable, Unreviewable System For Firms

Mark Gruenberg Editor, Press Associates Union News

Some 100 law professors from universities nationwide have told congressional leaders that the controversial Trans-Pacific Partnership (TPP) 'free trade' pact  includes an "unaccountable, unreviewable" legal system solely for corporations. 

Firms would then use that system to challenge and smash federal, state and local laws -- even after they lose cases against those laws in U.S. courts -- the law professors add.

Their mid-March letter comes as workers, unions and their allies muster a rising campaign against the TPP and against the Obama administration's planned request for so-called "fast-track" trade promotion authority (TPA).  Fast-track would let President Barack Obama (D) and his successor jam TPP and other trade pacts through Congress without changes, worker rights or environmental protections.

But to get the TPP, Obama first must convince lawmakers to pass fast-track, and he's run into trouble there, with workers, their allies and most congressional Democrats.  The ruling GOP, or most of it, favors fast-track.  But there are enough lawmakers up for grabs that unionists are making the rounds of undecided solons.

Now, they're also armed with the law professors' letter. The professors say TPP lets businesses challenge and overturn even existing protections, such as safety and health laws.

TPP would set up a system of foreign trade courts, called the Investor-State Dispute System (ISDS), where "foreign corporations (get) a special legal privilege, the right to initiate dispute settlement proceedings against a government for actions that allegedly cause a loss of profit for the corporation," says the letter, authored by Erwin Chemerinsky, dean of the University of California-Irvine law school.

Another pending trade pact, with Europe, also includes that court system, the letter says.  The court system has no appeals process, their letter points out.  And those trade courts would also be open to 16,000 foreign affiliates of U.S. multinational corporations, Public Citizen's Trade Watch points out, plus U.S. affiliates of foreign firms. 

During the AFL-CIO Executive Council meeting in Atlanta in February, Amalgamated Transit Union President Larry Hanley told his Atlanta local what ISDS could do.  He said that, if allowed under the European trade pact, firms could use the secret trade courts to challenge a proposed Atlanta city ordinance raising the minimum wage there to $15 an hour.

"Essentially, corporations use ISDS to challenge government policies, actions, or decisions that they allege reduce the value of their investments.  These challenges are not heard in a normal court but instead before a tribunal of private lawyers.  This threatens domestic sovereignty and weakens the rule of law by giving corporations special legal rights, allowing them to ignore domestic courts, and subjecting the United States to extrajudicial private arbitration," the letter adds.

"Corporations are able to re-litigate cases they have already lost in domestic courts.  Further, they are able to do so in a private system lacking procedural protections.  As more multi-national corporations are based outside of the U.S., more such challenges will be brought against the U.S...There is no appeals process.  There is no oversight or accountability. "

And while the firms can sue governments, governments can't sue firms, they wrote.

"In recent years, corporations challenged environmental, health, and safety regulations, including decisions on plain packaging rules for cigarettes, toxics bans, natural resource policies, health and safety measures, and denials of permits for toxic waste dumps.  Hundreds of cases have been filed against approximately 100 governments.  ISDS threatens domestic sovereignty by empowering foreign corporations to bypass domestic court systems and privately enforce terms of a trade agreement."

Meanwhile, the Japan Times, that nation's top English-language paper, reported the TPP talks stalled -- again.  The latest talks, in Honolulu, ended on March 15 after a week of discussions. Trade ministers did not set a date for new discussions.

“We anticipate a delay from the scenario we heard earlier,” Kenichiro Sasae, Japan’s ambassador to the U.S., said, referring to the goal of concluding the TPP this year.