Ridiculing Concerns About TPP Tyranny

People who support the Administration’s efforts on the TPP have been known to reply to my posts on this subject by attempting to ridicule the scenarios I’ve presented as possible under the TPP Agreement as “out there” speculation of the tin foil variety that will never actually happen. For those who think that my examples of what is possible under the TPP are just this kind of speculation, please keep in mind that I don’t have the proposed draft agreements to work from.

This is due to the President’s decision to classify the drafts and seek Fast Track Authority before disclosing them more freely even to Congress for an up or down vote. However, there is no indication from anyone that the actual drafts of the agreement contain rules that would definitively prevent the possible very damaging consequences I’ve mentioned here for example.

Elizabeth Warren and Bill Black make clear why the secrecy and Fast Track Authority (FTA) itself are anti-democratic, and they also point out that some speculation, or at least educated guesses about what exactly is in the TPP, is forced upon us in order to carry on political debate before it is too late to have it because Congress has given up its constitutionally important debate, negotiation, and amendment capabilities to the Fast Track process.

In short, debate on the TPP, and perhaps disclosure of it, must come first, before FTA is approved. Afterward no legitimate debate can be forced on those who want to push approval through Congress. So, why would they agree to one?

However, I don’t need access to the TPP text to counter the wild speculation charge. The fact is, that TPP Agreement provisions establishing Investor State Dispute Settlement (ISDS) tribunals allow supra-national elite authorities unaccountable to voters to trump domestic laws and in so doing subordinate the Government of the United States and the consent of the governed to such authorities.

There is no way around that, and no flood of propaganda about the good will and the debatable progressive bona fides of this President will compensate for this fact. The simple question is: “will ISDS tribunals be able to decide on disputes between sovereign governments and corporations without formal, enforceable constraints on the severity of the judgments that these tribunals can render?”

Is the discretion of ISDS judges in any way limited by the TPP language? And if it is, then do national sovereign governments have the uncontested right to enforce that language by simply rejecting these judgments? If not, national sovereignty, and in democracies, popular sovereignty and consent of the governed would be breached by the TPP.

To those who say that such a breach is only theoretical in nature because the past history of ISDS judgments doesn’t show a great number of extremist judgments, and none directed at the United States, that infringe on sovereignty in an unacceptable way, I reply that past history is often no guide to the future. If it were, we would never have had the crash of 2008.

Prior to the crash most economists had a very sanguine view of derivatives and did not consider them systemically dangerous. Now we know that they are. And we also know that their continued existence is an ever-present threat to the stability of the international financial system.

The trade agreements placed in force thus far, involve very few nations and are mostly bilateral in nature with trading partners that are small and have few rich corporations and individuals in a position to challenge the US or other major nations in an ISDS environment. With the passage of TPP, TTIP, and TISA, all that would change. 80% of the world’s trade would be subject to treaties of this sort, and the wealthiest corporations and individuals would be covered by these agreements.

Suing governments in the tribunals is an expanding line of business, and is viewed as such by multinationals. Actions against the United States will grow exponentially if the TPP and other expansive trade agreements are passed, and we would have to expect that regulations costing multinational firms billions of dollars would come under challenge by those firms, and also that they would win some judgments and that some of these would be substantial.

There is nothing in these agreements that places any constraints on the ISDS tribunals in relation to what they decide, or the amounts of the awards. They are empowered to ignore the stated objectives of the TPP and all manner of nice sounding language in it, because that language is not binding on their discretion, which is absolute, according to leaks of the text we have access to.

ISDS tribunals have already shown in relation to NAFTA that they will impose financial obligations on governments for new types of “violations” that have no explicit warrant in that agreement. They are sure to do the same in the new proposed agreements including the TPP.

An ISDS tribunal has already delivered a $2.3 Billion judgment against Ecuador that is such a great proportion of its GDP that it places a burden on that country that would be equivalent to a judgment of $340 Billion levied against the US Government. Ecuador has no recourse in contesting that judgment, and the US also would have no recourse if it received a judgment of proportionate size from an ISDS court.

The important thing to realize is that no one can predict exactly what the ISDS tribunals will do under this agreement, because they have the authority to be as extreme as they want to be in their judgments. So, I ask supporters of the TPP who think opponents of it like myself are creating ridiculous scenarios and inferences about what its consequences may be, does it make any sense at all to subject the United States or other sovereign governments to the risk of extreme financial judgments for the highly uncertain and small gains that are likely to result from these trade deals? Is it even constitutional for the Congress to give away its sovereign legislative authority to foreign bodies staffed by attorneys whose bills are paid for by corporations, or even to any foreign bodies, however staffed.

And if it does make sense to do that, isn’t such a fundamental change in legislative authority something that can only be legally done through the process of amending the constitution? Is it really constitutional for the Congress to delegate a portion of its legislative authority through a mere Congressional-Executive Agreement, which is what the TPP would be?

I’m afraid I don’t think so. What I do think is that an agreement like the TPP will never be accepted by the majority of Americans as legitimate, if it is railroaded through Congress while it is secret under FTA. It will be constantly challenged by conservatives and progressives alike.

Even it it is pushed through now by corporate interests, it will never be accepted by the majority of Americans once they see its effects. It will always be viewed as an attempt to turn the United States over to foreign powers, and the legacy of those passing it will be one of dishonor, and opprobrium.

17 responses to “Ridiculing Concerns About TPP Tyranny

  1. Steven Greenberg

    The irony of asking full disclosure and the President’s promising it is the very fact of one clause that is in the TPP. Certain sections of it are not to be publicly disclosed even after it is accepted. So the President would be violating one of the clauses in the agreement if he disclosed what he promised not to disclose.

    Why would he make promises to us on disclosure that he knows full well he cannot keep? Just another reason to distrust him on what he says about TPP.

    Murphy’s law that anything that can go wrong will go wrong is mostly aimed at inanimate objects and the seemingly perverse nature of probability. When you give your enemies weapons to destroy you with, it is silly to believe that they will not use them against you. It isn’t the perversity of nature that Murphy’s Law describes this. It is perfectly non-perverse behavior. So why would TPP supply these weapons, and then dismiss the concern that they would ever be used?

    • Joe Firestone

      Excellent points! When the big judgments start to fall, no one will able to say “who could have predicted” it was just “Murphy’s Law.” This won’t be “Murphy’s Law.” It will be Obama’s Law and the Law of the Republicans and Democrats who are part of the corporate uniparty on both sides of the aisle.

  2. Jeff Staniels

    I do not know the answer to this question so please don’t think I am being snippy: But, if as your second paragraph states, the text of TPP is unavailable because the PRESIDENT classified it, why doesn’t the speech and debate clause (Art I, sec. 6, cl. 1 of the Constitution), permit any legislator to say whatever they want about it on the floor of the House or Senate?

    • Joe Firestone

      Well, if they had copies of the text, then they could read it into the record as Senator Mike Gravel did with the Pentagon Papers after they were leaked to him by Daniel Ellsberg. However, one reason why they can’t do that is because copies aren’t available to them. They can see the text in a classified setting managed by the Special Trade Representative, but they cannot make copies, have their staff in with them or take any notes, so effectively their access to the text is faux access, isn’t it?

      Another reason however, why they cannot even disclose their memory of the text is that the Executive claims that they cannot, in effect, de-classify the contents of the drafts by disclosing them to the Congress. It is questionable whether this prohibition is constitutional because a Congressperson’s right to debate whatever they want to on the floor without any repercussion is quite explicitly guaranteed in the Constitution as a protection against tyranny. Nevertheless, not one of today’s “courageous” Senators or representatives is willing, as Mike Gravel was, to defy the claims of the Executive under national security legislation.

  3. The Four Rs
    Rejection: Stop Paying, Stop Obeying, Stop Playing
    Revolution: It is inevitable, so prepare, as they are.
    Restoration: Restore the American people, country and Constitutional republic.
    Retribution: The guilty must answer for their crimes against the American people and the Constitution.

    Demand Liberty. (Last sentence edited out since it stepped over the line of civil discourse.)

  4. Ancient public trust law may be a way out of this situation but probably only after the agreements are ratified. In a democracy the power to govern is derived from the of the citizenry. Under concepts of public trust no successive elected government can have its legislative power constrained by an earlier government. It may be the case therefore that any international trade agreement needs approval from any later government or the agreement is void.
    Every corporation is an artificial entity created under the law of a specific country. To submit the sovereignty of the citizens of one democratic country to the will of an artificial entity created in another country amounts to treason.
    Thomas Jefferson wrote, “I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country”.

    • Joe Firestone

      I agree with this argument. The thing is that if this Congress passes the TPP it will claim that it is binding on future Congresses in the absence of supra-majority voting for withdrawal. This claim will be adjudicated in the Courts of the United States, and who knows what this plutocratic Supreme Court may invent to give the corps what they want?

    • J Christensen

      A functioning democracy requires a well informed and participating electorate. The secrecy surrounding this and other agreements combined with poor at best media coverage, make it very difficult even for those who want to participate as informed voters in any participating country to do so; hence the growing global problem of voter apathy.

      For a “later government” to carry weight on such an issue, the agreement would have to become a major part of an election platform to ensure the facts get out there.

  5. Is it really constitutional for the Congress to delegate a portion of its legislative authority through a mere Congressional-Executive Agreement, which is what the TPP would be?

    “The United States shall guarantee to every State in this Union a Republican Form of Government. ” — Article IV, Section 4, US Constitution.

    Thanks to –
    http://ellenbrown.com/2015/04/24/the-trans-pacific-partnership-and-the-death-of-the-republic/

    • Joe Firestone

      Ellen cited my piece in her post linking to Naked Capitalism. However, it was first posted here: http://neweconomicperspectives.org/2015/03/thoughts-about-the-trans-pacific-partnership.html#more-9264 and I also raised the constitutional question there saying:

      Seventh, which brings us to another serious question, namely, would approval of the TPP with its investor-state dispute mechanisms even be constitutional? I think a case can be made that the TPP amounts to handing a legislative veto power over Congressional legislation to multinational corporation-dominated investor state courts. Does Congress really have the constitutional authority to provide such a veto power to authorities external to the United States?

      It’s been established in law that Congress can delegate its legislative authority to all sorts of agencies it designates, but to do this, Congress has to set forth in legislation an “intelligible principle” under which its delegation of authority is constrained. General grants of legislative authority are clearly unconstitutional.

      The “intelligible principle” in the TPP seems to be that these investor state three judge tribunals can invalidate future legislation, based on whether or not it is seen by such panels as hurting the potential profits of investor state plaintiffs, but otherwise their authority appears to be unconstrained. So, the constitutional question is whether this is a specific enough constraint for delegating Congress’s legislative authority to a private agency, as opposed to being an unconstitutional grant of arbitrary authority to an entity external to the United States.

      • “…who knows what this plutocratic Supreme Court may invent to give the corps what they want?”

        Aye, there’s the rub! But one would never know unless it’s tried. Do you know of a liberal constitutional attorney who would care to weigh-in in a post here at NEP in light of Art. 4, Sec. 4 or any other constitutional limitations? I think it would make for very good reading.

  6. micky9finger

    Why can’t some enterprising hacker get the text and publish it?
    It’s the American way.

  7. Erick Borling

    Great conversation. I must say I won’t touch Naked Capitalism with a ten-foot pole due to the brutally childish common taters there. Hence your antagonists, Joe? However, you are far from isolated in your objections to the TPP. Presumably you are familiar with Jim Hightower. If not, delight in his multitude of arguments against it (from a Texan!).

    I would be grateful for any historical evidence of attacks on local self-determination (and state and federal sovereignty) levied by multi-national corpses whose fantasies of profit were thwarted by the law, and who then sued for damages equivalent to their fantasies of plunder. Oh well guess what; there IS evidence. It happened already in the context of NAFTA. Here is an (supposedly outdated) wikipedia description of that:

    “In 1996, the gasoline additive MMT was brought into Canada by Ethyl Corporation, an American company. At the time, the Canadian federal government banned the importation of the additive. The American company brought a claim under NAFTA Chapter 11 seeking US$201 million, from the Canadian government and the Canadian provinces under the Agreement on Internal Trade (“AIT”). The American company argued that their additive had not been conclusively linked to any health dangers, and that the prohibition was damaging to their company. Following a finding that the ban was a violation of the AIT, the Canadian federal government repealed the ban and settled with the American company for US$13 million. Studies by Health and Welfare Canada (now Health Canada) on the health effects of MMT in fuel found no significant health effects associated with exposure to these exhaust emissions. Other Canadian researchers and the U.S. Environmental Protection Agency disagree with Health Canada, and cite studies that include possible nerve damage.
    Canada had filed numerous motions to have the duty eliminated and the collected duties returned to Canada. After the United States lost an appeal from a NAFTA panel, it responded by saying “We are, of course, disappointed with the [NAFTA panel’s] decision, but it will have no impact on the anti-dumping and countervailing duty orders.” (Nick Lifton, spokesman for U.S. Trade Representative Rob Portman)[38] On July 21, 2006, the United States Court of International Trade found that imposition of the duties was contrary to U.S. law.”

    TPP provides for additional avenues for transnationals to sue. Serves it up on a silver platter. So it WILL happen. Dr. Black has educated me thoroughly on this concept. Presumably the TPP court is a U.S. tribunal and an addition to the Federal budget! But who knows? It’s a secret! The U.S. will open the doors wide and pay for foreign claims against my community because we insist on clean air, water, and decent laws protecting Americans from financial rape? Holy mackerel… that’s %100 diabolical. It can’t happen except in a land where the system has arranged so that people are too busy scrambling for dough because “the system is in default (Mosler),” and they’re too bamboozled by lack of education to participate in civic life. Mission accomplished, Republican Revolution of 1995. The American El Salvador model has come home to roost, Saint Gipper is a contra, too!

    By the way, the Republican Party has cited concerns about subordinating national sovereignty to outside agencies (my wording) when refusing to sign on to treaties that promote humanitarian and environmental concerns, which might suggest they would be an ideological ally against the TPP. You can see a good perspective on such sentiments on The Daily Show of April 14, 2015 (- Fareed Zakaria). Of course the GOP is beholden to big transnational money, so the joke is on us, but imagine a multinational union suing thousands of states for thwarting U.S. workers’s reasonable expectations that we obtain remuneration commensurate with our abilities and the costs of our training (which are dwarfed by piddly wages), write tinfoil hat letters to your legislators posing as anti-union reactionaries posing such a hypothetical, or better yet ignore me ‘cuz Joe is better at poli-tickle strategy.

    Thank you for your service Firestone. You’re the Greatest Generation.

  8. The criticisms you noted in your first paragraph remind me of trying to explain some particularly heinous clauses in a proposed collective bargaining agreement to a rank and file blinded by the signing bonus. “They wouldn’t do that” was the usual response to contract language that laid out exactly what they wanted to do and in fact did immediately upon ratification of the CBA. Everyone believes what they want to believe and not what their lyin’ eyes tell them.

  9. TPP created in secret, kept in secret, fast track seeking…IS this how we wish to promulgate, and implement international race policies in a so-called open and free society?

    Me thinks the Bull hath crapped.

    Without regard to the President’s opine that TPP is “good for the American people” if so, let my elected representatives see it, read it (assuming they CAN read with understanding), and then openly vote upon this legislation.

  10. urban legend

    At the very least, there should be built in the principle that a bona fide legislative purpose in a piece of contested is so far outweighed by obvious protectionist purposes that it cannot reasonably be contended that the legislation has been made in good faith. (The formulation must be framed so as to give the country’s lawmakers the benefit of the doubt.)

    The apparent absence of any appeal also seems to violate any concept of due process as well. Some form of appeal using appeal arbitrators from outside the organization of designated arbitrators would seem to be an essential requirement as well.

    • urban legend

      In other words, the unconstitutional delegation argument looks compelling.