Left Wing Sovereigntism! Public Citizen Assaults Investor-State Tribunals

Public Citizen, an anti-free trade group based here in the U.S., sent around an email detailing its objections to a leaked draft text of the ongoing TransPacific Partnership negotiations, which would create a massive Pacific free-trade zone.  Its main complaint is not actually to the free-trade portion of the agreement, but to the proposals for a robust investor-state dispute resolution mechanism.  What I find interesting is how many of its objections (from the anti-free trade left) echo the type of arguments often made by what Peter Spiro would call the sovereigntist right.

Although TPP has been branded as a “trade” agreement, the leaked text shows that TPP would limit how signatory countries may regulate foreign firms operating within their boundaries, with requirements to provide them greater rights than domestic firms. The leaked text reveals a two-track legal system, with foreign firms empowered to skirt domestic courts and laws to directly sue TPP governments in foreign tribunals. There they can demand compensation for domestic financial, health, environmental, land use laws and other laws they claim undermine their new TPP privileges.

The leak also reveals that all countries involved in TPP talks – except Australia – have agreed to submit to the jurisdiction of such foreign tribunals, which would be empowered to order payment of unlimited government Treasury funds to foreign investors over TPP claims. As revealed in Section B of the leaked text, these tribunals would not meet standards of transparency, consistency or due process common to TPP countries’ domestic legal systems or provide fair, independent or balanced venues for resolving disputes between sovereign nations and private investors. For instance, in a manner that would be unethical for judges, the tribunals would be staffed by private sector lawyers that rotate between acting as “judges” and as advocates for the investors suing the governments.

This analysis evokes visions of shadowy international tribunals with broad powers and biased (maybe even corrupt) judges. Like critics of other kinds of international tribunals, the criticism here is somewhat over the top, but there is a kernel of truth to it. Public Citizen is ignoring, however, that few domestic legal systems would meet the standards of transparency, consistency, or due process they are demanding either.  In any event, it will be interesting to see if  sovereigntism will find fertile ground on the American political left.