Obama, Cameron Promote Trade Deal Granting Corporations Political Power

Obama Cameron Trade

President Barack Obama and British Prime Minister David Cameron promoted a trade deal that would empower corporations. (AP Photo by J. Scott Applewhite)

By Zack Carter
Huffington Post, May 13, 2013

WASHINGTON — President Barack Obama and British Prime Minister David Cameron on Monday pledged to pursue a broad trade agreement between the U.S. and European Union, amid growing domestic unrest with the Obama administration’s plans to include new political powers for corporations in the deal.

Negotiations have not formally begun, but a series of meetings between U.S. and EU officials have established some ground rules and the preliminary scope of the talks. Since tariffs are already low or nonexistent, the agreement will focus on regulatory issues. That emphasis has concerned food safety advocates, environmental activists and public health experts, who fear a deal may roll back important standards.

Obama and Cameron were vague on Monday, while celebrating the potential for a trade pact to create jobs.

“Our extensive trade with the U.K. is central to our broader transatlantic economic relationship, which supports more than 13 million jobs,” Obama said at a press conference Monday. “I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive.”

The 13 million figure is a broad measure of the total jobs in U.S. and Europe “supported” by both trade and financial investment. U.S. exports to Europe support 2.4 million American jobs, according to the Office of the U.S. Trade Representative.

“To realize the huge benefits this deal could bring will take ambition and political will — that means everything on the table, even the difficult issues, and no exceptions,” Cameron said. “It’s worth the effort. For Britain alone, an ambitious deal could be worth up to £10 billion ($15.3 billion) a year, boosting industries from car manufacturing to financial services.”

The negotiation has received little attention after being endorsed by Obama in February during his State of the Union address, and the official public comments system for a deal at regulations.gov received 347 comments, mostly from corporations and corporate lobbying groups.

Last week, however, Rep. Alan Grayson (D-Fla.) delivered more than 10,000 citizen comments to the U.S. trade representative that he received through an online campaign protesting the inclusion of new political powers for corporations under a controversial process known as “investor-state dispute resolution.” In April, the Office of the U.S. Trade Representative told HuffPost that the agency will seek to include such a process in the EU trade deal.

Investor-state resolution grants corporations the political power to appeal one government’s laws and regulations to an international court. If the court rules that the government’s standards violate the terms of a trade agreement, it can impose financial penalties and other sanctions.

The mechanism has been included in U.S.-negotiated pacts with individual nations since the North American Free Trade Agreement in 1994. But the resolution is not currently permitted in disputes with the U.S. and with EU nations, currently governed by World Trade Organization treaties. Under WTO rules, a company must persuade a sovereign nation that it has been wronged, leaving the decision to bring a trade case in the hands of elected governments.

Granting corporations the political power to appeal regulations and laws to an international court is usually defended as a way to protect companies from arbitrary dictators or weak court systems in developing countries. But the expansion of the practice to first-world relations exposes that rationale as disingenuous. Rule of law in the U.S. and EU is considered strong because the court systems are among the most sophisticated and expert in the world.

Public interest groups said they worry that an investor-state resolution system between the U.S. and the EU would allow corporations to compare regulatory standards in different countries, and sue the nation with the strongest rules. EU food safety regulations, for instance, are more robust than those in the U.S., while American bank regulations are stricter than those the many EU countries, including the U.K.

Grayson’s website, www.tradetreachery.com, allowed citizens to submit a form letter opposing the plan.
“I oppose including an ‘investor-state’ dispute resolution in this trade agreement,” the form letter read. “Corporations should not be allowed to sue my country to break the laws that they do not like.”

“We welcome all input from Members of Congress and their constituents,” USTR spokeswoman Carol Guthrie told HuffPost. “We are in contact with Rep. Grayson’s office directly to make sure we take in all comments.”

Companies have grown increasingly ambitious about bringing investor-state cases under NAFTA in recent years. Exxon Mobil and Dow Chemical have challenged Canadian rules that apply to offshore oil drilling, hydraulic fracturing and the use of pesticides. In December, drug giant Eli Lilly brought a NAFTA case against the Canadian government after it invalidated a patent for one of the company’s medications.

 

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