- entry 2014/07/19

Welcome to the corporate dystopia

The EU-US trade agreements are being renegotiated. This happens from time to time, and as the US is a sulky bully and the EU a bit namby-pamby, such agreements tend to be slanted in one particular direction. However in recent times, thanks in no small way to a certain Mr. Snowden, the EU has been one of the parts of the world more willing to stand up to the US. It is somewhat rude to carry out mass spying ops on allies. It shows a lack of trust. This whole thing hasn't gone down well in the EU, even if it did seem that Mrs. Merkel was the last person on the planet to know that Mrs. Merkel's phone was bugged.

Unfortunately, something called the Investor-to-State Dispute Settlement (ISDS) is a part of the trans-Atlantic trade agreement being negotiated right now. It sounds innocuous. In reality, it is anything but. Essentially, it will permit a corporation to sue a government for taking an action that would lead to a loss of profits.

Let me demonstrate this with a useful and real example:

• Recently, the French government, made a ruling that Amazon could not offer the 5% discount on books and free postage as this was severely disadvantageous to booksellers. So Amazon set their postage rate to €0,01. The French government responded by pointing out wording in the law, L.81-766 of 10 August 1981, that the 5% discount only applies to actual bookstores that people go to. It does not cover internet shopping - indeed it even predates the public roll-out of the vastly popular Minitel service. So in order to protect an industry that sat merry on its 5% maximum discount (means supermarkets cannot undercut; but also means there is no reason to be loyal to any brand) and did practically bugger all innovation for over a quarter century - it is ultimately the consumer that gets screwed.
  This ruling was more or less directly aimed at Amazon, so much so that it is informally known as the anti-Amazon law. Don't you think Amazon should have the right to sue France for their lost profits due to this incredibly protectionist interpretation of an old law?

Now let's look at hypothetical examples which are hypothetical today, but could be reality tomorrow:

• American chicken - how about some Kentucky Fried Chicken from Kentucky? Or maybe Maryland at a pinch. The problem is the method of washing the chicken involves a chlorine rinse which falls foul of EU food regulations. Chicken in the EU may come from Thailand, but it won't have come from the US (since 1997) because the chlorine thing is considered unsanitary. American poultry producers are looking forward to an expected $500 million in exports to the EU per year [source] if the new trade agreements allow them to foist their chlorine-washed chicken on us regardless of what the people or the governments want.
• GMO - from what the chickens are fed, to modified cows, to maize crops. The EU is mostly against the use of genetically modified creations, with some member states more against it than others. While the EU wishes to maintain its higher level of standards than are present in the US, it should be noted that several members of congress are reported to have stated an unwillingness to approve a deal that does not open more market access for American agribusiness, "including through getting rid of certain food safety standards". [source]

Apparently, as is so often the way, trade deals that involve the US are conducted with a high degree of secrecy. The document referred to just above states - and I quote - "But French Green MEP Yannick Jadot, who sits on the trade committee, said access to documents remains a problem, with only a handful of MEPs allowed to see “restricted texts".".

It may be that once the trade agreements have been ratified, these products - generally unwanted over here - will be dumped into our market regardless, and those member states that try to restrict or ban such things can be sued for lost profits. This has nasty implications for copyright, patents, privacy, and of course European employment. We have stricter controls on the sanitation of our poultry. Americans have minimal controls because they believe that the chlorine bath will kill off germs. That means European chicken will be more expensive to produce. You do the maths...

Now let's take this to the reductio ad absurdum:

• Microsoft sues France for speaking French because it is just such a bother and expense to translate everything into French...

Sounds silly, doesn't it?

Well, if this comes to pass, it will mean that corporate power will trump a democratically elected government. Not only that, but laws will no longer be able to be made in order to protect citizens, because if a law which is made to protect citizens would hurt the profits of a corporation, that corporation can now sue the lawmakers for their loss of profits and by consequence force those laws to be repealed.

Time for another reductio ad absurdum:

• In order to help allay the suffering of the wealthy, a business sets itself up where donor organs are directly harvested from the bodies of people deemed "unworthy" (prisoners, paedophiles, palestinians, whoever this weeks ""unworthy" is defined as). Once an "unworthy" person is nominated (using a closed unappealable process), they are obliged to maintain their body in good working order and not to contaminate it with pollutants such as alcohol.
  At such time as a donor part is required, the best match will be selected and a medical team will be dispatched to remove the part. The part will be weighed, and the person will be paid $1 per ounce...and then billed for the medical procedure involved.
  This is crazy, right? We are walking into Repo: The Genetic Opera right here, aren't we? Such things could never happen! There are laws forbidding the "sale" of body parts from a living person, and against descriminatory selections without consent, right? Right?
  Well... if those laws are shown to be hurting the profits of the organ harvesting business.......

Or slightly more realistic examples:

• You know the tide is turning against smokers and more and more places are smoke free and every so often governments flirt with nonsense ideas like putting cigarettes in unmarked packs? Well, surely that is going to affect the "profits" of the tabacco manufacturers?
• Forget about hybrid cars and subsidies. Anything that causes less petrol to be consumed will - without a doubt - hurt the already-offensive profits of the oil cartel.
• What do you mean insider trading is illegal? That's going to hurt our bottom line, repeal that law now!

It should happen like this:

• If a company can demonstrate that a law was specifically passed in order to create a barrier against them, and this was the direct and sole reason for the financial loss, then that company should be allowed to take the government to court. [this can, and does, happen already]
• Said trial will take place in a public court of law (either in the country, or the EU court - depending on the case in question), with or without a jury depending upon the specifics of the case. At no time should decisions of this nature be conducted in a closed tribunal.
• Under no circumstances whatsoever should a company be permitted to recover losses from, or overturn, a law that was passed fairly and "for the common good". For example if a competent research laboratory found that Statins are strongly implicated in the early onset of Alzheimers, and are thus banned, companies making Statins do not have a case as their product would be considered harmful and the ban would be for the common good of the citizens of the country.
• If the company loses the decision, there should not be any specific additional penalty; except if the case is considered to by frivolous - in which case they should be expected to reimburse the government for the costs of the legal proceedings.

tl;dr:

What this is saying, basically, is that if the agreement comes to pass in the way that Americas corporate shills would like, it would elevate a foreign corporation to a status above the national lawmaking process, with a direct ability to influence the legal apparatus of the country in question.

Your comments:

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