The ISDS (Investor State Dispute Settlement) provisions in the TPP will allow corporations to sue our government for policy decisions or regulations that cut into their corporate investments or profits. ISDS courts  won’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Maybe that makes sense in an arbitration between two corporations, but not in cases between corporations and governments. If you’re a lawyer looking to maintain or attract high paying corporate clients, there is a great incentive to rule in favor of corporations.¹

This information about the ISDS was taken from an article written by Elizabeth Warren. Elizabeth Warren is the United States Senator for Massachusetts. She has been a law professor at Harvard University for 20 years.  Time Magazine has twice included her in America’s 100 most influential people list.

ISDS is part of the NAFTA deal. Under the NAFTA ISDS framework, Canada has lost or settled six claims paying a total of $170 million in damages, while Mexico has lost five cases and paid out $204 million. The U.S.,meanwhile, has won 11 cases and has never lost a NAFTA investor state case.² Foreign investors are now seeking over $6 billion from the Canadian government in new cases. The Canadian government also has to spend millions of dollars on lawyers to argue their cases.³ 

Another concern with ISDS is that it will have a “chilling effect” on public policy and regulation. The risk of investment treaty litigation can deter governments from acting in the public interest.

TPP will increase the exposure of Canada to ISDS lawsuits as more industries and more countries are covered by the TPP. It is still possible to renegotiate NAFTA. It will be much easier to renegotiate NAFTA as there are only three countries involved. It will be much more difficult to renegotiate TPP if it is ratified as there are twelve countries involved.

ISDS is just one serious concern about the TPP. Read my other blog entries about other problems with the TPP.

1. The Trans-Pacific Partnership clause everyone should oppose. Washington Post.
2. NAFTA’s Chapter 11 makes Canada most sued country under Free Trade Tribunals. Huffington Post.
3. NAFTA Chapter 11 Investor State Disputes. Canadian Center for Policy Alternatives.