Foreign Companies Suing Our States: Dangerous ISDS Procedures in Trade Deals


Do You Want “Trade” Deals That Harm
State’s Rights and Create
more Global Governance?
An Assault on State’s Rights

President Obama’s Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) trade agreements will let foreign corporations tell your state what to do for business and financial regulation, food safety, tax and many other powers the constitution has reserved for the states.  If a foreign corporation does not like a state law, it can assert that the law hurts its “profit expectations” and sue your state in a World Bank tribunal. That tribunal can award damages to the foreign corporation to be paid out of YOUR taxpayer dollars.

What is Investor-State Dispute Settlement (ISDS)?

Among the most dangerous provisions in the TPP/TTIP are provisions that formally prioritize foreign corporate rights over the sovereign right of nations and states to govern their own affairs. The Office of the U.S. Trade Representative continues to build a system of global governance that subjects our local, state and national governments to the risk of paying massive claims to foreign companies. Obama’s TPP will include these ISDS provisions.  For instance, under this treaty, Samsung could sue the state of Florida in a World Bank tribunal. U.S. courts would have no jurisdiction!

How Can the World Bank Tribunals Trump U.S. Courts?

Comprised of three private attorneys, the extrajudicial tribunals are authorized to order unlimited sums of taxpayer compensation for sovereign government actions seen as undermining the foreign corporations’ “expected future profits.” There is no outside appeal. The tribunals can and do create new international law by adopting new rules and tests that are not found in international agreements and may be in conflict with U.S. laws.

Many of these attorneys rotate between acting as tribunal “judges” and as the lawyers launching cases against the government on behalf of the corporations. A whole industry of specialized financing and law firms has sprung up to extract our taxpayer dollars using the investor-state system.

The Threat Continues to Grow!

More than 500 cases have been launched, most of them since 2000.  In 2001 and 2003, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) held that a foreign company could appeal a Mississippi state court case loss to the ICSID. This extreme “investor-state” system already has been included in a series of U.S. “trade” deals, forcing taxpayers to hand more than $400 million to corporations for toxics bans, land-use rules, regulatory permits, water and timber policies and more.

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