TIME investigative reporter Edwards charges that the controversial Investor-State Dispute Settlement tribunals at the heart of many current trade deals represent a major shift in global relations in favor of private corporate interests.
These tribunals set up arbitration procedures separate and exempt from the judicial systems and laws of the participating states, and taxpayers of those states can be held financially liable for private investor losses. This can include potential future losses as compensation for government actions against private investments. TransCanada, for example, is presently attempting to extract $15 billion from American taxpayers as compensation for potential losses from the denial of the Keystone XL pipeline project. The company claimed that President Barack “Obama’s decision to block the project violated the North American Free Trade Agreement.” As the author clearly shows, ISDS is involved in many bilateral trade agreements between nations, beginning with the first one in 1969. Edwards also believes that U.S. policymakers, in their enthusiasm for the potential of the mechanism when used against relatively powerless nations, overlooked the possibilities of its use against the U.S. The provision was included in NAFTA, writes the author, because “U.S. and Canadian investors operating in Mexico would need a way to avoid capricious Mexican courts.” The growth in the number of agreements featuring such provisions has been quick. By the early 1990s, there were a few hundred, but “as of 2015, there were more than 3,000.” Furthermore, their use against emerging economies has accelerated markedly—Argentina has faced 54 of them—and the huge increase in foreign investment in the U.S. assures they will be used here, too. This troubling trend has spawned an unanticipated permanent structure of well-paid arbitrators developing their own private body of “law,” outside any properly constituted legal system, to the detriment of states and their taxpayers.
Edwards does a great service for the public by turning the spotlight of disclosure on this dark corner of international relations.