trade agreements – Techdirt (original) (raw)

Now That USMCA Is In Effect… Can Congress Even Reform Section 230 Without Violating The Agreement?

from the oh,-look-at-that dept

It seems like every other day we see yet another proposal to dismantle, revoke, or otherwise undermine Section 230 of the Communications Decency Act. But doing so might actually create massive international problems. That’s because, as you may recall, despite some last minute attempts to remove it, the final USMCA retained language that suggests that any signatory to USMCA must have Section 230-like laws in place to protect intermediary liability. And, while it got surprisingly little attention, the USMCA went into effect last week. And thus, any change to Section 230 may raise at least some questions about whether or not they violate the agreement.

Now, there are limitations to this provision, but it’s interesting to see some people pulling their hair out that “big tech” has already blocked any possible changes to 230 via the USMCA:

But it?s hard to invest much energy in what the optimal Section 230 framework would be, since Big Tech has already solved this potential problem?in a way only they can love. Years ago, they succeeded in getting a Section 230-style provision into the reworked NAFTA, the U.S.-Mexico-Canada Agreement (USMCA). And practically everybody now incensed by the Section 230 legal immunity willingly voted to implement it in that trade agreement. That makes it much, much more difficult to change it in any way.

I find this framing fairly hilarious if you know anything about the history here. As detailed in the excellent book, Information Feudalism, it was actually the big legacy “intellectual property” industries, starting with the big pharmaceutical companies and followed quickly by Hollywood, that pushed to include things like copyright and patent rights in international trade agreements. As we’ve described, those industries have long focused on this form of policy laundering to get what they want.

Indeed, the DMCA itself wouldn’t exist without this process. As one of the architects of that law, Bruce Lehman, publicly admitted years ago in the 1990s, when Congress refused to create a DMCA-like law, he helped architect a plan to “run to Geneva” and get the 1996 WIPO Copyright Treaty signed, which “obligated” the US Congress to then create a DMCA-like law.

I have long found this whole process to be rather disgusting: leveraging backroom deals in trade agreements, that are negotiated out of sight of the public (or public interest organizations), with heavy input from industry, and then turning around and insisting that Congress must then abide by the restrictions in those agreements or face concerns that we’re not living up to our “international obligations” (the favorite phrase of those laundering policy in this manner).

It is all a big scam, of course, but since everyone else played that game in order to attack the internet, is it really any surprise that internet companies eventually sought the same sort of protections via trade agreements as well?

So, while the whole process of laundering policy this way is slimy and disgusting, there’s some level of ironic enjoyment in watching those now pushing for the undermining of Section 230 (which is often being driven by behind the scenes support from Hollywood), suddenly realizing that they now are facing the exact same game plan that they spent decades pulling against the internet.

Filed Under: intermediary liability, international obligations, section 230, trade agreements, usmca

Australia Triumphs Definitively In Long-Running Battle With Big Tobacco Over Plain Packs For Cigarettes

from the no-sacred-right-to-use-trademarks dept

Techdirt has written a lot about corporate sovereignty — also known as “investor-state dispute settlement” (ISDS) — which allows companies to haul countries before special tribunals for alleged loss of profits caused by new laws or regulations. One industry’s use of ISDS that Techdirt has been following particularly closely is tobacco. As a typically brilliant John Oliver segment explained back in 2015, Big Tobacco companies have used corporate sovereignty clauses in international trade and investment deals to sue countries for daring to try to regulate cigarettes, advertising or packaging. Thankfully, that didn’t turn out so well. Philip Morris tried to use ISDS to roll back plain-pack laws, but cases against Australia and Uruguay were both thrown out. The tide against the use of corporate sovereignty by tobacco companies to undo health protection laws has turned so much that special carve-outs have been added to trade deals to prevent this kind of corporate bullying.

But the tobacco industry had one last trick up its sleeve. John Oliver noted five years ago that Big Tobacco persuaded three countries — Honduras, Dominican Republic and Ukraine — to file complaints with the World Trade Organization (WTO) against Australia, claiming the plain-packaging law violates trade agreements. As an article in the Financial Review explains, they were later joined by Indonesia and Cuba. A dispute panel backed Australia in June 2018, but Honduras and the Dominican Republic appealed against that decision. Now the WTO’s Appellate Body has made its final ruling:

The Appellate Body confirmed the previous WTO ruling, which said that when Australia prevented tobacco producers from differentiating themselves from their rivals via brand marketing, this wasn’t necessarily a restriction on trade.

It also rejected the argument that raising the purchasing age or increasing tobacco taxes were less trade-restrictive options that Canberra could have pursued instead of the plain packaging rules.

And it said that the international intellectual property regime didn’t give tobacco companies a right to use a trademark; it merely stopped competitors from using it. So there was no obligation on Australia to allow a company to use its trademark, and the plain packaging regime hadn’t “unjustifiably” encumbered companies’ trademark usage.

That last point is particularly interesting. As far back as 2011 the tobacco companies tried to argue that “plain packaging has a smothering effect on companies’ logos and trademarks.” The WTO has just stamped on the idea that companies have some kind of sacred right to use their trademarks, which could have wider implications.

As for the main attempt to get rid of plain packs in Australia, that has now failed definitively — there is no way to appeal against the WTO Appellate Body’s ruling. That means that many more countries around the world are likely to bring in plain-pack laws — a real victory for Australia’s tenacious pursuit of this important health measure.

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Filed Under: australia, health, plain packs, trade agreements, wto

Uber Wins Dubious Honor Of Being First Big Tech Company To Bully A Small Nation Using Corporate Sovereignty

from the welcome-to-the-ISDS-club dept

Six years ago, when Techdirt first started writing about the investor-state dispute system (ISDS) — or corporate sovereignty as we prefer to call it — it was largely unknown outside specialist circles. Since then, more people have woken up to the power of this apparently obscure element of international trade and investment deals. It essentially gives a foreign company the ability to threaten to sue a nation for millions — even billions — of dollars if the latter brings in new laws or regulations that might adversely affect an investment. The majority of corporate sovereignty cases have been brought by the extractive industries — mining and oil. That’s not least because many of the laws and regulations they object to concern environmental and health issues, which have come to the fore in recent years. New legislation designed to protect local communities might mean lower profits for investors, who then often threaten to use ISDS if they are not offered compensation for this “loss”.

Big tech companies, for all their real or supposed faults, have not turned to corporate sovereignty as a way of bullying small countries — until now. En24 News reports that Uber is threatening to invoke corporate sovereignty in a dispute with Colombia. According to Uber:

a series of recent measures by the Republic have had a serious adverse impact on Uber’s investments in Colombia and the viability of its operations in the country. On December 20, 2019, for example, through the Superintendence of Industry and Commerce (“SIC”), the Republic ordered Uber, Uber Colombia, and another Uber subsidiary that will virtually cease to make the Uber Platform available of Associated Drivers and passengers in Colombia.

Uber points out:

other companies in Colombia and third countries that offer similar forms in Colombia have not undergone the same treatment and continue to operate in Colombia without similar interference from the Republic.

The company claims a wide range of harms:

The illegal order of the Republic to block the Uber Platform in Colombia also constitutes an act of censorship in contravention of international human rights instruments that protect net neutrality, freedom of expression on the internet and freedom of use of the internet.

At the moment, this is all just saber-rattling, designed to encourage the Colombian government to unblock Uber in the country. If it doesn’t, the company says, it will invoke the ISDS Articles (pdf) of the 2012 United States-Colombia Trade Promotion Agreement, and ask a tribunal to award compensation. Even if the current threat to use corporate sovereignty is not followed through, it is surely only a matter of time before another big tech company joins the ISDS club.

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Filed Under: colombia, corporate sovereignty, free trade agreement, isds, trade agreements, trade promotion agreement
Companies: uber

Another Nail In the Coffin Of Corporate Sovereignty, As Massive Asian Trade Deal RCEP Nears Completion Without It

from the ISDS,-what-is-it-good-for? dept

Remember RCEP? The Regional Comprehensive Economic Partnership is a massive trade deal being negotiated by most of South-East Asia — including China and India. Although still little-known, it has been grinding away in the background, and is drawing closer to a final agreement. Almost exactly a year ago Techdirt noted that there were some interesting rumors that corporate sovereignty — officially known as investor-state dispute settlement (ISDS) — might be dropped from the deal. A story in The Malaysian Reserve confirms that is the case:

After missing several deadlines, member countries of the proposed Regional Comprehensive Economic Partnership (RCEP) have agreed to exclude the investor-state dispute settlement (ISDS) mechanism, a move that might expedite conclusion of the talks by the end of the year.

[Malaysia’s] Ministry of International Trade and Industry (MITI) Minister Datuk Darell Leiking ? said all RCEP member states — 10 Asean countries plus six free trade agreement (FTA) partners namely Australia, China, India, Japan, New Zealand and South Korea — have decided to drop the ISDS, but the item could be brought up again within two years of the agreement’s ratification.

So corporate sovereignty is definitely out of the initial agreement, but could, theoretically, be brought back after two years if every participating nation agrees. Despite that slight loophole, this is a significant blow against the entire concept of ISDS. It’s part of a larger trend to drop corporate sovereignty that has been evident for some time now. That still leaves plenty of toxic ISDS clauses in older investment treaties and trade deals, but the tide is definitely turning.

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Filed Under: china, corporate sovereignty, dispute settlement, india, isds, rcep, trade agreements

Could Article 13's Upload Filters Be Thrown Out Because Of The EU-Canada Trade Deal CETA?

from the it-ain't-over-yet dept

Now that the EU’s awful Copyright Directive has been passed, it would be easy to give up, and assume that nothing more can be done. That’s far from the case. Under EU law, this directive must now be implemented through national legislation in all of the EU Member States. Although that process is compulsory, there is still plenty of scope for interpreting what exactly the Copyright Directive’s text means. As a result, the fight against the worst elements — the upload filter and ancillary copyright for news — can now begin at a national level.

Moreover, there are other ways in which these aspects of the Copyright Directive can be challenged once they are law. A number of people have pointed out that Article 13 (now renumbered as Article 17) effectively imposes an obligation on sites to carry out “general monitoring”. That’s something that the Court of Justice of the European Union (CJEU), the highest court of the region, has already thrown out because it runs counter to Article 15 of the EU’s e-Commerce Directive. Once upload filters are implemented in national law, they can be challenged in the local courts. Since a question that affects the whole of the EU is involved — are upload filters a form of general monitoring? — the national court would almost certainly make a reference to the CJEU for clarification. The hope has to be that the whole approach would be ruled as inadmissible, as has already happened twice with other cases of general monitoring.

That’s one obvious avenue to pursue. But as the Pirate Party MEP Julia Reda mentioned in a recent Techdirt podcast, there’s another route worth investigating. Article 20.11 of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada reads as follows:

Subject to the other paragraphs of this Article, each Party shall provide limitations or exceptions in its law regarding the liability of service providers, when acting as intermediaries, for infringements of copyright or related rights that take place on or through communication networks, in relation to the provision or use of their services.

Moreover:

The eligibility for the limitations or exceptions referred to in this Article may not be conditioned on the service provider monitoring its service, or affirmatively seeking facts indicating infringing activity.

So the question is whether that excludes the kind of monitoring activity that the EU Copyright Directive will require. Obviously, the complex interaction of CETA and the new directive is something that will need consideration in the appropriate legal forum, whatever that might be. But at the very least, the idea that CETA could nullify Article 13/17 is an intriguing possibility.

In the past, the copyright industry has used commitments in existing trade deals to block proposals to create much-needed rights and exceptions for members of the public. It would be poetic justice if for once a trade deal blocked a key part of a new law that Big Copyright wanted so desperately.

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Filed Under: article 13, canada, ceta, copyright, eu, eu copyright directive, intermediary liability, julia reda, trade agreements

Canada's Bell Tried To Have VPNs Banned During NAFTA Negotiations

from the missing-the-point dept

Fri, Feb 1st 2019 06:23am - Karl Bode

Countries around the world continue to wage a not particularly subtle war on the use of virtual private networks (VPNs) and encryption. In Russia, the government has all but banned the use of VPNs by layering all manner of obnoxious restrictions and caveats on VPN operators. The goal, as we’ve seen in China and countless other countries, is to ban VPN use without making it explicitly clear you’re banning VPN use. The deeper goal is always the same: less privacy and online freedom for users who use such tools to dodge surveillance or other, even dumber government policies.

Of course there’s plenty of companies eager to see VPN use banned as well, whether it’s the entertainment industry hoping to thwart piracy, or broadcasters trying to hinder those looking to dance around geographical viewing restrictions. Lost in the hysteria is usually the fact that VPNs are just another security tool with a myriad of purposes, most of which aren’t remotely nefarious and shouldn’t be treated as such.

Apparently, you can count Canadian telecom incumbent Bell among the companies hoping to ban VPN use. Anja Karadeglija, the editor of paywalled telecom news outlet the Wire Report, obtained documents this week highlighting how Bell had been pushing Canadian Foreign Affairs Minister Chrystia Freeland for a VPN ban to be included in NAFTA negotiations. Why? It doesn’t want users using VPNs to watch the US Netflix catalog:

“In its submission, Bell argued that Canadians accessing content from a US service with a VPN ?unjustly enriches the US service, which has not paid for the Canadian rights? but nonetheless makes that content available to Canadians. Bell?s media arm reportedly spends millions on content for it streaming service, Crave TV, which allows Canadians to stream content from American networks such as HBO and Showtime.”

Again though, it’s not the VPN doing that. And if you want to stop users from flocking to better content catalogs elsewhere on the continent, you should focus your ire on the things causing that to happen — like increasingly dated and absurd geo-viewing restrictions, and your own substandard content offerings that fail to adequately match up. That message was lost on Bell, however:

?Canada should seek rules in NAFTA that require each party to explicitly make it unlawful to offer a VPN service used for the purpose of circumventing copyright, to allow rightsholders to enforce this rule, and to confirm that it is a violation of copyright if a service effectively makes content widely available in territories in which it does not own the copyright due to an ineffective or insufficiently robust geo-targeting system,? the submission stated.”

How exactly you’re supposed to determine that somebody is using a VPN to not watch Bell’s own television services isn’t really explained, and the fact that enforcement would likely be technically impossible appears to have been an afterthought. As Canadian Law Professor Michael Geist was quick to note, trying to ban VPNs just as they’re reaching critical mass as a partial solution to raging North American privacy scandals suggests Bell may not exactly have its finger on the pulse of common sense on this particular subject.

Filed Under: canada, streaming, trade agreements, usmca, vpn, vpns
Companies: bell canada

EU Drops Corporate Sovereignty For Internal Bilateral Agreements, But Top Court Adviser Says It Can Be Used In CETA

from the one-step-forward,-one-step-back dept

As Techdirt noted last September, corporate sovereignty — the ability of companies to sue entire countries for allegedly lost profits — has been on the wane recently. One important factor within the EU was a decision earlier last year by the region’s top court that investor-state dispute settlement (ISDS) — the official name for corporate sovereignty — could not be used for investment deals within the EU. The reasoning was that ISDS courts represented a legal system outside EU law, which was not permitted when dealing with internal EU matters. As a direct consequence of that ruling, the Member States of the EU have just issued a declaration on the legal consequences (pdf). Essentially, these are that all bilateral investment treaties between Member States will be cancelled, and that corporate sovereignty claims can no longer be brought over internal EU matters.

However, that leaves an important question: what about trade deals between the EU and non-EU nations — can they include ISDS chapters? In order to settle this issue, Belgium asked the Court of Justice of the European Union (CJEU) whether the corporate sovereignty chapter of CETA, the trade deal between the EU and Canada, was compatible with EU law. As well as clarifying the situation for CETA, this would also provide definitive guidance on the legality of ISDS in past and future trade deals. As is usual in cases sent to the CJEU, one of the court’s top advisers general offers a preliminary opinion, which has just been published (pdf):

In today’s Opinion, Advocate General Yves Bot holds that the mechanism for the settlement of disputes is compatible with the EU Treaty, the [Treaty on the Functioning of the European Union] and the Charter of Fundamental Rights of the European Union.

His argument is that ISDS courts can’t bind national courts, so the latter’s autonomy is not threatened, and thus corporate sovereignty chapters are compatible with EU legislation. That may be true as a matter of law, but ignores the political reality of corporate sovereignty. If huge fines are imposed by ISDS tribunals unless proposed changes to laws are dropped, governments frequently roll over and do as the corporations wish, because it seems the easier, cheaper option. So even though in theory corporate sovereignty cases can’t override national laws, in practice that’s often the outcome.

However, this is only the Advocate General’s view, which isn’t necessarily followed in the main CJEU ruling. It will be interesting to see whether the EU’s top court extends its earlier ruling on intra-EU investment agreements, and throws out ISDS for all trade deals, or whether it agrees with Advocate General Bot and permits corporate sovereignty chapters for things like CETA.

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Filed Under: ceta, cjeu, corporate sovereignty, eu, isds, trade agreements

A Mix Of Good And Bad Ideas In NAFTA Replacement

from the not-great,-but-some-useful-concepts dept

Let’s start with the simple concept that it’s not at all clear why intellectual property and intermediary liability issues should even be in various free trade agreements, other than to acknowledge that the legacy copyright industry has spent decades demanding that they be included in those agreements. I’ve mentioned it many times in the past, but the book Information Feudalism should be required reading on this subject, showing how copyright interests effectively hijacked the international trade agreement process to force through domestic policies they wished to have. The internet community mostly ignored the trade agreement process for years, allowing the RIAAs and MPAAs of the world to run rampant and get more or less whatever they wanted in smokey backrooms, before running home to Congress demanding that we pass new laws to “live up to our international obligations.”

When NAFTA was originally passed, this practice wasn’t as common. Nowadays, it’s more or less considered mandatory to include these issues in trade agreements. This is unfortunate for a large number of reasons, but it does mean that if these issues are going to show up in trade agreements, at least they ought to come out in a way that isn’t harmful.

And that takes us to NAFTA, which our current president demanded be renegotiated for no clear reason other than he was sure it was bad and we were being ripped off. And, voila, we now have a new agreement called the USMCA agreement designed to replace NAFTA (though I agree that we really missed a huge opportunity in not calling it the CAMUS agreement (or at least *something* that is pronounceable). And, because the RIAA and MPAAs of the world forced these issues into trade agreements, this new USMCA has a bunch of issues that have literally zero to do with “trade” but could have pretty widespread impacts on innovation and the internet.

Michael Geist has the best overview I’ve seen of the agreement, highlighting both the good and bad aspects of the agreement. On the bad side of the ledger, it forces Canada to extend its copyright terms from “life plus 50” to “life plus 70.” Thankfully, it appears the weird USTR confusion over the earlier idea that it was going to require life plus 75 years is now gone. But requiring life plus 70 is already problematic. It’s especially bad for Canada in that it will involve a massive taking of the public domain, and locking it up for two extra decades for no good reason. But it’s also bad for the US and Mexico in that it effectively blocks any chance of rolling back copyright terms to more reasonable levels (a proposal that even the US Copyright Office appeared to support in years’ past).

Also bad: expanding the data protection term of biologics. This is something that the US has pushed for in other agreements over the years and it’s really dangerous for basic science and innovation in the drug space. Big pharma companies want it because it allows them to extract monopoly rents, but it harms our ability to actually understand the efficacy of drugs and to make better drugs. We’ve also discussed how this can lead to real harm in silencing people pointing out health risks of certain drugs.

We also remain concerned about the vague “anti-counterfeiting” language that has been used in the past to justify some truly draconian policies that could create huge problems for innovation and privacy.

On the more neutral-to-possibly-bad side of the ledger, the agreement does allow Canada to retain its current “notice-and-notice” copyright policy, as opposed to a “notice-and-takedown” policy for copyright infringement that both the US and Mexico have. This is good, because Canada’s notice-and-notice policy was the result of many years of difficult negotiations and an attempt to do something not as draconian and problematic on questions of free speech than the notice-and-takedown system that we see abused nearly every day here in the US and elsewhere. Unfortunately, what puts this in the “neutral-to-possibly-bad” category is that Canada is only allowed to keep notice-and-notice because it’s effectively grandfathered in. The agreement more or less blocks the US or Mexico from moving to such a system.

This is ridiculous. Just as we’re getting evidence of how much better a system notice-and-notice is compared to notice-and-takedown, suddenly the US and Mexico will be barred from moving to such a system, even if the evidence shows that it’s better for everyone? That makes no sense at all.

On the neutral-to-possibly good side of the ledger, despite concerns that it was missing in earlier drafts and reports, the agreement does include a provision on what they refer to as “limitations and exceptions,” but which we note are really user rights such as fair use. It’s good that this is there. But… it’s less good that it uses the traditional “three steps test” found in Berne Convention. That’s concerning because at least some interpret the three step test to limit fair use (and some even argue — incorrectly — that US fair use is not permitted under the three step test). So, the “good” part is that the agreement includes something on user rights, but the bad part is that it defaults to the three step test which could be used to significantly limit just how fair use is applied.

Finally, on the “good” side of the ledger, the USMCA does provide language establishing strong intermediary liability protections:

no Party shall adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information.

This is useful, especially as CDA 230 and DMCA 512 are under attack. Again, I’m disappointed that we should need to use “trade agreements” to argue this point, but since others are trying to undermine intermediary liability through trade agreements, there needs to be some pushback, and this does establish that in a clear manner. Hilariously, a former RIAA exec who was instrumental in getting copyright expansions placed into trade agreements around the globe is now whining about how awful it is that intermediary liability protections are found in this new agreement, citing concerns raised by plenty of people who support these protections, but who in the past protested efforts to expand copyright rules through those trade agreements. What a hypocritical position for him to take. Dude, you were the one who forced these issues into trade agreements: don’t freak out and cry about it when you face some level of pushback in the form of policies you dislike. You made your bed.

In the end, again, it’s disappointing that these issues should be in a trade agreement at all. None of this really has anything to do with “trade” in the traditional sense. But they are in this agreement, and thus we should hope that they get the various issues right. The inclusion of intermediary liability protections is clearly a good result if you must include these kinds of provisions, but the copyright and biologic expansions are still incredibly problematic. Unfortunately, it seems likely that the response from the USTR or anyone else will be “well, you win some, you lose some” rather than fixing the problems.

Filed Under: biologics, canada, cda 230, copyright, copyright term, intermediary liability, mexico, nafta, notice and notice, notice and takedown, section 230, trade agreements, usmca

Corporate Sovereignty On The Wane, As Governments Realize It's More Trouble Than It's Worth

from the but-not-dead-yet dept

A few years ago, corporate sovereignty — officially known as “investor-state dispute settlement” (ISDS) — was an indispensable and important element of trade deals. As a result, it would crop up on Techdirt quite often. But the world is finally moving on, and old-style corporate sovereignty is losing its appeal. As we reported last year, the US Trade Representative, Robert Lighthizer, hinted that the US might not support ISDS in future trade deals, but it was not clear what that might mean in practice. The Canadian Broadcasting Corporation (CBC) site has an interesting article that explores the new contours of corporate sovereignty:

The preliminary trade agreement the U.S. recently reached with Mexico may offer a glimpse of what could happen with NAFTA’s Chapter 11 [governing ISDS].

A U.S. official said the two countries wanted ISDS to be “limited” to cases of expropriation, bias against foreign companies or failure to treat all trading partners equally.

The new US thinking places Canada in a tricky position because the latter is involved in several trade deals, which take different approaches to corporate sovereignty. As well as the US-dominated NAFTA, there is CETA, the trade deal with Europe. For that, Canada is acquiescing to the EU’s request to replace ISDS with the new Investment Court System (ICS). In TPP, however — still lumbering on, despite the US withdrawal — Canada seems to be going along with the traditional corporate sovereignty approach.

A willingness to move on from traditional ISDS can be seen in the often overlooked, but important, Regional Comprehensive Economic Partnership (RCEP) trade deal. India’s Business Standard reports:

Despite treading diametrically opposite paths on tariffs and market access, India and China, along with other nations, have hit it off on talks regarding investment norms in the proposed Regional Comprehensive Economic Partnership (RCEP) pact.

In a bid to fast-track the deal, most nations have agreed to ease the investor-state-dispute settlement (ISDS) clauses.

As with NAFTA and CETA, it seems that the nations involved in RCEP no longer regard corporate sovereignty as a priority, and are willing to weaken its powers in order to reach agreement on other areas. Once the principle has been established that ISDS can be watered down, there’s nothing to stop nations proposing that it should be dropped altogether. Given the astonishing awards and abuses that corporate sovereignty has led to in the past, that’s a welcome development.

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Filed Under: ceta, corporate sovereignty, isds, nafta, rcep, trade agreements, ustr

After Removing US From Negotiating Process, Now Trump Suddenly Wants US Back In TPP

from the say-what-now? dept

The Trans Pacific Partnership (TPP) Agreement is deeply unpopular with Americans for a variety of reasons (some of which we’ll discuss below). Because of its unpopularity, both Donald Trump and Hillary Clinton denounced the agreement during their campaign for the Presidency. Trump’s denunciation seemed a lot more genuine — he’s argued against free trade and in favor of protectionism for quite a long time. Clinton’s denunciation was highly suspect, as she had long been a supporter of the TPP, and many people expected that, if elected, she’d flip flop back to support the agreement. Of course, she didn’t get elected… but now it’s apparently, Trump who has flip flopped to now supporting TPP.

President Trump, in a sharp reversal, told a gathering of farm-state lawmakers and governors on Thursday morning that the United States was looking into rejoining a multicountry trade agreement known as the Trans-Pacific Partnership, a deal he pulled out of days after assuming the presidency.

Mr. Trump?s reconsideration of an agreement he once denounced as a ?rape of our country? caught even his closest advisers by surprise and came as his administration faces stiff pushback from Republican lawmakers, farmers and other businesses concerned that the president?s threat of tariffs and other trade barriers will hurt them economically.

We spent years explaining the many, many problems associated with TPP. While we tend to be supporters of free trade, the problem with the TPP was that it wasn’t actually a free trade agreement. Yes, a few parts of it included lowering tariffs and opening borders to trade (and those parts were, for the most part, pretty good), but the bigger part of the agreement was that it was an “investment” agreement, rather than a trade agreement. And thus it included two parts that were really problematic.

First, was an intellectual property section which was the exact opposite of “free trade.” Rather it required higher barriers to trade, creating mercantilist barriers to information and ideas, in locking up “intellectual property” under ever more draconian terms. The second part was what we’ve referred to as the “corporate sovereignty” section, which is officially referred to as “Investor State Dispute Settlement” provisions or (ISDS). This is a system by which companies can effectively take governments to a private tribunal, who will determine if their regulations cut into the expected profits of the company. The original idea behind such corporate sovereignty provisions was to deal with the situations in which, say, a big company invested in an economically developing country, and that country’s leadership suddenly decided to seize the factory or whatever. But, as we’ve seen, over the years, is that ISDS/corporate sovereignty has mainly been used as a tool for corruption.

Given all of that, we were happy that one of President Trump’s first moves in office was to drop out of the TPP, even as we noted that he was clearly doing so for the wrong reasons (his stated reasons being wishing for more protectionism, when it was the lowering of trade barriers that we found to be the only good parts of the TPP).

With the US out of the TPP, the remaining countries picked up the ball and ran with it — under the leadership of Canada who agreed to remove the intellectual property section. An agreement was reached earlier this year without the awful copyright and patent provisions, but with corporate sovereignty still in there. It’s ironic that Canada took over the leadership role, since it was actually a late entrant into the TPP after the US bent over backwards to keep Canada out of the agreement, partly in the belief that it would push back on things like the draconian intellectual property section.

So… given all of that it seems doubly ironic that Trump now apparently says he wants back in. His tweet on the subject is, as per usual, somewhat nonsensical.

Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!

— Donald J. Trump (@realDonaldTrump) April 13, 2018

Claiming he’d only rejoin the TPP if the deal is better than what Obama negotiated is a reasonable enough claim to make, but if that was the case… why did Trump completely drop out of the negotiations and let the other countries conclude all of the negotiations without any US influence at all? Reopening such negotiations at this point seems like a total non-starter, and even if it happened, the US would be at a distinct disadvantage, given that everyone else has already agreed to nearly everything.

And, of course, there’s little to suggest that the attempt to rejoin now is to get rid of things like corporate sovereignty, or to do the actual good stuff around lowering trade barriers (this is coming just weeks after Trump announced plans to put in place tariffs on certain Chinese products) and soon after the dubious claim that winning trade wars is “easy.”

As far as I can tell, this appears to be Trump trying to make a group of people he was talking to happy, and not really understanding the details:

As he often does, the president started to change gears after hearing complaints from important constituents ? in this case, Republican lawmakers who said farmers and other businesses in their states would suffer from his trade approach since they send many of their products abroad.

That, of course, seems like an odd way to lead. Or to negotiate.

Chances are nothing significant comes of this — certainly not a wholescale renegotiation of the TPP. Instead, we’ve just got yet another political mess.

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