The BBC recently broadcast an interesting documentary on the investor state dispute settlement (ISDS) mechanism built into multi-national trade agreements, such as the proposed Transatlantic Trade and Investment Partnership (TTIP) between the United States and European Union.
ISDS is a one way mechanism which allows corporations to bring claims against governments should these corporations feel unfairly treated. The most noted recent example being multi-national tobacco corporations using the Hong Kong/Australia trade agreement to bring a claim against the Australian government for its cigarette plain packaging legislation. We can clearly imagine the democratic consequences of these claims.
I was especially interested in these agreements’ historical contexts. These agreements and their associated mechanisms were historically designed to give developed nations’ corporations confidence investing in, and protection against, developing nations’ governments (the Egyptian government’s unilateral nationalisation of the British controlled Suez Canal was fresh in the memory). As we can appreciate, developing nations required these inward investments, so their governments signing these agreements was mutually beneficial. There were 15,000 of these agreements in place in Eastern Europe alone by the end of the 1990s.
TTIP is different because it is a proposed agreement between developed nations. However, many European nations are now concerned about American corporations bringing claims against their governments despite them (the documentary cited Germany but they’re not alone) being beneficiaries of these agreements in the past.
Common with many situations, issues enter the consciousness of governments and peoples only once they themselves become directly negatively affected. One may feel developing nations’ governments have felt at very least as vulnerable to and their peoples have had as much to lose against European corporations than European governments and their peoples will against American corporations.
Reference: Company vs Country – BBC