Will EU settlement allow transnational corporations to sue UK for policies they don’t like?

19 January 2016

Roger Godsiff, MP for Birmingham Hall green, is set to ask the Conservative government if it continues to support the Transatlantic Trade and Investment Partnership (TTIP) trade deal – part of a proposed EU settlement – in the light of breaking news that the US government is being sued by a Canadian infrastructure company for rejecting a pipeline that was to bring Canadian tar sands oil down through the US.

TTIP is a proposed trade deal between the European Union and the US that incorporates a powerful legal instrument called the Investor-State Dispute Settlement (ISDS), allowing transnational corporations to sue governments if policies are passed that could restrict their future profits. This dispute is under the North American Free Trade Agreement (NAFTA), which incorporates ISDS.

ISDS is in other existing agreements, notably Bilateral Investment Treaties – BITs. Tobacco giant Phillip Morris International attempted to sue the Australian government under Australia’s BIT with Hong Kong, for introducing plain packaging on tobacco products. The case was rejected but only on a technicality.

As well as threatening nations’ control over their environmental and social policies, these deals have potentially dire consequences for employment rights. For instance, French multinational Veolia is suing Egypt for raising the minimum wage.

Linda Kaucher of the Stop TTIP Campaign, said: “Firstly, it’s great that TTIP is being raised in Parliament, cutting through the Government’s current silence on TTIP. When people hear about TTIP, they reject it. Hence silence is being used as a crude tactic. Unfortunately, negotiations are continuing in the background, without public knowledge.

“Secondly, this shows how big a deal it will be, getting in an ISDS arrangement with the US – which, by the way, has never lost a case. With TTIP, we will be open to potential ISDS challenges from 19,900 US-based corporations that own more than 51,400 subsidiaries in the EU. So unimaginably big payouts and/or serious limits on EU governments’ right to regulate are strong possibilities.”

However, Linda, who will speak on TTIP at our forthcoming EU Developments: has Social Europe disintegrated? event, highlighted that TTIP is not the only deal on the table and that a similar agreement with Canada also threatens to provide multinational corporations with undue influence over public policy.

“At this point, we really need parliamentary attention to CETA, the Canada/EU ‘trade’ deal,” she said. “It is the back door for TTIP, is already agreed, yet the Commons library is not even producing research for MPs that will be called upon to ratify it – apparently due to lack of demand.”

For more on CETA, please read Linda’s article at the Campaign for Trade Union Freedom, and book now to attend our EU Developments conference.

Book your place now to see Linda Kaucher and other leading experts discuss the pros and cons of EU membership ahead of the referendum. Do you know how you will vote?