The United States is in the midst of negotiating a massive free trade agreement that some environmental groups fear will undermine regulations protecting air, land, water — and democracy.
The Trans-Pacific Partnership (TPP) negotiations include the United States and 11 other Pacific Rim nations, such as Australia, Singapore, Japan, Vietnam, Peru and Canada. If adopted, the pact would cover roughly 40 percent of the global economy. Treaty proponents say the partnership would boost trade between countries, as well as grow each nation's gross domestic product.
But, based on previous international trade deals like the North American Free Trade Agreement (NAFTA) and a slew of bilateral treaties, green groups fear the partnership could erode what environmental protections are currently in place and heighten the power of corporations to drill, cut, or catch wherever and whenever they choose.
While the text of the proposed treaty has remained secretive throughout the negotiations, a draft of the 29-chapter agreement was leaked last year. Environmentalists have homed in on a provision of the agreement's chapter on investment protections, called investor-state dispute settlement, which they say could allow corporations to go before international trade tribunals and argue that national laws are constraining their ability to generate profit.
Ilana Solomon is director of the Sierra Club's Responsible Trade Program. She told VICE News that under the TPP more corporations could litigate against national and local regulations.
"Corporations are claiming that new energy and climate policies violate their minimum standard of treatment," she said. "They often try to use a number of the guarantees in these investment chapters and throw the spaghetti on the wall and see what sticks."
The UN Conference on Trade and Development reported that as of 2013 more than 568 investor-state dispute claims had been filed under free trade agreements. The number of claims initiated in 2013 was not far behind the previous year's record high.
According to Jake Schmidt, Director of the Natural Resources Defense Council's International Program, many new companies will have standing for these cases. "We're seeing a potential risk of putting a lot of our bedrock environmental laws at risk of court challenges," he told VICE News.
An April document from the Congressional Research Service says international investment agreement rules related to public health, safety, or environmental regulation cannot be considered an expropriation of corporate profit, which might assuage some fears about what impact TPP might have on regulatory protections.
And for its part, the US Trade Representative (USTR), the office that oversees development of US international trade rules, says the agreement "will ... reaffirm the right of any TPP government to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health, or other regulatory objectives." According to the USTR, the United States already has investor-state dispute settlement agreements with six of 11 countries involved in TPP negotiations.
"Nothing in TPP prevents a government from regulating in the public interest, whether for environmental protection, health and safety, or any other public welfare objective," the USTR said in a statement to VICE News. "On the contrary, we are working in TPP to increase environmental protection in the Asia-Pacific and to address critical regional challenges such as illegal wildlife trafficking, illegal logging, and pirate fishing."
Legal precedent appears to support both sides of the argument.
Bilcon, an American energy company, prevailed earlier this year in a case against Canada, which denied the company's plan to expand a gravel quarry in Nova Scotia. The national and provincial governments rejected the proposal on environmental grounds. Using statutes under NAFTA, Bilcon could now collect damages of up to $300 million.
In an earlier case, an arbitration panel sided with the US government in a lawsuit against the Canada-based Methanex Corporation, a supplier of methanol to California producers of the gasoline additive MTBE— a substance banned under state law for health and environmental reasons. Methanex claimed damages of $970 million due to the state's ban.
Solomon says, despite government assurances, her organization remains concerned that TPP would expand the amount of corporate attacks on national environmental regulations. Around 9,200 US-located subsidiaries of TPP-country corporations would have new powers to launch investor-state dispute cases against the federal government, according to Public Citizen, a consumer interests think tank and lobbying group. Countries included in the partnership could face challenges from about 19,200 US subsidiaries.
Kyle Ash, Senior Legislative Representative at Greenpeace, says the secrecy of the TPP negotiations reflects the true aim of the treaty. "It isn't just about trade — it's about reducing public oversight, it's about expanding corporate cronyism," he told VICE News.
Solomon echoed Ash's concern. "Once we understand who has been involved in shaping the pact and who has been left out, it's a lot easier to understand who stands to benefit most from the agreement," she told VICE News. "In many cases that's going to be some of the world's biggest polluters."
Follow Emma Foehringer Merchant on Twitter: @emmafmerchant
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