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The Trans-Pacific Partnership (TPP) is likely to include much of the same investment text as the North American Free Trade Agreement (NAFTA), including the provisions that give foreign investors the extraordinary right to bypass U.S. courts and sue the U.S. government before an undemocratic, unaccountable international arbitration panel if investors feel they haven’t been treated “fairly” or if they believe a federal, state or local law interferes with their expected profits. No U.S.-based company has such an extraordinary right. U.S. citizens can’t bypass the Constitution (Article III of the Constitution sets up our judicial system). Why should foreign companies get to?

To ensure that the TPP achieves shared prosperity, it should eliminate investor-to-state dispute settlement (ISDS) as it undermines democratic control over corporate excesses and is being used currently to attack public health policies in Australia and Uruguay, environmental policies in Canada and Peru, and labor provisions in Egypt.  Rather than challenge discriminatory policies, global firms use ISDS to seek compensation for a violation of the nebulous right to “fair and equitable treatment,” which the private arbitration panels have interpreted expansively. ISDS creates a chilling effect on local, state and national measures, and poses an unjustifiable risk to our democracy and economy.  

These same rules give U.S. firms an incentive to invest overseas (taking U.S. jobs with them) so they can bypass foreign courts and sue our trading partners (often developing countries) before these international arbitration panels. We can’t let another trade agreement give U.S. companies even more reasons to send jobs offshore, nor can we allow the profit motives of a foreign corporation to interfere with our democracy. That’s why the AFL-CIO told the Obama administration not to include these provisions in the agreement.

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