Wednesday, January 20, 2016

TTIPs about ISDS

Huge corporations and the seriously wealthy will be the big winners from the controversial US-EU trade deal known as TTIP. The most controversial element of TTIP is the ‘corporate court’ system, formally called ISDS. This system allows multinational corporations and other foreign ‘investors’ to sue governments for enacting regulation which damage their profits. Proponents argue that this offers investors, like small business, protection against ‘arbitrary’ government action. Gus van Harten’s new reportshows that the really big winners of these cases are, unsurprisingly, really big corporations (over $1 billion in annual revenue) and super rich individuals (over $100 million wealth). Almost 95% of all compensation awarded in the corporate court cases studied went to these groups. The report also shows that the success rate of cases brought by such corporate giants is around 71% - far greater than the success rate of smaller companies and investors. While smaller companies and investors do sometimes take action, the report suggests that any winnings on their part is normally wiped out by the legal costs.  The idea that TTIP is about hard-done-by small business is clearly untrue. TTIP is a vehicle for channeling wealth to the 1%.  

Of course, the other big winners  is what van Harten terms the ‘ISDS legal industry’ – a selection of corporate law firms - which has made an incredible $1.7 billion in over 214 cases. Perhaps this shouldn’t be surprising, given a Friends of the Earth report from last year which showed that legal costs for such ISDS cases average over $8 million, exceeding $30 million in some cases, while 80% of the legal costs end up in the pockets of the parties’ lawyers. Elite law firms can charge $1,000 per hour, per lawyer.

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