New EU-US trade deal a threat to democracy, say MPs

Secret courts could allow big business to sue governments, reports Clare Speak

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MPs from all parties have called for talks on a proposed new EU-US trade deal to be frozen and demanded that one set of highly controversial rules, expected to be included in the deal, be left out because they pose a “real risk” to democracy in the UK.

The Big Issue in the North reported on 10 January (issue 1013) that under the rules, known as investor-state dispute resolution (ISDS) provisions, international corporations would be given the right to sue the UK government in secretive offshore arbitration courts, where cases would be judged by a panel of unaccountable corporate lawyers and would have no possibility of appeal.


The MPs signed an early day motion noting that under ISDS rules these cases would bypass national courts completely. It stated that their inclusion in the proposed Transatlantic Trade and Investment Partnership (TTIP) could “overturn years of laws and regulations agreed by democratic institutions on social, environmental and small business policy on both sides of the Atlantic”.

Michael Meacher, Labour MP for Oldham West and Royton, said that including ISDS rules in the new treaty would mean a “victory for unaccountable corporatism over political democracy”.

“Suppose the fight to win plain-packaged cigarette packets were finally trumped at the last hurdle by British American Tobacco deciding to take the government to court for undermining its tobacco sales, and winning,” he said, “Surely all hell would break loose. But that is exactly what could happen if the mooted Transatlantic Trade and Investment Partnership goes through.”

A number of MPs, as well as campaign groups such as the Corporate Europe Observatory, have stressed that the UK government, among others, has insisted that the European Commission makes sure ISDS mechanisms be included in the TTIP deal – a request the Corporate Europe Observatory says is being “pursued vigorously” by the European Commission.

Public concern

“At UK, EU and US governmental level the mood has been hush-hush – get it through before the natives find out what has been done in their name,” Meacher said.

The motion against the ISDS rules was tabled by Green MP Caroline Lucas and signed by a total of 26 MPs, 18 of them Labour.

From the north, this included Meacher as well as Jim Dobbin, Labour MP for Heywood and Middleton, and John Leech, the Liberal Democrat MP for Withington.

“The ISDS strengthens the stranglehold of multinational companies over national governments,” Labour MP for Birkenhead Frank Field told The Big Issue in the North. “It is highly symptomatic of the world we live in now, in which multinational companies can pick and choose which countries they wish to pay their taxes to.”

Graham Stringer, Labour MP for Blackley and Broughton (pictured), said: “I am very concerned that as the EU-US free trade area is being developed it will create the opportunity for multinational companies to challenge the NHS, and other services to the public which are delivered by the public sector, leading to more privatisation.”

Public concern is growing about the implications of ISDS for democracy. Last month around 200 trade unions and non-governmental organisations, mainly from the UK and Europe, signed a letter to European Trade Commissioner Karel de Gucht urging him to exclude ISDS rules from the EU-US treaty.

“Inclusion of ISDS in free trade agreements and bilateral investment treaties has allowed corporations to file over 500 cases against 95 governments,” they wrote. “ISDS has been used to attack clean energy, mining, land use, health, labour and other public interest policies.”

Domestic courts

According to advocates of ISDS the rules are needed because domestic courts don’t offer enough protection for international investors. But MPs who signed the motion disagree.

“The real reason of course is that the domestic courts, imperfect as they are, would still not let the big corporates get away with what they would if they only had to appear before a secret and opaque panel of corporate lawyers,” said Meacher.

The motion demands a public debate on the benefits of TTIP and states that those who have signed believe “the Government’s assertions about the economic benefits of the trade deal are questionable”.

Meacher dismissed the government’s promise of increased trade, investment and jobs under TTIP as a “scam”.

He added that Labour should oppose the bill and demand a full-scale investigation by Parliament to ensure that “the consequences of the deal are clarified and well publicised”.

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