The Energy Charter Treaty (ECT) has been described as ‘the world’s most dangerous investment treaty’
Those wanting to ‘take back control’ of their democracies would do well to begin with trade and investment agreements - especially in times of global pandemic.
Negotiated in secret, they are tools to transfer power and resources from people to transnational corporations – who are often the only ones in the room.
A total of 90 percent of the meetings that took place during the new European Union-United States trade talks replacing the Transatlantic Trade and Investment Partnership (TTIP) were with lobbyists.
This series of articles has been published in partnership with Dalia Gebrial and Harpreet Kaur Paul and the Rosa Luxemburg Stiftung in London. It first appeared in a collection titled Perspectives on a Global Green New Deal.
Unpaid labour
As well as lowering tariffs, trade deals seek to bring down ‘non-tariff barriers’ and achieve ‘regulatory coherence', almost always promoting a race to the bottom on worker’s rights and environmental and food standards.
Public services are also under threat, as the corporate lobby pushes for liberalisation of all services unless explicitly exempted, including future services.
The attack on public services has a particular impact on women, because they are the main users and workers in many of these sectors, and because they remain the main providers of unpaid labour at home or in the community which complements public services.
The deals often include ‘standstill’ or ‘ratchet’ clauses, meaning that once a sector has been liberalised, it’s extremely difficult to go back.
Trade agreements usually include Investor State Dispute Settlements (ISDS), which allow corporations to sue governments for loss of profits, including potential loss of future profits. Governments do not have the reciprocal right to sue corporations.
Dependence
By the end of 2018, states worldwide had been ordered or agreed to pay investors USD$88 billion in disclosed ISDS cases.
Research by the Transnational Institute and CEO and reported by openDemocracy has found that law firms are preparing for a ‘wave’ of such lawsuits in the post-pandemic era, as corporations sue governments for emergency measures brought in to protect populations from the coronavirus.
Measures that could face legal challenges include the state acquisition of private hospitals; steps introduced to ensure that drugs, tests and vaccines are affordable; relief on rent, debt and utility payments; and action taken to provide clean water for handwashing.
To date, no other trade and investment agreement has triggered more investor-state lawsuits than the Energy Charter Treaty (ECT) – which has been described as ‘the world’s most dangerous investment treaty’.
The Energy Charter Treaty (ECT) has been described as ‘the world’s most dangerous investment treaty’
Governments attempting to prevent projects that further lock
in fossil fuel dependence and accelerate climate breakdown can be held liable for billions in damages under the ECT. Despite its controversy, the ECT is currently expanding, especially in the Global South.
Imbalances
While those pushing these deals claim they are about ‘free trade’, there is one area in which they promote anything but freedom: intellectual property.
Mega-regional trade deals like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership include intellectual property protections that go way beyond WTO rules, and these provisions are replicated in multiplying bilateral and regional treaties.
They make it more difficult for people to access to affordable medicine, prevent farmers from saving seeds, and open the way to genetically modified organisms.
Trade deals entrench global imbalances and reinforce the international division of labour, standing in the way of a globally just Green New Deal.
Justice-oriented
In RCEP – a mega-regional trade deal currently being negotiated among 16 countries across Asia-Pacific – it is the corporations of big players like China, Japan, New Zealand and Australia who will benefit from the further opening up of key markets to large corporations, driving out the small family farms that produce 80 percent of the region’s food.
RCEP will also enable land grabbing, as vast tracts of land are bought up by foreign multinationals where currently in many countries investors can only lease land.
Unfortunately, deals negotiated behind closed doors in the presence of corporate lobbyists to shift wealth and power to giant corporations do not tend to bode well for people or planet.
Tackling trade and investment agreements19 will be an essential first step in achieving transnational and justice-oriented action on climate change in a post-Covid world.
This Author
Laura Basu is Europe editor for openDemocracy, based in Amsterdam, Netherlands.
