OTTAWA—The expanded rights granted to foreign investors in the Trans-Pacific Partnership (TPP) carry major risks for voters and taxpayers in TPP countries, says a study released today by the Canadian Centre for Policy Alternatives.
The study, by international investment treaty expert Gus Van Harten, examines the special privileges given to foreign investors by the TPP, including the right to compensation where government policy is found to interfere with an investor’s private interests.
"Overwhelmingly, the foreign investors that have benefited financially from the rights in agreements like the TPP have been very large companies and very wealthy individuals,” says Van Harten. “Nothing like these rights exists for other actors in international law, whether they are other foreign nationals, domestic investors, or citizens—even in the most extreme situations of mistreatment.”
The study notes that the TPP expands the investor-state dispute settlement (ISDS) rules to cover “investment agreements” between the federal government and foreign investors. "By this expansion of foreign investor rights, the TPP would tip the scales further in favour of multinationals, by giving them an advantage when they compete for government business,” Van Harten says.
According to the study, the TPP does not replace the ISDS provisions in NAFTA but simply adds to them by providing an alternative venue for such cases. Foreign investors will be able to sue under NAFTA where it is more friendly to their interests (e.g., with respect to anti-tobacco legislation) and to choose the TPP for disputes over financial regulation, or other areas, that were more effectively excluded under NAFTA than the TPP.
The TPP, along with the Canada-China investment treaty and the Comprehensive Economic and Trade Agreement between Canada and the EU, would result in almost all Canadian foreign direct investment being covered by these “special rights,” which can be expected to generate many more cases against Canadian public policies, notably in the resource management and environmental protection areas.
"The TPP was an opportunity for countries to step back from and reform the flawed system of foreign investor rights and investor-state dispute settlement but instead they have expanded the system. That is reason enough to reject the TPP in order to protect the established institutions of democracy, sovereignty, and the rule of law in TPP countries," Van Harten concludes.
Foreign investor protections in the Trans-Pacific Partnership is available on the CCPA website.
For more information contact Kerri-Anne Finn, CCPA Director of Communications, at 613-563-1341 x306.