Fairfax’s Michael West wrote an excellent article over the weekend warning how the inclusion of so-called Investor-State Dispute Settlement (ISDS) clauses into Australia’s latest trade agreements risks leaving us worse-off:
[ISDS] are legal clauses common in trade deals and they lend a foreign corporation the right to sue a government if that government has the cheek to govern in a way that damages their commercial interests…
This is how far they [corporations] have gone already: Egypt raised its minimum wage at the beginning of last year…
A French multinational with operations in Egypt, however, did not like this minimum-wage effrontery. A couple of months later, Veolia, the global services juggernaut, bobbed along and sued Egypt for the grievous disadvantage it had suffered thanks to the industrial relations changes.
Veolia’s claim relies on ISDS provisions in a trade treaty between Egypt and France.
Then there is the fifth-largest pharmaceutical group in the US, Eli Lilly, which is suing Canada [$US100 million] for having the temerity to make medicines cheaper and more accessible to Canadians… [after] two Canadian courts decided to uphold the country’s own patent laws. They found in favour of a generics manufacturer.
So, here is a situation where a foreign multinational is trying to entrench monopoly protection for its products in the name of free trade…
Despite the hype in the press and political classes, a survey of 5000 Australian firms by the Australian Chamber of Commerce and Industry in 2010 found just 51 firms reported “little if any” benefits from FTAs.
If ISDS mechanisms are in the deals Australia will almost certainly lose.
Of course, we don’t have to stray that far afield to see the potential harm that embedding an ISDS clause into the 12 member Trans-Pacific Partnership (TPP) trade deal could do.
Already, tobacco giant, Philip Morris, is suing the Australian Government for its implementation of plain packaging cigarettes under an obscure agreement signed with Hong Kong in the early 1990s. Expect more of these frivolous law suits under the TPP.
Then there are the leaked drafts of the TPP that also revealed that patents and copyright terms would be extended under the agreement, in addition to other provisions delaying the introduction of generic drugs onto the market. This means Australians would pay higher prices for both pharmaceutical and digital content.
ISDS, along with tighter intellectual property and copyright protections for US pharmaceutical and technological industries, is why the TPP is shaping up as an unambiguously bad deal for Australians.
Our parliament would be nuts to pass it.
