Last year at a Nike factory in Oregon President Obama said, “No trade agreement is going to force us to change our laws.”
This year, in response to a World Trade Organization (WTO) ruling, Country of Origin Labeling (C.O.O.L.) on imported beef and pork was repealed. Whoops.
The choice was between repealing existing U.S. law or requiring Americans to pay over $1 billion annually to Canada and Mexico. Country of Origin Labeling is still required on imported textiles despite their considerably less significant nutritional value.
What does it mean for our sovereignty when such a series of events results in the repeal of established U.S. law? Is there a possibility that rulings like this will give our legislators pause when it comes to drafting and enacting future public policies?
The WTO case offers an example of a similar problem inherent in trade deals like the Trans-Pacific: ISDS, or Investor State Dispute Settlement. ISDS gives financially punitive legislative powers to an extra-constitutional tribunal that is not accountable to any of our domestic courts.
ISDS allows foreign corporations to sue governments of sovereign nations for enacting public policies they believe violate protections afforded to them under the terms of a trade agreement. TransCanada, the corporation behind the unsuccessful Keystone XL pipeline project, has used the ISDS provision in North American Free Trade Agreement (NAFTA) to bring a lawsuit against the United States seeking to recover $15 billion in expected future profits.
That’s right. TransCanada is suing our government to recover something they never had but believe they would have had if something that wasn’t built had been built. If TransCanada wins American taxpayers must pay $15 billion to a foreign corporation for exercising our sovereign rights.
The question is, has the United States ever repealed or modified domestic laws as a result of legal action or the threat of legal action by a foreign corporation through ISDS or similar mechanisms? The answer is yes.
Is that what democracy looks like? The answer is no.
We should not have to be anti-democracy to be pro-trade.