[A2k] EU – US trade agreement will give a boost to expropriation trolls

Ante Wessels ante at ffii.org
Mon Feb 4 08:46:38 PST 2013

EU-US trade agreement will give a boost to expropriation trolls
with links

February 4, 2013
By Ante

Tomorrow EU trade commissioner Karel de Gucht will travel to
Washington to discuss the possibilities to start negotiations on
an EU – US trade agreement. The industry already dreams of
setting a gold standard in areas such as intellectual property
protection – just like they tried with ACTA. But that is not
all. An EU – US trade agreement will also give a boost to
expropriation trolls, the more evil kid brothers of patent and
copyright trolls. Expropriation trolls abuse arbitration
tribunals to attack legislative reforms and demand high damages.

Investor – state arbitration

The Interim Report to Leaders from the Co-Chairs EU-U.S. High
Level Working Group on Jobs and Growth, 19 June 2012, (pdf)
writes about a possible investment chapter: “The aim would be to
negotiate investment liberalisation and protection provisions on
the basis of the highest levels of liberalisation and protection
that both sides have negotiated to date.”

The High Level Working Group refers to investor – state
arbitration, which gives multinational companies the right to
directly sue states in international tribunals. Adding investor
– state arbitration to an EU – US agreement is not necessary,
but detrimental.

Not necessary: Both the EU and US have excellent laws providing
protection against expropriation. Both the EU and US have good
court systems and highly respected high courts. We are not
banana republics. There is no need for protection against
expropriation in a trade agreement between the EU and US.

Detrimental: Arbitration tribunals are placed above the high
courts. There is almost no possibility for appeal. In recent
years, arbitration tribunals increasingly stretched the concept
of expropriation. Multinationals claim that reforms of
legislation that could reduce their profits are expropriation
and demand high damages. Arbitration tribunals award such
damages. Basically, investor – state arbitration is hijacked by
a captive incrowd.

Public Citizen’s Lori Wallach wrote a two part overview (part I,
part II) of investor – state arbitration in the TPP agreement,
which is also an excellent general overview. See also the FFII
press release on the EU – Canada trade agreement.

Assault on democracy

Faced with the negative consequences of investor – state
arbitration, Australia decided not to sign treaties containing
such clauses any more. The High Level Working Group disregards
recent developments, its advice is flawed and dangerous.

Patent and copyright trolls are legal entities that use bogus
law suits to extort money. They use flaws in legislation,
legislation that can still be repaired. Expropriation trolls use
arbitration tribunals to attack legislative reforms and protect
old business models. With investor – state arbitration we
undermine democracy and risk making trolling perpetual.

Yesterday: The era of monolithic trade agreements is over?
Tomorrow: A new ACTA?

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