Tag Archive | "economics"

3 Ways the TPP Advances Human Rights Protections

by Jeremy S Goldstein*

[Denver, CO] Last week, signatory nations released the long-awaited full text of the Trans Pacific Partnership (TPP) agreement, which is poised to reshape the way that countries comprising 40% of the world’s economy conduct business. While the white-hot media spotlight has been searing hairs off trade provisions relating to the automotive, agricultural, pharmaceutical, and technology sectors, little attention has been placed on other chapters of the agreement. Few commentators have noticed that the TPP includes provisions which are quite unique in trade agreements, in many places heeding recommendations of the United Nations and other global civil society organizations in a manner which advances human rights. This is important because while many of the 12 nations currently signed to the agreement have substantial domestic human rights protections that will prevent violations resulting from business operations, such as the United States, Australia, New Zealand, Japan, Canada, Peru, Chile, Singapore and to an extent Mexico, others, specifically Vietnam, Malaysia, and Brunei, do not.

During negotiations, the White House released a document, Advancing Human Rights through the Trans-Pacific Partnership, where the administration acknowledged that the TPP “has provided the Administration with significant opportunities to make progress on human rights issues” and they would therefore be developing the agreement in a manner which ensures “that people everywhere are treated with dignity and respect.” The document discusses country and issue specific actions taken by US negotiators to make clear that “protecting human rights … is a core American value.” Even so, of the available publications discussing the administration’s implementation of these goals, most carry an opinion similar to that of a DIPLOMAT article titled Sure, TPP Is ‘Win-Win’… Unless You Care About Human Rights. These authors seemingly miss the point, because trade agreements are not, and have never been, fundamentally concerned with human rights protections. While the goal of many organizations may be to change that reality, relative to most other international trade and investment agreements the TPP stands up as a progressive document, which in many ways heeds recommendations of civil society and of the United Nations Guiding Principles on Business and Human Rights (UNGP). Specifically, there are three chapters in the treaty in which provisions fulfilling the administration’s promise to highlight the importance of human rights are located: Chapter 19 – Labour, Chapter 23 – Development, and Chapter 9 – Investment.

Labour – Chapter 19

Article 19.3 requires that all nations adopt and maintain laws, and take action to implement those laws, which are consistent with the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up. The agreement also includes a duplicate list of rights, such as freedom of association and collective bargaining, elimination of forced labor, abolition of child labour, and elimination of discrimination. The express protections listed in 19.3 do differ slightly from the ILO’s recommended protections, in that they do not include minimum wage or work hours, but are nonetheless sufficient, and specifically address a major issue for signatory nations, prohibiting the worst forms of child labour.

Article 19.7, Corporate Social Responsibility, goes a step further in responding to the demands of civil society in requiring that signatory parties “endeavor to encourage enterprises to voluntarily adopt corporate social responsibility initiatives on labour issues that have been endorsed or are supported by that Party.” This article is followed by others which further layout the required means of implementation and the preferred methods of reporting for corporations and state parties in implementing labour and CSR standards.

Finally, in annex to the text of the agreement, the US has initiated Labour Consistency Plans with Brunei and Malaysia mandating specific changes to the domestic national laws of each country, which will place them closer to compliance with the ILO requirements. The US and Vietnam have agreed to a similar document in annex to Chapter 19, which is specific enough to require Vietnam to “develop and implement a strategy for targeting inspection and other enforcement activities to sectors where forced labour or child labour has been identified through the National Child Labour Survey or otherwise, including at informal work sites and sub-contractors in the garment industry.” These provisions in the TPP are in line with recommendations from international human rights organizations, and will force improvements in labour standards in the manufacturing powerhouses of Malaysia and Vietnam, greatly reducing the worst labour rights violations in those countries, which are known to be prevalent.

Development – Chapter 23

In an unprecedented move in US trade agreement history, Chapter 23 goes beyond merely arguing that trade enhances development, stating that signatory parties “affirm their commitment to promote and strengthen an open trade and investment environment that seeks to improve welfare, reduce poverty, raise living standards and create new employment opportunities in support of development.” Not only do they affirm this commitment, but they “acknowledge the importance of development in promoting inclusive economic growth, as well as the instrumental role that trade and investment can play in contributing to economic development and prosperity.” This models the UNGP language closely, asserting that trade and development are vital to prosperity and poverty reduction, a key first step in advancing development policy in line with UNGP recommendations.

Most importantly, while the chapter only uses the term sustainable development twice, and one of those instances merely in indirect reference to the UN sustainable development goals, it does make express reference to the importance of women to development. Article 23.4 may not include mandatory requirements on signatory parties, however it does recognize the importance of women in development and suggests steps which may be taken to “enhance the ability of women, including workers and business owners, to fully access and benefit from the opportunities created by [the TPP].” While many may take this for what it is on its face, a hollow but hopeful statement, the chapter does include public recognition from all signatories, including Malaysia and Brunei, that “enhancing opportunities in their territories for women, including workers and business owners, to participate in the domestic and global economy contributes to economic development.”

Investment – Chapter 9

For decades, scholars have lamented the ways in which ambiguous terms of art in international investment agreements like “fair and equitable treatment” and “tantamount to expropriation”, have been used in investor-state arbitration proceedings to restrain states domestic policy space. Many other erudite scholars will argue that the investor-state investment dispute settlement provisions in Section B of Chapter 9 of the TPP have a potential to encourage frivolous claims against states for violations of the agreement, which have, in the past, led to enormous damage awards. However, due to the adoption of recommendations from the UN Guiding Principles on Business and Human Rights (UNGP) and civil society organizations such as the International Institute for Sustainable Development (IISD) in Section A of chapter 9 of the TPP, the danger of frivolous claims by investors is reduced significantly from investment agreements of the past.

UNGP article 9 recommends that states draft investment agreements in a manner which prohibits them from having a reductive effect on the state’s domestic policy space to regulate human rights. The IISD Model Investment Agreement suggests that in order to implement the UNGP recommendations, states should, among other things, define and limit the minimum standard of treatment and create general exceptions provisions which retain policy space for the government to regulate in response environmental and human rights concerns.

An example of the traditional minimum standard of treatment provision in investment agreements follows as such; “Each Party shall accord to covered investments treatment in accordance with international law, including fair and equitable treatment and full protection and security.” Issues resulting from the vagueness of these terms include investors seeking remedy for regulatory efforts by states which do not conform to the investors’ ‘legitimate expectations’. In order to prevent these frivolous claims, and protect state’s domestic policy space, TPP article 9.6 clarifies that the minimum standard is to only include “treatment in accordance with applicable customary international law principles”, and that “the concepts of ‘fair and equitable treatment’ and ‘full protection and security’ do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights.”

In addition, 9.6 states that ‘fair and equitable treatment’ includes only “the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world”; and that ‘full protection and security’ only “requires each Party to provide the level of police protection required under customary international law.” Article 9.6(4) goes even further, stating that “the mere fact that a Party takes or fails to take an action that may be inconsistent with an investor’s expectations does not constitute a breach of this Article, even if there is loss or damage to the covered investment as a result,” expressly precluding claims based on an investor’s expectations. This significantly reduces restrictions on government policy space to regulate human rights abuses by reducing the frivolous claims which may be presented by harmed investors covered by the agreement.

Article 9.15 prohibits claims by investors relating to regulatory measures that a state party “considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health or other regulatory objectives.” This is an express dictation of the UNGP article 9 requirement, reducing state’s fears that TPP provisions can be used to investors to restrict their policy space through threat of suit. Finally, as is common throughout other chapters of the TPP, Article 9.16 includes an affirmation of the “importance of each Party encouraging enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate into their internal policies those internationally recognized standards, guidelines and principles of corporate social responsibility that have been endorsed or are supported by that Party.”

Conclusion

The TPP will not eradicate all human rights violations by businesses in signatory nations, it was not intended to do so, and presumably no agreement could have this effect. The TPP does, however, heed recommendations of the UNGP and other civil society organizations, advancing progressive provisions to prevent human rights violations. The document should be challenged where it is faulty and applauded where it succeeds, not derided entirely for failing to meet unrealistic expectations. After all, the TPP increases trade, trade is essential to continued economic development, and economic development is core to achieving advancements in human rights in developing nations such as Vietnam and Malaysia, specifically those rights listed under the ICESCR. The three chapters examined above, which include more protective human rights provisions than any other multilateral trade agreement the US has entered into in its history, are a step in the right direction. The progressive language in this agreement shows the dedication of the international community to ending the cycle of human rights violations by businesses in the developing world. For this reason, I believe that these 12 courageous nations should be applauded; and for the same reason they should be simultaneously reminded that with great power, comes a great responsibility to ensure the TPP is used to advance human rights through sustainable development across the Pacific, and across the world.

*Jeremy S Goldstein is a 3L J.D. student at the University of Denver – Sturm College of Law and the Online Editor-in-chief of the Denver Journal of International Law and Policy.

TPP

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Jeremy GoldsteinComments (1)

The Trans-Pacific Partnership: Exploring concerns over an Investor-State Dispute Settlement mechanism

transpacificpartnership
find more at https://curiousmatic.com/trans-pacific-partnership

After years of negotiations, this week saw the conclusion of the Trans-Pacific Partnership agreement (“TPP”). The TPP unites eleven pacific-rim nations and the United States–a collection of 40% of global gross domestic product and one-third of world trade–making it the largest regional trade agreement in history.

Although the terms of the agreement have not been released yet, it has been a divisive topic throughout negotiations. The Obama administration and TPP’s proponents point toward the elimination of more than 18,000 tariffs in place on American exports by the other participating countries as one of the key benefits of the deal. One of the sticking points for opponents to the deal is the inclusion of an investor-state dispute settlement (ISDS) mechanism. Critics of this ISDS provision claim it undermines state sovereignty by creating a supra-national tribunal where global corporation’s may sue member-states and receive taxpayer compensation.  On the surface, the critics concern is a real one–state sovereignty will be undermined–but states cede sovereignty each time they enter into an international agreement. The real issue at play is whether the obligations the TPP allows global corporations to enforce against the United States are so egregious as to make the cession of the United State’s sovereignty unacceptable.

An accurate answer to this issue cannot be had until the final terms to the TPP are released to the public. Although WikiLeaks published an alleged text of the Investment Chapter of the TPP in March of this year, which is said to create the ISDS. This post will wait to evaluate the obligations of the TPP until it is released. However, two of the rumored grounds for suit, “expected future profits” and indirect expropriation, are provisions found in many of the 3,000-plus trade agreements in place around the world. A look at corporations’ use of these provisions in other trade agreements provides positive arguments for both sides of the TPP ISDS debate.

Under NAFTA, Methanex, a Canadian corporation sued California for loss of $970 million in expected future profits after California banned the chemical MTBE from gasoline sold in the state. The NAFTA ISDS tribunal dismissed the claims against California. TPP supporters say the ruling prove that domestic regulations for the public good will win out under any ISDS regime. Opponents, on the other hand say that those companies from larger countries that are set to gain access to similar rights against the United States will not lose such cases. The ongoing dispute between the United States tobacco company Phillip Morris and Australia for mandating plain packaging of tobacco products on public health grounds is cited as an example of a suit TPP will allow against the United States to the potential detriment of taxpayers.

Opponents also fear “indirect expropriation” will be interpreted broadly by a TPP ISDS tribunal to oppose regulations that may diminish a foreign corporation’s investment expectations in the United States. An example of a corporation successfully suing a state for indirect expropriation is the 2012 Occidental Petroleum’s award of $2.3 billion from Ecuador for its expropriation of oil drilling. The Office of the United States Trade Representative has dedicated an entire website to dispelling critic concerns over a TPP ISDS tribunal issuing similar judgments against the United States. It cites investor burden of proof and a state’s ability to seek expedited review of frivolous claims brought against it as key mitigating factors.

TPP-protest-train-and-big-banner-1024x576

TPP protests

In the near future the final terms of the TPP will be released to the public. The agreement has the potential to change the United States’ strategic position in Asia and increase its exports in certain struggling industries. It also has the potential of opening the vault to the United States’ taxpayer money. I believe that in order for the TPP to pass congressional approval, ISDS provision must contain the mitigation mechanisms necessary to prevent foreign corporations from impeding the United State’s sovereign right to regulate trade within its borders. Whatever the outcome, the TPP ISDS tribunal will likely influence a similar ISDS provision in the Transatlantic Trade and Investment Partnership currently being negotiated between the United States and the European Union.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Philip Nickerson, Phillip NickersonComments (0)

Migrants seen as Economic Detriment to Greece and Benefit to Germany

By the end of July 2015, more than 124,000 refugees and migrants had arrived in Greece; an astonishing 750% increase in the amount of refugees and migrants from the same time the previous year. The vast majority of these refugees are those feeing conflict and human rights violations in Syria, Afghanistan, and Iraq in wake of the humanitarian crisis.

Refugees arriving in Lesbos, Greece. Photo credit: Laxar Simeonov (click for source)

For these refugees, the Greek financial crisis has been both a blessing and a curse. For many, travel into the Greek islands is attractive because of the country’s reputation for leniency in immigration laws and lack of resources to adequately control its borders and the flow of immigrants. However, once they’re in, many face the bleak reality of the struggling Greek economy. Though some view Greece as simply the entry point into Western Europe with plans to move north to more prosperous countries such as Germany, many flee to Greece with very little possessions and money and can’t afford to travel any further. It’s at this point that the realities of the Greek economy and the scope of the refugee crisis come into view: Greece simply cannot support and process the major influx of refugees while at the same time trying to recover its dismal economic state. Frustrations in the wake of such considerations have reached a tipping point recently culminating in riots on the island of Lesbos over seemingly inefficient process for intake of refugees and inability of the government to provide basic necessities to those arriving on the islands.

Although Greece is struggling to assist refugees, the generous response from the Greek society, in a very difficult time, should be and appears to be acknowledged with action and support from the European Union. On September 22, the EU Interior Ministers voted in favor of a quota system to address the crisis and help to relocate asylum-seeks throughout Europe. Though the plan has been approved by the EU Interior Ministers, it still must be considered by the EU Presidents and Prime Ministers, and the EU remains divided on how best to address the refugee crisis, with some member states calling the quota system “unreasonable” and a “waste of time.” However, scholars on the other side have taken the position that the massive influx of refugees seeking employment and ready to build a new life presents a valuable opportunity for countries like Germany, with an aging workforce and declining population, and have gone as far as to forecast that a sharp increase in growth will result for those willing to accept new migrants and asylum-seekers stating, “an influx of 1 million people over the next three years would raise the country’s GDP by 0.6% by 2020.” Germany’s ability to integrate a substantial number of asylum-seeks seems to have been taken into consideration, with Germany being asked to take by far the highest number of immigrants under the proposed plan.

Demi Arenas is a 3L at the University of Denver Sturm College of Law and a Staff Editor on the Denver Journal or International Law and Policy.

Posted in 1TVFA Posts, 2Featured Articles, Demi Arenas, DJILP StaffComments (0)

News Post: Is Austerity the Answer Europe’s Been Looking For?

Since the collapse of the world markets, Europe has been obsessed with austerity.  Just recently, 25 of 27 EU member states agreed to a new “fiscal compact” that would never allow them to have a cyclically adjusted budget deficit of more than 0.5% GDP.  As the American economy has begun to heal, Europe’s austerity policies have drawn the scrutiny of economists from around the world.  Some see the measures as an impediment to global economic recovery; others see the efforts as a worthy, albeit frustrating, strategy for long-term stability and growth.  Considering the depth of the crisis, the ultimate verdict on European austerity will be out for years to come.

When Prime Minister Cameron took power, Britain “was supposed to be a showcase for ‘expansionary austerity.’”  Those skeptical of Cameron’s strategy, which has been adopted by a majority of EU nations, point to Britain’s paltry recovery in comparison to that from the Great Depression as a sign that austerity has effectively failed.  Four years into the Great Depression, Britain had regained its peak in GDP.  In comparison, at the same point in its current recovery, Britain is “nowhere close to regaining its lost ground.”  Such comparisons are not unique to Britain, as Italy and Spain are experiencing similarly frustrating recoveries in comparison to the 1930s.  Nonetheless, European leaders continue to beat the drums of austerity as the best option for recovery.

Austerity protesters in Brussels (AP Photo/Geert Vanden Wijngaert)

Those supporting Europe’s austerity measures recognize the short-term perils of a reduction in expenditures.  The argument goes, whatever short-run impact lower demand will have on Europe’s debt ratio will be offset by rebounds in future demand.  In the long-run, therefore, austerity’s impact on deficits, as opposed to debt ratios, will spur even greater economic growth.  Proponents suggest that prospective buyers of long-term European bonds would be wise to maintain confidence in austerity’s positive influence on deficits, not on the short-term negative impact it has on debt ratios, as a sign of long-term economic health.   In the end, cutting deficits will allow European countries to take on more risk in the future, increasing potential for growth.  Europe need only survive the short-term pains of austerity to reap its long-term rewards.

A glance at recent headlines would suggest Europe’s economy has only two options: austerity or stimulus.  Some suggest, however, that the answers to Europe’s crisis may not be so polarized.  Although stimulus may provide a shot of confidence to the system, the long term deficit impacts could impede future growth. Alternatively, austerity could forever stunt the development of a whole generation of European workers and consumers.  Many economists believe the true answer to Europe’s economic woes resides in neither camp, but rather in a more stable fiscal union of European states.  Former ECB president Jean-Claude Trichet envisioned the creation of a euro-zone Ministry of Finance to oversee national budgets and economic policies.  In order for such a system to succeed, members of the euro zone must commit themselves to developing more consistent and universal labor costs, levels of productivity, and financial systems for example.  Given the EU’s unity struggles over the last several decades, this will certainly be no small task.

Posted in 1TVFA Posts, DJILP StaffComments (0)


University of Denver Sturm College of Law
Visit the DJILP Newsroom

Posts by Date

July 2017
M T W T F S S
« Jun    
 12
3456789
10111213141516
17181920212223
24252627282930
31  
Resources