U.S. Trade Deals Mean Justice for Some, Not Justice for All

Celeste Drake

Celeste Drake Trade and Globalization Policy Specialist, AFL-CIO

2017 was another banner year of justice for sale, reveals the United Nations Conference on Trade and Development’s annual review of investor-to-state dispute settlement (ISDS) cases. What’s the report say? It reveals lots of new ways global investors are undermining democracy in private tribunals.

What’s ISDS? It’s a private justice system. ISDS means any investor—usually a corporation, but sometimes an individual, who buys property in a foreign country, from a hectare of land to stocks and bonds—can use this private justice system to sue host countries over laws, regulations and court decisions that may affect the investor’s current or future profits.

ISDS means justice for some, rather than justice for all. Those with the means to become international wheeler-dealers can access ISDS. The rest of us have to rely on public courts—the same ones that investors say are “inadequate” to handle their needs. That’s not fair, and that’s not right.

In 2017, 65 new known cases were filed, for a total of 855 known ISDS cases. Some cases are secret, so we’ll never really know how many cases have been filed.

The U.S. is the most frequently claimed “home state” of investors using the system, which tells us that U.S. trade and investment treaties (such as the North American Free Trade Agreement and the U.S.-Panama Trade Promotion Agreement) are pretty effective at promoting outsourcing to our trading partners (or else there wouldn’t be anything to sue over).

Spain is the third most sued country, and Canada is the sixth most sued, which tells us that ISDS isn’t really about “deficient” justice systems in poor countries—it’s about empowering economic elites to challenge democracies. Of all ISDS cases that have been decided on the merits, the investor wins 61% of the time, winning $504 million on average.

Two of last year’s cases approved the right of Chinese state-owned companies to use ISDS, despite claims by host countries that the Chinese government was actually calling the shots. In two other cases, investors were allowed to pursue their cases even though their original investments were illegal under the laws of Uzbekistan and Peru, the host countries. And in an extremely rare appellate case, one tribunal said it was OK for another tribunal to order a country not to enforce the rulings of its own domestic courts. Since one of the arguments made by those who favor ISDS is that the tribunals can only order monetary damages—rather than tell governments what their laws can be—this result is shameful. And maybe it is just the kick in the pants that governments need to abandon ISDS altogether.

In the NAFTA renegotiations, the U.S. has proposed to nearly (but not quite) eliminate the unfair ISDS system, but Canada and Mexico are saying no. The U.S. proposal would allow countries to opt out of the system entirely, and even if they do opt in, it would place restrictions on the kinds of cases investors could bring. The AFL-CIO supports this U.S. proposal and asks Canada and Mexico, “What are you waiting for?”

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Reposted from AFL-CIO

Posted In: Allied Approaches, From AFL-CIO

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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A Friendly Reminder

A Friendly Reminder