The Trans-Pacific Partnership and the Death of the Republic

The United States shall guarantee to every State in this Union a Republican Form of Government.    — Article IV, Section 4, US Constitution

A republican form of government is one in which power resides in elected officials representing the citizens, and government leaders exercise power according to the rule of law. In The Federalist Papers, James Madison defined a republic as “a government which derives all its powers directly or indirectly from the great body of the people . . . .”

On April 22, 2015, the Senate Finance Committee approved a bill to fast-track the Trans-Pacific Partnership (TPP), a massive trade agreement that would override our republican form of government and hand judicial and legislative authority to a foreign three-person panel of corporate lawyers.

The secretive TPP is an agreement with Mexico, Canada, Japan, Singapore and seven other countries that affects 40% of global markets. Fast-track authority could now go to the full Senate for a vote as early as next week. Fast-track means Congress will be prohibited from amending the trade deal, which will be put to a simple up or down majority vote. Negotiating the TPP in secret and fast-tracking it through Congress is considered necessary to secure its passage, since if the public had time to review its onerous provisions, opposition would mount and defeat it.

Abdicating the Judicial Function to Corporate Lawyers

James Madison wrote in The Federalist Papers:

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, . . . may justly be pronounced the very definition of tyranny. . . . “Were the power of judging joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control, for the judge would then be the legislator. . . .”

And that, from what we now know of the TPP’s secret provisions, will be its dire effect.

The most controversial provision of the TPP is the Investor-State Dispute Settlement (ISDS) section, which strengthens existing ISDS  procedures. ISDS first appeared in a bilateral trade agreement in 1959. According to The Economist, ISDS gives foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever the government passes a law to do things that hurt corporate profits — such things as discouraging smoking, protecting the environment or preventing a nuclear catastrophe.

Arbitrators are paid $600-700 an hour, giving them little incentive to dismiss cases; and the secretive nature of the arbitration process and the lack of any requirement to consider precedent gives wide scope for creative judgments.

To date, the highest ISDS award has been for $2.3 billion to Occidental Oil Company against the government of Ecuador over its termination of an oil-concession contract, this although the termination was apparently legal. Still in arbitration is a demand by Vattenfall, a Swedish utility that operates two nuclear plants in Germany, for compensation of €3.7 billion ($4.7 billion) under the ISDS clause of a treaty on energy investments, after the German government decided to shut down its nuclear power industry following the Fukushima disaster in Japan in 2011.

Under the TPP, however, even larger judgments can be anticipated, since the sort of “investment” it protects includes not just “the commitment of capital or other resources” but “the expectation of gain or profit.” That means the rights of corporations in other countries extend not just to their factories and other “capital” but to the profits they expect to receive there.

In an article posted by Yves Smith, Joe Firestone poses some interesting hypotheticals:

Under the TPP, could the US government be sued and be held liable if it decided to stop issuing Treasury debt and financed deficit spending in some other way (perhaps by quantitative easing or by issuing trillion dollar coins)? Why not, since some private companies would lose profits as a result?

Under the TPP or the TTIP (the Transatlantic Trade and Investment Partnership under negotiation with the European Union), would the Federal Reserve be sued if it failed to bail out banks that were too big to fail?

Firestone notes that under the Netherlands-Czech trade agreement, the Czech Republic was sued in an investor-state dispute for failing to bail out an insolvent bank in which the complainant had an interest. The investor company was awarded $236 million in the dispute settlement. What might the damages be, asks Firestone, if the Fed decided to let the Bank of America fail, and a Saudi-based investment company decided to sue?

Abdicating the Legislative Function to Multinational Corporations

Just the threat of this sort of massive damage award could be enough to block prospective legislation. But the TPP goes further and takes on the legislative function directly, by forbidding specific forms of regulation.

Public Citizen observes that the TPP would provide big banks with a backdoor means of watering down efforts to re-regulate Wall Street, after deregulation triggered the worst financial crisis since the Great Depression:

The TPP would forbid countries from banning particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG. It would prohibit policies to prevent banks from becoming “too big to fail,” and threaten the use of “firewalls” to prevent banks that keep our savings accounts from taking hedge-fund-style bets.

The TPP would also restrict capital controls, an essential policy tool to counter destabilizing flows of speculative money. . . . And the deal would prohibit taxes on Wall Street speculation, such as the proposed Robin Hood Tax that would generate billions of dollars’ worth of revenue for social, health, or environmental causes.

Clauses on dispute settlement in earlier free trade agreements have been invoked to challenge efforts to regulate big business. The fossil fuel industry is seeking to overturn Quebec’s ban on the ecologically destructive practice of fracking. Veolia, the French behemoth known for building a tram network to serve Israeli settlements in occupied East Jerusalem, is contesting increases in Egypt’s minimum wage. The tobacco maker Philip Morris is suing against anti-smoking initiatives in Uruguay and Australia.

The TPP would empower not just foreign manufacturers but foreign financial firms to attack financial policies in foreign tribunals, demanding taxpayer compensation for regulations that they claim frustrate their expectations and inhibit their profits.

Preempting Government Sovereignty

What is the justification for this encroachment on the sovereign rights of government? Allegedly, ISDS is necessary in order to increase foreign investment. But as noted in The Economist, investors can protect themselves by purchasing political-risk insurance. Moreover, Brazil continues to receive sizable foreign investment despite its long-standing refusal to sign any treaty with an ISDS mechanism. Other countries are beginning to follow Brazil’s lead.

In an April 22nd report from the Center for Economic and Policy Research, gains from multilateral trade liberalization were shown to be very small, equal to only about 0.014% of consumption, or about $.43 per person per month. And that assumes that any benefits are distributed uniformly across the economic spectrum. In fact, transnational corporations get the bulk of the benefits, at the expense of most of the world’s population.

Something else besides attracting investment money and encouraging foreign trade seems to be going on. The TPP would destroy our republican form of government under the rule of law, by elevating the rights of investors – also called the rights of “capital” – above the rights of the citizens.

That means that TPP is blatantly unconstitutional. But as Joe Firestone observes, neo-liberalism and corporate contributions seem to have blinded the deal’s proponents so much that they cannot see they are selling out the sovereignty of the United States to foreign and multinational corporations.

For more information and to get involved, visit:

Flush the TPP

The Citizens Trade Campaign

Public Citizen’s Global Trade Watch

Eyes on Trade

__________________

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com.

81 Responses

  1. Where is the public outcry ?…we are doomed, and no rep responds in proper fashion as expected of course.

  2. Considering the line ” Negotiating the TPP in secret and fast-tracking it through Congress is considered necessary to secure its passage, since if the public had time to review its onerous provisions, opposition would mount and defeat it.

    Defeat it ? That makes it sound as if we already know what’s in it ! Presumptuous !

  3. […] Ellen Brown Writer, Dandelion Salad The Web of Debt Blog April 24, […]

  4. Reblogged this on Jana Murray.

  5. it doesn’t get much plainer than this piece by Ms Brown that the experiment in American democracy ended some time ago and the fast tracking of the TPP is just the finishing up of nailing the coffin closed.

  6. Benjamin Franklin said that the new constitution implemented “a republic, if you can keep it”. Well, 225 years or so wasn’t a bad run – even if the republic was mostly smoke and mirrors for the last 100 years.

  7. […] Ellen Brown Web of Debt […]

  8. It’s all good, Ellen. Bad news is good news because it takes us closer to a crisis that will flush this system. Good news is good news, well because good news is good news. 🙂 There is no way any of the actions of politicians are going to stick long term. Kings rule by decree and eventually the outcomes of their violence lead to eating cake, guillotines and the like.

  9. David Korten, who wrote the book “When Corporations Rule the World” years ago, may not have realized how prophetic he was.

  10. To truly understand how and why the TPP is being fast tracked, here is some required reading for every American – please read this and pass it on to everyone you know: http://scannedretina.com/2015/03/19/before-things-get-out-of-hand-judge-anna-von-reitz/

  11. Thanks, Ellen.
    Excellent reporting here.

  12. So the Buccaneers have stolen the high moral ground from Sea Sheperd and are flying the Jolly Roger throughout the sea of Soverign Countries, plundering where they see fit and dragging any opposition into a corrupt and untouchable International jurisdiction , which the Corporate thuggish lawyers have set up, where they can charge our Governments, State and Federal for their loss of profits, determined by ‘them’. Ned Kelly had the decency to wear a mask and he was one of the good guys.

  13. […] Ellen Brown Writer, Dandelion Salad The Web of Debt Blog April 24, […]

  14. […] April 26, 2015 | Authors: Ellen Brown | Ellen Brown | […]

  15. Reblogged this on Perpetual Wealth Systems.

  16. […] articles: The Trans-Pacific Partnership and the Death of the Republic – The Web of Debt […]

  17. Excellent, very through analysis of how the TPP will work to overturn the kind of government envisioned by Madison. Less clear is why Obama is so obsessed with ramming the agreement through Congress. You could argue that he is simply feathering his own nest, looking forward to a lucrative retirement – and that could also explain why his Republican allies are so he’ll-bent on abandoning their usual obstructionism. This, in fact, is the only conclusion that can be drawn, based on Obama’s flimsy and vague justifications for the secret deal. The “what’s he hiding” argument is simple and sells well to a public that has long since lost faith in the president.

    But I suspect that he – and his allies – are also motivated by fear of rising Chinese power. The TPP will bind key nations on China’s periphery to US interests, at a time when they (Japan, Viet Nam, and the Phillipines) are already alarmed by aggressive moves by China into the South China Sea. From the Marshall Plan onward, such agreements and outright aid have been used to contain the ambitions of Russia and China. Recently, China and Russia have become much closer, and Beijing has proposed a new international banking system to counter the US-dominated IMF and World Bank, and such a system could easily draw in weak neighbors like Viet Nam , the Phillipines, Malaysia – not to mention Iran.

    Or to sum it all up more simply, no nation can run a massive empire and retain a republic at home.

  18. […] The Trans-Pacific Partnership and the Death of the Republic […]

  19. […] Ellen Brown Writer, Dandelion Salad The Web of Debt Blog April 24, […]

  20. Excellent article, showing the lack of transparency, which has been going on for decades, by both Demopublicans and Republicrats. One of the goals of the Communist Party, from a book called “The Naked Communist,” (1958) was to take over both political parties, including breaking down the family and sexual morality. THEY’RE WINNING!
    I highly recommend a book by the late U.S. Senator George W. Malone, called “Mainline.” Sen. Malone was one of the senators from Nevada, from 1946-1958. In his book he shows how Congress began to abdicate its responsibility to regulate trade during the Roosevelt era and that it was speeded up during Eisenhower’s term. Remember, this is a Republican senator accusing a Republican president of also being derelict is his constitutional duties. The same treasonous actions are also being done by NAFTA, WTO and GATT, most of which are offshoots of the United Nations. By they way, that’s why we have the United Nations, which the communists promoted, since after the failure to have the U.S. Senate pass the League of Nations treaty after WWI, the powers that be, decided that the UN proposal would be shoved through with little or no debate and especially no chance for the public to figure out what ramifications were in the UN treaty in regards to U.S.
    sovereignty. Same procedure with the Patriot Act and Obamacare!!
    Get the book “America’s Engineered Decline” by William Norman Grigg.
    I discovered the “Mainline” book in the bibliography of Grigg’s book.

  21. […] the highly uncertain and small gains that are likely to result from these trade deals? Is it even constitutional for the Congress to give away its sovereign legislative authority to foreign bodies staffed by attorneys whose bills are paid for by corporations, or even to any foreign bodies, […]

  22. […] The Trans-Pacific Partnership and the Death of the Republic  by Ellen Brown, http://www.ellenbrown.com/   The United States shall guarantee to every State in this Union a Republican Form of Government.  — Article IV, Section 4, US Constitution – A republican form of government is one in which power resides in elected officials representing the citizens, and government leaders exercise power according to the rule of law. In The Federalist Papers, James Madison defined a republic as “a government which derives all its powers directly or indirectly from the great body of the people . . . .” – On April 22, 2015, the Senate Finance Committee approved a bill to fast-track the Trans-Pacific Partnership (TPP), a massive trade agreement that would override our republican form of government and hand judicial and legislative authority to a foreign three-person panel of corporate lawyers. – The secretive TPP is an agreement with Mexico, Canada, Japan, Singapore and seven other countries that affects 40% of global markets. Fast-track authority could now go to the full Senate for a vote as early as next week. Fast-track means Congress will be prohibited from amending the trade deal, which will be put to a simple up or down majority vote. Negotiating the TPP in secret and fast-tracking it through Congress is considered necessary to secure its passage, since if the public had time to review its onerous provisions, opposition would mount and defeat it. – Abdicating the Judicial Function to Corporate Lawyers James Madison wrote in The Federalist Papers: The accumulation of all powers, legislative, executive, and judiciary, in the same hands, . . . may justly be pronounced the very definition of tyranny. . . . “Were the power of judging joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control, for the judge would then be the legislator. . . .” – And that, from what we now know of the TPP’s secret provisions, will be its dire effect. – The most controversial provision of the TPP is the Investor-State Dispute Settlement (ISDS) section, which strengthens existing ISDS  procedures. ISDS first appeared in a bilateral trade agreement in 1959. According to The Economist, ISDS gives foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever the government passes a law to do things that hurt corporate profits — such things as discouraging smoking, protecting the environment or preventing a nuclear catastrophe. …. Abdicating the Legislative Function to Multinational Corporations Just the threat of this sort of massive damage award could be enough to block prospective legislation. But the TPP goes further and takes on the legislative function directly, by forbidding specific forms of regulation. – Public Citizen observes that the TPP would provide big banks with a backdoor means of watering down efforts to re-regulate Wall Street, after deregulation triggered the worst financial crisis since the Great Depression: – read more. […]

  23. No other comments yet??? . . . That disappointing! This is EXACTLY why I’m sooo worried, and why I got: http://www.no2tpp.com & http://www.nototpp.com website addresses (Along with no2tpp@gmail.com (outlook, hotmail, yahoo & startpage.coms). I’m am NOT looking so sell them, but rather give them away to someone that use them as an umbrella website with pertinent links to the other “like-minded” YouTube videos and other websites with names that are not-so-easy to remember. I hope that person will be you Ellen. Feel free to call me (Gary) so we can chat at 805-470-8020 ANYTIME day or night.
    Oh, BTW. . . I think you “hit-it-out-of-the-park” with your on-air answer to me with Coast to Coast. After studying your writing and YouTube videos I knew you would, but your entire interview and comment to me far exceeded what even I expected. Remember George Noory said to you “We need to do an entire show about this. . . (i.e. TPP). I have some ideas about how to leverage that and raise allot of money too defeat TPP and similar issues . Hope to hear from you soon.
    Ps: You and I are on the same page with EVERYTHING you talked about on-air . . . including studying Radionics!!!
    Gary Lane

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