Contributed by Joe Montero
The United Kingdom and Australian governments have stitched up a rotten trade deal, which is expected to be signed on 11 June. The British Trade Minister has confirmed an Investor State Dispute Settlement (ISDS).
This is a provision that first appeared after former colonies gained their independence from the old colonial powers, and imposed to protect corporations based in these powers, protection form “expropriation,” broadly defined, to cover any measure t harming existing or future potential profits.
Corporations are given the right to sue under an ISDS regime.
Photo from Sky News: British Trade Minister Liz Truss and her Australian counterpart Dan Tehan
The British push for the deal has a lot to do with securing the Australian market to cover loss of trade with Europe after Brexit. The push for an ISDS is mostly being about the flow of investment. Trade in goods and services is also there. But this is mostly related to the interests of British big business and breaking down remaining barriers to their operations in Australia, to make up for British Brexit losses.
There may be some scope to increase Australian agricultural exports. but this will be more than offset by the he loss of economic sovereignty and Australia being used as a dumping ground for British products.
The core aim is to lift British investment in the Australian economy.
It makes perfect sense from the view of the Fleet street bankers and other financial institutions, who make up the second biggest foreign trading block in Australia, a little behind those based in Wall Street. The inclusion of the ISDS will extend the power of the big Fleet Street investors in Australia and thereby compromise Australia’s ability to make independent economic decisions.
The special target is the Australian government and blocking any restriction to the further penetration of Fleet street investors.
The Howard government was on track to include the ISDS provision in a similar agreement in 2004 with the United States. It was politically impossible then. The Morrison government now seems willing to take it further.
For example, should a government wish to bring in legislation that will put an end to fossil fuels and promote sustainable energy. British investors in the fossil fuel industry will have a weapon to block it. The ISDS can be used to restrict government involvement, in areas such as health, education, social security, and more, if there is a private sector and British investors are involved.
It would be the same story if the government tried to reign in the corporate tax evasion industry or tried to impose some conditions on the ANZ bank for example, where Fleet Street bankers hold the controlling share.
Two major operators in the mining industry in Australia are the British Glencore and Rio Tinto. Both have come into conflict over indigenous land rights. Any action by government that protects these rights would also be a breach of the agreement. Rio Tinto was at the centre of the destruction of the Juukan Gorge Indigenous sacred site.
British owned Bupa is the biggest owner on nursing homes in Australia. STDS would prevent anything that improved the regulation of the industry for the benefit of its residents or take away the generous taxpayer money handouts to the private providers.
Supporters of the ISDS system argue that it is possible to have exceptions. Exceptions are normally time limited and do not apply in the longer-run.
Corporations are still free to tie governments in a long and costly process involving hundreds of millions of dollars.
Even if this was not the case defending against claims can cost tens of millions of dollars of taxpayer money. Corporations can tie governments into a lengthy and expensive process, and this works to pressure compliance, even where a claim of expropriation does not hold.
Under an ISDS regime, cases would not be heard under a judicial system.
Judicial process is replaced tribunals of mostly corporate world appointed members, charged to only consider the commercial aspects of a claim, and arbitrate, not questions of justice.
British investors are not shy to press the advantage. ninety cases with other nations are currently pending.
Australia’s most celebrated case was the one where, tobacco giant Philip Morris tobacco company sued the Australian government over its plain packaging law. This one failed because widespread community opposition forced the Howard government to refuse to agree for the time being on the inclusion of the ISDS provision in the United States – Australia Free Trade Agreement.
Which goes to show, it is possible to resist the threat.