The Place Where the Global Elite Exerts Its Will

A little while back, I noted the good news that at least some presidential candidates are talking about a very important aspect of trade policy that gets extremely little attention. Now the Financial Times picks up on it:

Amid the noisy battering the North American Free Trade Agreement is taking from both Democratic presidential hopefuls, one recent statement from Hillary Clinton was particularly resonant. “We will have a very clear view of how we’re going to review Nafta,” the New York senator said. “We’re going to take out the ability of foreign companies to sue us because of what we do to protect our workers.”

The treaties and tribunals that regulate international investment have become both more powerful and more controversial as global trade becomes less about goods flowing across borders and more about multinationals siting abroad. There are now nearly 3,000 bilateral investment treaties (BITs) between countries worldwide, designed to protect foreign-owned companies from discrimination, arbitrary nationalisation or other unfair treatment by the host country government…

…As Mrs Clinton suggested, even the White House and Congress were surprised and disturbed when the US ended up being on the end of several high-profile claims under Nafta. With companies from emerging markets like India and China investing abroad, the rich countries could find themselves increasingly targeted by litigation.

These tribunals are where the rubber really hits the road in trade policy - they are the places that the global elite really exerts its will. So remember the next time a trade deal comes up (and it looks like the Colombia FTA is coming down the pike) - those thousands of pages in that deal are not protections for people. They are protections for multinational corporations that give them rights at these tribunals - rights that supersede many of our own country's domestic laws.