5 ms·

How do you propose to mediate trade disputes between companies and states without something like the ISDS? Imagine this on say the US national level. Apple wan

by avar 10y ago

How do you propose to mediate trade disputes between companies and states without something like the ISDS? Imagine this on say the US national level. Apple wants to sell its computers in Alaska, but Alaska has a domestic computing company that gets goverment subsidizes, creating unfair competition. In this case the federal government would step in. There's an analogous issue with international trade agreements. National governments will enter into those agreements, but their courts are always going to be biased towards their local constituents, so in my example Apple couldn't hope for a fair result by suing in Alaskan courts. So there needs to be some pan-national body to settle these sort of disputes without turning every little international company v.s. company or company v.s. government issue into a full-on diplomatic dispute between the respective governments involved. The ISDS in the TTIP seems like such a facility. Why is it unreasonable? I'm not some TTIP proponent or corporate shill, I'm just genuinely curious about this, it just seems to me that a lot of comments on the Internet, including on HN, have knee-jerk negative reactions to every provision in the TTIP without thinking about the real issues those provisions might be solving.

rm_-rf_slash 10y ago
Apple was a bad example. What you should have gone with was a utility company or a bank. Those are necessary in every society and the "level playing field" of "reformed" economies desired by the West for trade agreements only really creates David-and-Goliath situations where David's slingshot was determined to be unfair domestic subsidization by the World Bank, IMF, etc.
- avar 10y ago
  Is it really a bad example? The typical scare story about trade agreements seems to be that they're going to result in some big scary multinational shutting off the water supply or something. Is that really the common case or even all that plausible? Or is it just going to be normal businesses like Apple colliding with some country's protectionist policies that are counter to the trade agreement? Besides, if these supposed kangaroo courts are really so unfair the aggrieved countries could just leave the TTIP. That seems to be another detail that's glossed over, that somehow these pan-national arbitration bodies are going to be corrupt, but not quite so corrupt that the trade agreement isn't an overall improvement for the countries involved, because otherwise they'd be pulling out of it, right?
- dapramdeach 10y ago
  Or you could use a toothpaste example, where california bans microbeads. Under TTPA the US gov could be sued under these disputes process.
mamon 10y ago
>>...without turning every little international company v.s. company or company v.s. government issue into a full-on diplomatic dispute between the respective governments involved. The thing is that "full-on diplomatic dispute" is the only fair way to settle that, because governments are chosen by people, so they are legal representatives of them. ISDS on the other hand is some shady institution without any democratic control, and probably sponsored by the very corporations they are supposed to judge. If you put things in perspective you can see what this TTIP deal is all about: big international corporations like Apple or Google don't like the fact that governments can create laws that they are obliged to respect. What corporations hate even more is every country having it's own set of laws to follow. So, the whole idea of TTIP is to strip governments (with possible exception of US government) of power over corporations.
- danmaz74 10y ago
  > because governments are chosen by people In some parts of the World...
  - avar 10y ago
    We're discussing the TTIP here, which is exclusively a deal between western democracies. You may be confusing it with the TPP which e.g. includes Singapore.
- avar 10y ago
  I think you're fundamentally misunderstanding representative democracies. Nothing about them says the can't enter into an agreement to create a pan-national body to settle trade disputes, as opposed to escalating every incident to a diplomatic dispute. If people don't like that they'll make in an election issue, and either it'll be re-negotiated after the next election or the nation will leave the trade agreement. That's the democratic process at work. How is that a better option anyway? So now instead of some court that has to be seen to be fair to the entire trade block deciding things, you want to have n^2 potential dispute mechanisms in place between the n countries that are part of the agreement? > big international corporations [...] don't like the fact that > governments can create laws that they are obliged to respect. Or you could look at this from the flip side of that argument, which is that it's detrimental to international trade if companies can't make international investments without being at risk to domastic political whimsy that runs counter to the spirit of the trade deal that was initially agreed upon.
woodpanel 10y ago
'there needs to be some pan-national body to settle [...] disputes without turning every little international [trade] issue into a full-on diplomatic dispute' Exactly. Suddenly it's ok, if we have arbitration courts with "lesser" countries, but not so much if we feel we could be playing the role that usually a third world country plays. Some topics are just scapegoat-ish. It becomes impossible to reason with people who are convinced <inser-here> is evil, will be the end of all whats sacred. Now as international treaties go, the sovereign remains the nation. Imagine the most evil conspired trade-agreement (as the scapegoaters do), only founded to use it's arbitration courts for extortion. Wouldn't it be much wiser to keep your extortion-weapon sharp and thus use the arbitration court's biased-ness only in rare cases, rather than on a daily basis?
deleted 10y ago
[deleted]
sandstrom 10y ago
I think it's something that free markets can handle pretty well on their own. Countries that expropriate property will see less investment in the future, that's a pretty strong incentive. Also, in e.g. a US-Europe trade deal there is very little real need for ISDS. Both countries have court systems dating several hundred years back. Another market solution is insurance, where a company can simply insure against expropriation or similar.
- avar 10y ago
  > I think it's something that free markets > can handle pretty well on their own. The entire point of these deals is that some random US company in some random US state shouldn't have to worry about dealing with some random EU company in some random EU country, for any value of state/country for the two. There should be unified standards. Saying that you should just let the free market handle it is the libertarian idea that now every company needs to have expertise in international politics in order to invest or do business, as opposed to just having a well regulated market. > Both countries have court systems > dating several hundred years back. Which doesn't mean that those courts are compatible in their decisions, or would treat foreigners fairly, which is what the ISDS addresses. > Another market solution is insurance. I.e. wasted capital because of uncertainty incurred by a lack of free trade guarantees, something a free trade agreement would address. We could just not waste that capital to begin with. The entire point of a free trade agreement is to remove those hurdles where you don't have to buy insurance or hedge your bets just to sell something to another country.
  - rodgerd 10y ago
    > There should be unified standards. Why should the people of Germany be bound by the whims of the people of Delaware?
    - avar 10y ago
      Bound? The people of Germany, in this example, voted for a government that approved the TTIP. If they don't like it they can vote again and leave the agreement. If it's not obvious from my comments I'm not advocating for agreements like the TTIP or other agreements that enforce international trade in this comment chain. I'm just saying that if people want agreements like that in some shape or form that's going to necessarily result in some loss of national sovereignty. Any international trade agreement worth its salt will do that. As an example. Let's say there's been an agreement between the US and Germany to enforce no tariffs on their trade. Now Germany is massively subsidizing its steel industry and there's a Delaware startup trying to smelt steel to compete with them. Don't you think there should be a dispute mechanism in place to say "hey guys, we agreed to no tariffs, that really doesn't make sense if you subsidize steel and we don't".?
rodgerd 10y ago
> How do you propose to mediate trade disputes between companies and states without something like the ISDS? The companies could try accepting the laws of the country they wish to trade in, rather than shopping around for dodgy countries and then trying to export country B's laws to override country A?
DominikR 10y ago
My solution to this would be to shrink the governments power in economic affairs so every investor can be sure that it wont retroactively change the rules of the game and punish them for investing in our economies. This could draw in a lot of investors from around the world. Foreign governments then can decide between either continuing going down this path that will leave their population impoverished in the long term or they may also choose to open up their economy to investments by signalling that they wont cheat investors whenever they feel like it.
dilemma 10y ago
>Imagine this on say the US national level. Apple wants to sell its computers in Alaska, but Alaska has a domestic computing company that gets goverment subsidizes, creating unfair competition. In this case the federal government would step in. A prime example of why ISDS is needed is the subsidies American corporations like Tesla, Facebook, and Apple receive in the US, creating unfair competition. >There's an analogous issue with international trade agreements. National governments will enter into those agreements, but their courts are always going to be biased towards their local constituents, so in my example Apple couldn't hope for a fair result by suing in Alaskan courts. Agreed. Case in point, Apple's rounded rectangle lawsuit against Samsung, or "Korean Samsung" as Apple's legal prefer it. Apple need to be taken to international court for its abuse of the US legal system, and the US government needs to get told. Someone call the WTO.

by avar 10y ago

rm_-rf_slash 10y ago

Apple was a bad example. What you should have gone with was a utility company or a bank. Those are necessary in every society and the "level playing field" of "reformed" economies desired by the West for trade agreements only really creates David-and-Goliath situations where David's slingshot was determined to be unfair domestic subsidization by the World Bank, IMF, etc.

avar 10y ago
Is it really a bad example? The typical scare story about trade agreements seems to be that they're going to result in some big scary multinational shutting off the water supply or something. Is that really the common case or even all that plausible? Or is it just going to be normal businesses like Apple colliding with some country's protectionist policies that are counter to the trade agreement? Besides, if these supposed kangaroo courts are really so unfair the aggrieved countries could just leave the TTIP. That seems to be another detail that's glossed over, that somehow these pan-national arbitration bodies are going to be corrupt, but not quite so corrupt that the trade agreement isn't an overall improvement for the countries involved, because otherwise they'd be pulling out of it, right?
dapramdeach 10y ago
Or you could use a toothpaste example, where california bans microbeads. Under TTPA the US gov could be sued under these disputes process.

mamon 10y ago

>>...without turning every little international company v.s. company or company v.s. government issue into a full-on diplomatic dispute between the respective governments involved. The thing is that "full-on diplomatic dispute" is the only fair way to settle that, because governments are chosen by people, so they are legal representatives of them. ISDS on the other hand is some shady institution without any democratic control, and probably sponsored by the very corporations they are supposed to judge. If you put things in perspective you can see what this TTIP deal is all about: big international corporations like Apple or Google don't like the fact that governments can create laws that they are obliged to respect. What corporations hate even more is every country having it's own set of laws to follow. So, the whole idea of TTIP is to strip governments (with possible exception of US government) of power over corporations.

danmaz74 10y ago
> because governments are chosen by people In some parts of the World...
- avar 10y ago
  We're discussing the TTIP here, which is exclusively a deal between western democracies. You may be confusing it with the TPP which e.g. includes Singapore.
avar 10y ago
I think you're fundamentally misunderstanding representative democracies. Nothing about them says the can't enter into an agreement to create a pan-national body to settle trade disputes, as opposed to escalating every incident to a diplomatic dispute. If people don't like that they'll make in an election issue, and either it'll be re-negotiated after the next election or the nation will leave the trade agreement. That's the democratic process at work. How is that a better option anyway? So now instead of some court that has to be seen to be fair to the entire trade block deciding things, you want to have n^2 potential dispute mechanisms in place between the n countries that are part of the agreement? > big international corporations [...] don't like the fact that > governments can create laws that they are obliged to respect. Or you could look at this from the flip side of that argument, which is that it's detrimental to international trade if companies can't make international investments without being at risk to domastic political whimsy that runs counter to the spirit of the trade deal that was initially agreed upon.

woodpanel 10y ago

'there needs to be some pan-national body to settle [...] disputes without turning every little international [trade] issue into a full-on diplomatic dispute' Exactly. Suddenly it's ok, if we have arbitration courts with "lesser" countries, but not so much if we feel we could be playing the role that usually a third world country plays. Some topics are just scapegoat-ish. It becomes impossible to reason with people who are convinced <inser-here> is evil, will be the end of all whats sacred. Now as international treaties go, the sovereign remains the nation. Imagine the most evil conspired trade-agreement (as the scapegoaters do), only founded to use it's arbitration courts for extortion. Wouldn't it be much wiser to keep your extortion-weapon sharp and thus use the arbitration court's biased-ness only in rare cases, rather than on a daily basis?

deleted 10y ago

[deleted]

sandstrom 10y ago

I think it's something that free markets can handle pretty well on their own. Countries that expropriate property will see less investment in the future, that's a pretty strong incentive. Also, in e.g. a US-Europe trade deal there is very little real need for ISDS. Both countries have court systems dating several hundred years back. Another market solution is insurance, where a company can simply insure against expropriation or similar.

avar 10y ago
> I think it's something that free markets > can handle pretty well on their own. The entire point of these deals is that some random US company in some random US state shouldn't have to worry about dealing with some random EU company in some random EU country, for any value of state/country for the two. There should be unified standards. Saying that you should just let the free market handle it is the libertarian idea that now every company needs to have expertise in international politics in order to invest or do business, as opposed to just having a well regulated market. > Both countries have court systems > dating several hundred years back. Which doesn't mean that those courts are compatible in their decisions, or would treat foreigners fairly, which is what the ISDS addresses. > Another market solution is insurance. I.e. wasted capital because of uncertainty incurred by a lack of free trade guarantees, something a free trade agreement would address. We could just not waste that capital to begin with. The entire point of a free trade agreement is to remove those hurdles where you don't have to buy insurance or hedge your bets just to sell something to another country.
- rodgerd 10y ago
  > There should be unified standards. Why should the people of Germany be bound by the whims of the people of Delaware?
  - avar 10y ago
    Bound? The people of Germany, in this example, voted for a government that approved the TTIP. If they don't like it they can vote again and leave the agreement. If it's not obvious from my comments I'm not advocating for agreements like the TTIP or other agreements that enforce international trade in this comment chain. I'm just saying that if people want agreements like that in some shape or form that's going to necessarily result in some loss of national sovereignty. Any international trade agreement worth its salt will do that. As an example. Let's say there's been an agreement between the US and Germany to enforce no tariffs on their trade. Now Germany is massively subsidizing its steel industry and there's a Delaware startup trying to smelt steel to compete with them. Don't you think there should be a dispute mechanism in place to say "hey guys, we agreed to no tariffs, that really doesn't make sense if you subsidize steel and we don't".?

rodgerd 10y ago

> How do you propose to mediate trade disputes between companies and states without something like the ISDS? The companies could try accepting the laws of the country they wish to trade in, rather than shopping around for dodgy countries and then trying to export country B's laws to override country A?

DominikR 10y ago

My solution to this would be to shrink the governments power in economic affairs so every investor can be sure that it wont retroactively change the rules of the game and punish them for investing in our economies. This could draw in a lot of investors from around the world. Foreign governments then can decide between either continuing going down this path that will leave their population impoverished in the long term or they may also choose to open up their economy to investments by signalling that they wont cheat investors whenever they feel like it.

dilemma 10y ago

>Imagine this on say the US national level. Apple wants to sell its computers in Alaska, but Alaska has a domestic computing company that gets goverment subsidizes, creating unfair competition. In this case the federal government would step in. A prime example of why ISDS is needed is the subsidies American corporations like Tesla, Facebook, and Apple receive in the US, creating unfair competition. >There's an analogous issue with international trade agreements. National governments will enter into those agreements, but their courts are always going to be biased towards their local constituents, so in my example Apple couldn't hope for a fair result by suing in Alaskan courts. Agreed. Case in point, Apple's rounded rectangle lawsuit against Samsung, or "Korean Samsung" as Apple's legal prefer it. Apple need to be taken to international court for its abuse of the US legal system, and the US government needs to get told. Someone call the WTO.