Trade & Investment
In 2016, TNI’s work with others to expose the unjust protection mechanisms for investors almost brought about the collapse of the EU-Canada Comprehensive Economic and Trade Agreement (CETA). TNI also helped organize training of civil society leaders in Latin America and Asia so that they are better equipped to push for a just trade and investment policy in their regions. The challenge now is to ensure that promised reforms are not just cosmetic, but start to shift the balance so that the public interest comes above investor rights.
Goal (2016-2020): To establish the principle that the public interest and integrity of national judicial systems should not be undermined by trade and investment rules, particularly investment disputes.
|Goals||Outcomes in 2016 to which TNI contributed|
|Governments in the South/EU start to question their investment agreements.||
|The inclusion of investment protection in the EU-led bilateral FTAs is challenged by media.||
|Policy-makers in EU and South speak critically about the dangers of investment arbitration and see the need for reform.||
|Opinion-makers, including lawyers, join their voices to the growing critique of IIAs/ISDS.||
|CSOs in Asia (ASEAN + India) and Latin America increase awareness of the dangers of IIAs and ISDS and capacity to engage their own governments and media on the investment protection agenda and are able to propose alternatives.||
|Dutch government indicates willingness to review their model BITs and renegotiate their old ones.||
|MEPs and policy-makers in EU and the South accept that ICS does not address the key flaws of ISDS system.||
Project in numbers
- 652 people participate in 11 TNI co-organized events
- 8,000 march against CETA in Netherlands
- 14 briefings/reports published
- Unmasked report reaches 462,000 twitter accounts
Why this issue matters
International trade is worth $10 million a minute – 25 times bigger than aid flows – but who benefits depends on how trade and investment rules are written. More than 2,670 international investment agreements are already in force and many more are being negotiated. Multinational companies have a huge influence over negotiations, so most of these agreements grant corporations special privileges and impunity for human rights and environmental violations and roll back state regulations that protect people and the environment. The costs are felt by people whose jobs are outsourced, whose land and resources are ‘grabbed’, whose environment is destroyed and whose fundamental democratic rights are signed away in favour of corporate freedom.
“The year 2016 must be considered a real “annus horribilis” for the EU’s investment law and arbitration policy.”
(European Federation of Invesment Law Arbitrators)
ISDS illegitimacy almost sinks CETA
TNI has supported movements opposing unjust trade agreements since the 1990s – particularly focusing on the injustice of the Investor-State Dispute Settlement Mechanism (ISDS) that allows corporations to sue states for regulations that protect the public interest. TNI’s research, prominent publications such as Profiting from injustice, education and training, media outreach and coalition-building efforts have succeeded in turning this hitherto unknown system into “the most toxic acronym in Europe” (in the words of Cecilia Malmström, EU's Trade Commissioner). In 2016, ISDS illegitimacy grew to such as an extent that it almost brought down the EU-Canada Comprehensive and Economic Trade Agreement (CETA).
CETA was expected to be signed without controversy, but legally had to be ratified by all member state parliaments. This enabled critical public debate and led to serious opposition within several parliaments, most notably Belgium’s Walloon parliament that forced a delay in the official signing of the agreement. TNI helped organize a 8,000 strong demonstration against CETA (and TTIP) in Amsterdam on 22 October, and was involved in a series of lobby meetings with Dutch parliamentarians to support the resistance by the Wallonian regional government.
With the agreement at serious risk of collapse, the European Commission was forced onto the defensive, battling to defend its largely cosmetic reforms to ISDS, known as the Investment Court System (ICS). Although the agreement was eventually signed, the battle is far from over as CETA will only come into full effect once ratified by all of EU’s 38 parliaments. The Belgian government also committed to asking the European Court of Justice to examine the compatability of ICS with EU law.
Bilateral investment treaties unravel
The near collapse of CETA was mirrored by the unravelling of Bilateral Investment Treaties (BITs) in many regions of the world. Within Europe, during 2016, Romania, Italy, the Czech Republic and Denmark initiated termination of BITs between EU member states. India meanwhile announced termination of all BITs that came up for renewal. The criticism of ISDS has also been at the heart of rising popular and political resistance to the proposed EU-US trade agreement, TTIP, which has now been suspended.
The success in derailing an extreme pro-corporate trade agenda can be seen in the despondency of corporate investment lawyers. Prominent investment lawyer Philippe Pinsolle says defending investment arbitration in its current form is now “a lost battle”. The pro-arbitration lobby EFILA complained publicly that the EC trade and investment agenda has stalled: "In sum, it must be concluded that the transfer of the FDI competence to the EU has not yielded any results since the beginning. After 6 years no single trade deal has been fully signed, ratified and entered into force.”
“There is a pressing need for systematic reform of the international investment agreements (IIAs) regime to bring it in line with today's sustainable development imperative. Today the question is not whether or not to reform, but about the what, how and extent of such reform.”
Arguing for real not cosmetic reforms to ISDS
TNI’s research has contributed towards the European Commission's admission of flaws and injustices in the current investment agenda, but as yet has not led to any proposals for effective reform. Rather the EC has embraced minor reforms that leave the fundamentals of the system intact, and used this to re-legitimize investor-state dispute settlement and pushed it through in new negotiations. In April, together with four European and Canadian NGOs, TNI published Investment court system – put to the test that exposed the cosmetic nature of the EC’s reforms by showing how five of the most controversial historic ISDS arbitration cases could still be launched under the Investment Court System (ICS).
The criticism was echoed by Germany’s largest association of judges and public prosecutors as well as the European Association of Judges. The former remarked that “Neither the proposed procedure for the appointment of judges of the ICS nor their position meet the international requirements for the independence of courts.”
The challenge for TNI and others is now to push the European Union to embrace a new trade and investment agenda that is socially just and no longer allows corporations to sue states for measures that protect the public interest.
Struggles against ISDS spread in the South
With the EU-US TTIP negotiation suspended, the EU has been moving aggressively to open up trade and investment agreements with the Philippines, Indonesia, Myanmar and Mexico. There are also drives within Asia and Oceania for a trade deal called the Regional Comprehensive Economic Partnership (RCEP). TNI in 2016 therefore invested resources in building the collective knowledge and capacity of civil society leaders in these regions so that they can engage in analysing the agreements and hold their governments to account. These trainings and knowledge-sharing events are critical for democracy as most trade agreements habitually exclude civil society participation due to their technical complexity.
In July, TNI co-hosted a workshop on RCEP in Kuala Lumpur (Malaysia) and also in Mongolia where 100 people attended workshops during the Asia-Europe Summit. TNI was one of the key organizers of the parallel Asia-Europe Peoples' Forum in which more than 500 Mongolians and 250 international guests came together to analyse and strategize on how to advance climate justice and confront land and resource grabbing. TNI presented a study at the conference that examined how transational companies were undermining the Mongolian government's attempts to regulate its mining sector with investment claims at international arbitration courts.
In November, TNI co-organized training in Manila attended by 45 representatives of social movements, NGOs and trade unions from Myanmar, Indonesia, the Philippines, Malaysia, Cambodia, and Thailand, as well as India and Korea. A virtual workshop on Free trade Agreements and ISDS held in Latin America, with the academic support of two universities, was joined by 500 participants. The participatory trainings have been widely praised by participants. Doi Ra, from Myanmar organization Paung Ku says the training enabled her to actively participate in a consultation with World Bank officials.
The training also helped kick-start key regional campaigns. In Myanmar, for example, over 150 civil society organizations signed a letter calling for a postponement of the EU–Myanmar Investment Treaty until the European Court of Justice makes its decision on ICS. When EU negotiators held consultations in December during the fourth round of negotiations with Myanmar, they were forced to debate well-prepared informed civil society representatives. In Indonesia, 12 civil society organizations ran public events and lobbied officials during negotiations for a Regional Comprehensive Economic Partnership (RCEP), explaining to the public what investment protection means for ordinary people – its impact on living wages, land distribution, access to free, accessible medicines, public healthcare and education.
TNI also accompanied a delegation from the Philippines in May during the first round of negotiations for a Free Trade Agreement (FTA) in Brussels, enabling Filipino movement representatives to engage with MEPs, the European Commission and the media on the potential impacts of an EU-Philippines FTA.
“Not long after the [TNI] workshop, I had the opportunity to attend consultation meetings with the Secretary General of ICSID [International Centre for Settlement of Investment Disputes - World Bank] and representatives from the European Commission. The workshop prepared me well for those kinds of meetings – through the role play sessions, case studies and reference materials. I was able to present concerns... to Ms. Meg Kinnear [of ICSID] based on lessons learnt from the workshop and to explain how it could stall the country’s democratisation process...”
– Doi Ra, Paung Ku , Myanmar
High quality research and media outreach
TNI continued its record of producing high-quality research and publications, including research that showed how ISDS constrains regulation of mining, undermines tax justice and weakens food safety regulations. TNI also evaluated the negative impacts that ISDS and free trade agreements have had in Colombia, Mexico and Mongolia.
This research has made us a highly trusted source within the media. We gave considerable advice and support, for example to an 18-month investigative research project by Buzzfeed which resulted in four long-read articles. TNI staff similarly posted op-eds in The Guardian (UK), Agence Europe, El Universaland Reforma (Mexico), Tercera Informacion (Spain) and others.
Trade and Investment Project Coordinator
Economic Justice Programme Coordinator
Research Associate, Argentina
Research Associate, India
Dutch Advocacy Officer
- The hidden costs of RCEP and corporate trade deals in Asia
- Repercussions in Colombia of the free trade agreement with the European Union after three years of implementation
- Making sense of CETA (2nd Edition)
- CETA - trading away democracy (2016 version)
- Food safety, agriculture and regulatory cooperation in the Canada-EU Comprehensive Economic and Trade Agreement (CETA)
- Mongolia’s experience with investment treaties and arbitration cases
- Unmasked: corporate rights in the renewed Mexico-EU FTA
- Signing away sovereignty: How investment agreements threaten regulation of the mining industry in the Philippines
- Proposal to expand investors’ rights for all intra-EU investment will be the next nail in the coffin of European integration
- Investment Court System put to the test
- The expected impact of the EU-Ukraine Association Agreement
- Oil corporations vs climate: the Keystone XL case
- The zombie ISDS
- Taxes on trial
Friends of the Earth International
- Seattle to Brussels network
- Aitec, France
- ATTAC France
- Attac Austria
- Centre National de Coopération au Développement (CNCD), Belgium
- 11.11.11, Belgium
- Friends of the Earth Europe, Belgium
- Corporate Europe Observatory, Belgium
- Fairwatch, Italy
- France America Latina, France
- Institute of Global Responsibility, Poland
- Milieudefensie, Netherlands
- Oficina International de los Derechos Humanos Acción Colombia (OIDHACO), Belgium
- Powershift, Germany
- Re-Common, Italy
- Stop TTIP – Italy campaign
- Vedegylet Egyesulet, Hungary
- Both ENDS, Netherlands
- SOMO, Netherlands
- FNV, Netherlands
- WEMOS, Netherlands
- Foodwatch, Netherlands
- Dutch Dairymen Board, Netherlands
- Nederlandse Akkerbouw Bond
- ASEED, Netherlands
- Vrijschrift, Netherlands
- Platform Authentieke Journalistiek, Netherlands
- Platform ABC, Netherlands
- Ecologistas en Acción, Spain
- Traidcraft, UK
- War on Want, UK
- Global Justice Now, UK
- Rosa Luxembourg Foundation Brussels office, Belgium
- Afrika Kontakt, Denmark
- Forum Umwelt und Entwicklung, Germany
- Jubileo Sur Americas
- Grupo Carta de Belem
- Confederation Sindical de las Americas
- The Democracy Center, Bolivia
- CENSAT Agua Viva /Friends of the Earth, Colombia
- Colectivo de Abogados “José Alvear Restrepo” (CAJAR), Colombia
- Centro de Investigación y Educación Popular (CINEP), Colombia
- Escuela Nacional Sindical, Colombia
- Ecuador Decide, Ecuador
- Institute for Policy Studies (IPS), United States
- Redes/Friends of the Earth, Uruguay
- ATTAC Argentina
- Campaign Mexico better off without TPP
- Campaign Chile better off without TPP
- Campaign Argentina better off without FTAs
- Coalition "Jornada Continental por Democracia y Contra Neoliberalismo"
- Council of Canadians, Canada
- EU-ASEAN FTA network, South East Asia
- Focus on the Global South, Philippines, Thailand and India
- Alyansa Tigil Mina, Philippines
- Indonesia for Global Justice, Indonesia
- Paung Ku, Myanmar
- Kesan, Myanmar
- Myanmar Alliance for Transparency and Accountability
- Monitoring Sustainability of Globalisation, Malaysia
- IDEALS, Philippines
- SENTRO, Philippines
- Forum Against FTAs, India