Investor State Dispute Settlement (ISDS)

[Machjo]

Why does Canada insist on including this in its trade agreements?

I get that investors was protection from discrimination against them, but sometimes it goes too far.

For example, if Canada adopts tougher anti-tobacco laws, as long as they don't discriminate between domestic and foreign tobacco companies, then foreign tobacco companies should not be allowed to sue.

I also get that investors might want protection against unfair government competition. For example, what private airline would appreciate the government deciding to establish its own state-owned airline?

However, there can sometimes be a valid case made to nationalise a natural monopoly. And since this would hurt domestic and foreign privately-owned airlines operating in Canada, we can't say it discriminates against foreign airlines specifically. Of course if Canada decided to nationalise candy shops, investors might have a point there. There is no reason to nationalise what is not a natural monopoly. But even then, would we really need to establish an ISDS just for that? Why not just include in the agreement that the goverents must sell off any state-owned industry that is not a natural monopoly within 15 years let's say. That could mean selling off liquor stores and lottery corporations for example. But even then, we'd expect that any industry that could be reasonably be considered anatural monopoly the government could nationalise through with fair compensation or creating its own.

An investor should not be allowed to sue for economic democratization either. For example, if a government decided to unilaterally drop tariffs on all imports to sole traders, worker cooperatives, and consumer-coopetative natural monopolies, other businesses should not be allowed to sue the government for that. They too could just choose to either convert to that kind of business to enjoy the tariff exemptions or pay the tariffs. But they should not be allowed to sue the government over that.

If the government decides to raise the tax on animal products or by-products or non-renewable resources, again as long as the government is not discriminating between domestic and international companies, where's the problem? Same with raising taxes on addictive products like alcohol or tobacco or banning their advertising, etc.

I think if Canada includes ISDS in trade agreements, it's essential that they be limited in scope, perhaps far more than now.

The more I think about it, the more I think we should scrap ISDS.

Also, scrapping ISDS could make it easier for Canada to sign CETA.

 

[Tecumsehsbones]

So, a good thing that "somtimes goes too far" should be scrapped?

Wow, you just basically did in every government institution in Canada.

The cops? Sometimes they go too far.

The schools? Sometimes they go too far.

The courts? They get it wrong sometimes.

For that matter. . .

Corporations? They sometimes go too far.

The banks? They sometimes (every day) go too far.

Eliminate 'em all!

 

[Machjo]

So, a good thing that "somtimes goes too far" should be scrapped?

Wow, you just basically did in every government institution in Canada.

The cops? Sometimes they go too far.

The schools? Sometimes they go too far.

The courts? They get it wrong sometimes.

For that matter. . .

Corporations? They sometimes go too far.

The banks? They sometimes (every day) go too far.

Eliminate 'em all!

I never said eliminate ISDS, only that I am leaning towards that. I recognizes how eliminating it can cause its own problems such as when a goverents decides to discriminate against foreign investors. But if we must err, it should be in favour of the public interest. From that standpoint, the problems scrapping ISDS could cause might be preferable than now.

Perhaps a better solution would be learning from experience and at least imposing significant limitations on its scope. Much of it if not all of it could be handled through regular courts, no?

 

[Tecumsehsbones]

I never said eliminate ISDS

True, you specifically said "Why does Canada insist on including this in its trade agreements?"

I apologize. Because that doesn't imply wanting to eliminate them from trade agreements AT ALL.

 

[Machjo]

It was a question. Yes I lean towards scrapping them, but also recognize that that can cause problems of its own with governments distinguishing between domestic and foreign investors. But where's the problem with the regular court system? Why a separate one?

And if we do insist on ISDS, then why not limit its scope to just ensuring no discrimination between domestic and foreign investors and maybe limit the government's ability to nationalize what is not a natural monopoly for example.

You do understand the difference between 'leaning towards or in favour of' and 'being decided on,' do you?

 

[darkbeaver]

So, a good thing that "somtimes goes too far" should be scrapped?

Wow, you just basically did in every government institution in Canada.

The cops? Sometimes they go too far.

The schools? Sometimes they go too far.

The courts? They get it wrong sometimes.

For that matter. . .

Corporations? They sometimes go too far.

The banks? They sometimes (every day) go too far.

Eliminate 'em all!

You went too far.

 

[Machjo]

You don't work for the tobacco industry, do you?

Here's where I can see a benefit to scrapping or at least significantly limiting SIDS:

Right now, a foreign investor decides to invest in a presently-legal but environmentally or socially harmful business.

Later, the government closes the loophole in the law and that hurts the business. The business can now sue for damages and have the law reversed.

Under a more limited SISD:

A foreign investor wants to invest in a presently-legal but environmentally or socially harmful business. Aware of its harm to the environment or society and no protection against legitimate regulation that applies equally to domestic businesses, he now has to consider whether it's worth it. He could decide to open the business anyway but with expensive insurance coverage against any future legislative damage and pass the cost on to the consumer if he thinks he can still make a profit from it. Or he decides it's not worth it. Done. As long as the law doesn't discriminate between domestic and foreign investors, he gets no protection and so the onus is on him to act more responsible.

For example, don't get into the tobacco or alcohol or gambling industry and act all surprised when the government introduced new regulations.

Likewise don't enter the non-renewable-resource sector and act all surprised when the government decides to regulate it.

You want minimal regulation? Then start a farming business, and even then there is reasonable regulation. Open up an online media business. Even thatfaces reasonable regulation.