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"No more vampire treaties" The Global South has much to lose with so called Free Trade Agreements – Interview with Sanya Reid Smith

By Gerhard Dilger Ms. Smith, what chances and what risks are there for the countries of the Global South when negotiating so-called new generation free trade agreements (FTAs), or vampire treaties? Let´s take the Mercosur-EU negotiations as an example. ------------------------ sanya: Latin America is facing many FTA negotiations at the moment and they’re all being negotiated in secret, so they can be called vampire treaties – we don’t know what’s in them unless the text is leaked...

Comparing TiSA and TTIP

this is one of three documents which somebody posing as me uploaded some time ago to a site, around the same time as my twitter account was arbitrarily deleted. Although Its open access and says so, I had not uploaded it. So I find that as quite strange. Its still worth reading now, given that Biden has been elected so these deals are likely to both be revived soon. They set our country up for huge punitive penalties if we attempt to change our minds about the things that result in the highest fines ever recorded - for example. ISDS and non-ISDS work alikes like the sanctions in anti-democratic WTO deals should be eliminated. This is the URL that is linked. https://www.rosalux.rs/sites/default/files/publications/5_Comparing_TTIP_and_TiSA_web.pdf One of the others is "TISA vs Climate Action: Trading away EnergyDemocracy" That one is also quite topical. Its worrisom that ISDS could put our country on the hook for huge bills that could literally result in our natural resources like energy and water being sold off to pad the pockets or pay the debts created by - seized to pay debts incurred by our dishonest oligarchs, in the country's's peoples names.

Cry for Argentina: Fiscal Mismanagement, Odious Debt or Pillage?

Fiscal mismanagement or odious debt? Besides impossibility of performance, there is another defense Argentina could raise in international court – that of “odious debt.” Also known as illegitimate debt, this legal theory holds that national debt incurred by a regime for purposes that do not serve the best interests of the nation should not be enforceable. The defence has been used successfully by a number of countries, including Ecuador in December 2008, when President Rafael Correa declared that its debt had been contracted by corrupt and despotic prior regimes. The odious-debt defence allowed Ecuador to reduce the sum owed by 70 percent. In a compelling article in Global Research in November 2006, Adrian Salbuchi made a similar case for Argentina. He traced the country’s problems back to 1976, when its foreign debt was just under six billion dollars and represented only a small portion of the country’s GDP. In that year: An illegal and de facto military-civilian regime ousted the constitutionally elected government of president María Isabel Martínez de Perón [and] named as economy minister, José Martinez de Hoz, who had close ties with, and the respect of, powerful international private banking interests. With the Junta’s full backing, he systematically implemented a series of highly destructive, speculative, illegitimate – even illegal – economic and financial policies and legislation, which increased Public Debt almost eightfold to 46 billion dollars in a few short years. This intimately tied-in to the interests of major international banking and oil circles which, at that time, needed to urgently re-cycle huge volumes of “Petrodollars” generated by the 1973 and 1979 Oil Crises. Those capital in-flows were not invested in industrial production or infrastructure, but rather were used to fuel speculation in local financial markets by local and international banks and traders who were able to take advantage of very high local interest rates in Argentine Pesos tied to stable and unrealistic medium-term U.S. dollar exchange rates. Salbuchi detailed Argentina’s fall from there into what became a 200 billion dollars debt trap. Large tranches of this debt, he maintained, were “odious debt” and should not have to be paid: “Making the Argentine State – i.e., the people of Argentina – weather the full brunt of this storm is tantamount to financial genocide and terrorism. . . . The people of Argentina are presently undergoing severe hardship with over 50% of the population submerged in poverty . . . . Basic universal law gives the Argentine people the right to legitimately defend their interests against the various multinational and supranational players which, abusing the huge power that they wield, directly and/or indirectly imposed complex actions and strategies leading to the Public Debt problem.” Of President Nestor Kirchner’s surprise 2006 payment of the full 10 billion dollars owed to the IMF, Salbuchi wrote cynically: “This key institution was instrumental in promoting and auditing the macroeconomic policies of the Argentine Government for decades. . . . Many analysts consider that . . . the IMF was to Argentina what Arthur Andersen was to Enron, the difference being that Andersen was dissolved and closed down, whilst the IMF continues preaching its misconceived doctrines and exerts leverage. . . . [T]he IMF’s primary purpose is to exert political pressure on indebted governments, acting as a veritable coercing agency on behalf of major international banks.” Sovereign bankruptcy and the “Global Economic Reset” Needless to say, the IMF was not closed down. Rather, it has gone on to become the international regulator of sovereign debt, which has reached crisis levels globally. Total debt, public and private, has grown by over 40 percent since 2007, to 100 trillion dollars. The U.S. national debt alone has grown from 10 trillion dollars in 2008 to over 17.6 trillion today. At the World Economic Forum in Davos in January 2014, IMF Managing Director Christine Lagarde spoke of the need for a global economic “reset.” National debts have to be “reset” or “readjusted” periodically so that creditors can keep collecting on their exponentially growing interest claims, in a global financial scheme based on credit created privately by banks and lent at interest. More interest-bearing debt must continually be incurred, until debt overwhelms the system and it again needs to be reset to keep the usury game going. Sovereign debt (or national) in particular needs periodic “resets,” because unlike for individuals and corporations, there is no legal mechanism for countries to go bankrupt. Individuals and corporations have assets that can be liquidated by a bankruptcy court and distributed equitably to creditors. But countries cannot be liquidated and sold off – except by IMF-style “structural readjustment,” which can force the sale of national assets at fire sale prices. A Sovereign Debt Restructuring Mechanism ( SDRM) was proposed by the IMF in the early 2000s, but it was quickly killed by Wall Street and the U.S. Treasury. The IMF is working on a new version of the SDRM, but critics say it could be more destabilising than the earlier version. Meanwhile, the IMF has backed collective action clauses (CACs) designed to allow a country to negotiate with most of its creditors in a way that generally brings all of them into the net. But CACs can be challenged, and that is what happened in the case of the latest Argentine bankruptcy. According to Harvard Professor Jeffrey Frankel: “[T]he U.S. court rulings’ indulgence of a parochial instinct to enforce written contracts will undermine the possibility of negotiated restructuring in future debt crises.” We are back, he says, to square one. Better than redesigning the sovereign bankruptcy mechanism might be to redesign the global monetary scheme in a way that avoids the continual need for a bankruptcy mechanism. A government does not need to borrow its money supply from private banks that create it as credit on their books. A sovereign government can issue its own currency, debt-free. But that interesting topic must wait for a follow-up article. Stay tuned. (Ellen Brown - Web of Debt - http://ellenbrown.com )

Opinion: Crisis, Emergency Measures and Failure of the ISDS System: The Case of Argentina

"The first salient conclusion is that the ISDS system has a very low capacity to adapt to totally exceptional circumstances for which it does not seem to have been designed. Despite the efforts of Argentinian attorneys to show that the measures implemented in the post-crisis period were adopted in an emergency context, being so exceptional as to justify any breach of the substantial clauses of the BITs, few tribunals were prepared to sustain this defence."

'Ticking Time Bomb': Corporate Lawyers Openly Discussing Suing Nations Over Profits Lost to Covid-19 Measures

By Jake Johnson, Common Dreams. This is a major issue, Like Slovakia with its health insurance mess, in Achmea, once countries sign trade deals, they can't enact regulations that they need for common sense reasons, ISDS makes it impossible for countries to do things like close for epidemics, or limit business operations in needed ways, or (if they apply to foreign companies and their workers) It may even make it FTA illegal to raise minimum wages. Imagine if you could not fix deep seated problems like environmental risks, lack of affordable healthcare or rising education prices. That would be the US today. Thanks to ISDS and ISDS-like provisions in the WTO, now, for 20 years, corporations have always come first. This is why people can't be allowed to vote for improvements.

Achmea search on italaw_com

The Achmea case shows how a small country that, while part of a country, Czechoslovakia, that did/does not exist any more mistakenly signed a trade deal that was highly unfavorable to their ability to determine their own health care through voting. When the Czech and Slovak nations split, both countries inherited these bad deals between powerful and legally savvy Western European countries rushing to take advantage of the naivete of the Eastern Europeans in matters of trade, after communism fell. (this happened all throughout eastern Europe in a problem that was collectively called the IntraEUBITS. ) The case also spotlights the destruction of democracy by ISDS because after voting in a landslide for single payer in 2006 the country was immediately sued by a health insurer for the tort of "indirect exxpropriation" of "their property" (the policy space was treated like a piece of property) in an ISDS case. Notable for many reasons, particularly to me because in the end (Slovakia eventually won on a EU-specific technical issue) the EU high court did NOT touch what I consider to be the core issue, whether countries (in this case EU Member States) have the right to regulate, especially important in life and death issues like health care. The case could have decided that but did not, leaving that all important issue alone. In fact, if one looks at the later documents and the legal articles on it later on the health insurance versus single payer issue is almost never mentioned. Showing how out of touch the international law community in Europe is with the common peoples needs, among other things. Something like it could easily happen here - Look at what happened to South Africa and it's NHI, for example. South Africa voted for NHI a long time ago but it's voters wishes have been frustrated by GATS, and politicians have not been straightforward with the country about why, similar to the US, GATS has become a mother lode of politician dishonesty that will cause endless corruption and lock in as long as the country remains bound by it. In South Africa's case, GATS is also a binding but little known legacy of the apartheid regime that continues to frustrate the hopes of South Africans for change.

What's the Matter With NAFTA?

by Elaine Bernard, Harvard University School of Law. (1993) A good intro to FTA concepts and it illustrates how shamelessly we've beeen manipulated. (and for SO long too) "Here's an example from the investment chapter of NAFTA, Chapter 11. Section 4 of Article 1101 on Scope states "Nothing in this Chapter shall be construed to prevent a Party from providing a service or performing a function, such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care, in a manner that is not inconsistent with this Chapter." This utterly confusing statement is a standard paragraph found in many of the chapters of NAFTA. Double negatives such as "not inconsistent" are common language in many trade agreements. They are a trade lawyer's version of a positive assertion. That is, they allow the drafters to avoid a clear assertion that something is permitted. Instead, activities are crypticly permitted as "not inconsistent." Double, indeed quadruple negatives are positive assertions. Imagine for a moment how the drafters of NAFTA would have phrased the famous quote "Yes, Virginia there is a Santa Claus" into "NAFTAese." It would probably have read, "Yes, Virginia, nothing should be construed to prevent you from believing that the existence of Santa Claus is not inconsistent with reality." But what of the substance of this clause and of similarly written clauses? Here's the real problem. Essentially, it says that the services listed in the paragraph, from corrections to childcare, from public education to social security are to be open to the various investment (and services) provisions of NAFTA. This includes giving companies the rights of national treatment, the right of establishment, and exposing these services to tri-national harmonization. Terrific! This illustrates some of the problems with both the language but also the substance of what is being proposed in this agreement. But why NAFTA, and why now? On the one hand, there is a larger economic story about globalization and the increased mobility of capital, increasing international competition, deregulation, privatization and the business quest for lower wages and higher profits. However, the specific drive behind NAFTA is a business fear that growing public demands for control, called re-regulation, over the excesses of capital and business in the last decades could lead to restrictive legislation. Business fears the possibility of a change in government in all three countries, and it realizes that it could face a change in policy. With NAFTA, business has locked in the policies of Bush, Salinas, Mulroney."

"Achmea: The Beginning of the End for ISDS in and with Europe?"

"The Achmea case essentially concerned a preliminary reference by the German Federal Court of Justice over whether EU law precluded the application of an arbitration clause in an IIA between EU member states. Slovakia had challenged before German courts the jurisdiction of an investment tribunal constituted under the Dutch–Slovak bilateral investment treaty (BIT). A Dutch investor (Achmea) had seized that investment tribunal over a partial reversal of the Slovak government’s decision in 2004 to privatize the health insurance market. In 2007 Slovakia had prohibited the distribution of profits generated by private health insurance activities. The investment tribunal considered this a breach of the BIT and awarded Achmea damages of EUR 22.1 million."

The recent Achmea case has received a lot of news coverage in Europe but almost none of it actually explains what the case was about. This PDF..

contains a factual summary (on page 13) which explains that the case was about the electoral victory in Slovakia of a candidate who ran on a platform of restoring single payer health care in the country, as well as limiting the profits of any health insurer, in the intirim period to 20% changes which which were immediately attacked in the first of two Investor vs. State arbitral lawsuits. Slovakia lost the first round. This case is also a good introduction to the sordid history of the IntraEUBITS.