The Cato Institute is a libertarian think tank founded by Charles Koch that advocates for ‘individual liberty, limited government, free markets, and peace’, including abolishing the minimum wage and affirmative action, and for privatizing Social Security. Dan Ikenson is director of Cato’s Herbert A. Stiefel Center for Trade Policy Studies, where he coordinates and conducts research on all manners of international trade and investment policy. This week he wrote in the influential business magazine Forbes that, “Much of the public’s antipathy toward trade agreements can be boiled down to concerns about the so-called Investor-State Dispute Settlement (ISDS) provision.”
He argues, “The inclusion of ISDS in trade agreements subverts prospects for trade liberalization. U.S. multinational corporations want access to ISDS, but they don’t need it. If the trade agenda is the proverbial airplane that is down an engine and losing altitude, throwing ISDS out of the cargo hold to lighten the load is the best way to reduce the chance of a crash.” From a libertarian perspective, he says, “ISDS is a subsidy for MNCs and a tax on everyone else.” And he points to a new Cato Institute paper and a list of eight reasons “why ISDS should be purged from the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership negotiations.”
This Forbes article was followed by Council of Foreign Relations senior fellow Edward Alden commenting, “Dan Ikenson at the CATO Institute has just published a must-read policy memo on the issue of including investor-state arbitration in trade agreements. With President Obama’s ambitious trade agenda stalled in Congress, Ikenson suggests a radical, but to my mind rather sensible, move to break the impasse–drop the provision from the Trans-Pacific Partnership and future U.S. trade agreements.”
He notes, “Ikenson explains in detail, ISDS has morphed from a fairly narrow tool to deal with blatant expropriation to a much broader weapon that companies can use to challenge government policies and regulations that they believe harm their businesses. In the process, ISDS has become far more controversial, feeding public fears that trade agreements will be used to undermine the sovereign right of governments to protect consumer health and welfare and safeguard the environment.”
Understanding libertarian and business-friendly opposition to investor-state provisions in ‘free trade’ agreements may be an important (and yes risky) tool for us as we seek to shift Conservative and Liberal Members of Parliament and provincial premiers in this country and as we lobby the European Parliament (which is expected to tilt further to the right after the May 22-25 elections) to exclude investor-state provisions from the Canada-European Union Comprehensive Economic and Trade Agreement.
Further reading
European regulations could be badly affected by Transatlantic free trade
Far-right poised for gains in May elections to the European Parliament
