Sen. Elizabeth Warren on Wednesday said that the investor-state dispute settlement provision in the Trans-Pacific Partnership trade deal would allow corporations to challenge foreign laws before private arbitration panels outside of the traditional legal system.
“It allows companies to challenge foreign laws they don’t like and potentially win millions or even billions of dollars from taxpayers,” Warren (D-Mass.) told reporters on a conference call, which was hosted by left-leaning advocacy group Public Citizen and included economist Jeffrey Sachs and law professors Cruz Reynoso and Alan Morrison.
Warren, who did not take questions from reporters, has been a vocal critic of TPP, which emerged as a contentious issue on the presidential campaign trail. President Obama has called for a lame-duck vote on the 12-nation trade agreement, but some Democrats — from progressives like Warren to presidential nominee Hillary Clinton — have split from the president on the issue, and congressional leaders have thrown cold water on the possibility of holding a vote this year.
Warren said the investor-state dispute settlement provision would prompt nations to shy away from tough regulations and give foreign investors an advantage.
“Giving foreign corporations special rights to challenge laws outside of the legal system is a bad deal for everyone except those corporations,” she said. “That’s why I oppose ISDS, why Secretary Clinton and Sen. Kaine oppose ISDS.”
Warren pointed to the TPP’s exemption of tobacco-control laws from ISDS challenges as a small victory, but said the exclusion reveals larger issues with the provision.
“Our trade negotiators claim they fixed some of the problems with ISDS, but the changes they’ve made are window dressing,” she said. “I’m glad the TPP includes this carveout, but the carveout implicitly concedes that ISDS can be used by big companies to stop laws they don’t like.”
The conference call coincided with the release of a letter signed by 223 law professors and economists calling for lawmakers to oppose TPP because of the provision.