Overview of the Controversial Negotiation Aspect - Trans-Pacific Partnership Agreement - Essay Example

Global Business Environment OVERVIEW OF THE CONTROVERSIAL NEGOTIATION ASPECT The Trans-Pacific Partnership Agreement is typically viewed as a free-trade agreement, which is presently being exchanged by nine nations throughout the globe. These nations comprise the United States, Singapore, Chile, Vietnam, Brunei Darussalam, Malaysia, Peru and New Zealand (Cheong 1-26). The prime intentions of this agreement can be apparently observed as liberalising as well as managing trade, promoting growth and most vitally, regionally incorporating the economies belonging to diverse Asia-Pacific regions (Electronic Frontier Foundation, “Trans-Pacific Partnership Agreement”). According to various advocacy groups, state officials and environmentalists’ view, Trans-Pacific Partnership Agreement can prove to be one of the visible pathways through which, the vision of liberalising free trade in Asia Pacific regions can be attained. It would be vital to mention that the agreement focuses upon promoting growth through liberalising trade in Asia-Pacific region, as this particular region is identified to be a chief driver of financial development within the global marketplace. The various benefits expected to be obtained from this agreement include enhancement in worldwide supply chains, greater market access towards various goods and/or services, technological developments, increased level of free trade and superior capital along with investment flows (Australian Government, “Trans-Pacific Partnership Agreement Negotiations”). Considering the various facets of Trans-Pacific Partnership, certain negotiations have been apparently prioritised in the Agreement with the aim of liberalising trade within the Asia-Pacific region. These negotiations are identified to be related to Intellectual Property Rights (IPR), legal enforcement in counterfeiting copyright piracies, better access towards medicines, assisting internet providers, protecting trade secrets and promoting investor-state dispute system (Fergusson, Cooper, Jurenas and Williams 1-59). In this similar context, amidst the above-discussed negotiations, one of the negotiated aspects relating to Trans-Pacific Partnership Agreement can be identified in terms of the Investor-State Dispute Settlement System (ISDS). ISDS depicts the notion that the foreign investors belonging to Trans-Pacific Partnership Agreement nations would hold the right to sue the government of host nations in the context of an international tribunal. Contextually, the ISDS has been criticised to certainly enable the foreign investors participating in the Trans-Pacific Partnership Agreement to take legal actions or charge the government for not fulfilling any of its obligations. In most of the US free trade agreements, one of the tribunals commonly cited is the International Centre for Settlement of Investment Disputes (ICSID). This is regarded as an effective form of arbitration court, which is hosted by Word Bank from Washington (Global Research, “The Trans-Pacific Partnership Agreement (TPPA): When Foreign Investors Sue the State”). Reports suggest that the negotiation ISDS is potential to become an effective and powerful system in imposing diverse Trans-Pacific Partnership Agreement rules that are presently being negotiated by the US and other Pacific RIM nations. According to the regimes of ISDS, the foreign investors involved in the Trans-Pacific Partnership Agreement are entitled to obtain the legitimate rights to take up a case in demand that their respective government has not complied with its pertinent Trans-Pacific Partnership Agreement obligations. In precise, it can be affirmed from a broader understanding that the negotiation centred to ISDS is principally viewed as a protest against ineffective performances of the governments in meeting their respective Trans-Pacific Partnership Agreement obligations. Moreover, the mechanism of ISDS is also duly considered as one of the effective measures towards safeguarding the self-interests of the foreign investors. In this similar context, the foreign investors strongly believe that ISDS would aid them to promote greater liberalisation of trade, which in turn, would provide significant benefits to the foreign investors (GlobalResearch, “The Trans-Pacific Partnership Agreement (TPPA): When Foreign Investors Sue the State”). These benefits can be measured in the form of settling investor-state disputes, forming new investment agreements and developing the legal approval for investment arbitration system among others (OECD 183-224). CONTROVERSIAL ASPECTS OF INVESTOR-STATE DISPUTE SETTLEMENT SYSTEM (ISDS) Arguably, certain unfavourable aspects associated with the Trans-Pacific Partnership Agreement eventually make the idea of ISDS a controversial one. One of these aspects is the imposition of negative impacts upon the country whose foreign investors are deemed liable towards charging host government for not complying with its necessary and relevant obligations. This particular stance can be further justified with reference to the fact that judicial sovereignty of the nations would get affected at the time when their financial investors are quite likely to sue their respective governments. This might result in restricting the promotion of free trade of such nations by a certain degree. Moreover, with the implementation of ISDS, the nations would become much susceptible towards costly legal suits taken by their respective financial investors. This might affect the financial resources of the government, imposing high risks to the economic development of the nations (Global Research, “The Trans-Pacific Partnership Agreement (TPPA): When Foreign Investors Sue the State”). The other controversial aspect of ISDS lies in the argument that the mechanism has only the power to order the states in paying out compensations for not complying with their respective obligations, but should be restrained from applying force on the public authorities towards repealing a specific policy. According to the critiques made by civil society, the controversial facet of ISDS can be clearly understood. The critique of the civil society mainly asserted that the notion of ISDS provides ample rights to the business corporations as well as the financial investors. However, the European Commission has argued unfavourably for the raise concern, stating that the idea of ISDS does not offer rights. Rather, it combats against various critical issues such as discrimination, fortification in opposition to illegitimate expropriation and most vitally, an obligation towards treating the financial investors equitably as well as fairly (Powershift, “Seattle to Brussels Network”). Based upon the above discussion, it can be affirmed that the functionalities or the facets of ISDS constitute few of the controversial aspects in relation to Trans-Pacific Partnership Agreement. This can be justified with reference to the fact that supportive arguments made by civil society often view the notion of ISDS as a major pathway towards providing adequate rights to the financial investors in obtaining necessary compensations for the claims. In this regard, the claims mainly arise from non-compliance with any sort of Trans-Pacific Partnership Agreement obligations. On the other hand, arguments in opposition made by civil society recognises the idea of ISDS as a bias notion, augmenting threats to national sovereignty in preventing or taking legal actions against foreign investors’ unethical demands (Columbia University, “Investor-State Dispute Settlement: A Government’s Dilemma”). REASONS FOR CONTROVERSY IN INVESTOR-STATE DISPUTE SETTLEMENT SYSTEM (ISDS) Apart from the facets of ISDS, there are certain reasons for which it is asserted as controversial in relation to Trans-Pacific Partnership Agreement. In this regard, one of the reasons for having such controversies in the negotiation of ISDS is its intention to facilitate the financial investors from acquiring significant profits rather than raising a voice of protest against their discrimination based on various social, political or financial grounds. It would be vital to mention in this similar concern that the notion of ISDS has been suspected towards charging the governments for securing the financial conditions of the investors in the form of securing their profits. Contradictorily, the opponents of ISDS claimed that the system is effective in raising strong voice against the governments because of their non-compliance towards Trans-Pacific Partnership Agreement obligations, instead of safeguarding the self-interests of the financial investors or the companies belonging to diverse Trans-Pacific Partnership nations (CEO, “Civil Society Groups Say No to Investor-State Dispute Settlement in EU-US Trade Deal”; TNI, “S2B Refutes European Commission’s Defense Of Controversial Investor-To-State Dispute Settlement”). The other reason for the controversial aspect of ISDS becomes apparent as it increases chances of direct effects on environmental policies along with public interests. This can be supported with reference to the fact that in recent times, the application of ISDS, for challenging a board assortment of governmental policies has extended dramatically. The enclosure of ISDS, particularly in free trade agreements as well as bilateral investment treaties, has certainly facilitated the business corporations to file in excess of 500 cases in opposition to 95 governments. These cases eventually affect the environmental policies along with the public interests in the involved nations at large (CEO, “Civil Society Groups Say No to Investor-State Dispute Settlement in EU-US Trade Deal”). Specially mentioning, the improvement scope of ISDS is the other major reason for the rising level of controversy surrounding the agreement within the international arena. Justifiably, it has been argued that the system has worked appropriately, but requires improvements in finding an improved balance between the fundamental rights of the states to control and the requirements to safeguard the investors at the utmost level (European Commission 1-10; Friends of the Earth Europe, “The TTIP of the Anti-Democracy Iceberg”). VIEWPOINT ABOUT THE VALIDITY OF THE ABOVE STATED CONCERNS A critical understanding to the viewpoints raised in the controversies persisting in relation to ISDS, can be argued as valid by a certain degree. This might be owing to the reason that according to critics, the foreign investors of diverse Trans-Pacific Partnership nations must not be permitted towards challenging their host governments directly in the circumstance of international law. It is the respective government, who must remain much competent in complying with its necessary obligations with the execution of ISDS. The European Commission has however challenged this particular viewpoint asserting the financial investors who belong to diverse Trans-Pacific Partnership nations have to suffer from greater risks to financial losses in the host country and must be aided with adequate immunity in their legal position. In this regard, the financial investors hold the right to legally charge against their host governments due to their non-compliance with Trans-Pacific Partnership programs, instead of making settlements with the governments through ISDS (Kelsey and Wallach 1-9). CONCLUSION Based on the above discussion, it can be apparently observed that several negotiations have been taken into concern in the stated Trans-Pacific Partnership Agreement for liberalising trade in Asia-Pacific regions, as these regions are duly considered the major drivers of greater financial growth. Evidently, amid the various negotiation aspects, ISDS has been found quite controversial in the Trans-Pacific Partnership Agreement. Correspondingly, the functionalities and the utilisation factors can be duly considered as the major contributory facets highlighted through the controversial ISDS agreement. In this regard, one of the reasons behind controversies related to ISDS can be apparently noted as directly affecting environmental policies along with public interests in the form of filing in excess of 500 cases in opposition to 95 governments due to their non-compliance with Trans-Pacific Partnership obligations. Conclusively, the above-discussed concerns, which prove the notion of ISDS to be controversial, are valid, as a greater improvement of ISDS is required in order to maintain an optimum balance between the fundamental rights of the states to control the foreign investors from inhibiting the nation’s sovereignty and the requirements to safeguard the investors’ interests. Works Cited “Trans-Pacific Partnership Agreement Negotiations.” Australian Government. n.d. Web. 27 Feb. 2014. Cheong, Inkyo. “Negotiations for the Trans-Pacific Partnership Agreement: Evaluation and Implications for East Asian Regionalism.” ADBI Working Paper Series: 1-26. Print. “Investor-State Dispute Settlement: A Government’s Dilemma.” Columbia University. 2014. Web. 27 Feb. 2014. “Civil Society Groups Say No to Investor-State Dispute Settlement in EU-US Trade Deal.” CEO. 2013. Web. 27 Feb. 2014. “Trans-Pacific Partnership Agreement.” Electronic Frontier Foundation. n.d. Web. 27 Feb. 2014. European Commission. “Investment Protection and Investor-to-State Dispute Settlement in EU Agreements.” Fact Sheet: 1-10. Fergusson, Ian F, Cooper, William H, Jurenas, Remy and Williams, Brock R. “The Evolution of the TPP.” The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress: 1-59. Print. “The TTIP of the Anti-Democracy Iceberg.” Friends of the Earth Europe. 2013. Web. 27 Feb. 2014. “The Trans-Pacific Partnership Agreement (TPPA): When Foreign Investors Sue the State.” GlobalResearch. 2014. Web. 27 Feb. 2014. Kelsey, Jane and Wallach, Lori. ““Investor-State” Disputes in Trade Pacts Threaten Fundamental Principles of National Judicial Systems.” Background: 1-9. Print. OECD. “Improving the System of Investor-State Dispute Settlement: An Overview.” Working Papers on International Investment: 1-43. Print. “Seattle to Brussels Network.” PowerShift. 2014. Web. 27 Feb. 2014. “S2B Refutes European Commission’s Defense of Controversial Investor-To-State Dispute Settlement.” TNI. 2014. Web. 27 Feb. 2014. Read More