Quick Hit Ellyn Fortino Tuesday April 19th, 2016, 4:18pm

Pending U.S. Trade Deals Could Gut Environmental Policies, Report Argues

A leading environmental group is sounding the alarm over climate threats posed by pending trade agreements, including the controversial Trans-Pacific Partnership (TPP).

TPP is a free trade agreement among the United States and 11 other countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The agreement was signed in February and still needs ratification from the U.S. Congress.

In a recent report, the Sierra Club says the TPP and another proposed trade agreement under negotiation between the United States and the European Union, called the Transatlantic Trade and Investment Partnership (TTIP), “threaten efforts to keep fossil fuels in the ground.”

“Like NAFTA [the North American Free Trade Agreement], the TPP and TTIP would give foreign corporations broad rights, including the right to challenge new fossil fuel restrictions that thwart their ‘expectations’ for a stable business environment,” the report explains. “The trade deals would empower the corporations to bypass U.S. courts and take such challenges to tribunals of three private lawyers, unaccountable to any domestic legal system, under a process known as ‘investor-state dispute settlement’ (ISDS).”

The two pending trade agreements would together more than double the number of fossil fuel firms that could challenge U.S. policies and sue for monetary compensation through the ISDS process, according to the Sierra Club. Under the TPP and TTIP, the ability to launch ISDS cases would be extended to 1,000 U.S. subsidiaries of 100 foreign fossil fuel companies. 

If the two trade agreements take effect, the Sierra Club’s analysis shows that “45 of the world’s 50 largest corporate climate polluters” would be among those newly allowed to use the ISDS system to challenge restrictions on fracking, offshore drilling, greenhouse emissions and other climate and environmental policies. 

The 45 corporations in question have collectively produced over 20 percent of historical greenhouse gas emissions and include “all of the eight largest private greenhouse gas emitters outside of the U.S. — BP, Shell, Total, BHP Billiton, Anglo American, RWE, Eni and Rio Tinto,” the report states.

Ben Beachy, senior policy advisor for the Sierra Club’s Responsible Trade Program, wrote the report.

“These trade deals would empower some of the world’s largest polluters – including those fracking on our public lands and drilling off our shores – to use unaccountable tribunals to defend a model of fossil fuel dependency that spells climate crisis,” Beachy said. “To keep fossil fuels in the ground, we cannot afford the new roadblocks posed by the TPP and TTIP.”

TransCanada is among the fossil fuel companies already using ISDS systems under existing trade agreements. In January, TransCanada brought a challenge under NAFTA seeking $15 billion in compensation from the United States over President Barack Obama’s rejection of the Keystone XL pipeline. The company brought its claim on the grounds that the pipeline permit “denial was arbitrary and unjustified.”

“Just as the U.S. begins to transition away from fossil fuels, the TPP and TTIP would empower an unprecedented number of fossil fuel corporations to follow TransCanada’s lead in asking private tribunals to help maintain the crisis-prone status quo,” Beachy wrote in the Sierra Club report. “The fight for climate progress already faces enough obstacles without the additional roadblocks imposed by the TPP and TTIP. Replacing these toxic deals with a new climate-friendly model of trade is an essential component of the growing effort to keep fossil fuels in the ground.”

Labor groups as well as health and consumer advocates have also spoken out against components of the TPP agreement, which has been a key issue in this year’s presidential election cycle. All but one of the remaining presidential candidates, Ohio Gov. John Kasich (R), oppose the TPP.

For his part, Obama maintains that the TPP “will end up being the most progressive trade bill in history,” asserting that the agreement “will have the kinds of labor and environmental and human rights protections that have been absent in previous agreements.”

TPP proponents could push for the trade deal’s approval during the post-election lame duck session in November. Congress would be prevented from making amendments to the finalized TPP thanks to the “fast-track” trade authority granted to Obama by the legislative body last year. The president said he needed fast-track authority in order to close the TPP trade deal.

Stay tuned.


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