Gaius Publius: Tobacco Deaths, TPP and the “Trade” Courts

Yves here. Obama’s pending trade deals, the TransPacific Partnership and the Transatlantic Trade and Investment Partnership, have few fans at Naked Capitalism. But we are always looking for ways for like-minded readers to to alert friends and colleagues to the dangers of the proposed pacts and hopefully take action against them. This post gives concrete, accessible examples of some of the uses made of investor-state dispute  settlement panels, which Gaius calls trade courts (even though they are actually secret arbitration panels) by Big Tobacco.

By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, Americablog, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. A version of this piece first appeared at digby’s Hullabaloo. GP article archive here

This piece is about corporations as predators, as plunderers, in a literal sense. Please follow closely; I want to get past the sense that “predator” is a metaphor. I want to make the case that the word is a literal description of the way the rich harvest the world.

trade deal smoking-baby-indonesia
Indonesia’s “smoking baby

In a recent piece I wrote about how the world’s rich, controllers of the world’s largest corporations, were plundering the world and noted specifically that “plunder” was indeed the right word:

What does [Hillary] Clinton want [from Elizabeth Warren]? Policy ideas, an endorsement, or some second-hand credibility? Policy ideas are free and obvious — rein in Big Money, take away some of their plunder (yes, that’s the right word for it), and give that recovered loot back to the people they took it from.

We tend to see language like this as extravagant. Are corporations literally “killers,” as the Coca Cola Corporation or Ford Motor Company are accused of being? Language like that is received as polemical, even by sympathizers with the anti-corporate cause.

John Oliver, Killer Tobacco and International “Trade” Courts

In that light, consider this piece by the best political comedian on the air, John Oliver, from a recent edition of Last Week Tonight. It’s reasonably short and despite the content, fun to watch. As you do watch though, ask yourself — What is your honest moral evaluation of the CEO class that controls tobacco companies like Philip Morris? In other words, if the corporation were a person, what words would you use to describe their behavior?

Just to draw you in, here’s how he starts:

“Tobacco. It used to be a cornerstone of American life. It was how we knew that sex was over before the female orgasm was invented.”

But that’s not the good part. The good part is helping you clearly see the role of “free trade agreements” as agents of corporate predation. Every example Oliver cites in the clip has a “free trade court” as the corporate weapon of choice. Go back and check. Starting at 5:55 in the clip:

“Countries can try to counteract the influence of that marketing…”

… but they can’t, thanks to “free trade courts.” Examples:

▪ Australia’s 2011 “plain packaging law” challenged in the highest Australian court and was upheld. Then Australia was sued in an “international court” under a 1993 trade agreement for lost “value of its trade mark and intellectual property.” Notice that the news presenter at 8:10 calls this court an “international court” without saying it’s a “trade court.”

▪ Then countries like Ukraine complained to the World Trade Organization (WTO) that Australia was hurting its tobacco exports to the land down under — of which, in the case of Ukraine, there were none. (Did I mention the western-backed Ukraine was a hotbed of neoliberalism?)

▪ Philip Morris International is suing Uruguay for its increasingly aggressive tobacco health warnings. And yes, a trade court is the agent:

The company [PMI] complains that Uruguay’s anti-smoking legislation devalues its cigarette trademarks and investments in the country and is suing Uruguay for compensation under the bilateral investment treaty between Switzerland and Uruguay.[2] (Philip Morris is headquartered in Lausanne.)[3] The treaty provides that disputes are settled by binding arbitration before the International Centre for Settlement of Investment Disputes (ICSID).

▪ Philip Morris International is also threatening to sue Togo, one of the poorest countries on earth, to prevent cancer warning pictures, instead of just words, on cigarette packs (keep in mind that 40% of the country is illiterate). The PMI threat — “an incalculable amount of international trade litigation.” That means “trade courts” again.

▪ Oliver also cites similar threats to Namibia and the Solomon Islands. For Namibia, the corporate agent is, again, trade laws. The New York Times:

Alarmed about rising smoking rates among young women, Namibia, in southern Africa, passed a tobacco control law in 2010 but quickly found itself bombarded with stern warnings from the tobacco industry that the new statute violated the country’s obligations under trade treaties.

And in the Solomons:

[T]the industry responded to the government’s regulations for the new Tobacco Control law by submitting its own version and threatening legal action if it was not implemented[.]

Because the Solomon Islands government stands fully behind its new, and implemented, Tobacco Control law, the only lawsuit venue can be “trade” courts.

World trade — because nothing says “corporate control” like a nation-trumping “trade” court. With brings us to …

The Obama Connection

President Barack Obama is pushing hard, very hard, to get the next trade abomination (sorry, “job”-creator) passed through Congress. Trade agreements kill, as should be obvious above, all for corporate profit (meaning millionaire and billionaire CEO-class compensation). Tobacco deaths are real deaths, just as Ford Pinto deaths — those condemned to die by (psychopathic?) profit-driven humans who do cost-benefit analyses — are still human deaths. And all for profit.

What used to be a Pinto after a rear-end collision

Is this exaggeration? If not, and in that light, why is Barack Obama pushing so hard for TPP? It’s a corporate wet wish, a must-have, just like tax-forgiveness for trillions held untaxed abroad (which Obama also strongly supports, by the way). I can only think of two answers to the question above:

Obama is too deluded to understand what John Oliver sees clearly.

Obama is trading lives for legacy and Clintonian post-presidential income and acclaim.

The second questions asks, in short, “Is Obama is cashing out?” (Do most politicians “cash out” these days?) About that Clintonian income and foundational “legacy”:

One of the largest donors to the Bill, Hillary, and Chelsea Clinton Foundation is the government of Saudi Arabia. The Clintons’ personal net worth now probably exceeds $200 million, and while earned legally, both the money’s sources and the Clintons’ public statements indicate a strong aversion to rocking boats or making powerful enemies.

That’s not chump change, though it’s pocket lint to the Kochs, the Dimons and the Waltons. Does Obama want some of that? The theme of this piece is language and its accuracy. Is the above language polemical or accurate? Or do you have a third answer to the question?

Because if you don’t, you’re stuck with the two answers above. A challenging thought, I know; real cognitive dissonance territory if you have a Democratic party loyalist bone somewhere inside you. But there it is. Neither you nor I are making him do this stuff.

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  1. Integer Owl

    Thanks for posting this. One of the things that gives me hope of at least some of this deal being neutered is that the Australian health officials stand very strongly against tobacco, and succeeded in get plain packaging of cigarettes here. There are a few angles to this, but along with the general wellbeing of citizens and especially the youth, Australia has an aging population and the projected increase of strain on the medical system was accounted for in this decision. I certainly could be wrong, but personally I can’t see the Health Authorities here allowing changes to tobacco laws.

    1. Pepsi

      Seeing every man at your hard physical labor job utterly addicted to cigarettes and legal gambling let’s you how awesome free enterprise can be.

      Hopefully our trans pacific trade partners can kill this deal so that it doesn’t come down to a choice by our democratically elected representatives. Who has trade authority in Japan?

    2. Nathanael

      It’s also worth noting that Uruguay really doesn’t give a damn what international arbitration courts want. It may not be Bolivia (which *really* doesn’t care), but they’re not going to knuckle under.

  2. Integer Owl

    Just to clarify, there has been quite a targeted campaign to get middle-age people to quit smoking, due to the high amount of smoking related illnesses seen by the medical industry. Along with preventing teenagers from starting the habit, of course.

    Anyways, I’m off for a cigarette…


  3. Everythings Jake

    Those who grow tobacco should be ashamed, but of course, like those who join the military intending to do good and end up just shooting at and killing brown and yellow poor people when U.S. elites love the profit in that, what should the farmers do, sacrifice themselves when nobody cares? No, If you’re at all sane/reasonable, of course what we should do is convert tobacco farms to hemp farms, take the privatized profits based on government research from the obscenes who run DuPont (why we don’t have hemp farms) and convert those employee’s efforts to better uses. But of course, that would mean, eek, communitarianism and above all, the sociopaths don’t know how to listen to legitimate complaint (witness, posted on this site, Paul Mason’s interview with some fat-faced, well-fed, German Deputy of Fuck the Poor). So until la guillotine chant encore…

    1. Ivy

      Shame, and its cousin guilt, disappeared from American life in so many areas over the past few decades. Tobacco farmers are just an easy, visible emblem of a larger systemic problem.

      1. hunkerdown

        Perhaps because shame and guilt have been overused for private benefit at public cost. Consider it an adaptation to corporate manipulation.

  4. Winston Smith

    So question to Yves or anyone who understands these so called international courts.

    1) Do these courts have any real power?! If so, who enforces? Why would Australia even listen and just ignore any letter? Would, in this example, PM get their way with some credit agency and down grade Australian debt or paper?

    2) Why not simply revoke said trade agreement or rewrite it or just ignore it.

    I’m doing what I can do get the word out about the TPP.

    I am encouraged by the Japanese though. Japanese farmers there have enormous clout and are completely against the TPP. I was back in my wife’s hometown in a very rural part of Japan and there where “NO TPP” (in English) every where. My father-in-law, a retired lawyer/salaryman, calls the TPP (Baka!)

    1. Integer Owl

      I expect the current trade deal (1993) that big tobacco is using to try to sue Aus. has some loopholes in it, allowing Aus. some wiggle room.

      As for the TPP, I expect all loopholes will be thoroughly lawyered out of the agreement (“won’t make that mistake twice“), and it would have the status of an international treaty. In practice I expect the more vulnerable countries will be bullied more by the corporations.

      Apologies for bombarding this thread. This is something I am very concerned about. I have just downloaded the IP and environmental chapters of the draft agreement from wikileaks so I’ll share the info here once I go through it.

    2. Yves Smith Post author

      They are not courts but secret arbitration panels, and yes, they absolutely do and their decisions are not subject to appeal (except on narrow technical grounds and those appeals hardly every succeed). The German government has paid hundred of millions in euros of fines to a Swedish company, for instance, over lost potential future profits (not making this up) due to Germany’s decision to phase out nuclear power. This is one reason the TTIP might not pass, the German public was hopping mad over this issue and the TTIP would greatly expand the rights of investors to seek recourse via these panels.

      Details here:

      1. Bobby K

        Obama is too deluded to understand what John Oliver sees clearly.

        If O is as smart as people claim, he’s not deluded, he wants to cash out.

        1. MartyH

          Rahm explained how it all worked before O got to the Senate. He’s on a Career Path to be the Billary. Was when the Chicago Machine put him up fot the Senate seat.

        2. jrs

          Obama is not that bright, But you don’t need to be very bright to sell your soul for a pocketful of silver. You just need to have no morals, like Obama.

      2. Nathanael

        OK, let’s be specific here. The arbitration panels have no enforcement power themselves. They rely on finding friendly governments to enforce their edicts. For instance, the German government had the edict enforced against it by other European governments.

        This means that it is *countries with foreign bank accounts and overseas assets* which are at risk of enforcement actions.

        None of these panels can do anything to Cuba, for example, which was cut off from foreign credit and access to foreign assets decades ago.

      1. Vatch

        It’s only a treaty if it’s ratified by 2/3 of the senators present when it’s voted on. So if an international agreement is given the “fast track” process, and it’s only “ratified” by a simple majority, it doesn’t have the constitutional standing of a treaty. From Article II, Section 2, Clause 2:

        “[The President] shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur”

        1. liberal

          I don’t think it’s due to fast track. Apparently there’s a long history of “executive-legislative agreements” or something like that, fast track or no fast track. Basically, they pass what appears to be a treaty by the usual legislative process—majority votes in both houses of Congress, followed by a presidential signature.

          A key question is whether such agreements—laws, really—are binding in the manner treaties are, as the latter are described in the Constitution.

      2. Jeremy Grimm

        I read “All you need to know about the TPP” and “Obama 2006” and defending 1938 programs. The TPP and TTIP appear to have strong, possibly overwhelming support from both parties in the Congress. What can we do about it?

        Write to our Congressmen and Senators? Write to President Obama?
        — Does the President or Congress still care anything about the American people? I am growing skeptical they do.

        Should we march in the streets or create nuisances as Ulysses suggests?
        — What impact did the occupy movement have and what response? The best lesson to be learned from our neverending foreign wars is how ineffectual a direct mano-a-mano assault on the armed forces of this government would be. What does that leave?

        I will write to my Congressmen and Senators … again. I will write to President Obama. I’m too old to march in the streets. But I feel like I’m just pissing into a strong wind.

        At this time when the very foundations of our civilization shear and crack threatening to crumble as if built upon thawing Arctic ground the leadership of this country and the many countries of the world are oblivious to the situation. They rant denials or recite cosy homilies and sing us lullabies and they do nothing. Now they would make treaties and trade agreements washing their hands of authority and responsibility while passing all initiatives for action into the control of soulless incorporeal legal persons.

        What can we do about all this? Corporations will live on, as much as they live now, long after we all are gone back to the dust.

    3. metamars

      I am encouraged by the Japanese though. Japanese farmers there have enormous clout and are completely against the TPP. I was back in my wife’s hometown in a very rural part of Japan and there where “NO TPP” (in English) every where. My father-in-law, a retired lawyer/salaryman, calls the TPP (Baka!)

      That’s great! However, the complete absence of a similar public presence of anti-TPP memes in the parts of NJ that I pass through alarms and depresses me. Where is the organization to bring about a similar level of public-meme-penetration in the US??

      I have addressed these questions in 2 diaries:
      Towards mobilizing successful activism against the plutocracy
      Kevin Zeese Optimistic About Stopping TPP Fast Track but Shouldn’t Be

  5. Fiver

    Obama never ceases to under-perform lowered expectations – to the end a Clinton/Bush toy to play with. Great video from Oliver.

    We are seeing a huge counter-reaction to the small eruptions of democracy here and there over the last several years, for instance, the Snowden revelations, a reaction that encompasses everything from the add-water, instant Islamic State and a renewed Global War on Pawns to TPP to Governments all over the West passing new, more draconian anti-(guess who defines the)threat measures, to pursuit of economic policies proved beyond doubt to favour the wealthy and crooked at the expense of everyone else. It appears the US will have this signed by everyone whether they want it or not. I, for one, am deathly afraid my Government will do so, and all efforts to responsibly manage resources, the environment, pharma, industrial programs/strategy, important parts of banking/finance, the works, are down the tubes. The current PM is a shoe-in to sign as he is welded to the oil industry. What choice do the rest of them have given the evident priority the US has put on this?

    1. Ulysses

      “We are seeing a huge counter-reaction to the small eruptions of democracy here and there over the last several years,”

      Yes, and while discouraging, it also shows the vulnerability of the kleptocrats, some of whom are smart enough to realize just how pissed off at them many of us are today. Small little acts of rebellion need to be multiplied everywhere so that we can exhaust, and slow down the oppressive apparatus. For example, if a security guard tells you to open your bag, don’t do it! Tell the guard that while you can’t prevent them from violating your privacy, you also can’t be forced to do the uncompensated work of opening the bag. Let the guard open the f&^$ing bag! I have done this several times and it has always escalated to the point of management being called. In every instance onlookers have expressed support for my point of view, have joined me in my non-compliance, and management has backed down to avoid a fuss!

      The only way to confront violent, impatient authoritarians is with dignified, non-violent ungovernability. Why should we make it easy for the kleptocrats to control us?

      1. ambrit

        The choke points for “modern” urban civilization are food and energy. To have any chance of succeeding, these modern resistance movements will have to at the least acquire sources of food for their geographical regions. State actors throughout history have shown no compunctions about starving whole regions in the furtherance of their aims. With a food supply, everything else becomes possible. Heirloom seeds anyone?

      2. Jeremy Grimm

        I think it might be unwise to refuse to open your bag as you suggest. Instead of doing something overt which can only open you to unpleasant retaliations might I suggest getting a larger bag, as large as “reasonable” and carrying all kinds of stuff in the bag. Be sure to select stuff you can “reasonably” claim a need to carry. “Reasonable” can be a function of how you are dressed and your demeanor — appear to be a sloppy pack rat and all sorts of things become reasonable. Even so, what you carry should be related to whatever purpose you have for crossing a secured boundary.

        It might also be a good idea to go with plenty of extra time to burn or go through the security for no particular reason in cases where the security boundary is set around a public building like a court or Federal building. To add to the impact choose a very busy time to increase the nuisance you create.

        Overt actions tend receive unpleasant, too often violent responses.

        1. Nathanael

          The key is to never do overt actions solo. You always do them with a group of supporters with cameras, wired for livestreaming.

          This is how the Montgomery Bus Boycott operated, contrary to myth. It was *organized*.

      3. Nathanael

        “We are seeing a huge counter-reaction to the small eruptions of democracy here and there over the last several years,”

        “Yes, and while discouraging, it also shows the vulnerability of the kleptocrats, ”

        All correct. This is *stupid* on the part of the kleptocrats — they are trying the “rule through crackdowns” which was tried in 1848. That just leads to World War I and the October Revolution. (And quicker now with improved communications tech.) But their kleptomania means they are unable to see how self-destructive their actions are.

        The kleptocracy will lose power and collapse; that is not in question. They are too incompetent to stay in power. The questions are (a) when will they lose power, and (b) what will replace them.

        A key to non-violent (or violent) revolutions is to establish alternative, parallel systems of government which can leap in to replace the collapsed tyrant’s government. One very simple form of this is local, or subnational, units of government. The individual SSRs promptly took over when the USSR collapsed. But there are other forms.

        These other forms are what you need to watch. The “investor state arbitration panels” have no democratic legitimacy and no direct enforcement power, so they’re unimportant in this consideration. What *is* important is the internal corporate bureaucracies, which are practically feudal systems where the lower-down swear loyalty to the higher-up in exchange for the promise of a salary. These have the structure of governments. Some (Google, for example) earn more loyalty than others, and have more potential to actually take over governance roles.

        1. Jeremy Grimm

          I sincerely hope you are right and I hope whatever local government you’ve experienced is more responsive and enlightened than mine. I live in a municipality with what I perceive as an especially effective and responsive local government. But I would not be pleased to have this local government become an alternative system.

          I have met the people controlling our local government and contributed money and time, in such small amounts as I could afford, to their election campaigns. They are most interested that I should listen to their direction and little or not interested in listening to me or suffering my questions — or the pointed questions from others. Like you, I believe, I placed hope in having some impact on local politics — at least understanding some of its nusances. I’m not especially ambitious in this but I quickly found reluctance in my local representives to address simple questions which in any way suggested a questioning of their wisdom or authority. Little questions about bus and taxi services and the possibility of gypsy cabs or statements about the image and message sent by the physical premises at our local police station, which resides behind darkened — I would guess bullet-proof glass — are met not with answers but questions for why I should ask. [We don’t have drones or MRAP vehicles yet — and I hope we never will. We do have far more police officers than I would think our low-crime area should need. In truth, I don’t even know and feel very reluctant, even afraid, to ask just how many officers our little area has.]

          The “… huge counter-reaction to the small eruptions of democracy” worry me greatly for the huge-counter-reactions to these counter reactions which could result. As little faith as I have in the current oligarchy I have as little faith in the outcomes of the reaction it could provoke.

          And in fullest Truth, I have no bidding concern in government, economics or politics. I just want to live a full and free life and share that same luxury with my family, friends, countrymen, and all people of the world.

  6. craazyboy

    Soon, thread bombing will be considered a terrorist attack!

    This exploding pinto thing could be photoshoped – we know how easy that is. I’m still trying to match up rear roof pillars to ascertain whether this is really a pinto, or perhaps a Government Motors product – which is good for GDP growth, unions, AND National Debt reduction. Hard to tell, but suspicious enough methinks.

    But whatever. This would never happen to your $50k assembled in Mexico with a Chinese gas tank BMW!

    Besides – it’s not really money if Deutsche Bank securitized it and Wall Street stuffed the AAA security into your pension or 401K.

    Smoking nylon is legal – probably because it probably contains carcinogen BPAs and is as must fun as eating canned cat food.

    Sex used to last an hour when limited by the need for a cigarette. Now it lasts only 8 minutes after 30 years of Coke and McDs excellence.

    What I like to make myself believe is anything that is secret with be like a big surprise party whenever we find out about it. Is that like a Libertarian thing or a government incompetence thing? I’m having trouble deciding?

  7. dee preston

    Doesn’t congress understand that if they fast track TTP they fast track their loss of power. All of theses agreements go against everything america stands for. It opens our government (our tax dollars) to lawsuits from foreign corporations! Who does this??? Big O is insane or totally on the take or both — but Americans are at risk. More risk I mean. Why would anyone open our nation up to this exposure? I’m sure there is a golden ring for O if he gets this through. So disappointed in what America has become.

    1. craazyboy

      “Doesn’t congress understand that if they fast track TTP they fast track their loss of power. ”

      My ever increasingly cynical brain says “YES”. Plausible deniability as cover – their corporate campaign financers win – and then Congress tells the voters they were hoodwinked – “sorry voters, our bad”.

      Lawsuits against governments will become a new profit center – a positive for GDP growth and, if you win, the USG will probably pay your legal cost too – at $1000 an hour or so. That will increase the personal income stats – a lot if it goes all the way to the Supreme Court! Nothing but win-win all the way around. Stay turned to the news so you can keep track of how you’re doing.

      Meds available from O Care – if you can pay for them.

    2. Brooklin Bridge

      As the brutality unfolding in Europe with regards to Greece and austerity indicates,
      1) people come to believe in their own hype (in this case “trade deals” lower costs),
      2) As a species our credulity has exceptional elasticity, and
      3) this elasticity increases by an order of magnitude if it comes to be causally associated with a direct and substantial increase in personal fortune or what some would vulgarly call a payoff.

      These three characteristics ( for which politicians seem particularly fertile as breeding hosts), but particularly the last one, appear to be sufficient to overcome concerns about what – in the mind at least – comes down to a minor quibble about future politicians loosing some degree of power to actually represent, or fleece, their constituency.

      1. Brooklin Bridge

        In other words, the slime, sorry, politicians, in Washington are gainfully, opps, painfully unaware that TTP and TTIP are direct assaults on democracy.

  8. Nat Scientist

    The Global Clinton Insertion is all about the preservation of global monopolies like the Kingdom Tower builders.
    While skyscrapers are easier to build than pyramids for the modern pharaohs; the futility is the same for the population like an energy sink.
    The trade court is invented to disable un-sponsored individuals, wherever they are. .because they can, because disruptors are troublesome to existing cash flows, like Galileo Galilei was. Fast track to Global control, and Justice for just us.

  9. TedWa

    Called Sen Wyden the other day. He’s come out as supporting fast-track and told his aide that fast track of these trade agreements will put Congress out of a job. Don’t these people think beyond the immediate, short term gains? I’m seeing more and more of what Andrew Jackson called the adverse spirit of speculation every day infecting more people. The lust for short term gains taking precedent over common decency.

  10. Will

    I can’t be the only one who reads about those tobacco industry lawsuits against supposedly sovereign nations and thinks “Oh look, a 21st-century take on the Opium Wars!” Ugh.

  11. thelonegunman

    we have technocrats running the ‘economy’ to satisfy corporate interests, operating beyond the overside of elected officials… we have trade agreements overriding laws…

    when did the Uniform Commercial Code trump The Constitution and how did ‘we’ vote for that in our ‘free’ ‘democracy’?

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