Shadow Courts: The Tribunals that Rule Global Trade

by Haley Sweetland Edwards

Overview

A detailed look at one little-known but powerful provision in most modern trade agreements.

International trade deals have become vastly complex documents, seeking to govern everything from labor rights to environmental protections. This evolution has drawn alarm from American voters, but their suspicions are often vague.

In this book, investigative journalist Haley Sweetland Edwards focuses on one crucial aspect of these massive agreements: a powerful provision called Investor-State Dispute Settlement, which allows foreign corporations to sue sovereign nations before little-known supranational arbitration tribunals.

Edwards makes a devastating case that these tribunals (the "shadow courts" of the book's title), which were designed 50 years ago to protect foreign investors' property rights abroad, are now being exploited by multinational corporations at the expense of sovereign nations and their citizens. From the 1960s to 2000, corporations brought fewer than 40 cases through these tribunals. In the last 15 years, they’ve brought nearly 650.

In the course of her reporting, Edwards interviewed dozens of policymakers, activists, and government officials in Argentina, Canada, Bolivia, Ecuador, the European Union, and the United States. The result is a major story, untold before now, about a significant shift in the global balance of power.

Product Details

ISBN-13:	9780997126402
Publisher:	Columbia Global Reports
Publication date:	09/06/2016
Edition description:	New Edition
Pages:	142
Product dimensions:	4.90(w) x 7.40(h) x 0.50(d)

About the Author

Haley Sweetland Edwards is a correspondent at Time. Previously, she was an editor at the Washington Monthly, where she wrote about policy and regulation. From 2009 to 2012, she lived and worked in the Middle East and the former Soviet Union, where she wrote for The Los Angeles Times, The Atlantic, and The New Republic, among other publications. She studied philosophy at Yale and journalism at Columbia University's Graduate School of Journalism. She lives in Washington, D.C.

Table of Contents

Acknowledgments 10

Introduction 12

Chapter 1 Buenos Aires 22

Chapter 2 A Very Short History of Investors' Rights 33

Chapter 3 The Battle of La Pedrera 46

Chapter 4 Panning for Gold 59

Chapter 5 Property Rights 72

Chapter 6 Boxing Ghosts 85

Chapter 7 A Bridge Too Far 97

Chapter 8 Not Your Grandmother's Globalization 109

Further Readings 122

Endnotes 126

Editorial Reviews

"I read it in one night and felt like underlining every word of every page." —Cathy O'Neil, author of Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy

"One of those wonderful, short books from Columbia Global Reports." —Felix Salmon, Slate Money

"Shadow Courts shows how ISDS threats have strained support for free trade around the world." —Politico

"This slim, timely book discusses the history of the provision and the effects that ISDS litigation—a tactic not available to domestic firms—has had on social and environmental legislation and regulation. The version of the ISDS system that has evolved is not likely to withstand close scrutiny." —G. John Ikenberry, Foreign Affairs

"This book is a short, vital introduction to [Investor-state dispute settlement] history and use, the shocking ways in which corporations have used it to bend governments to their will, and the total lack of justification for using such mechanisms in developed, stable countries." —The Week

"Time investigative reporter Edwards charges that the controversial Investor-State Dispute Settlement tribunals at the heart of many current trade deals represent a major shift in global relations in favor of private corporate interest.... Edwards does a great service for the public by turning the spotlight of disclosure on this dark corner of international relations." —Kirkus Reviews

"Haley Sweetland Edwards explains the history of global shadow courts and how these courts have spun out of control, threatening the interests of citizens everywhere including in the United States. Her fantastic book is exactly what long-form journalism is meant to do, to move beyond current events and provide historical perspective that aims at future reform. Shadow Courts should be at the top of the reading list of all those interested in redesigning trade agreements to be in the public interest." —Jeffrey D. Sachs, UniversityProfessor, Columbia University, author of The End of Poverty

"I read it in one night and felt like underlining every word of every page." —Cathy O’Neil, author of Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy

From the Publisher

2016-07-19
TIME investigative reporter Edwards charges that the controversial Investor-State Dispute Settlement tribunals at the heart of many current trade deals represent a major shift in global relations in favor of private corporate interests.These tribunals set up arbitration procedures separate and exempt from the judicial systems and laws of the participating states, and taxpayers of those states can be held financially liable for private investor losses. This can include potential future losses as compensation for government actions against private investments. TransCanada, for example, is presently attempting to extract $15 billion from American taxpayers as compensation for potential losses from the denial of the Keystone XL pipeline project. The company claimed that President Barack “Obama’s decision to block the project violated the North American Free Trade Agreement.” As the author clearly shows, ISDS is involved in many bilateral trade agreements between nations, beginning with the first one in 1969. Edwards also believes that U.S. policymakers, in their enthusiasm for the potential of the mechanism when used against relatively powerless nations, overlooked the possibilities of its use against the U.S. The provision was included in NAFTA, writes the author, because “U.S. and Canadian investors operating in Mexico would need a way to avoid capricious Mexican courts.” The growth in the number of agreements featuring such provisions has been quick. By the early 1990s, there were a few hundred, but “as of 2015, there were more than 3,000.” Furthermore, their use against emerging economies has accelerated markedly—Argentina has faced 54 of them—and the huge increase in foreign investment in the U.S. assures they will be used here, too. This troubling trend has spawned an unanticipated permanent structure of well-paid arbitrators developing their own private body of “law,” outside any properly constituted legal system, to the detriment of states and their taxpayers. Edwards does a great service for the public by turning the spotlight of disclosure on this dark corner of international relations.

Kirkus Reviews