Explore, Enjoy and Protect the Planet
U.S. -South Korea Free Trade Agreement Falls Short of Fair Trade Promise
The Sierra Club believes that trade done right can foster development and sustainable growth while also protecting workers and the environment in the United States and abroad. Unfortunately, the recently concluded U.S.-South Korea Free Trade Agreement (FTA) falls short of these goals.
Similar to previous FTAs, the U.S.-South Korea FTA contains an Investment Chapter that provides foreign investors and corporations expansive rights to directly challenge public interest laws and regulations for compensation before international tribunals, bypassing domestic courts. These international tribunals are not based on precedent, and lack public accountability and standard judicial ethics. This "investor-state" enforcement was originally included in FTAs with developing countries with no reliable judicial system. Therefore, investor-state provisions are not necessary for an agreement between two developed countries with dependable judicial processes. The U.S.-Australia FTA did not include private enforcement of its investor provisions, and neither does the EU-South Korea FTA.
The U.S.-South Korea FTA would be the first FTA since NAFTA with a major capital exporter that includes investor-state arbitration. This creates a much greater likelihood that U.S. state and federal laws would be challenged in foreign tribunals, exposing U.S. taxpayers to potential large new liabilities and threatening to undermine important public interest policies. The U.S.-South Korea FTA poses a special threat due to the high number of U.S. and Korean companies cross-established in each other's national markets. If ratified and implemented, at least 1,030 corporations with 2,055 establishments across the United States and South Korea would obtain new FTA rights to demand taxpayer compensation through challenges of U.S. and South Korean federal and state laws in foreign tribunals.
We are also troubled that the U.S.-South Korea FTA allows foreign investors and corporations to bring suit over natural resource, services and infrastructure contracts with the federal government. And while we are encouraged that the Administration attempted to achieve greater market access for American autoworkers and manufacturers, we are concerned that the agreement could have the impact of weakening South Korea's emissions standards.
The U.S.-South Korea FTA falls far short of President Obama’s promise of a “smart, fair and strong” trade policy that would create jobs and protect the environment. We need to put pressure on our Members of Congress to oppose the U.S.-South Korea FTA and to build a new model for future trade policy that truly benefits the environment and public interest.
TRANS-PACIFIC PARTNERSHIP GROWS
Malaysia officially joins negotiations for fourth round in New Zealand
The Trans-Pacific Partnership (TPP) free trade agreement gives us the opportunity to address environmental and labor concerns that were ignored in the U.S.-South Korea negotiations and other past FTAs. If fashioned correctly, it can be an important tool to facilitate sustainable development provided that the trading partners have the appropriate legal and institutional structures to address the challenges of liberalized trade. During the third round of negotiations in Brunei Darussalam, Brunei, Malaysia became a full negotiating member of the TPP agreement, bringing the list to nine pacific countries: Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, United States, and Vietnam.
Malaysia’s inclusion in the TPP brings a new set of challenges. Poor enforcement of forestry management in Malaysia has led to illegal logging and contributed to environmental degradation, especially river pollution, erosion, landslides, mud deposits and floods.1 Malaysia also suffers from poaching and illegal wildlife trade of endangered species. In July 2010, Malaysia’s Department of Wildlife and National Parks confiscated a total of 1,050 endangered animals and 111 items made from endangered animal parts.2 However, Malaysia is attempting to combat wildlife trafficking, as they recently passed a new wildlife law that will go into effect this month.3 Although 44 percent Malaysia's government revenue is comprised of oil exports, they have expressed an interest in transitioning to a clean energy economy and eliminating fossil fuel subsidies.4 Trans-Pacific Partnership countries should work with Malaysia to address global climate issues and commit to eliminating subsidies for fossil fuel industries.
The TPP presents an opportunity to address Malaysia's environmental governance challenges and facilitate better coordination and cooperation with trading partners to fight illegal wildlife and logging trade. The TPP also offers an important opportunity to advance U.S. objectives related to climate, as trade rules must support, rather than undermine our efforts to combat climate disruption.
Trans-Pacific Partnership members just concluded their fourth round of negotiations in Auckland, New Zealand on December 11th. They aimed to have well-developed text in most chapters by the end of the week.5 New Zealand civil society groups, concerned that the TPP may fall back on the same failed trade model, protested the negotiations.
As our trade negotiators get closer to drafting the actual text of the TPP during these rounds of meetings, we must call for meaningful reforms of the investment chapter—the primary threat to the public interest. The next round of negotiations is scheduled for February 14th 18th, 2011 in Santiago, Chile.
COMMERCE GROUP CORP TAKES ADVANTAGE OF CAFTA'S INVESTOR PROVISIONS
Wisconsin-based Mining Company suing El Salvador for $100 million
The Central America Free Trade Agreement (CAFTA) contains a dispute resolution system that allows foreign corporations to sue governments when they feel that laws and regulations, including environmental protections, violate a trade agreement. Commerce Group Corp is a Wisconsin-based company that is taking full advantage of these foreign investor rights. They are undermining democracy and limiting El Salvador’s ability to protect its people and environment.
Commerce Group Corp owns a gold mine in El Salvador, less than three miles northwest of the city of Santa Rose de Lima. Their mining activities over the past 40 years have resulted in severe environmental and public health problems. Chronic headaches and kidney disease are only a few examples of the widespread reports of human health problems in the region.6 Also, the water running in the area is 100,000 times more acidic than uncontaminated water found in the same region; it is so toxic that it is nearly devoid of fish. As a result of these problems, the Salvadoran government revoked Commerce Group’s mining permit in September 2006.7 Commerce Group now believes that the El Salvadorian government owes them millions of dollars in lost future profits. In March of 2009, Commerce Group Corp and San Sebastian Gold Mines, Inc acted by filing a notice of intent to File Claim under CAFTA’s foreign investor protections.
On November 12th, 2010, a coalition of 58 community organizations in Milwaukee, WI called on Commerce Group to drop its lawsuit on El Salvador, clean up the environmental damage, and compensate the victims of the mine's pollution.8 The first hearing of the case, on November 15th, 2010, evaluated the preliminary arguments of Commerce Group and the government of El Salvador. The tribunal will submit their written decision by January 13th, 2011.9
For more information on Commerce Group's lawsuit against El Salvador or to become involved in the campaign to put people and the planet above corporate profit, please contact: Rachel Ackoff of the Sierra Club Labor, Workers' Rights, and Responsible Trade program at: Rachel.ackoff@sierraclub.org.
The Sierra Club believes that trade done right can foster development and sustainable growth while also protecting workers and the environment in the United States and abroad. Unfortunately, the recently concluded U.S.-South Korea Free Trade Agreement (FTA) falls short of these goals.
Similar to previous FTAs, the U.S.-South Korea FTA contains an Investment Chapter that provides foreign investors and corporations expansive rights to directly challenge public interest laws and regulations for compensation before international tribunals, bypassing domestic courts. These international tribunals are not based on precedent, and lack public accountability and standard judicial ethics. This "investor-state" enforcement was originally included in FTAs with developing countries with no reliable judicial system. Therefore, investor-state provisions are not necessary for an agreement between two developed countries with dependable judicial processes. The U.S.-Australia FTA did not include private enforcement of its investor provisions, and neither does the EU-South Korea FTA.
The U.S.-South Korea FTA would be the first FTA since NAFTA with a major capital exporter that includes investor-state arbitration. This creates a much greater likelihood that U.S. state and federal laws would be challenged in foreign tribunals, exposing U.S. taxpayers to potential large new liabilities and threatening to undermine important public interest policies. The U.S.-South Korea FTA poses a special threat due to the high number of U.S. and Korean companies cross-established in each other's national markets. If ratified and implemented, at least 1,030 corporations with 2,055 establishments across the United States and South Korea would obtain new FTA rights to demand taxpayer compensation through challenges of U.S. and South Korean federal and state laws in foreign tribunals.
We are also troubled that the U.S.-South Korea FTA allows foreign investors and corporations to bring suit over natural resource, services and infrastructure contracts with the federal government. And while we are encouraged that the Administration attempted to achieve greater market access for American autoworkers and manufacturers, we are concerned that the agreement could have the impact of weakening South Korea's emissions standards.
The U.S.-South Korea FTA falls far short of President Obama’s promise of a “smart, fair and strong” trade policy that would create jobs and protect the environment. We need to put pressure on our Members of Congress to oppose the U.S.-South Korea FTA and to build a new model for future trade policy that truly benefits the environment and public interest.
TRANS-PACIFIC PARTNERSHIP GROWS
Malaysia officially joins negotiations for fourth round in New Zealand
The Trans-Pacific Partnership (TPP) free trade agreement gives us the opportunity to address environmental and labor concerns that were ignored in the U.S.-South Korea negotiations and other past FTAs. If fashioned correctly, it can be an important tool to facilitate sustainable development provided that the trading partners have the appropriate legal and institutional structures to address the challenges of liberalized trade. During the third round of negotiations in Brunei Darussalam, Brunei, Malaysia became a full negotiating member of the TPP agreement, bringing the list to nine pacific countries: Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, United States, and Vietnam.
Malaysia’s inclusion in the TPP brings a new set of challenges. Poor enforcement of forestry management in Malaysia has led to illegal logging and contributed to environmental degradation, especially river pollution, erosion, landslides, mud deposits and floods.1 Malaysia also suffers from poaching and illegal wildlife trade of endangered species. In July 2010, Malaysia’s Department of Wildlife and National Parks confiscated a total of 1,050 endangered animals and 111 items made from endangered animal parts.2 However, Malaysia is attempting to combat wildlife trafficking, as they recently passed a new wildlife law that will go into effect this month.3 Although 44 percent Malaysia's government revenue is comprised of oil exports, they have expressed an interest in transitioning to a clean energy economy and eliminating fossil fuel subsidies.4 Trans-Pacific Partnership countries should work with Malaysia to address global climate issues and commit to eliminating subsidies for fossil fuel industries.
The TPP presents an opportunity to address Malaysia's environmental governance challenges and facilitate better coordination and cooperation with trading partners to fight illegal wildlife and logging trade. The TPP also offers an important opportunity to advance U.S. objectives related to climate, as trade rules must support, rather than undermine our efforts to combat climate disruption.
Trans-Pacific Partnership members just concluded their fourth round of negotiations in Auckland, New Zealand on December 11th. They aimed to have well-developed text in most chapters by the end of the week.5 New Zealand civil society groups, concerned that the TPP may fall back on the same failed trade model, protested the negotiations.
As our trade negotiators get closer to drafting the actual text of the TPP during these rounds of meetings, we must call for meaningful reforms of the investment chapter—the primary threat to the public interest. The next round of negotiations is scheduled for February 14th 18th, 2011 in Santiago, Chile.
COMMERCE GROUP CORP TAKES ADVANTAGE OF CAFTA'S INVESTOR PROVISIONS
Wisconsin-based Mining Company suing El Salvador for $100 million
The Central America Free Trade Agreement (CAFTA) contains a dispute resolution system that allows foreign corporations to sue governments when they feel that laws and regulations, including environmental protections, violate a trade agreement. Commerce Group Corp is a Wisconsin-based company that is taking full advantage of these foreign investor rights. They are undermining democracy and limiting El Salvador’s ability to protect its people and environment.
Commerce Group Corp owns a gold mine in El Salvador, less than three miles northwest of the city of Santa Rose de Lima. Their mining activities over the past 40 years have resulted in severe environmental and public health problems. Chronic headaches and kidney disease are only a few examples of the widespread reports of human health problems in the region.6 Also, the water running in the area is 100,000 times more acidic than uncontaminated water found in the same region; it is so toxic that it is nearly devoid of fish. As a result of these problems, the Salvadoran government revoked Commerce Group’s mining permit in September 2006.7 Commerce Group now believes that the El Salvadorian government owes them millions of dollars in lost future profits. In March of 2009, Commerce Group Corp and San Sebastian Gold Mines, Inc acted by filing a notice of intent to File Claim under CAFTA’s foreign investor protections.
On November 12th, 2010, a coalition of 58 community organizations in Milwaukee, WI called on Commerce Group to drop its lawsuit on El Salvador, clean up the environmental damage, and compensate the victims of the mine's pollution.8 The first hearing of the case, on November 15th, 2010, evaluated the preliminary arguments of Commerce Group and the government of El Salvador. The tribunal will submit their written decision by January 13th, 2011.9
For more information on Commerce Group's lawsuit against El Salvador or to become involved in the campaign to put people and the planet above corporate profit, please contact: Rachel Ackoff of the Sierra Club Labor, Workers' Rights, and Responsible Trade program at: Rachel.ackoff@sierraclub.org.