Category Archives: Trade

Be A Hero hosted a candlelight vigil at the White House calling for a 'True TRIPS waiver' for global vaccine equity and to save lives

Congress and President Biden Must Take Domestic and International COVID-19 Action

Congress and President Biden Must Take Domestic and International COVID-19 Action

Elissa Hackerson
May 13, 2022

How do you carve out a “new normal” in the calm days that follow the urgent times of a pandemic? Two years into life with COVID-19, people in the United States have yet to reach consensus on the path to achieve and maintain normalcy. Medical experts, governments, houses of worship, and ordinary citizens do not accept a uniform standard of safety and protection. Tensions arise over mask requirements in public spaces, vaccines and therapeutics are questioned, restrictions on large public gatherings are shunned, and the efficacy of booster shots is debated. In developed countries like ours, this is privileged discourse. Domestic and international COVID-19 infections persist, but most of us have taken the shot and are now blessed with significantly diminished threats of death and serious illness.

But what about our global siblings in under-resourced nations? How do they fare in places where jabs in the arm aren’t coming because of a lack of political will and resources? The short answer is, not well.

Global Vaccine rates in low-income and middle-income countries are dismally low | Congress and President Biden Must Take Domestic and International COVID-19 Action

© UNICEF/Maria Wamala
COVID-19 vaccinations are being administered in communities hosting refugees, such as Fort Portal, in Uganda.

Globally, only 80% of people in lower-income countries have received at least one dose of a COVID-19 vaccine. The United Nations reports that of the more than 10 billion doses given out worldwide, only one percent have been administered in low-income countries. Here, there is no debate: citizens across the globe that don’t have an economy like ours, and thus lack access to life-saving vaccines and therapeutics, are suffering. They are ravaged by a pernicious disease tamed by remedies in our country because of economic and health inequities: lack of funds to secure the vaccines and therapeutics, well-resourced countries hoarding supply, and Big Pharma’s preference for patent control and profits over sharing the science for lower-cost vaccine production.

Last October, in remarks given at the World Meeting of Popular Movements, Pope Francis called on pharmaceutical companies to release vaccine patents to make COVID-19 accessible by the poor. He noted at the time that only 3%-4% of the population in some countries had been vaccinated. One would hope that Big Pharma and world leaders would reflect on that dismally low vaccination rate, heed the words of the Pope, and take action that values lives over profit. But that didn’t happen.

What can people of faith do? Be a pest for those in poverty here and abroad 

In the Popular Movements meeting, Pope Francis recognized that some consider him to be a “pest” because of his unwavering defense of the poor and vulnerable. It doesn’t stop him in the pursuit of prophetic Christianity and it won’t stop NETWORK, either. As a member of the Catholic Cares Coalition, a national coalition of 60 Catholic religious and non-profit organizations promoting domestic COVID-19 vaccination and working to address COVID-19 vaccine and treatment equity in the U.S. and globally, we advocate for life-saving vaccine policies. Most recently, NETWORK signed on to a coalition letter urging Congress to pass a supplemental funding bill that prioritizes funding for ongoing domestic and international COVID-19 needs.

The pressure for domestic COVID-19 funds is necessary because nationwide, government money that secured hospital resources and rapid response measures during the height of the pandemic are running out. In our current landscape, if the government doesn’t pass a supplemental bill, it is likely that our “new normal” includes locking out Medicaid recipients, the uninsured, and the under-insured from free and deeply affordably COVID-19-related care, treatment and vaccines. It is critical that we provide funding which allows the United States to respond to these needs while also fulfilling our promises to assist those around the world.

NETWORK’s Request to Congress:

We support the Catholic Cares Coalitions request: pass the supplemental funding bill with at least $10 billion in domestic funding and $5 billion in international funds for COVID-19 vaccines, testing, therapeutics and delivery system strengthening.

What’s a TRIPS Waiver for COVID-19 All About?

Laura Peralta-Schulte Speaks at a White House Candlelight Vigil Calling for a True TRIPS waiver | Congress and President Biden Must Take Domestic and International COVID-19 Action

Laura Peralta-Schulte speaks at a White House candlelight vigil in May 2022 calling for a true TRIPS waiver.

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an agreement created when the World Trade Organization was formed in 1995. This agreement restricts the rights to make and distribute patented medicines or materials, including COVID vaccines, testing and treatment, except under emergency conditions.

This Agreement, pushed by knowledge-based economies like the United States and the multinational, research-intensive pharmaceutical industry, imposed a base of protections for intellectual property rights, from patents to copyrights. Johns Hopkins University

In an effort to decrease pandemic deaths and illnesses, a COVID TRIPS waiver was proposed by South African and Indian governments to relax the intellectual property rights protections for medicines and technologies needed to prevent and treat COVID-19. This initial effort to release the science so lives could be saved was rebuffed by developed nations and pharmaceutical companies — who’ve thus far proven maximizing profits and maintaining control of monopolies is more important than saving lives. South Africa and India amended their waiver request so that it subsides in three years. The cap on the TRIPS waiver was intended to make rich countries and Big Pharma in Europe and North America feel better about lost profits and diminished control (in exchange for saving the lives of the global poor), but the measure has yet to draw support.

Are We Our Brother’s (And Sister’s) Keeper?

Congress and President Biden Must Take Domestic and International COVID-19 Action

Ady Barkan appears on screen at a White House candlelight vigil calling for vaccine equity.

Humanitarian efforts to protect our global siblings should trump financial gains and political posturing. After all, the United States is privileged to benefit from Big Pharma’s vaccine supply. Don’t we have a moral obligation to help vaccinate the rest of the world? Pope Francis would say yes!. And so would Ady Barkan, the founder and co-executive director of Be A Hero. During his electoral campaign, Joe Biden promised Barkan that, “if the United States were to discover a vaccine, he would ensure that no patents stand in the way of other countries’ and companies’ mass-producing it.” As president, Mr. Biden has stated that patents and international trade agreements should not be allowed to prevent the affordable production of COVID-19 treatments.

Unfortunately, these have been empty pledges to date. Pfizer and Moderna, two of the companies that received billions of dollars in public taxpayer funding to develop their vaccines, have not shared their innovation with global scientists. This is particularly disturbing in the case of Moderna’s vaccine project which was completely funded by public money. While U.S. tax dollars fueled the Moderna vaccine, the company padded their profit margin, Moderna forecasts at least $19 billion in sales in 2022.

NETWORK and our Catholic and interfaith partners will continue calling on the U.S. government to share live-saving technology and know-how with countries in the global South so that they can begin developing necessary vaccines, testing and treatment for their citizens. For too long, access to healthcare has depended on the charity of rich countries which is neither predictable or sufficient. Justice requires ensuring countries must be able to protect the health and well-being of their own citizens especially in times of crisis. We must shift from an economy of exclusion to one that prioritizes life.

We Continue Putting People over Profits

Domestically, the appetite for COVID-19 prevention measures may be waning, but the disease is here to stay. We must not ignore it, and we must urge our leaders to diminish its ability to compromise health and take lives domestically and globally. Affordable access to shots, therapeutics, testing, and boosters are key as we continue to battle COVID-19 and any variants that emerge. It’s hard to accomplish this goal when the government funding that ushered us into our “new normal” is drying up.

Globally, even if the TRIPS waiver is granted, money will be needed to produce, transport, and administer the vaccine. Congress should act to address our obligation to take care of people at home and abroad in the supplemental COVID funding bill. Pfizer, Moderna, and other biopharmaceutical companies that maintain a monopoly on innovations created with public funds, cannot produce enough doses on their own to vaccinate the world. By protecting their monopoly, they deny billions of people access to vaccinations.

On May 12, 2022, the second Global COVID-19 Summit was held. Its co-hosts, the United States, Belize, Germany, Indonesia, and Senegal, called for global researchers, heads of states, philanthropic executives, and health experts to explore solutions — and make commitments — to “vaccinate the world, save lives now, and build better health security — for everyone, everywhere.” At the onset of the Summit, President Biden announced a major commitment to vaccinating the world’s lower-income citizens.

NETWORK believes this action, combined with the renewed and increased financial support from other global leaders in the West has the potential to be a game changer for global health and lives around the world. Through the National Institutes of Health, the United States has licensed 11 COVID-19 research tools and early-stage vaccine and diagnostic candidates to the Medicines Patent Pool (MPP) so that global manufacturers can use these technologies for the potential development of COVID-19 vaccines, treatments, and diagnostics to benefit people living in low- and middle-income countries.

According to the White House, new financial commitments were made at the Summit that totaled more than $3 billion in new funding above and beyond pledges made to date in 2022. This includes over $2 billion for immediate COVID-19 response and $962 million in commitments toward a new pandemic preparedness and global health security fund at the
World Bank.

See the White House’s account of global commitments made during the summit.

We know that the solution to COVID-19 lies in affordable and widespread access to vaccines, testing and therapeutics. We will continue raising our voices to the White House to oppose Big Pharma’s efforts to exacerbate vaccine inequity in the name of profit. We will continue to urge Congress to pass a supplemental funding bill that prioritizes funding for ongoing domestic and international COVID-19 needs; and we call on President Biden to continue working for an effective TRIPS waiver that makes lifesaving technology available to all.

Calling for Global Vaccine Creation and Access

Calling on the Biden Administration to Support Increased Global Access to Vaccines

Sr. Simone Campbell
February 26, 2021

Today, I joined partners in calling on the White House to support an emergency COVID-19 waiver of World Trade Organization (WTO) intellectual property rules, so that greater supplies of vaccines, treatments, and diagnostic tests can be produced in as many places as possible as quickly as possible.

We have learned over the past year that pandemics are communal struggles. We are all vulnerable, and we all can help control the virus. In our nation, over 500,000 people have died and millions have been infected. The U.S. government has invested over $13 billion in taxpayer funds to create vaccines, and other developed nations have invested as well. Now, we in these rich nations have an obligation to share with the global community. That is the only way to protect the vulnerable here and abroad. Both faith and pragmatics demand it. When we faithfully care for our neighbors, we pragmatically care for ourselves.

The global COVID-19 pandemic has cost too many lives and devastated communities not only in the United States but around the world. At the World Trade Organization’s upcoming General Council meeting March 1-2, I hope the Biden Administration reverses course from the Trump administration and supports a waiver to help speed up the end of this pandemic.

Watch the Press Conference and read other participants’ comments below.

U.S. Representative Rosa DeLauro (D-CT.), House Appropriations Committee chair
“The COVID-19 pandemic knows no borders and the need for vaccine development and dissemination across the globe is critically important. The TRIPS waiver raised by India and South Africa at the WTO would help the global community move forward in defeating the scourge of COVID-19 by making diagnostics, treatments, and vaccines available in developing countries. We must make vaccines available everywhere if we are going to defeat this virus anywhere. The U.S. has a moral imperative to act and support this waiver at the WTO, and I am hopeful that the Biden Administration will support this waiver to help our allies around the globe bring an end to this pandemic.”

 U.S. Representative Earl Blumenauer (D-OR), House Ways and Means Subcommittee on Trade chair
“As a global community, we must come together and use every tool at our disposal to stop this pandemic,” Blumenauer said. “Unfortunately, we have seen intellectual property rules and corporate greed have disastrous impacts for public health during past epidemics, and we need to ensure that this doesn’t happen again. Working to ensure that trade rules do not stunt the developing world’s access to vaccines, treatments, and diagnostic tests is a clear step. It’s the right thing to do not only for our country, but for the entire world.”

U.S. Representative Jan Schakowsky (D-IL), House Senior Chief Deputy Whip and Energy and Commerce Consumer Protection and Commerce Subcommittee chair
“I support the proposed TRIPS waiver because I support equitable vaccine distribution worldwide, because if vaccines aren’t available everywhere, we won’t be able to crush the virus anywhere. The new COVID-19 variants, which show more resistance to vaccines, prove that further delay in immunity around the world will lead to faster and stronger mutations. Equitable access is essential. Our globalized economy cannot recover if only parts of the world are vaccinated and have protection against the virus. We must make vaccines available everywhere if we are going to crush the virus anywhere.”

Paul Farmer, Co-Founder, Partners In Health
“If we want to stop COVID-19 here, we have to stop it everywhere. The world does not have time to wait for the usual, slow, and unequal distribution of treatments, diagnostics, and vaccines. We can take a lesson from the global AIDS movements and make sure patent laws don’t block access to lifesaving therapies for the poor. It’s a similar story for vaccines, which in the case of covid19 we’re so lucky to have and in such short order. Moderna has waived these rights and others should follow suit as we deploy one of the mainstays required to end this pandemic.”

New Agreement, Old Problem for the USMCA

New Agreement, Old Problem for the USMCA

Laura Peralta-Schulte
July 14, 2020

The U.S.-Mexico-Canada Agreement (USMCA), the updated North American trade agreement, came into effect on July 1, 2020. NETWORK and progressive allies worked with Members of Congress to ensure the new agreement contained significantly improved labor standards and labor enforcement. Unfortunately, new evidence shows labor activism remains a deadly undertaking in Mexico even though the new North American trade deal ushered in the first real legal protections for workers there. It is increasing clear that only strict enforcement of the agreement will end violence against union activists and give Mexican workers true protections and freedom to organize for better working conditions.

Since the agreement was signed by President Trump in January 2020, there have been significant threats and violations. U.S. and other multinational corporations have filed over 600 lawsuits to block Mexican labor reforms. The Mexican government has also pushed back on creating a review and redo process for Mexican union contracts.

Further, labor unionists have been the targets of violence and arrest. In May, Oscar Ontiveros Martínez, a Mexican union organizer, was murdered as he was trying to organize mining workers.  The 29-year-old’s killing sent a warning to anyone still thinking about organizing the mines where Ontiveros once helped to lead a strike. Ontiveros was the fourth organizer of the Media Luna strike gunned down in three years. A fifth colleague, Oscar Hernández Romero, disappeared in October. The murders remain unsolved, and no trace of Hernández has been found.

More recently, Mexican labor activist Susana Prieto, a prominent labor lawyer representing exploited workers in Mexico-Texas border maquiladora factories, was held without bail for three weeks on trumped-up charges of “mutiny, threats and coercion” after trying to register an independent union to replace a corrupt “protection” union. Her case reflects the myriad of labor abuses throughout Mexico, where workers fighting for independent unions, better wages and COVID-19-safe workplaces face ongoing abuse and resistance. She was released on July 1. The conditions for her release, including a 30-month internal exile, are designed to end her representation of Matamoros workers seeking independent unions and intimidate workers nationwide seeking to exercise their labor rights. She must end her Matamoros labor organizing, not leave Mexico, and relocate to the state of Chihuahua, where a prosecutor issued new warrants for her arrest.

Mexico has a long history of labor abuse. The new USMCA agreement is a significant new tool to pressure the Mexican government to protect workers, but change will not be quick. Until new labor rules are fully enforced, corporations will continue to exploit workers on both sides of the border.

NETWORK Calls for Affordable Drugs in NAFTA 2.0 Negotiations

Congress Must Demand the Administration Remove New Pharmaceutical Monopoly Protections from the Text of NAFTA 2.0

Laura Peralta-Schulte
May 10, 2019

Laura Peralta-Schulte, NETWORK Senior Government Relations Advocate, participated in a briefing on Capitol Hill to raise concern for policies included in the Trump administration’s ongoing trade negotiations. Read Laura’s speech below:

Good afternoon. My name is Laura Peralta-Schulte and I am a Senior Government Affairs Advocate for NETWORK Lobby for Catholic Social Justice. NETWORK is a Catholic leader for justice founded over forty years ago by Catholic Sisters and open to all who share our passion. Some of you may know us by our campaign, “Nuns on the Bus.”

People of faith across traditions believe every life has dignity and is sacred. NETWORK Lobby grounds our work in the principles of Catholic Social Justice, which hold that access to healthcare is human right because it is necessary for well-being. The Catholic Sisters and activists of NETWORK reject the notion that only the wealthy should have access to care. Our most sacred texts urge us to “Learn to do good. Seek justice. Help the oppressed.” (Isaiah 1:17)

We acknowledge the genius of scientists who create cures for disease and the role industry plays in our health system. Business is a noble calling if performed in the service of the common good.

Provisions in the current NAFTA 2.0 text, however, are not pro-patient and do not promote the common good. Instead, they prioritize profits over patients.

Powerful companies are attempting to use complicated trade negotiations to lock in current U.S. drug policies and prevent Congress from taking reasonable steps to curb drug price gouging. The new agreement creates new roadblocks for generic companies to compete with brand name products after a patent has expired. It also attempt to export our bad policies to our neighbors.

This is the wrong way forward.

The provisions of the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), currently in effect in all NAFTA countries, should continue to be the standard in the new NAFTA agreement. TRIPS calls for respect of intellectual property rights, including those for medicines. It also recognizes each nation’s right to take necessary steps to ensure that medicines are available to all of their residents.

We urge your offices to insist that the Administration change the text of the current Agreement to get rid of the following anti-competitive, anti-patient provisions:

First: The current text of NAFTA 2.0 locks in a minimum 10-year marketing exclusivity period for new biologic medicines. (Article 20.49.1).  These medicines include many new treatments for cancer, heart disease and even vaccines.

This provision would lock in current rules and stop from Congress from being able to make change.

The faith community has particular concern about how this rule would affect Mexico, where access to medicines for many patients is already simply out of reach. According to the OECD data, seven of every 10 Mexicans live in or near poverty.1 If unchanged, even fewer people will be able to afford needed medicines causing preventable suffering and death.

Second: NAFTA 2.0 expands what drugs get special biologic protections and doubles exclusivity for some medicines. This is in Article 20.49.2. Congress expressly excluded certain drugs from additional monopoly protections. This provision, and others, must be changed to conform to U.S. law.

Third: NAFTA 2.0 extends monopoly protection through “evergreening” provisions. It requires nations to extend patents through minor changes without any increased therapeutic benefits for patients well beyond the original 20-year patent. This is in Article 20.36.2.

Lastly, the agreement requires nations to provide patent term extensions or grant longer protections for perceived administrative delays. This is Article 20.44. This provision would block competition from the marketplace and limit Congress from making changes.

No matter what your position is on trade policy, we believe Congress should establish U.S. healthcare policy, not trade negotiators and industry lobbyists.

We believe each nation has a right to ensure residents have access to life-saving treatments.

At the beginning of his pontificate, Pope Francis wrote a letter were he sharply condemned what he called an “an economy of exclusion.” He wrote, “Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say, “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. “

Today, high prescription drug prices force people to choose whether to take the medicines they need, or, instead, to ration or simply go without needed treatments in order to be able pay for other necessities like food and shelter. This is wrong.

Congress must say no to an economy of exclusion and insist the Administration remove these provisions from the current text.


View NETWORK’s Principles of Drug Pricing.



Promoting the Dignity of Labor in NAFTA Negotiations

Promoting Dignity of Labor in NAFTA Negotiations

Mary Cunningham
July 30, 2018

When the North American Free Trade Agreement (NAFTA) was signed in 1994, the United States, Canada, and Mexico hailed it as a groundbreaking deal that would bring job growth, economic vitality and improved living standards to all three countries. Despite these promises, the trade deal failed to live up to the hype and has resulted in stifled wages in Mexico and the U.S., mass migration from Mexico to the U.S., and no improvement in labor and environmental protections.  After the passage of NAFTA, the U.S. flooded the Mexican market with corn, decreasing the value of Mexican corn by 66% which led directly to farmer displacement and migration.  Wages in Mexico have fallen below pre-NAFTA levels as have worker’s wages in the U.S. Likewise, America’s small farmers have been forced to compete with large industrial agricultural corporations against which they don’t stand a chance. NAFTA was negotiated by and for the big corporations and has failed workers on all sides of the table.

This brings us to the current state of NAFTA today. During his campaign and continuing into his presidency, President Trump dismissed NAFTA, declaring it “the worst trade deal.” He believes NAFTA is to blame for the loss of U.S. manufacturing jobs and the exportation of jobs to countries with lower production costs, like Mexico. President Trump’s distaste for NAFTA set the stage for NAFTA renegotiations led by U.S. Trade Representative, Robert Lighthizer. Thus far, there have been 7 rounds of talks, but no conclusive agreement has been reached.  Following the election of the new Mexican president, Andrés Manuel López Obrador (AMLO), negotiators from Mexico, Canada, and the U.S. have a window to try to conclude an agreement; however, the negotiations are more likely to continue into 2019.  As the Wall Street Journal reports, several of Andrés Manuel López Obrador’s priorities align with President Trump’s, increasing the likelihood of reaching a consensus on negotiations. Although there has been tension between President Trump and Prime Minister Justin Trudeau following the G-7 meeting, Canada and the U.S. are important trade partners and it is in both of their country’s interest to continue talks.

The main goals of the negotiations include updating trade practices to reflect new advancements in technology and “fixing” parts of the agreement that haven’t worked.  For the administration, this means eliminating certain investor protections that force federal governments to pay fines to transnational companies. It also means improving Mexican labor laws to combat the low wages and unfair labor standards which the administration argues have led to mass migrations and a precipitous decline in U.S. manufacturing jobs.  Part of the U.S. proposal is to have automobile parts manufactured in work zones with a minimum wage of $15. This would spur manufacturing in the U.S. and simultaneously increase wages in Mexico.  Mexican negotiations have expressed openness to these objectives although the business communities in all three countries vigorously object to provisions that protect workers and end investor courts.

Only by paying attention to the plight of the workers impacted by NAFTA can a comprehensive deal be reached. Although negotiations are complicated, a deal that treats all workers with the respect and dignity they deserve is possible. This means guaranteeing stable wages, the right to unionize, and worker protections. NAFTA has not lived up to its expectations, but these negotiations are a promising step forward.


Despite Opposition, Colombia FTA Is Approved By Congress

Despite Opposition, Colombia FTA Is Approved By Congress

David Golemboski
October 14, 2011

On Wednesday, October 12, the U.S. Congress engaged in a rare act of bipartisan agreement. Unfortunately, the House and Senate did not move together to address unemployment, the country’s wealth gap, or other pressing matters of justice, but rather to pass a set of three misguided free trade agreements (FTAs) negotiated during the Bush administration. Both chambers approved FTAs with South Korea, Panama, and Colombia, the last of which is especially troubling. NETWORK has lobbied for several years to oppose the Colombia FTA, and we are disappointed that the agreement passed.

The Colombia agreement is anticipated to have a serious negative impact on many of the most vulnerable people in that country. The agricultural provisions of the agreement will flood the Colombian market with cheap imported commodities, undermining the livelihoods of small-scale farmers and rural communities. This will only accelerate displacement and exacerbate the conditions of instability and conflict that have plagued Colombia for decades. The agreement does not take adequate steps to address pervasive labor abuses. Even the refinements negotiated by the Obama administration are insufficient. Also, intellectual property rights provisions in the agreement will increase the cost of medicines in Colombia and lead to reduced access to critical drugs.

The good news concerning Wednesday’s vote is that a significant number of members of Congress stood in opposition to the flawed Colombia FTA. The months (years!) of lobbying by faith, labor, and human rights advocates helped to rally a strong statement of concern. NETWORK lobbyists made dozens of visits to congressional offices, and NETWORK members sent thousands of messages opposing the FTA. Unfortunately, President Obama had long ago abandoned his 2008 campaign promises to oppose the agreement, but nevertheless over 82 percent of Democrats voted against the Colombia FTA. Supporters of global trade justice should find reason for hope in the large number of votes against the agreement.

The coming months and years will challenge us to build on this work in fighting for fair and responsible trade agreements. The Obama administration has been working for over a year to negotiate the Trans-Pacific Partnership Agreement between the U.S. and Pacific-rim countries. The administration has committed to securing a “high-standards” agreement, but it is unclear if this will amount to anything more than words. As the agreement proceeds through negotiations and eventually moves to the stage of congressional consideration, people of faith must raise the voice of justice to demand that U.S. global trade policies support authentic development and not merely corporate interests.

The passage of the Colombia FTA was a disappointing end to several years of advocacy on this issue, but it sets the stage for continued vigorous work to ensure just trade policy going forward.

Blog: Trade Agreements Can Have a Huge Impact on a Nation’s Life

Blog: Trade Agreements Can Have a Huge Impact on a Nation’s Life

By Carolyn Burstein
October 16, 2014

Included in every significant U.S. trade deal of the past 25 years is a system of private tribunals, known as the Investor-State Dispute Settlement (ISDS), which allows corporations to sue governments when they feel that their financial interests have been breached by a government policy, rule or regulation. These suits are not heard in any court, but in an extra-governmental tribunal consisting of three judges engaged for just that one case. And there is no appeal from that tribunal to a higher court. Under ISDS, there is no higher court.

The position of the U.S. Trade Representative (USTR), who represents the U.S., is that ISDS attracts foreign investment by protecting investors from government expropriation or rogue judgments in countries with weak judicial systems. The inclusion of ISDS mechanisms in the Transatlantic Trade and Investment Partnership (TTIP), the most significant trade agreement between the U.S. and the EU currently in negotiation, has actually endangered its passage because of growing opposition from strong constituencies in both the EU and the U.S. At this point, officials in both areas as well as their respective business groups support the inclusion of ISDS in the TTIP, although approval is waning among EU leadership (more on this later).

While the above reasons of the USTR for favoring ISDS hardly pertains to the EU where well-established legal systems and effective protections for investors exist, the U.S. insists that the goal of the TTIP is to close loopholes in existing bilateral deals and set a high standard for future trade agreements, especially in countries whose judicial systems are not as highly developed as those in Europe. However, those arguments have not convinced the majority of those who oppose ISDS.

The Greens/European Free Alliance in the European Parliament has written several reasons on its website why ISDS is not needed in the TTIP and they are similar to arguments presented by groups on both sides of the Atlantic. These “fundamental flaws” in the dispute system were listed in mid-July 2014 after a period of public consultation (a significant exercise in transparency not used as extensively in the U.S.):

  • ISDS has a chilling effect on regulations because of the possibility of a costly legal dispute between a government and a company. The costs of defending a case are so high — $8million on average — as to act as a disincentive to public policies that might affect corporate interests. The threat alone acts as a deterrent for governments in their efforts to protect citizens or their environment.
  • Almost 75,000 companies (the number of U.S. companies operating in the EU and vice versa) could potentially seek damages from the U.S. and the EU governments (thus citizens, through taxes).
  • Only foreign investors can use ISDS panels (or tribunals); regular citizens and domestic companies must continue to use the normal legal system of courts.
  • ISDS is explicitly designed to operate outside the regular legal system and does not require that local remedies be exhausted, thus undermining democracy and the rule of law.
  • ISDS allows companies to sue governments for any legislation they deem unfair or inequitable that is developed after the treaty becomes effective, thus fundamentally shifting the balance of power between investors and states in a way that undermines fair resolution of legal disputes.
  • ISDS is not bound by legal precedent, which makes many of its decisions seem arbitrary and introduces a high level of uncertainty into the system.
  • ISDS is the only international dispute settlement system giving rights to corporations instead of states.
  • EU guidelines mandate an impact assessment in any situation where substantial sums can be transferred from the EU to foreign entities. Such an impact has never occurred.
  • ISDS proceedings are held behind closed doors and are totally non-transparent even though cases may involve an issue of high public interest.
  • Even without ISDS mechanisms, the EU and U.S. already trade huge volumes ($2.2 billion in 2012), proving that ISDS is unnecessary.
  • Risk insurance is offered to all companies by a host of providers, one of many alternatives to ISDS.
  • Corporations have become more aggressive in the past few years with substantial challenges to government policies. Only 50 ISDS claims were filed in the first 50 years of investor-state dispute settle, but 58 new cases were initiated in 2012 alone. In a September 4, 2014 letter to the USTR, an array of U.S. organizations (e.g. AARP, AFL-CIO, Center on Budget and Policy Priorities — CBPP, Consumers Union) wrote: “Biased outcomes, large compensation awards and the potential for forcing policy changes appear to be driving an unprecedented number of challenges by global corporations.”
  • U.S. state and local governments have no standing to defend the state and local policies that are often challenged in ISDS cases.

Most importantly, in light of the primary reason given by the USTR for supporting ISDS, there is no conclusive evidence that signing investment treaties with ISDS mechanisms leads to increased foreign investment. As a matter of fact, nearly all governments around the globe are doing everything they can to lure foreign investment and few are experiencing difficulty if they have sound domestic policies in place — not trade agreements. For example, neither Brazil nor China has signed many trade treaties, yet both have attracted substantial amounts of foreign direct investment, according to an article in the October 1, 2014 issue of the Financial Times.

It appears that many of the foregoing problems with ISDS as well as numerous concrete examples from countries with ISDS trade agreements have given pause to officials in the EU, especially after they received more than 150,000 comments (mostly against the inclusion of ISDS in the TTIP) during their public consultation period. They have also been influenced by the countries of South Africa, Brazil, India and Indonesia, which have established policies against ISDS-type tribunals in international trade agreements.

Lauding South Africa’s policy of opposition to ISDS, Joseph Stiglitz, a Nobel Prize-winning economist, wrote that the real reason for including such tribunals in any investment agreement is “to restrict governments’ ability to regulate and tax corporations — that is, to restrict their ability to impose responsibilities, not just uphold rights. Corporations are attempting to achieve by stealth — through secretly negotiated trade agreements — what they could not attain in an open political process” (quoted in an April 24, 2014 blog by Thomas McDonagh in “Our Kingdom: Power and Liberty in Britain”).

What are some egregious examples handled by secretive trade tribunals that have impelled a change of attitude in many German officials, including Angela Merkel, in the new President of the European Parliament, Jean-Claude Juncker, and in numerous other EU officials? Here are a handful of many cases that are offensive to most democratic countries:

  • Philip Morris International v Australia’s Plain Packaging Law: the company maintains that Australia has expropriated its intellectual property by insisting that its cigarettes be sold in plain drab packaging with warning labels and stark images of their unhealthy effects on the human anatomy, as Australia’s 2011 law demands. Case is still pending, according to an October 6, 2014 article in the Financial Times.
  •  Eli Lilly (pharmaceuticals) v Canada: the company claims that a Canadian court decision which invalidated one of its patents breached international obligations that are part of NAFTA. This case challenged in a trade tribunal a drug patent ruling from a Canadian court, according to an August 1, 2014 issue of Citizens Press.
  • Lone Pine (Canadian Oil and Gas Company) v Quebec: the company claims that Quebec’s moratorium against all oil and gas exploration activities under the St. Lawrence River, adopted by the province in June 2011, is a form of indirect expropriation without compensation of the company’s potential future profits.
  • Vattenfall (a Swedish energy company) v Germany: the company has sued Germany through the ISDS process for its post-Fukushima decision to phase out nuclear power plants throughout the country. This case followed a prior case in which approval of Vattenfall’s permit to build a coal-fired power plant was conditioned on its taking measures to protect the Elbe River from its waste products. Because of the company insisting on $1.9 billion in damages, Germany eventually lifted its conditions and allowed the company to build the plant, according to a Harold Meyerson editorial in the October 9, 2014 Washington Post.
  • Pacific Rim (a Canadian mining company) v El Salvador: the company contaminated 90% of El Salvador’s surface water and when the government attempted to withdraw its mining permit, Pacific Rim sought $314 million in damages, an outrageous amount based on El Salvador’s GDP (that amount would be equal to nearly 2% of its GDP), according to Lauren Carasik in the October 1, 2014 issue of Foreign Affairs.

The latter case is emblematic of tribunals awarding damages that are not only onerous for struggling economies like that of El Salvador, but force their eventual capitulation, and make them wary of laws sought by environmentalists to prevent global warming. After all, do secretive tribunals have the power to dictate the terms of development for emerging economies?

In the EU environmentalists worry that the TTIP’s inclusion of ISDS panels would allow big U.S. oil companies to challenge anti-fracking laws in various countries and other strict environmental regulations. Consumer groups and others are disturbed by the possibility that the EU’s ban on genetically modified foods will be challenged by American agribusiness. These are major concerns outlined in a March 10, 2014 article written by Shawn Donnan in the Financial Times.

Groups in the U.S. also have concerns about the consequences of accepting the standard clauses of ISDS in the TTIP and other trade agreements. For example, many of these groups point to global pharmaceutical companies that could challenge state legislatures, the Congress, or public agencies in their ability to manage pharmaceutical costs in public programs. Probably the worst fear on both sides of the Atlantic, is the proliferation of cases before ISDS panels at the present time  involving investments in oil, gas and mining — 9 cases are currently pending in bilateral treaties between the U.S. and various countries in the EU, all brought by U.S. investors. At risk are a whole range of environmental laws and regulations.

It is one thing to have liberal economists like Joseph Stiglitz and Paul Krugman argue that ISDS panels undermine the sovereignty of nations, but it is quite another when the head of the trade division at the libertarian Cato Institute, Daniel Ikensen, says that ISDS protections not only have amounted to a corporate subsidy, but also that now such tribunals have become toxic. He continues to plead that ISDS be eliminated from all trade agreements.

Trade officials and supporters of ISDS contend that ISDS tribunals issue commonsense rulings, for the most part, and that frivolous cases rarely succeed. In addition, by allowing negotiations of ISDS to proceed, a welcome opportunity will be created for closing loopholes learned from other trade agreements and will raise the bar for future treaties. But, as some members of the Cato Institute claim, these arguments grossly underestimate the depth of popular opposition to the use of any ISDS mechanisms.

Some remedies that have been discussed include: clearly defining the grounds under which foreign investors may seek compensation; clarifying the nature of each dispute clause; opening all hearings, documents and cases to the public; and, exempting from challenge all regulatory actions designed to protect legitimate public welfare objectives such as public health, safety and the environment (these remedies are discussed in greater detail in a lengthy article in the October 1 issue of the Financial Times and a July 31, 2014 article in a Woodrow Wilson International Center for Scholars’ blog entitled “ISDS: A Sticky Issue in Both the TPP and TTIP”).

Skepticism, even outright rejection of retaining ISDS mechanisms in international trade agreements, is growing in both the EU and the U.S., making remedies appear rather quaint. In the U.S. suspicion of ISDS is partly fuelling the reluctance of Democrats to grant the president fast-track negotiating authority, according to Cato Institute’s Ikenson.

Nations with  poverty requiring them to seek foreign investment, should not be bullied by corporations, whose chief concern is to maximize profits, but should be able to protect their citizens through safeguards to their health, safety and general well-being and in accordance with their needs as well as those of their environment. The supporters of ISDS tribunals have not provided viable proof that they are either essential to international trade agreements or necessary for the implementation of the TTIP.

Blog: June 22 Trade Update – Messy Business of Passing an (Unjust) Trade Bill

June 22 Trade Update – Messy Business of Passing an (Unjust) Trade Bill

By Laura Peralta-Schulte
June 22, 2015

The Obama administration is in the process of negotiating many significant trade agreements with countries around the world.  One such agreement, the Trans-Pacific Partnership (TPP), a trade agreement with 12 countries accounting for 40% of world GDP, is nearing completion.  All trade agreements are negotiated in secret and informed by an elaborate system of official advisory committees that are overwhelmingly corporate.  That is why current trade agreements, while perhaps sounding good in theory, do not promote the common good.  Voices of all affected people are not included in negotiations.

In order to ease the passage of this and other trade agreements, the administration has asked Congress to pass a bill providing “fast track” trade promotion authority (TPA).  Under fast track, TPP and other agreements will receive what is known as a “privileged vote” meaning that time for debate is limited, the agreement cannot be edited, and Congress has a short period of time in which to conduct a simple yes or no vote.  The fast track bill currently under consideration in Congress provides for this special process for six years, so that this administration as well as the next could use fast track to pass other major agreements. Two such agreements are currently under discussion: the Transatlantic Trade and Investment Partnership (T-TIP) – between the U.S. and European Union countries – and the Trade in Services Agreement (TiSA) – a multilateral service agreement.

On May 22, the Senate passed a fast track trade bill that contained three key provisions. The first provision provides fast trade authority for up to six years, the second provides trade adjustment assistance [TAA] to help workers displaced by the trade bill, and the third makes miscellaneous customs modifications – including an amendment on human trafficking.  That bill was sent to the House for consideration.

House Republicans leaders found that it would be difficult to pass comprehensive trade legislation through their caucus, so they decided to split the Senate bill into three pieces.  All three pieces of legislation had to pass the House to reach the president’s desk.  The most controversial provision for Republicans was providing trade adjustment assistance (TAA); conservative Republicans argue that TAA represents wasteful welfare spending.  The leadership was hoping to pass the fast track and customs provisions with large Republican majorities and believed that Democrats would provide the lion’s share of votes for TAA.   To their surprise, the Democrats and a significant number of Republicans did not support TAA.  TAA was voted down by a large majority, sinking – temporarily at least – passage of the trade bill.

President Obama and the House Republican leadership, backed by the business community, responded with backdoor deals and devised an alternative way to get fast track approved.  The House decided to push through a TPA-only bill and quickly passed it late last week by a vote of 218-208. The measure moves to the Senate tomorrow.  If it is passed, the president will gain fast-track authority to sign the TPP into law.  Tomorrow you will receive a special alert, asking you to tell your Senator to vote NO on fast track, so that you can make justice happen and make the common good, not special interests, the top priority in trade agreements.

NETWORK Statement on NAFTA

Renegotiating the North American Free Trade Agreement

Laura Peralta-Schulte
May 18, 2017

Download as a PDF.

When the North American Free Trade Agreement (NAFTA) passed almost a quarter of a century ago, proponents promised it would lead to job creation in North America, increased living standards for workers and protection of the environment. The current agreement has been beneficial to some, but reality shows the agreement falls woefully short of being the boon it was promised to be. NETWORK Lobby for Catholic Social Justice is committed to mending the gaps in income and wealth disparity, and it is clear that our trade agreements have been one of the drivers of that inequality, both domestically and abroad.

Some of the most adversely impacted communities are small farmers in the U.S., Mexico, and Canada. In Mexico, for example, we have seen population losses in the countryside and increased food insecurity. In the U.S. and Canada, there are fewer farmers left to work the land as industrial agriculture takes over production. Rural dislocation has been a leading cause of migration from Mexico to the North because small farmers cannot support themselves at home. Trade policies like NAFTA widen the gaps between rich and poor.

Renegotiating NAFTA offers the possibility to address food insecurity, remedy the incentive that drives rural dislocation, and fix other problems. However, to do so, the Administration must seek changes that puts the needs of vulnerable communities first. To do so, there must be an open and transparent process so that all communities – not just the corporate community – have a seat at the table. We need a trade policy that puts people and the planet first.

Pope Francis reminds us that access to adequate food is a basic human right, one that people of faith are called by the Gospel to address. “We are in front of a global scandal of around one billion — one billion people who still suffer from hunger today. We cannot look the other way and pretend this does not exist… We need, then, to find ways by which all may benefit from the fruits of the earth, not only to avoid the widening gap between those who have more and those who must be content with the crumbs, but above all because it is a question of justice, equality and respect for every human being.”

Trade policy must address issues of inequality and the alleviation of poverty. A people first agenda means creating an environment where small farmers are not be forced to migrate to ensure that their families can survive, workers receive living wages, people have access to life-saving medicines, and the environment is protected from destruction.