The Investor-State Dispute Settlement (ISDS) clause in the Transatlantic Trade and Investment Partnership (TTIP) is creating significant tensions between countries, governments, citizens, and corporations that are impacted. The TTIP is a free trade agreement being negotiated between the USA and the European Union, both of whom have well established and respected processes for litigation. The recent conclusion of the 12th TTIP negotiation round in Brussels (https://ec.europa.eu/trade/policy/in-focus/ttip/ ) can provide additional perspective.
The ISDS is a mechanism by which an investor can take legal action directly against the country hosting the investment. The details governing the ISDS are part of international agreements. The most contentious issues for the ISDS in the TTIP involve legal action without involvement of the investor's country of origin, or involvement of the host country's legal system, and the settlement of the claim by arbitrators who are independent of the host country's legal system. Please read the Economist article titled "The Arbitration Game" (10/11/2014) for a brief backgrounder. The article is available on Canvas in the Supplemental Materials folder under Course Content.
ISDS mechanisms allows corporations to sue governments for regulations that may lower returns on private investment, whether these regulations are in the public interest or not. A current example is the spate of lawsuits brought by cigarette manufacturers against governments creating restrictions on sales and packaging of cigarettes in the interests of public health. A situation profiled with dark humor by John Oliver in this video:https://www.youtube.com/watch?v=6UsHHOCH4q8#t=128
Assignment Prompt:
Please research the issue of the ISDS in the TTIP. The arguments for and against including the ISDS in the TTIP are based on diverse concepts such as sovereignty, public interest, corporate interest, ethics, morality and political economy. Please put yourself in either a) The role of a citizen of a TTIP country, or b) The role of an international investor. In that role, please develop your position on the idea of a parallel dispute resolution system. Do you support its inclusion in the TTIP, or are you opposed? Please provide support for your position using concepts from this, and other classes as well as external sources (please cite them). Be sure to integrate your personal values and ethics as appropriate.
Guideline:
This question asks you to examine an important issue in business; the role of governments in balancing the public interest and the interests of investors. Note that the question is normative and asks you to develop a case for what the outcome should be. There is no right answer, only a well-supported and well-argued answer.
This is a complex assignment. Despite its short length, the assignment requires a good foundation in values, ethics, and the global business environment before you can develop your position. Please allow sufficient time for research. You are encouraged to bring in content and ideas from this, and other courses. You should revise and review this paper several times before submitting.
Some useful sources of country level information and reference information (not all are free):
International Business Etiquette and Manners