One of the controversial features of the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership (which is still being negotiated) is a provision called the Investor-State Dispute Settlement (ISDS), whereby a private party can sue a government for violating a trade or investment agreement. Such suits are judged by private arbitration panels whose decisions cannot be appealed. ISDS provisions have existed for many years, but they have rarely been put to use—and when they have been, it has usually been in cases in which a government has destroyed or confiscated a foreigner’s property without adequate compensation. In recent years, however, the number of suits has risen sharply as lawyers have rediscovered the ISDS and expanded its application to the loss of expected future profits. Last year, the energy infrastructure firm TransCanada sued the Obama administration, claiming that the U.S. president had violated North American Free Trade Agreement rules by prohibiting the company from completing the Keystone XL oil pipeline. 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.
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