How Transpacific Partnership treaty threatens NC economy, democracy

The Transpacific Partnership treaty currently before Congress will have dire consequences for the North Carolina economy.

Imagine it’s 2018 and you are the owner of a small business in North Carolina with 60 employees that produces water-filtration equipment used in sewage treatment plants. You were particularly excited to hear of state government’s new procurement program to help localities finance purchases of filtration equipment to upgrade their facilities to meet requirements for cleaner water. You know this is necessary for the health of a growing population and to attract businesses and tourists who count on high water quality. You think it’s perfectly appropriate that the state’s law has a “buy local” provision requiring at least 60 percent of the equipment to be purchased from businesses like yours headquartered and operated in North Carolina. After all, you’ve paid state taxes for years, as have your employees, and you know that small businesses are the backbone of job creation in North Carolina. You’re hoping to add employees once you successfully bid for a contract.

Imagine your consternation when you open your local newspaper and read that a Japanese corporation has filed suit against the North Carolina government claiming that this buy-local requirement is illegal and that, as a result, Raleigh has rolled back this law to avoid costly litigation. Reading on, you discover that this suit has not been filed in any U.S. court but before an arbitration panel that the U.S. government agreed to in a “free trade agreement” called the TPP in 2015. The Japanese corporation charges that North Carolina has violated the “national treatment” provision of the TPP, which states that products from a TPP country like Japan must receive treatment “no less favorable” than products of national origin and that the new “buy local” law discriminates against this corporation.

Reading further, you become increasingly confused and angry as you learn that the arbitration panel is part of a new form of global governance called “Investor State Dispute Settlement” in the TPP. The panel has only three members, and they are not judges appointed by a U.S. court, but private arbitration attorneys appointed by a unit of the World Bank. Isn’t this an infringement of American sovereignty? Since when does international arbitration “law” supersede the U.S. Constitution? And when did North Carolina weigh in on creation of this “law,” which undermines states’ rights under our federal system?

In this future, the bad news is that you would be right to be worried. The “buy local” program you had hoped would benefit you and keep wealth in North Carolina is very similar to a “buy local” program created in 2009 by the province of Ontario, Canada, to support its solar and wind energy industries. But Ontario’s “buy local” law was rescinded after a successful 2010 challenge by a Japanese corporation under the ISDS provisions of the World Trade Organization.

The good news is that it’s not 2018, but 2015. Today, Congress has granted President Obama fast track authority to negotiate the Transpacific Partnership, but the treaty is not a done deal until it comes up for a up or down vote before the U.S. Congress later this year. Irrespective of political party, North Carolinians should be deeply concerned about the violations of U.S. sovereignty that have been tucked into provisions of the TPP. We should all urge the North Carolina congressional delegation to vote against the TPP for the sake of American democracy.

This story was originally published July 8, 2015 at 5:33 PM with the headline "How Transpacific Partnership treaty threatens NC economy, democracy."