Consumers Union to Congress, TPP Dispute System (ISDS) is “Fatal Flaw”

“Consumers Union and Consumer Federation of America urge you not to support approval of the Trans-Pacific Partnership (TPP) trade agreement if presented to you this year, or if presented at any time in its current form,” begins the letter from the producers of the magazine Consumer Reports and the popular website Consumerist.

The non-profit group is sending this letter to every federal representative as the critical lame-duck period of the Obama administration closes in.

A press release at the main site of Consumers Union says:

Consumers Union and Consumer Federation of America sent this letter to all members of the U.S. House and Senate, asking them not to support approving the Trans-Pacific Partnership trade agreement in its current form.


The letter goes straight to the root of the language used to support TPP, taking on the term “barriers”:

The TPP goes far beyond what are traditional mechanisms for facilitating trade–reducing tariffs, lifting or relaxing quotas, and promoting non-discriminatory treatment of goods and services. The TPP addresses a wide range of so-called “non-tariff trade barriers,” implicating important government regulatory policies that have only an incidental, and often unintended, effect on international trade. Speaking of these regulatory policies as “barriers” inherently skews the focus to the costs they impose on industry, to the exclusion of the benefits they provide consumers and the public. And using international agreements to reduce or remove these supposed “barriers” in the name of facilitating international trade makes them susceptible to undue influence from industry interests seeking to relax regulatory compliance requirements.


This is particularly the case when industry interests are given such significant access and voice during a negotiation process that is largely kept confidential from the public… with only one consumer representative out of roughly 600 advisors.


The Investor-State Dispute Settlement (ISDS) process allows industry to “demand compensation from governments in private arbitration tribunals based on claims that consumer protection rules are reducing foreign corporate profits.” To give an example, after a case was filed at World Trade Organization (WTO),

Congress, under threat, obliged and abolished Country of Origin Labels for beef and pork imported from Canada and Mexico. We are concerned that the TPP will lead to more industry-driven challenges to consumer protections, and that ISDS will provide an open avenue for doing so…

ISDS enlists private arbitrators, largely drawn from the ranks of the international business community and their legal advisors, who are likely to have less affinity for the public policy interests that governments are responsible for promoting and protecting. These private judges do not undergo the same scrutiny and oversight that apply to the U.S. federal judiciary.

In the past, ISDS procedures were designed to safeguard against government expropriation of assets. Today, the likelihood of asset expropriation occurring is very low. There are other ways of protecting businesses both in law and in available insurance. On the other hand, ISDS is a tool for deregulation against consumers.

After discussing ISDS at length, the letter concludes:

there is no actual need, and therefore no justification, for including ISDS in this agreement. And there is considerable risk of significant harm to the public. ISDS does not belong in the TPP, and its inclusion is a fatal flaw.

Every member of Congress is probably aware of ISDS by now. While this letter may be informative to us, it is up to us to tell them we know too. #WhosAgainstTPP.


Consumers Reports (CR, previously known as Consumers Union) is an expert, independent, nonprofit organisation, whose mission is to work for a fair, just, and safe marketplace for all consumers. CR publishes Consumer Reports and in addition to two newsletters, Consumer Reports on Health and Consumer Reports Money Adviser with combined subscriptions of more than 7 million. Consumers Reports also has more than 500,000 online activists who help work to change legislation and the marketplace in favor of the consumer interest and several public education Web sites. Since its founding in 1936, Consumers Reports has never taken any advertising or freebies of any kind. The organization generates more than $160 million in revenue and a staff of more than 50.