HOW THE TRANS-PACIFIC
PARTNERSHIP IMPACTS PUBLIC SERVICES
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& HOW THE TPP IMPACTS EVERYTHING ELSE
The Trans-Pacific Partnership
Would Undermine Public Services - Affecting Utilities, Transportation, Education and More
The TPP includes rules limiting how governments may regulate the service sector - utilities, transportation, education and more. These rules would cover all services, except those exclusively offered by the government without a fee for use, unless a government negotiates an exception. That means public utilities would be covered, because fees are charged, and services provided both by governments and private firms would be covered by TPP rules. Among the rules are a requirement that private firms be allowed to enter a country and compete under rules limiting governments' ability to apply needs tests and other common policies aimed at ensuring broad access for consumers.
In addition, the extreme "investor-state" provisions of the TPP would allow foreign corporations to drag a government to an extrajudicial tribunal to demand taxpayer compensation for policies relating to essential services such as water, electricity and gas. A review of some investor-state cases brought under related agreements highlights the threat that the TPP, by expanding these radical investor privileges, would pose:
- Undermining Water Services. The French water company Vivendi and affiliated companies made a deal with the outgoing governor of the province of Tucuman to take over the provincial water utility. Customers soon saw a doubling of their bills. The new governor and the provincial legislature tried to limit invoice increases, so Vivendi launched an investor-state case. The company argued that Argentina's federal government should have intervened to block the provincial government from limiting rate increases. The company lost in a 2000 ruling, which said that the federal government should not be held responsible for provincial-level actions. Vivendi didn't like that result, so the corporation tried to get a different one, proceeding to have the case annulled and re-litigated. In 2007, the company finally got a different investor-state panel to agree with it. The tribunal ordered Argentine citizens to pay the company over $100 million.
- Undermining Electricity Services. The law firm King & Spalding brought an investor-state case against Argentina for El Paso International Energy Company, which had invested in Argentina's electricity sector. The tribunal, which handed down its ruling in October 2011, found that the company was guaranteed better treatment than Argentine citizens. They also found that, while none of the specific complaints that the company made actually violated any provision of the U.S.-Argentina investment treaty, all the complaints taken together showed that the company had been treated in a "creeping" unfair fashion. Now, Argentina's taxpayers have been ordered to pay the company over $43 million.
- Undermining Gas Services. In 2001, CMS Gas Transmission Company, a U.S. investor, launched an attack on Argentina, claiming that the country's financial rebalancing policies violated its rights as an investor in a privatized gas distribution company. An investor-state panel awarded CMS over $133 million, stating that the financial stability measures and limitations on gas utility increases violated the company's rights.
FOR A DEEPER UNDERSTANDING