Nobel Prize Winner Joseph Stiglitz Against Global Court System


Economist Joseph Stiglitz wrote this letter to Congressional leaders outlining why the global court system, called Investor State Dispute Settlement, should not be a part of trade deals

Among important points, Stiglitz writes:

Proponents argue that ISDS measures are needed to protect the rights of U.S. and other foreign investors in partner countries.  Few would argue that investors should not be secure and made whole in their expectation that governments would not literally expropriate assets.  But if that were the problem, we already have the solution: insurance against the risk provided by the Word Bank Group’s Multilateral Investment Guarantee Agency, and the United States’ Overseas Private Investment Corporation. …

Most fundamentally, if there were something wrong with their system of property rights protection, why should it be changed only for foreign firms.  If there were something wrong with their system of dispute adjudication, why should that be changed only for foreign firms and only for this particular class of disputes. …

Consider asbestos: for years, companies produced a cancer-causing product and through public civil law were forced to pay settlement to their victims.  But if the ISDS rules had been in place, and the offending companies had been owned by a foreign firm from a country with which we had an investment agreement, the asbestos manufacturers would have been able to sue the government for imposing new laws attempting to regulate asbestos manufacturing. The US taxpayer would have been asked to pay the firm not to produce the death-inducing product.

In the asbestos example, US firms would be out of luck but the foreign firms would gain taxpayer compensation.

See the whole text of the letter here.

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