TransCanada Just Gave Environmentalists a Huge Boost

For many, the Keystone XL pipeline was a catalyst for environmental action, and when the State Department denied developer TransCanada’s permit application in November, it was a signal that the environmental movement had triumphed over corporate and fossil fuel interests.  So when the tar sands company announced this week that it was filing a claim against the United States for $15 billion, under provisions in the North American Free Trade Agreement (NAFTA), many were outraged.

But TransCanada’s heavy-handed use of the Clinton-era agreement might be the rallying point activists need to stop another, perhaps even more far-reaching, federal action: the pending Trans-Pacific Partnership.  The TPP is a massive, Pacific Rim trade agreement that would apply NAFTA-like provisions — including prohibitions on interfering with private investment — to the relationships between the United States and 11 other countries, including Japan, Malaysia, and Vietnam.

Environmentalists have long warned that the TPP, which was finalized last fall and is awaiting Congressional ratification, would jeopardize countries’ abilities to implement climate and environmental policies.

Those warnings now come with a high-profile example.

“TransCanada has just done the best possible job of making clear why TPP is such a terrible idea,” Bill McKibben, founder of 350.org and a leader of the environmental movement, told ThinkProgress via email.  “Their position seems to be that NAFTA is a planetary suicide pact that forces us to pour carbon into the atmosphere.  Americans rallied in unprecedented numbers to beat Keystone, and now TransCanada wants to overturn all that energy behind closed doors?”

The culprit in both NAFTA and the TPP is the so-called Investor State Dispute Settlement (ISDS) clause, which allows companies to file claims for damages if government regulations interfere with their business.  The intention of the clause is to prevent countries from preferential permitting, such that a Canadian business has the same right to U.S. development as a U.S. company.  But the process can be used to elevate corporate profits over self-determination and has been broadly criticized by not just environmentalists, but also health care officials, food safety groups, and human rights organizations.
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And for those who say the TPP is a better-crafted deal that its North American predecessor, analysts point to the striking similarities between the TPP and NAFTA.  According to analysis from Public Citizen, a group that lobbies on behalf of the American public, the TPP is no better than NAFTA at preventing the kind of abuse the TransCanada claim represents.
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So, while the TPP negotiations are done — President Obama is reportedly keen on getting it passed during his final year in office — ratification is by no means guaranteed.  In addition to dealing with an intractable Congress, whose Republican leadership says it won’t move on the agreement until after November, this new development is likely to earn the TPP a second look.
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If the 400,000 people who rallied against Keystone XL during last year’s Climate Day of Action put their force against the TPP, it may die.

Otherwise, as McKibben put it, we could find ourselves in “a perfect version of what a corporate-run world looks like.”

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