What The Free Trade Battle Is Really About

Passage of the Pacific free trade agreement now appears likely, with many wondering what all the discord was about. The issue has typically been portrayed as a no-brainer, but New Yorker economics writer James Surowiecki looks at something called the  Investor-State Dispute Settlement (or I.S.D.S.) provisions of free trade agreements and explains why they raise the hackles of environmentalists and public health advocates, as well as labor unions. Currently, for example, on the basis of an I.S.D.S agreement in another trade agreement – one between Hong Kong and Australia – Phillip Morris Asia is suing to have Australia’s strict cigarette packaging requirements overturned. The matter has not concluded, but typically, Surowiecki writes, these I.S.D.S disputes are resolved not by any country’s domestic court, but by an international arbitration tribunal “made up of three lawyers.” That’s what has the opposition livid, but apparently, on this go-round, without consequence.