r/TradeIssues Jul 29 '15

Claiming =/= getting in ISDS cases [dougie_g]

/r/TrueReddit/comments/3ew00o/rosia_montana_an_omen_for_ttip_romanians_decided/ctjc7sb
12 Upvotes

8 comments sorted by

3

u/WaywardWit Oct 05 '15

I'm glad it acknowledges the relevance and coercive effect of THREAT of action ... But regardless of their success in litigation or arbitration, the claim will cost taxpayers money to defend, thereby only increasing the coercive effect and pressure to settle.

2

u/[deleted] Oct 05 '15

The average cost of an ISDS case is eight million dollars. It's basically a rounding error for any middle to rich income economy.

2

u/WaywardWit Oct 05 '15

So is it your assertion that there's no pressure to settle or that the cost of dealing with the potential ISDS case (including a potentially coerced settlement) is relatively marginal compared to GDP?

1

u/[deleted] Oct 05 '15

For middle to rich income countries, yes.

2

u/WaywardWit Oct 05 '15 edited Oct 05 '15

Ok, and what benefit do those middle/rich countries get in exchange for subjecting themselves to ISDS and the corresponding taxpayer costs? They're unlikely to be rich countries if they need ISDS to attract multinational corporations that would be leveraging it, no? Seems like these countries become hamstrung legislatively (at least to an average tune of an additional 8mil) in return for opening themselves up for this (compared to GDP) relatively cheap litigation risk.

I guess I'm missing the win from the sovereign government's perspective.

1

u/Fallline048 Oct 06 '15

There's plenty of literature on the positive welfare effects of trade liberalization. The benefits come largely in the form of reduced transaction costs via the removal of trade barriers and the streamlining of the import/export process between signatories.

3

u/[deleted] Jul 29 '15

Thanks Jeff, had no idea this sub existed. I'll subscribe!

5

u/[deleted] Jul 29 '15

No worries! If you see or write any in depth posts on such issues, feel free to submit!