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If you know anything about the checkered history of the Trans Pacific Partnership, you know that this is coming.

Trans Pacific Partnership Coming

Despite the attitude of the Democratic Party, which has a strong contingent in opposition, President Obama (and former President Clinton and future possible President Hillary Clinton) are for the TPP. (She supported the TPP while calling for protections for labor, the environment, and other regulations. But if the final product is deficient in those areas, she will still support TPP's adoption).

President Obama is in a perfect position to get TPP passed. While there was a Democratic majority in the Senate, passage was in doubt. But now he can work with the Republican majority to get it enacted. And that is precisely where he is headed.

What is wrong with the TPP? It is NAFTA on steroids. Here's how it works. As in NAFTA, there will be whole sections in the TPP that override important national law regarding labor, environment regulations, and the like. Under the U.S. Constitution, a treaty overrides both state and federal law. So the TPP will be the superior law. If a foreign company believes that the TPP is in conflict with an American law, it can bring a lawsuit. But the lawsuit isn't brought in a court, but before a TPP arbitration panel – comprised of private lawyers, some of whom were probably responsible for drafting the TPP in the first place. And whatever the panel decides goes!

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Under NAFTA, for example, Fedex actually sued the Canadian Post Office before a NAFTA arbitration tribunal, arguing that the Canadian government was undercutting Fedex's business in favor of the post office. Fortunately, even the private lawyers on the tribunal rejected that claim, but if they hadn't, Canada would have had to shell out millions of dollars to Fedex.

And here's the kicker. If Fedex doesn't like that the U.S. Post Office is doing, it can sue under NAFTA (as it will also be able to do under TPP) by having one of its “foreign subsidiaries” bring the lawsuit. In other words, an American company can sue its own government in a private court and collect U.S. Taxpayer money by asserting a treaty against rules that the company doesn't like.

S[o – watch out for the TPP, all you who want to protect American sovereign rights. Because once it is enacted, our entire legal system is up for grabs. And for those of you who are Democrats, you can thank your beloved President for the result.


Michael T. Hertz