Commerce Group CAFTA Ruling Highlights Threat of Foreign Investor Rules Also Included in Korea FTA Even as Mining Firm's Frivolous Challenge of Environmental Policy Is Dismissed on Technicality, El Salvador Must Pay $800,000 http://citizen.typepad.com/eyesontrade/2011/03/commerce-group-cafta-ruling-highlights-threat-of-foreign-investor-rules-also-included-in-korea-fta.html

That El Salvador must pay more than $800,000 in legal fees to defend itself against a frivolous corporate challenge of its environmental laws under the Central America Free Trade Agreement (CAFTA) provides a glaring example of why having the same provisions in the Korea trade pact now before Congress is so dangerous. In fact, there are nearly $9.1 billion in claims in the 14 known investor-state cases outstanding under NAFTA-style deals. None of them relate to traditional trade concerns; all of them relate to environmental, public health and transportation policy...The tribunal in this case made clear that Commerce Group Corp. had the right under CAFTA to challenge El Salvador's mining policy.

The case was dismissed on a technicality: If Commerce Group had simply written a letter to the Salvadoran judiciary informing it that it was waiving its right to challenge revocation of its environmental permits in Salvadoran courts, then Commerce Group's attack on Salvadoran mining policy would likely be going forward under CAFTA.Indeed, when El Salvador attempted to recoup its legal costs, the tribunal sided with Commerce Group that its case was not frivolous. The fact that a corporate attack on a sovereign country's domestic environmental policy before a foreign tribunal would even be possible - much less cost a country almost a million dollars when they win the case - highlights what is wrong with our current trade agreement model.

The same outlandish investor rights were in the trade deal George W. Bush signed with Korea that President Barack Obama now wants to push through Congress early this year. If Congress implements the U.S.-South Korea Free Trade Agreement (FTA), the hundreds of Korean firms operating here would get new rights to skirt our court system and domestic laws and demand taxpayer compensation before foreign tribunals for U.S. policies that they don't like, just as these mining corporations are doing in El Salvador. In contrast to pacts such as CAFTA, the Korea FTA involves a country that has 270 corporate affiliates established in this country - all of which would be newly empowered to attack our public interest laws before foreign tribunals to demand taxpayer compensation for loss of expected future profits.