Obama, Cameron encourage deal that gives corporations political power

Should businesses in the West have enough political power to potentially change law?

President Barack Obama and British Prime Minister David Cameron have pledged their support in establishing a trade agreement between the U.S. and European union which would give corporations new political powers.

Talks concerning the deal have not formally begun, but U.S. and EU officials have begun establishing ground rules for negotiations. However, an online campaign has highlighted concerns over the "investor-state dispute resolution" included within the agreement.

This type of process gives corporations the political power to appeal governmental laws and send the case to an international court. The court can then impose financial penalties if it believes governmental legislation violates the terms of a trade agreement.

The stipulation is present in U.S.-negotiated pacts with individual nations, but is not currently accepted in disputes within the U.S. and European Union, which is currently governed by WTO standards. Under WTO, a corporation is required to leave the ultimate decision to governmental bodies and law enforcement agencies.

Allowing corporations such power is usually a way to promote business growth and protect firms from corrupt or weak court systems in developing countries. However, critics worry that the new deal will allow companies to compare regulatory systems in multiple countries, and then appeal to have them changed in the most strict. For example, if you compare banking standards between the U.S. and EU, Americas are far more rigorous.

Website tradetreachery.com allows citizens to submit a form opposing the deal, which reads "I oppose including an 'investor-state' dispute resolution in this trade agreement. Corporations should not be allowed to sue my country to break the laws that they do not like."

In contrast, U.S. and EU officials believe that new legislation will improve economic relationships, open markets and encourage competition.

Read More: Huffington Post

Image credit: CBS News

This post was originally published on Smartplanet.com