TPP, Trans-Pacific Partnership, ISDS


The highly publicized Trans-Pacific Partnership (TPP) trade agreement has reignited a long-running debate between environmentalists and free trade advocates about the impacts of the investor-state dispute settlement (ISDS) system on the global economy and environmental preservation. The ISDS provision potentially gives foreign investors the right to challenge domestic regulations intending to protect the environment if those regulations discriminate against foreign investors and result in substantial monetary loss to the investors’ property. Critics of the TPP argue that we should learn from the troubling legacy of the North American Trade Agreement (NAFTA), which, according to critics, overwhelmingly favored investors over states and domestic environmental concerns. Given the similarities between the TPP and NAFTA, critics argue that the TPP will similarly favor the rights of foreign investors over environmental regulations. Proponents of ISDS argue that the ISDS system as a whole provides much needed recourse to investors, fosters economic development, and strengthens the rule of law. Furthermore, many proponents argue the TPP provides far greater protections than NAFTA to host-state governments regulating for the public good, and, nonetheless, NAFTA jurisprudence is not as investor-friendly as critics contend. The purpose of this article is to examine the relationship between ISDS and environmental regulations pursued by host-states in an effort to determine whether member countries can realistically enact legislation to protect the environment when they are signatories to the TPP.