Expanding property rights under investor-state dispute settlement (ISDS): class struggle in the era of transnational capital

Abstract

How does the inclusion of the investor-state dispute settlement (ISDS) framework in free trade agreements impact property rights and the contested terrain between the public and the private? Authorizing foreign investors and corporations to bring disputes against governments for the costs associated with regulations negatively impacting future profitability or market share, ISDS has become highly controversial in debates over trade agreements. This article surveys the constellation of early investor-state disputes arbitrated under Chapter 11 of the North American Free Trade Agreement (NAFTA) to provide analysis of the politico-juridical ideology articulated by this regime and the nature of the class struggle underlying it. The evidence presented suggests that arbitrators have selectively chosen from a body of unsettled US jurisprudence to expand the boundaries of expropriation and, thus, property rights. Such a development has dramatic theoretical and practical consequences. Concretely, it impacts political accountability and has the potential to generate regulatory chill. Theoretically, it illuminates the class struggle unfolding in the current era of de-centered capitalism characterized by transnational production and financial flows. This article asserts that ISDS dispossesses citizens of the ability to successfully translate popular demands for social protection into regulations when such measures conflict with corporate profitability.

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