The real intent of these provisions is to impede health, environmental, safety, and, yes, even financial regulations meant to protect America’s own economy and citizens. Companies can sue governments for full compensation for any reduction in their future expected profits resulting from regulatory changes.
This is not just a theoretical possibility. Philip Morris is suing Uruguay and Australia for requiring warning labels on cigarettes. Admittedly, both countries went a little further than the US, mandating the inclusion of graphic images showing the consequences of cigarette smoking.
The labeling is working. It is discouraging smoking. So now Philip Morris is demanding to be compensated for lost profits.
via The Secret Corporate Takeover by Joseph E. Stiglitz – Project Syndicate.