Tuesday, October 06, 2015

The TPP Deal

The TPP is the largest trade deal in history — involving countries stretching from Chile to Japan, representing 792 million people and accounting for 40 percent of the world economy –and it was drafted in secret. Lobbyists from the big corporations and banks have been involved but not the public.

Trade in the past has usually been a choice between “free trade” and “protectionism.” Free trade meant opening our borders to products made elsewhere. Protectionism meant putting up tariffs and quotas to keep them out. It’s no longer free trade versus protectionism. Big Business and Wall Street want both. The TPP represents not "freer" trade, but re-regulation of trade to entrench corporate profit making.

They want more international protection when it comes to their intellectual property and other assets. So they’ve been seeking trade rules that secure and extend their patents, trademarks, and copyrights abroad, and protect their global franchise agreements, securities, and loans. But they want less protection of consumers, workers, small investors, and the environment, because these interfere with their profits. So they’ve been seeking trade rules that allow them to override these protections. The TPP provides exactly this mix. The pharmaceutical industry gets stronger patent protections, delaying cheaper generic versions of drugs. That will be a good deal for Big Pharma but not necessarily for the inhabitants of developing nations who won’t get certain life-saving drugs at a cost they can afford.

The TPP also gives global corporations an international tribunal of private attorneys, outside any nation’s legal system, who can order compensation for any “unjust expropriation” of foreign assets. The tribunal can order compensation for any lost profits found to result from a nation’s regulations. The foreign subsidiaries of U.S.-based corporations could just as easily challenge any U.S. government regulation they claim unfairly diminishes their profits – say, a regulation protecting American consumers from unsafe products or unhealthy foods, investors from fraudulent securities or predatory lending, workers from unsafe working conditions, taxpayers from another bailout of Wall Street, or the environment from toxic emissions. Imagine a scenario in which the U.S., coming to its senses about climate change, imposes a revenue-neutral carbon fee on fossil energy. According to provisions of the TPP, a fossil-fuel company in a signatory nation could then sue the U.S. for lost profits, real or imagined. The threat is not an idle one. Philip Morris is using a similar provision against Uruguay (the provision appears in a bilateral trade treaty between Uruguay and Switzerland), claiming that Uruguay’s strong anti-smoking regulations unfairly diminish the company’s profits. In 2012, the U.S.’s Occidental Petroleum received an ISDS settlement of $2.3 billion from the government of Ecuador because of that country’s apparently legal termination of an oil-concession contract. Currently, the Swedish nuclear-power utility Vattenfall is suing the German government for $4.7 billion in compensation, following Germany’s phase-out of nuclear plants in the wake of Japan’s Fukushima disaster. Twenty years after NAFTA -- the first free trade agreement to include ISDS -- came into effect there are many examples of laws duly passed by legislatures in the public interest that have been ruled in violation of NAFTA. Some are more egregious than others -- but they all challenge and assign financial penalties against laws that one government or another thought were important enough to implement. According to Scott Sinclair with the Canadian Centre for Policy Alternatives, "Canada has been the target of over 70 per cent of all NAFTA claims since 2005. Currently, Canada faces eight active claims… Foreign investors are seeking several billions in damages from the Canadian government. These include challenges to a ban on fracking by the Quebec provincial government…" Canada has never won a case against the U.S.

"TPP is a deal for big business," said Nick Dearden, director of the UK-based Global Justice Now. "Two fifths of the global economy will be covered by corporate courts, meaning a huge rise in governments being sued for protecting the public interest from corporate greed." Dearden continued: "Medicine prices will rise as Big Pharma gets more power to monopolize markets. Small farmers will suffer from unfair competition with industrial scale agribusiness. No wonder this has been agreed in secret."

Chris Shelton, president of the Communication Workers of America, said the agreement is "bad news" for working families and communities. "Despite broad promises from the Obama administration [the TPP]would continue the offshoring of jobs and weakening of our communities that started under the North American Free Trade Agreement and would mean labor and environmental standards that look good on paper but fall flat when it comes to enforcement." He added "It’s a corporate dream but a nightmare for those of us on Main Street,"

Maude Barlow, national chairperson of the Council of Canadians asks "Just what are we supposed to make of a deal that has been kept secret from the Canadian public? Our own legislators don’t even know what’s in it. The Harper government has signed a deal that will lay off thousands of auto workers and put thousands of dairy farmers in jeopardy while giving even more foreign corporations the right to dictate Canadian policy," she continued, adding that “Stephen Harper negotiated the TPP during an election when his mandate is simply to be a caretaker government. Parliament now has the ability to vote on the TPP. We strongly encourage the next government to reject it."

The Sierra Club, the oldest and largest grassroots environmental organization in the United States, explains “The Trans-Pacific Partnership would empower big polluters to challenge climate and environmental safeguards in private trade courts and would expand trade in dangerous fossil fuels that would increase fracking and imperil our climate. The TPP’s environment chapter might look nice on the surface but will be hollow on the inside, and history gives us no reason to believe that TPP rules on conservation challenges such as the illegal timber or wildlife trade will ever be enforced.”

Criticisms of TPP are likely to continue to when the national parliaments seek to ratify the TPP in the months to come. In the world of business companies targeted with a hostile takeover often use a "poison pill" strategy to make their stock less attractive to the acquirer. What better poison pill for a prime minister than to tie the hands of future governments with a string of corporate rights agreements. As with all other trade agreements, the only "winners" are the 1% - the owners and controllers of capital. The workers and consumers in all of the signatory countries are the losers - always! It comes down to profits over people - every time. These trade agreements are about eliminating hurdles that stand in the way of earning ever-increasing profits by exploiting the planet and workers all over the globe by the huge corporate conglomerates for the 1%. That is the inherent nature of capitalism.

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