The ‘medicine’ of the Trans-Pacific Partnership as bitter as ever

The Trans-Pacific Partnership is as dangerous as ever. Denying access to medicines, increased surveillance of Internet usage and mandatory patents at the behest of multi-national corporations are some of the corporate goodies stashed in the TPP’s intellectual property chapter, revealed by WikiLeaks this month. Journalism could even be criminalized.

The more we know about the TPP, the worse it gets, which is why the governments of the 12 countries involved, led by the Obama administration, continue to negotiate in unprecedented secrecy. The latest text of the TPP’s intellectual property chapter shows very little change from an earlier draft also published by WikiLeaks. In a press release accompanying this month’s publication of the revised text, WikiLeaks says:

“[T]here are significant industry-favouring additions within the areas of pharmaceuticals and patents. These additions are likely to affect access to important medicines such as cancer drugs and will also weaken the requirements needed to patent genes in plants, which will impact small farmers and boost the dominance of large agricultural corporations like Monsanto.”

An analysis by Public Citizen explains:

“A rule [would] require the patenting of plant-related inventions, such as the genes inserted into genetically modified plants, putting farmers in developing countries at the mercy of the agriculture industry, including seed manufacturers such as Monsanto, and threatening food security in these countries more broadly.”

The architecture of Melbourne

The architecture of Melbourne

Monsanto, already attempting to gain a stranglehold over the world’s food supply, is hardly in need of yet more favorable treatment. Proprietary seeds and genetically modified organisms are Monsanto’s routes to control what you eat and what farmers grow. Once under contract, farmers are required to buy new genetically engineered seeds from the company every year and the Monsanto herbicide to which the seed has been engineered to be resistant.

Stealth ‘fast-track’ process needed to sneak TPP through Congress

Concomitant to the secrecy shrouding the TPP is the stealth needed to pass the “free trade” treaty. The Obama administration is seeking to be given “fast-track” authority by Congress. Under the fast-track process, Congress cedes its right to make any changes, limits its time to debate, and must schedule a straight yes-or-no vote (no amendments allowed) in a short period of time. Some of the worst “free trade” deals have been approved in this manner, and the importance of fast-track is shown in that the last U.S. trade pact approved, with South Korea, was approved in 2007 — literally one minute before fast-track authority expired!

A fast-track bill, known as Camp-Baucus for its two sponsors, was essentially dead on arrival early this year due to widespread opposition in Congress, mostly by Democrats but also some Republicans. That this arose was because of organized activist work by groups across the United States. But Democratic Senator Ron Wyden, last April, signaled his intention to introduce a new fast-track bill, which he rebranded “smart track.” U.S. activists widely speculate that either Senator Wyden’s thinly disguised “smart track” bill or a more openly fast-track bill, perhaps written by Republicans in the House of Representatives, will be introduced in Congress following the November election with the intention of ramming it through a lame-duck session.

U.S. activists for the past year and a half have focused on stopping fast-track in Congress because it will be virtually impossible to pass the TPP otherwise. Other countries have signaled their reluctance to agree to a final TPP text unless Congress grants the Obama administration fast-track authority. Without such authority, Congress would retain the right to make changes to an agreed-upon treaty, potentially unraveling any deal. The Canadian government, in late September, made this reluctance explicit.

Washington Trade Daily recently reported that the Canadian ambassador to the U.S., Gary Doer, said Canada and other negotiating countries won’t conclude negotiations until the Obama administration has the “political muscle” of trade-promotion authority (the formal name for fast-track). Thus, activists advocate no lessening of vigilance against new attempts to introduce fast-track legislation. A Week of Action Against Fast Track is being organized for November 8 to 14 in the U.S. In Australia, a series of rallies opposing the TPP are taking place this week in Sydney and Canberra.

These efforts come against a renewed push for a completed deal; negotiators are meeting this week, to be immediately followed on October 25 by a ministerial-level meeting in Sydney.

Criminalizing your right to know

There is much to oppose in the Trans-Pacific Partnership itself. A trade-secrets provision in the leaked intellectual property chapter is written in a way that makes it possible for reporting the contents of a future trade deal to be prosecuted. The article in question states:

“In the course of ensuring effective protection against unfair competition … each Party shall ensure that natural and legal persons have the legal means to prevent trade secrets lawfully in their control from being disclosed to, acquired by, or used by others (including state commercial enterprises) without their consent in a manner contrary to honest commercial practices.”

Criminal penalties would be mandatory for:

“the unauthorized, willful access to a trade secret held in a computer system; the unauthorized, willful misappropriation of a trade secret, including by means of a computer system; or the fraudulent (or unauthorized) disclosure of a trade secret, including by means of a computer system.”

WikiLeaks’ publication of this text would be a criminal matter under this provision. This provision would make it mandatory for signatory governments to enact strict laws protecting undefined “trade secrets.” The text of the TPP itself is classified as a secret! Legislators and the public are excluded from seeing the text. In the United States, the only people other than negotiators to have access to the text are 605 “advisers,” who are almost all executives of multi-national corporations or corporate lobbyists.

The Age newspaper of Melbourne summarizes the threat to journalism this way:

“The leaked treaty text shows that in an effort to deal with ‘unfair competition,’ largely from Chinese industrial espionage, the United States has pushed ahead with proposals to criminalise disclosure of trade secrets across the Pacific Rim. The draft text provides that TPP countries will introduce criminal penalties for unauthorised access to, misappropriation or disclosure of trade secrets, defined as information that has commercial value because it is secret, by any person using a computer system.  …

There are no public interest or free speech exemptions. Criminalisation of disclosure would apply to journalists working for commercial media organisations or wherever the leak was considered harmful to the ‘economic interests’ of any TPP country.”

Barriers to cheaper generic medications

Other rules in the TPP intellectual property text would raise barriers to generic medications becoming available and mandating that the terms of patents be extended on demand by patent holders. The United States and Japan even propose language that would require intellectual property enforcement to be elevated above any other legal consideration! The U.S. is also seeking the criminalization of copyright infringement, even in cases where there is no attempt to gain financially, such as a fan posting a work, and would also mandate that Internet service providers remove content upon a corporation’s demand to avoid legal penalties.

The linchpin to enforcement of draconian rules — the worst of which are put forth by the United States with Japan often seconding — is the “investor-state dispute mechanism.” That is a requirement that governments submit to binding arbitration in secret tribunals when an “investor” wants a law changed; the judges in these tribunals are corporate lawyers.

The dispute mechanism is not directly mentioned in the intellectual property chapter, but the one article that purports to uphold national sovereignty is contradicted by another article that mandates that multi-national corporations be given the same rights as national corporations. That clause, standard in “free trade” agreements, is a battering ram used by the secret tribunals to order the withdrawal of laws safeguarding environmental, safety, health or labor standards. These rulings, in turn, become precedents that are used to hand down future harsher decisions.

The Trans-Pacific Partnership, however, is far from the only danger to working people. There is also the Transatlantic Trade and Investment Partnership between the U.S. and the E.U.; the Trade In Services Agreement that would eliminate the ability of governments to regulate the financial industry (50 countries are in on this one); and the Canada-European Union Comprehensive Economic and Trade Agreement. Each of these are designed to elevate corporations to the level of a country, although in practice, because of tribunal precedents, they would elevate corporations above national governments.

“Free trade” agreements have little to do with trade, and much to do with imposing the domination of capital in as many spheres of life as possible. They are massive failures for working people in all countries. They offer, and can offer, nothing but a race to the bottom. Attempting to reform a race to the bottom is a fool’s errand. The TPP and its equally vile cousins must be defeated, and a complete re-conceptualization of trade and who should benefit from trade, substituted. That in turn requires directly challenging prevailing economic systems, otherwise we will be shoveling against the tide.

Please make your comment after we make our decision

Taking a page from their United States counterparts, European Union trade negotiators apparently interpret the word “consultation” as a synonym for “ignore.” Fresh evidence for this attitude toward the public was provided thanks to a leak of the final text of the proposed “free trade” agreement between Canada and the EU.

Although the E.U. trade office, the European Commission Directorate General for Trade, promotes a process of public consultation on its web site, it isn’t the public who gets listened to. The final text of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) includes language mirroring corporate wish lists unchanged from previous drafts despite the fact that the E.U. trade office has not had time to analyze comments submitted by the public.

This farce of a “consultation” process mirrors the secretive negotiations in the better known Trans-Pacific and Transatlantic trade agreements. Corporate lobbyists are well represented in these talks, but the public, watchdog groups and even parliamentarians and legislators are barred from seeing the text. The CETA text is also secret, but was leaked by the German television news program Tagesschau, which published the entire 521-page document on its web site. Yep, 521 pages.

The Rideau Canal in Ottawa (photo by John Talbot)

The Rideau Canal in Ottawa (photo by John Talbot)

Critical to understanding the CETA text is Section 33, the portion simply labeled “dispute settlement.” Under that bland heading a reader finds the muscle — what is known as an “investor-state dispute mechanism.” These “mechanisms,” found in many bilateral and multilateral trade deals, are corporate-dominated secret tribunals that hand down one-sided decisions with no oversight, no public notice and no appeals. Governments that agree to these mechanisms legally bind themselves to mandatory arbitration with “investors” in these secret tribunals on which most of the judges are corporate lawyers who represent the “investors” in other legal proceedings.

Kenneth Haar, a spokesman for the watchdog group Corporate Europe Observatory, in an interview with the EurActiv news site, called the dispute mechanism “an outright danger to democracy,” and said:

“The Commission is not really serious about its own consultation. It’s more about image than substance. … I think those who chose to respond to the Commission’s consultation are being ridiculed.”

Decisions will be final and unaccountable

Employing the standard sweeping language, CETA’s Article 14.2 (the articles here are numbered “14” even though they are found in Section 33) states: “[T]his Chapter applies to any dispute concerning the interpretation or application of the provisions of this Agreement” [page 472]. Article 14.10 goes on to declare, “The ruling of the arbitration panel shall be binding on the Parties. … The panel shall interpret the provisions referred to in Article 14.2 in accordance with customary rules of interpretation of public international law” [page 476].

“Customary” international law is whatever one of these secret tribunals says it is. Environmental regulations, “buy local” laws or any other government action that a corporation claims will hurt its profits can be, and frequently are, ruled illegal by these tribunals when adjudicating disputes under existing trade agreements. Such rulings set precedents that become “customary” international law.

In case these “customary” laws are not clear, on page 480 of the CETA text is Article 14.16, which would supersede national law:

“No Party may provide for a right of action under its domestic law against the other Party on the ground that a measure of the other Party is inconsistent with this Agreement.”

Your law was passed in a democratic process? Too bad — it will be overruled if an “investor” doesn’t like it.

CETA’s proposed rules are consistent with what is being secretly negotiated in the Transatlantic Trade and Investment Partnership between the U.S. and E.U., and in the Trans-Pacific Partnership being negotiated among 12 Pacific Rim countries. A majority of the world’s economy would be removed from any possibility of democratic control should these three trade deals come into effect.

The watchdog group Council of Canadians warns:

“The Harper government has thrown Canadian municipalities under the bus, forever banning ‘buy local’ and other sustainable purchasing policies that help create jobs, protect the environment and support local farmers and businesses. The Harper government has also agreed to lengthen patents and give new monopoly protections to already profitable brand name drug companies, which will needlessly add hundreds of millions to the cost of prescription drugs in Canada.”

Not even water would be exempt. If a water system is privatized and a local government chooses to re-municipalize it because rates have risen while service declines (as has routinely occurred on both sides of the Atlantic), the investor would be able to hold out for an extra windfall under the terms of the trade deal.

Only corporate lobbyists need apply

Although the public, and public-interest groups, are not heard, corporate lobbyists are. For example, there are 605 “advisers” with access to the text of the Trans-Pacific Partnership and who shape U.S. negotiating positions. Virtually every one is an executive of a multi-national corporation or a corporate lobbyist working for an industry association.

It is little different in Europe. Corporate Europe Observatory reports that 92 percent of the closed-doors meetings of the E.U. trade office have been with corporate lobbyists, while only four percent have been with public-interest groups. The trade office has gone so far as to actively solicit the involvement of corporate lobbyists. That perspectives other than those of multi-national capital are not considered can be inferred from the very way public input is solicited, the Observatory said:

“How would the average citizen respond to questions such as: ‘If you are concerned by barriers to investment, what are the estimated additional costs for your business (in percentage of the investment) resulting from the barriers?’ So, clearly, the close involvement of business lobbyists in drawing up the EU’s position for the [Transatlantic Trade and Investment Partnership] talks is a result of the privileged access granted to them.”

It’s no different for CETA, and the same dynamic exists across the Atlantic. Former U.S. Trade Representative Ron Kirk once admitted that if people knew what was in the Trans-Pacific Partnership, it would never pass. It is important to remember that these massive “free trade” deals are not simply business as usual — they go well beyond even the draconian rules of the North American Free Trade Agreement.

So although the competitive pressures of each country attempting to give an advantage to its multi-national corporations does mean that maneuvering through differing interests requires lengthy negotiations — not to mention the sometimes conflicting interests of various industries — at bottom there is a unifying class interest in the overall project. It is true that the U.S. adopts the hardest line in the trade negotiations it participates in (before we even get to the military muscle it applies to force open Southern countries), yet the absence of the U.S. from a Canada-European Union trade deal has made no practical difference to its outcome.

That different countries, different administrations, reach similar one-sided “free trade” agreements in which “investors” are allowed to overrule national laws, and labor, safety and environmental regulations are “harmonized” at the lowest level, is a product of capitalist competition. The rigors of that structural competition mandate expansion and growth — as local markets mature, capital has no choice, if it is to survive relentless pressure from competitors, other than opening new markets and relentlessly cutting costs to maintain profit levels. “Free trade” agreements represent one of the most effective ways to accomplish that.

Popular revolts against these agreements must be continued, and strengthened, but there will be no end to them as long as economic and social decisions are allowed to be made by “markets,” which are not disembodied entities sitting dispassionately on an Olympian throne but rather are the aggregate interests of the most powerful industrialists and financiers.

Financiers seek to have fondest dreams come true through own secret trade deal

The financial industry has grown ever more powerful in recent decades, so perhaps the world’s governments believe it is only fitting that it has its own secret treaty. Similar to “free trade” agreements that curtail regulation of manufacturers, the Trade In Services Agreement’s Financial Services Annex, if passed, would eliminate the ability of governments to regulate the financial industry.

Incredible as it sounds, the annex, being negotiated in secret among 50 countries with continuing advice from lobbyists, would require signatory governments to allow any corporation that offers a “financial service” — that includes insurance as well as all forms of trading and speculation — to expand operations at will and would prohibit new financial regulations.

The driver of this offensive is the “investor-state dispute mechanism.” Deceptively bland-sounding, the “mechanism” is secret tribunals controlled by corporate lawyers that are commonly used under “free trade” agreements. Corporate executives angered because an environmental or safety rule keeps it from earning the highest possible profit can ask for a hearing at a designated tribunal to adjudicate its “dispute” with a government. Many of the judges who sit on these tribunals are corporate lawyers who otherwise represent corporations, and there is no appeal to their one-sided decisions.

City of London expanding (Photo by Will Fox)

City of London expanding (Photo by Will Fox)

The Financial Services Annex contains language identical to standard language used in “free trade” agreements that obligate “equal treatment” of all corporations. The practical effect of that language would result in the profits of speculators being elevated above all other human considerations, similar to proposed agreements such as the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership that would elevate corporate profits above all other considerations, should they come into force.

The countries negotiating the Trade In Services Agreement (TISA) Financial Services Annex, which include the United States, Canada, Australia, Japan and the 28 countries of the European Union, refer to themselves as the “Really Good Friends of Services.” If the “services” in question are services to the financial industry, then these governments are indeed really good friends.

If it is done in secret, it is for a reason

That we know anything at all about the Financial Services Annex is because the text has been published by WikiLeaks. Just as agreements like the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership are being conducted in secret because, as former U.S. Trade Representative Ron Kirk admitted, if people knew what was in the TPP, it would never pass, the annex is kept hidden from view, except for industry lobbyists.

The leaked text of the Financial Services Annex states it should be declassified “five years from entry into force of the TISA agreement or, if no agreement enters into force, five years from the close of the negotiations.” A deal designed to give financiers even more power over the economy is a state secret!

As with the ongoing “free trade” agreement negotiations, one should not hold one’s breath waiting for substantive information on TISA or the annex. The latest round of negotiations were held June 23 to 27 in Geneva, and here is what the U.S. Office of the Trade Representative reported, in full:

“The fourth round of TISA talks was positive and productive, with participants expecting to table offers by the end of this month. Additionally, the draft text of the agreement was further stabilized with the removal of all brackets concerning the ‘negative list’ approach. U.S. negotiators look forward to further work on this important agreement.”

Yep, that’s it. Despite that meaningless ode to bureaucratic blandness, the United States and the European Union are vying to introduce the most draconian language. WikiLeaks, in a press release accompanying its publication of the secret text, said:

“The US and the EU are the main proponents of the agreement, and the authors of most joint changes, which also covers cross-border data flow. … The draft Financial Services Annex sets rules which would assist the expansion of financial multi-nationals — mainly headquartered in New York, London, Paris and Frankfurt — into other nations by preventing regulatory barriers. The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data. … [T]he Agreement is being crafted to be compatible with [the General Agreement on Trade in Services] so that a critical mass of participants will be able to pressure remaining [World Trade Organization] members to sign on in the future.”

The intention is to make the agreement universal, solidifying the financial industry’s grip on the global economy.

A backdoor for Wall Street to eliminate Social Security?

Articles 1 and 2 of the Financial Services Annex place no limits on what constitutes covered “financial services”:

“This section/Annex applies to measures affecting the supply of financial services. … A financial service is any service of a financial nature offered by a financial service supplier of a Party. Financial services include all insurance and insurance-related services and all banking and other financial services.”

“Party” in the text refers to a signatory government. Among other provisions, the annex would require:

  • Countries to change their laws to conform to the annex’s text (Article 3).
  • Countries to “eliminate … or reduce [the] scope” of state enterprises (Article 5).
  • Prohibit any “buy local” rules for government agencies (Article 6).
  • Prohibit any limitations on foreign financial firms’ activity (articles 7 and 10).
  • Prohibit restrictions on the transfer of any data collected, including across borders (articles 8 and 11).
  • Prohibit any restrictions on the size or expansion of financial companies and a ban on new regulations (Article 15).
  • Require any government that offers financial products through its postal service to lessen the quality of its products so that those are no better than what private corporations offer (Article 22).

Beyond the dry, bureaucratic language in which the annex is written is the crucial matter of how the text will be interpreted. Already, under the North American Free Trade Agreement, a corporate parcel-delivery service sued Canada in an attempt to have the Canadian postal system dismantled. That attempt failed, but as the secret tribunals issue more and more rulings granting more and more “investors’ rights” that become precedents for the next dispute, it is no stretch to believe that a tribunal of three “really good friends” of the financial industry could issue a ruling that a government retirement system such as Social Security is an illegal restraint on private profit.

Wall Street has long desired a privatization of Social Security, and the Financial Services Annex might prove to be the ticket for it to achieve its most sought-after goal and thereby put other countries’ public retirement systems at risk. Articles 5 and 22 hold the potential for a tribunal to rule that a government financial service such as a national retirement system is an unfair state subsidy. Consider Goldman Sachs, where customers are referred to as “muppets” with the intention of “ripping eyeballs out.” The infamous “vampire squid” stands out among its financial-industry peers for its ability to, in the words of Matt Taibbi:

“hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage.”

The foregoing, of course, is the standard operating principal of the entire financial industry. Is this who you want to control the possibility of your retiring some day?

European privacy laws would also be in the crosshairs. The U.S. has proposed language allowing cross-border movements of personal data without restriction, while the E.U. (which is negotiating on behalf of its 28 member countries) has proposed language allowing data transfers ameliorated only by boilerplate language that exempts personal privacy unless it “circumvents” the annex — a loophole wide enough to drive a truck through.

Existing “free trade” agreements have similar boilerplate language supposedly granting exceptions for human health and safety, but other clauses requiring adherence to “international norms” supersede such exceptions, rendering them meaningless.

Speculators would have unconditional rights to profit

Article 20 contains language sponsored by the U.S. and the E.U. that would require investor disputes to be heard by a panel having “the necessary expertise relevant to the specific financial service” — an invitation for bankers to sit in judgment of such disputes — and Article 13 contains language pushed by the U.S. that is essentially identical to text typically found in “free trade” agreements requiring “equal treatment” of domestic and foreign corporations.

It is that “equal treatment” language that is the battering ram used by corporations to knock down national regulations on health, safety and the environment.

For example, Chapter 11 of the North American Free Trade Agreement codifies the “equal treatment” of business interests in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or act that might prevent the corporation from earning the maximum possible profit. Canada, in two separate cases, had to reverse bans on chemicals known to be dangerous to human health and pay millions of dollars to the chemical manufacturers.

In one of those chemical cases, the tribunal ruled that, when formulating an environmental rule, a government “is obliged to adopt the alternative that is most consistent with open trade.”

These are the types of precedents that will be used to further engorge financial speculators should TISA and its Financial Services Annex become law.

Those living in countries not yet part of these negotiations also have much to fear. Developing countries are mostly shut out of the TISA negotiations. The coalition group Our World Is Not For Sale, which includes more than 200 member organizations, writes:

“The proposed TISA is thus a cynical attempt of the major proponents of so-called ‘free trade’ and aggressive market opening to ensure that corporate wish lists can be fulfilled, without having to make any changes to existing WTO [rules] demanded by poor countries.”

A separate group of 341 civil-society organizations, in an open letter demanding ministers cease TISA negotiations, note that:

“The TISA negotiations largely follow the corporate agenda of using ‘trade’ agreements to bind countries to an agenda of extreme liberalization and deregulation in order to ensure greater corporate profits at the expense of workers, farmers, consumers and the environment. The proposed agreement is the direct result of systematic advocacy by transnational corporations in banking, energy, insurance, telecommunications, transportation, water and other services sectors, working through lobby groups.”

Red carpet for lobbyists, red-baiting for unions

The watchdog group Corporate Europe Observatory reports that the European Commission trade department, which is negotiating on behalf of the E.U.’s 28 countries, has met more than 20 times with the European corporate lobbying group leading the push for TISA, the European Services Forum (ESF), but has met only once with trade unions. In fact, the ESF was set up with the encouragement of the European Commission in the 1990s, leading to a situation “where the public authority lobbies business to lobby itself,” the Observatory said. On the other hand, the Commission has descended to red-baiting unions when they bring up their concerns:

“When the Commission meets concerns about its aggressive services liberalisation agenda, it reacts with ignorance and mockery. A staff member of the European Federation of Public Service Unions, told Corporate Europe Observatory about one of the Commission’s Civil Society Dialogue meetings: ‘When I voiced concerns over the way public services were being dealt with in the EU’s trade policy, one of the officials basically said ‘there is no going back to the Soviet Union.’ ”

Privatization über alles! The European Commission, the bureaucratic arm of the E.U., is free from democratic accountability and if even if it weren’t there would be little or no accountability considering that the four largest blocs within the European Parliament collectively holding 549 of the 751 seats are broadly in favor of “free trade” agreements; the main center-right and center-left blocs hold a majority of the seats between them.

Nor should help be expected from the other side of the Atlantic. Not only does the U.S. consistently push for the most draconian rules regardless of which party is in the White House but its trade representative, Michael Froman, is a former high-ranking executive at Citigroup Inc. who is a protégé of former Treasury Secretary Robert Rubin, an architect of the Clinton administration’s 1990s dismantling of financial regulations, which led to the next decade’s economic collapse.

Multi-national corporations are well organized across borders; financiers and industrialists understand their common interests. If there is any hope to put an end to “free trade” agreements — and then go on the offensive to reverse those already in place — we had better do the same.

Trade legerdemain on both sides of the Atlantic

The Democratic Party has responded to the resistance against ramming through new trade agreements by giving the process a new name. “Fast-track” has been rebranded as “smart-track” and, voilà, new packaging is supposed to make us forget the rotten hulk underneath the thin veneer.

Don’t be fooled. The Obama administration and its Senate enablers are nowhere near giving up on its two gigantic trade deals, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Because the stealthy “fast track” route — special rules speeding trade legislation through Congress with little opportunity for debate and no possibility of amendments — is the only way these corporate wish lists can be enacted, a “rebranding” is in order.

The new chair of the U.S. Senate’s Finance Committee, Oregon Democrat Ron Wyden, earlier this month, in a speech given to apparel-industry corporate executives, announced his intention to replace the “fast track” process with a “smart track” process. That is noteworthy because the Finance Committee has responsibility in the Senate for trade legislation. It also noteworthy because Senator Wyden has voted to approve the last five U.S. “free trade” agreements, going back to 2005.

Grand Place, Brussels (photo by Wouter Hagens)

Grand Place, Brussels (photo by Wouter Hagens)

Although the Transatlantic Partnership being negotiated between the United States and the European Union receives less attention than the 12-nation Trans-Pacific Partnership, neither has much chance of passing without special fast-track authority. Should Congress agree to grant the White House fast-track authority, the Obama administration would negotiate a deal and submit the text for approval to Congress under rules that would prohibit any amendments or changes, allow only a limited time for debate, and require a straight yes or no vote.

None other than the previous U.S. trade representative, Ron Kirk, said the Trans-Pacific Partnership has to be secret because if people knew what was in it, it would never pass. We should take him at his word.

Tell the people what they want to hear

On the surface, Senator Wyden’s speech to the American Apparel & Footwear Association Conference on April 10 sounds conciliatory. He made the standard ritual references, calling for trade agreements that create jobs and “expand … the winners’ circle.” The senator proclaimed:

“I want to be very clear: only trade agreements that include several ironclad protections based on today’s great challenges can pass through Congress. I am not going to accept or advance anything less.”

He did not fail to declare that “strong standards and enforcement” on labor and environmental standards “is an imperative.” But we can be forgiven skepticism here because Senator Wyden had this to say on existing labor and environmental standards:

“People on all sides of the trade debate should more openly acknowledge the progress in these areas and the hard work that went into getting those reforms.”

Progress? There are no enforceable rules concerning these areas in existing trade agreements such as the North American Free Trade Agreement. Lost jobs, reduced wages, more unemployment, higher food prices and reversals of environmental laws have invariably been the results. Unaccountable, secret tribunals staffed by corporate lawyers have enabled corporations to overturn regulations in all three NAFTA countries — and the U.S. government, in its current trade negotiations, wants rules even more weighted in favor of multi-national corporations than exists in NAFTA.

If this is what Senator Wyden considers to be “progress,” what possible basis could there be for believing the Trans-Pacific and Transatlantic partnerships will deliver anything other than more corporate-dictated austerity?

The existing version of fast-track legislation — the Bipartisan Congressional Trade Priorities Act of 2014, better known as the Camp-Baucus bill — was effectively dead not long after its January release. It was expected that a new version of fast-track, with a couple of small, cosmetic changes and a cover story that opponents had been heard, would come. Senator Wyden has not disappointed, and it’s coming perhaps quicker than activists expected. This will become a hot potato as the November mid-term elections approach, so the senator was careful in his speech to not provide a timetable:

“I am going to work with my colleagues and stakeholders on a proposal that accomplishes these goals [of more transparency] and attracts more bipartisan support. As far as I’m concerned, substance is going to drive the timeline.”

‘Consultation’ only to let people vent

The perception of more transparency and public participation is all that we are likely to see, perhaps on the model of the European Union’s new public-consultation process. The process centers on a web site that E.U. citizens can use to fill out a questionnaire. The page is complicated to use, and has a 90-minute time limit, after which any imputed data is wiped out. Write fast! And for good measure, the E.U. trade commissioner, Karel De Gucht, once again declared, in his last visit to Washington:

“[W]e are happy to be scrutinized on this: no standard in Europe will be lowered because of this trade deal; not on food, not on the environment, not on social protection, not on data protection. I will make sure that [the Transatlantic Trade and Investment Partnership] does not become a ‘dumping’ agreement.”

Neither his office, nor that of the U.S. trade representative, Michael Froman, have been kind enough to share with the public when the next Transatlantic negotiating session will be held. There has been no lack of communication with corporate lobbyists, however. A European public-interest group, Corporate Europe Observatory, requested documents from the European Commission (the bureaucratic arm of the E.U.) to discover with whom E.U. negotiators are consulting.

It was revealed that of 127 closed meetings concerning the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists. The Observatory reports:

“The list of meetings reveals that … there is a parallel world of a very large number of intimate meetings with big business lobbyists behind closed doors — and these are not disclosed online. These meetings, moreover, were about the EU’s preparations of the trade talks, whereas the official civil society consultation was merely an information session after the talks were launched. The Commission’s rhetoric about transparency and about consulting industry and NGOs on an equal basis is misleading and gives entirely the wrong impression of [the European Commission’s] relations with stakeholders.”

Three German Green Party members of the European Parliament (Ska Kellar, Rebecca Harms and Sven Giegold) have leaked the E.U.’s position paper on the Transatlantic Partnership negotiations (Members of the European Parliament are shut out of the negotiations.) Although this leak offers only a glimpse at E.U. negotiating positions, Europeans have a basis for concern. A rough English translation of the leaked document (available only in German) states:

“The agreement will provide for the reciprocal liberalization of trade in goods and services and rules on trade-related issues, which it pursues through ambitious goals that go beyond what is available via the existing WTO commitments.”

Although it also says the agreement will include a “general exception clause” on the basis of articles XX and XXI of the General Agreement on Tariffs and Trade (GATT), which purport to allow exceptions to trade agreements when necessary to safeguard human, animal or plant life or health, such clauses are meaningless. Other agreements have similar clauses, but are consistently superseded by rules such as Article 12.6 of the Trans-Pacific Partnership text that “Each Party shall accord to covered investments treatment in accordance with customary international law.”

‘Customary law’ is what a secret tribunal says it is

Precedents handed down in secret tribunals are what constitute “customary international law.” That the E.U. negotiators intend to “go beyond” the rules of the World Trade Organization should leave no doubt that “law” as desired by multi-national corporations is what is contemplated. Indeed, the leaked E.U. text states an intention to:

“Provide a level playing field for investors in the U.S. and in the EU. … The agreement should provide an effective mechanism for the settlement of disputes between investors and the state.”

That goal should be borne in mind when evaluating the E.U.’s April 10 announcement that it has refused to include the standard investor-state dispute rules in its proposed trade agreement with Canada, despite Canada’s now dropped insistence that it be included. Inside U.S. Trade reports that:

“Canada and the EU have agreed to a ‘closed list’ approach toward defining what constitutes a breach of fair and equitable treatment that was proposed by the EU. … The closed list that the two parties agreed upon is comprised of: denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds; and abusive treatment of investors.”

On the surface, the “closed list” approach to the bases over which a corporation can sue a government appears to have narrowed from the more common approach that places no limits on corporate suits. But, critics say, the list of arbitrable issues remains open-ended and open to corporate abuse. The Canadian public interest group International Institute for Sustainable Development, in a recently updated paper, warns:

“The definition of investment is defined too broadly, covering any kind of asset, independent of whether or not investments are associated with an existing enterprise in the host state. … [The E.U. proposal would] make the concept of fair and equitable treatment very open-ended and, as a consequence, highly problematic.”

The agreed-upon language, by not defining what constitutes an “asset,” would enable corporations unlimited opportunities to sue governments. Any rule or regulation that a corporation says will reduce its profits remains eligible to be overturned under the precedents of “customary international law.” The text of the agreements — and how they are likely to be interpreted — count for vastly more than the happy talk of trade negotiators, whichever side of the Atlantic or Pacific oceans.

European countries with strong regulations on the environment or food safety are at grave risk from the U.S., and environmental laws everywhere are prime targets. Activist work against these multi-national trade agreements has gained momentum in the past year, but there is much work to be done to stop what constitutes the most destructive corporate power grabs yet. Popular pressure is the only means to stop the Trans-Pacific, Transatlantic and Canada-E.U. trade deals. The next task will be to reverse existing trade deals that have done so much damage.

The scorecard of NAFTA: Losses for all three countries

The North American Free Trade Agreement has been a lose-lose-lose proposition for working people in Canada, the United States and Mexico.

Let us count the ways: Lost jobs, reduced wages, more unemployment, higher food prices and reversals of environmental laws. NAFTA, a 20-year laboratory for mainstream economics, has been a bonanza for the executives of multi-national corporations, and that is all you need to know why the so-called “free trade” model continues to be promoted despite the immiseration and dislocation it spawns. Agreements like NAFTA, and proposed deals that would go further in handing power to corporate executives and financiers such as the Trans-Pacific Partnership, have little to do with trade and much with ensuring corporate wish lists are brought to life.

Not dissimilar to medieval doctors who insisted that having leeches bleed the patient was the only course of action, neoclassical economists, who dominate the field, won’t budge from their prescriptions of neoliberal austerity. But although the medical field has made enormous strides in recent centuries, there is no such progress among neoclassical economists. That is because said economists — most often under the banner of “Chicago School” but sometimes using other names — promote ideology on behalf of the powerful, not science for all humanity.

"Canada in fog" photo by Kat Spence

“Canada in fog” photo by Kat Spence

Thus the spectacularly wrong predictions made for NAFTA before it was went into force on January 1, 1994, have no effect on their predictions for new deals. To provide one example, in 1993 the Peterson Institute for International Economics predicted 170,000 jobs would be created in the U.S. alone by 1995, that the U.S. would enjoy an expanded trade surplus with Mexico and that the Mexican economy would grow by four to five percent annually under NAFTA.

As we will see presently, none of those rosy predictions came close to becoming reality. (True to neoliberal form, the institute is grandly predicting “gains of $1.9 trillion” for the Trans-Pacific Partnership.) The point here isn’t to pick on one particular institution — in fact, it is quite typical. The models developed to make these predictions and explain economics are mathematical constructs disconnected from the real world.

Sure it works better in a dream world

The Chicago School and other mainstream neoclassical schools of economics rest their models on the concept of “perfect competition,” which assumes that all prices automatically calibrate to optimum levels, and that there are so many buyers and sellers that none possess sufficient power to affect the market. This model assumes that employees are in their jobs due to personal choice, and wages are based only on individual achievement independent of race, gender and other differences. That this bears little resemblance to the real world is not your imagination.

From this, mainstream economists assume all trade will be beneficial because all economic activity quickly adjusts to create a new equilibrium following a disruption. As Martin Hart-Landsberg wrote in his 2013 book Capitalist Globalization: Consequences, Resistance and Alternatives:

“[T]his kind of modeling assumes a world in which liberalization cannot, by assumption, cause or worsen unemployment, capital flight or trade imbalances. Thanks to these assumptions, if a country drops its trade restrictions, market forces will quickly and effortlessly lead capital and labor to shift into new, more productive uses. And since trade always remains in balance, this restructuring will generate a dollar’s worth of new exports for every dollar of new imports. Given these assumptions, it is no wonder that mainstream economic studies always produce results supporting ratification of free trade agreements.” [page 104]

World Bank studies promoting “free trade” agreements, Professor Hart-Landsberg wrote, assumes that tariff reductions will have no effect on government deficits, governments will automatically be able to replace lost tariff revenue with revenue from other sources and that there is full employment. He writes:

“Although working people have been ill served by capitalist globalization, many are reluctant to challenge it because they have been intimidated by the ‘scholarly’ arguments of those who support it. However … these arguments are based on theories and highly artificial simulations that deliberately misrepresent the workings of capitalism. They can and should be challenged and rejected.” [page 80]

Mexican farmers forced off their lands

Mexico had annual per capita gross domestic product growth of 0.9 percent in the first 20 years of NAFTA — one-fifth of the per capita GDP growth of the preceding 20 years. The Center for Economic and Policy Research reports that Mexico’s growth during the past 20 years under NAFTA ranks the country 18th of 20 Latin American countries and is half of the average Latin American growth rate. Among other results, the center reports:

• 4.9 million family farmers have been been displaced — more than half the total number of Mexican farmers in 1991.
• More than 14 million more Mexicans live below the poverty line than in 1994. Just more than half of Mexicans are below the poverty line, nearly identical to the 1994 rate, but the population has increased.
• Inflation-adjusted wages have risen two percent over 18 years and are barely above the 1980 level.

Subsidized corn from the United States flooded Mexico, sold below the costs of small Mexican farmers. Corn imports from the U.S. increased fivefold and pork imports from the U.S. increased by more than 20 times, according to a Truthout report by David Bacon.

As a result, Mexican farmers forced off their land either became seasonal workers on growing agribusiness farms, sought work in the cities or migrated north. Seasonal agricultural workers (those working less than six months per year) grew by almost three million — more than doubling their ranks — during the same period that 4.9 million family farmers were displaced. The number of Mexicans emigrating to the U.S. rose by almost 80 percent from 1994 to 2000, before falling significantly afterword because of the post-9/11 increased border security.

Nor did Mexicans get cheaper food as a result of the flood of U.S. corn. Public Citizen, in its just released report on NAFTA, reports that the deregulated price of tortillas nearly tripled in the first 10 years of the agreement and that a Mexican minimum-wage earner can buy 38 percent less than he or she could when NAFTA went into effect.

The only countervailing effect, the increase in factory jobs as maquiladoras (factories near the U.S. border producing for export) increased for a time, but those low-wage jobs are now dwindling because China’s wages are far cheaper than Mexico’s. The same pitiless market competition that sent jobs south now sends them across the Pacific. China now accounts for 23 percent of U.S. imports as compared to Mexico’s 12 percent, according to International Monetary Fund statistics.

A 2011 paper issued by the Economic Policy Institute summarized the effects of NAFTA on Mexico:

“From the standpoint of the business community, NAFTA’s most important achievement was that it made Mexico a much safer and more attractive location to invest and outsource U.S. manufacturing production. NAFTA’s investment provisions created new and improved safeguards for foreign investors, including new dispute settlement tribunals providing a mechanism for settling disputes with foreign governments outside of the Mexican legal system. By eliminating Mexico’s developmental state and use of local content rules, and other demands and conditions on foreign investors, the trade agreement greatly reduced the cost of doing business in Mexico, and increased the security of those investments.” [page 6]

Mexico’s conversion into an export platform does not mean higher skills for its workforce. The biggest initiative in job creation came during the administration of Vicente Fox, which offered training in low-skill jobs for landscapers, construction workers, factory workers and maids.

Hundreds of thousands of jobs leave the United States

The United States has seen a net displacement of almost 700,000 jobs through 2010 directly attributable to NAFTA, according to Economic Policy Institute calculations. Moreover, the U.S. has had large annual trade deficits with Mexico since NAFTA was implemented; in earlier years, trade was roughly balanced between the two. In addition to the job losses, Public Citizen reports these negative impacts on U.S. workers:

• U.S. food prices have risen 67 percent since NAFTA took effect, despite an increase in food imported from Mexico and Canada.
• Purchasing power for U.S. workers without a college degree, adjusted for inflation and taking into account those consumer goods that have become cheaper, has declined 12 percent under NAFTA.
• Two-thirds of displaced manufacturing workers who were rehired in 2012 experienced a wage cut; the reduction in the majority of cases was at least 20 percent.
• U.S. manufacturing and services exports to Mexico and Canada grew slower after NAFTA took effect than it had been earlier.

By making it easier for capitalists to move production, NAFTA has directly contributed downward pressure on wages. With fewer well-paying manufacturing jobs, pressure on wages not only affects manufacturing but other industries as well as displaced workers seek employment elsewhere.

Capital mobility has been an irresistible hammer for holding down wages and worsening job conditions — a study by Cornell University Professor Kate Bronfenbrenner found that more than 50 percent of employers made threats to shut down and/or move their facilities in response to unionization activity during the three-year period of 1993 to 1995, and that the rate of actual shutdowns tripled from the pre-NAFTA rate. She wrote:

“NAFTA has created a climate that has emboldened employers to more aggressively threaten to close, or actually close their plants to avoid unionization. The only way to create the kind of climate envisioned by the original drafters of the [National Labor Relations Act], where workers can organize free from coercion, threats, and intimidation, would be through a significant expansion of both worker and union rights and employer penalties in the organizing process both through substantive reform to U.S. labor laws and by amendments to the North American Agreement on Labor Cooperation.” [page 3]

That would take massive organizing to achieve. The Obama administration is actively trying to use the rules of NAFTA as a starting point for further weakening of labor, safety, health and environmental laws in the ongoing Trans-Pacific Partnership negotiations, which would tighten corporate control should the ongoing TPP negotiations be successful. The White House undoubtedly has the same goals for the Transatlantic Trade and Investment Partnership talks with the European Union.

Canadian safety net shredded to ‘compete’ in markets

Spending on Canada’s social safety net has decreased while corporate revenue has doubled and manufacturing jobs disappeared. In addition, a Canadian Centre for Policy Alternatives researcher reports, the country’s growing trade surplus with the United States has translated to few jobs. The study found:

• After 12 years of NAFTA, government transfers to individuals have dropped from 11.5% of GDP to 7.8% of the country’s GDP.
• “[M]uch of the growth in gross exports over the last decade reflected the markedly elevated use by Canadian-based companies of imported inputs in their production, significantly overstating the employment impact of the growth of manufactured exports.”
• The length that Canadians could collect unemployment benefits was reduced, the amount of the benefits were cut and the criteria for those eligible were reduced, reducing the proportion of unemployed people who qualified for unemployment insurance to one-third from three-quarters.
• Composite revenues of 40 of Canada’s biggest businesses increased 105 percent from 1988 to 2002, while their workforces shrank by 15 percent.

These developments fueled rising inequality, the centre’s executive director, Bruce Campbell, wrote:

“The most striking feature of this growing inequality has been the massive gains of the richest 1% of income earners at the expense of most of the population. The growth of precarious employment, the undermining of unions as a countervailing power to transnational capital, the erosion of the Canadian social state, and heightened economic dependence on the United States are the hallmarks of the free trade era in Canada.” [page 53]

Pressing its advantage, Canadian big business interests demanded and received tax cuts on the ground that Canada could not be competitive otherwise. Those cuts resulted in loss of C$20 billion in federal revenue for 2005 alone, the study said, on top of provincial revenue losses of $30 billion. The tax cuts were primarily given to high-income individuals and corporations, who argued that these would create “a level field of competition” with the United States but also increase labor market “flexibility” — a code word meaning lower wages and reduced job security, always the goal of capitalists.

It’s always our turn to ‘cut back,’ never the bosses’ turn

The key NAFTA provision is Chapter 11, which codifies the “equal treatment” of business interests in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or law that might prevent the corporation from extracting the maximum possible profit.

Under these provisions, taxation and regulation constitute “indirect expropriation” mandating compensation — a reduction in the value of an asset is sufficient to establish expropriation rather than a physical taking of property as required under U.S. law. Older decisions become precedents for further expansions of investor “rights” and thus constitute the “evolving standard of investor rights” required under “free trade” agreements.

Toothless “side agreements” on labor rights are meaningless window dressing; the arbitration bodies that decide these cases (in secret with no accountability or right of appeal) are governed by the main body of the text, such as Chapter 11. Corporations can sue governments over regulations or laws they don’t like, but working people and governments have no right to sue.

As Mr. Bacon put it in his Truthout report:

“The most any union or group of workers got from filing a case was ‘consultations’ between the governments and public hearings. There is no process in the agreement for penalties for violation of union rights. And although there are minor penalties for violating child labor or occupational health laws, they’ve never been implemented. Not a single contract was signed as a result of the side-agreement process, nor was a single worker rehired. Those unions that have filed cases have generally sought to use the process to gain public exposure of abuses and exert indirect pressure on employers.”

The neoliberalism that began gathering steam with the rise of Margaret Thatcher and Ronald Reagan, and which has intensified since, is not the handiwork of some secretive cabal, nor is it some tragic bad turn from an otherwise “rational” system. It is the natural evolution of modern capitalism and its relentless competition. “Free trade” agreements that have little to do with trade and much to do with imposing corporate wish lists in the service of ever more inequality and power imbalances is an inevitable component.

Implementing a “reform” of agreements designed to maximize corporate profits above all other considerations and shred the remnants of democracy is less than an illusion. Overturning the entire “free trade” apparatus is indispensable to any serious project of building a better world. Trade should conducted for the benefit of all, not only the one percent — unlike the current global system in which human beings are in the service of markets instead of the other way around.

Putting a gun to their own heads: Governments give themselves a ‘free trade’ offer they can’t refuse

A frequent criticism of “free trade” agreements is that corporations are elevated to the level of a country. It might be more accurate to say that corporations are elevated above countries.

The muscle in trade agreements like the North American Free Trade Agreement or the proposed Trans-Pacific Partnership is the mandatory use of “investor-state dispute mechanisms.” That bland-sounding bureaucratic phrase is anything but bland in its application — these “mechanisms” are the tools used to turn corporate wish lists into undemocratic reality.

Labor, environmental, social-justice and other groups rally on the steps of New York City Hall on January 14 to demand Congress vote against fast-track legislation.  (Photo courtesy of New York State AFL-CIO)

Labor, environmental, social-justice and other groups rally on the steps of New York City Hall during a January 14 snowstorm to demand Congress vote against fast-track legislation.
(Photo courtesy of New York State AFL-CIO)

The concrete form of these “mechanisms” are corporate-dominated secret tribunals that hand down one-sided decisions with no oversight, no public notice and no appeals. This is so is because governments that sign trade agreements legally bind themselves to mandatory arbitration in these secret tribunals despite (or because of) their one-sided nature. It is a virtually certainty that, should be they passed into law, the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) will contain some of the most draconian language yet in this area.

Activists in the TPP countries, as well as those in the European Union, should pay particular attention to the experience of Canada under the North American Free Trade Agreement (NAFTA). Canada has been the principal target within NAFTA because of its superior environmental laws in comparison to the United States and Mexico, with U.S.-based multi-national corporations the primary suers. Environmental, safety, labor and “buy local” laws around the Pacific and in Europe will be targets should the TPP and TTIP be implemented.

The rules of NAFTA allow multi-national corporations to sue national governments because rules safeguarding the environment, for example, are interpreted to “unfairly” reduce profits. Decisions handed down in the secret tribunals — in which corporate lawyers who specialize in representing corporations in these kinds of cases sit as judges — further stretch the bases on which corporations can successfully sue governments. NAFTA, and tribunal judgements stretching it, constitutes the starting point from which the U.S. government, sometimes assisted by other governments, seeks to impose still more draconian rules.

Corporations can change laws to suit themselves

Decisions made under NAFTA rules are noteworthy because of their outrageousness, but also merit attention because they provide a preview of what is in store for other countries under the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership. Here are some “highlights”:

  • Eli Lilly and Company is suing Canada for $500 million because Canada would not grant it two patents, rulings upheld by the Supreme Court of Canada. Eli Lilly claims the denial is an illegal confiscation of profits — it is using NAFTA as a tool to dismantle Canada’s well-developed patent system. No tribunal ruling yet.
  • Ethyl Corporation sued Canada for $250 million because of a ban on a gasoline additive known as MMT, a chemical long believed to be dangerous to health. Ethyl claimed the Canadian ban was an “expropriation” of its “investment” and a violation of the principal of “equal treatment” even though, had a Canadian producer of MMT existed, it would have had the same standard applied. Canada settled to avoid a total defeat, paying Ethyl a smaller amount and reversing its ban.
  • A U.S. company, Metalclad, sued Mexico because a city government refused to grant it a permit for a waste dump (similarly denied to a Mexican company that previously wanted to use the site). Mexico lost, and had to grant the permit despite environmental concerns and pay $15.6 million to Metalclad.
  • Another U.S. company, S.D. Myers, sued Canada because of a ban on the transportation of PCBs that conformed with both a Canada-United States and a multi-lateral environmental treaty. A tribunal ordered Canada to pay $5.6 million and reverse the ban, negating the two environmental treaties and ignoring the fact that PCBs are known carcinogens banned since 1979 in the U.S. The tribunal ruled that, when formulating an environmental rule, a government “is obliged to adopt the alternative that is most consistent with open trade.” So much for democracy!

The above is merely the tip of the iceberg. How do such extraordinarily one-sided decisions get handed down? Because the corporations dominate the tribunals and play a heavy role in writing the trade agreements to begin with. There are 605 corporate lobbyists who have access to the Trans-Pacific Partnership text — officially known as “trade advisers” — but no members of any legislative body are allowed to see it, and the public is completely shut out. The “advisers” are eagerly working to make the TPP a repository for their wish lists.

The key to making corporate dreams come true is the “investor-state dispute mechanism.” Under these mechanisms, governments legally bind themselves to settle “disputes” with “investors” in the secret tribunals. By far the most used of these tribunals is the International Centre for Settlement of Investor Disputes (ICSID) — an arbitration board that is an arm of the World Bank. Cases that go before one of the Centre’s tribunals are decided by a panel of three judges that are selected from a roster. The judges are appointed by the national governments that have signed on to ICSID, which include most of the world’s countries.

Working to overturn Australian laws, but he’s ‘neutral’

These judges are not disinterested arbiters. For example, one of the judges appointed to the ICSID by New Zealand is David A.R. Williams, who is currently representing Philip Morris in its suit seeking to force Australia to overturn its tobacco regulations. Australia’s rules limiting tobacco advertising and packaging, enacted in the interests of public health, were found to be legal by Australia’s supreme court, the High Court.

Not willing to accept the Australian constitution, Philip Morris moved some of its assets to Hong Kong, so it could declare itself a Hong Kong company eligible to sue Australia under the Australia-Hong Kong bilateral investment treaty, which, unlike some Australian trade pacts, allows corporations to sue one or the other government. (This case is still pending.)

The ultimate arbiter of a constitution, or writer of laws, are not domestic bodies subject to democratic checks, but unaccountable corporate representatives acting in secret. Who are these mercenaries? As an example, each of the eight ICSID judges appointed by the United States has a long career dedicated to serving large corporations. Six are currently partners in some of the world’s most formidable corporate law firms, one is an academic who formerly was a corporate lawyer and one is a lobbyist for a business group that seeks to codify pro-corporate trade rules under law.

That is a common pattern. One of Australia’s appointees is Doug Jones, a lawyer with one of Australia’s largest corporate law firms, and one of Chile’s is Carlos Eugenio Jorquiera, a corporate lawyer and president of the country’s National Chamber of Commerce.

Further titling the scales are that only corporations, not governments nor public-interest groups, can sue under these treaties. Governments must pay expenses that can total tens of millions of dollars, regardless of outcome, with no provisions to block frivolous claims. The judges are paid by the hour, with no defined limits on costs, giving them an incentive to drag out proceedings, which in turn favors deep-pocketed “investors.”

In fact, the TPP would place no limits on who qualifies as an “investor”: Anyone who applies for a permit or license, or who “channels” resources or capital to set up a business, without placing any limits on what qualifies for such a status, would be eligible to sue.

‘Customary law’ is what a corporation says it is

Leaked article 12.7 of the TPP, for instance, provides a long list of prohibitions against government actions. Under it, laws imposing capital controls (even to ameliorate a crisis), rules governing domestic content of products or any protections of any domestic industry would be illegal. It then provides a generic exception allowing environmental or other measures “that are not inconsistent with the Agreement; necessary to protect human, animal, or plant life or health; or related to the conservation of living or non-living exhaustible natural resources.”

But that exception is rendered meaningless not only by other, superseding, rules but by the rulings of the corporate-lawyer judges in the secret tribunals. Leaked TPP language specifically requires that excepted rules must be “not inconsistent with the Agreement.” The key sentence opens Article 12.6: “Each Party shall accord to covered investments treatment in accordance with customary international law.” The “Party” here are national governments, and the “customary international law” is that already established by NAFTA and the decisions made by ICSID and similar tribunals concerning disputes under NAFTA and other trade agreements.

Last year’s change of government in Australia has left working peoples in the 12 TPP negotiating countries more vulnerable. Under the previous Labor governments, Australia had refused to agree to the insertion of an investor-state dispute mechanism in the TPP. The new Tony Abbott government, however, has shown worrisome signs of reversal on this critical issue, claiming that such mechanisms would provide “greater market access for Australian exporters.”

The world’s 99 percent can’t afford to lose any bulwark against substituting corporate-dominated secret tribunals for democracy because the Obama administration is pushing hard for the most draconian rules. Knowing that secrecy is the only way for the TPP to gain approval of the U.S. Congress, the White House is pushing for “fast-track authority” — under which, Congress could not change so much as a comma of an agreement, would be severely limited in its ability to debate and would be obligated to vote yes or no in a very short period of time.

An increasingly strong pushback by activists in the U.S. has led to more than 200 members of Congress publicly committing themselves to voting against fast-track, which only Congress can impose on itself. Many of the other 11 national governments negotiating the TPP are nervously watching this development, because if Congress votes against fast-track, it will be far more difficult for TPP to earn congressional approval, leaving those governments less willing to buck their own internal oppositions.

If you believe that democracy is preferable to corporate dictatorship, the time is now to join an international fight against the Trans-Pacific Partnership and its spawn, such as the Transatlantic Trade and Investment Partnership.

Corporate power grab of Trans-Pacific Partnership clearer, but opposition building

The usual boilerplate announcements that “significant progress” was achieved in the just concluded round of Trans-Pacific Partnership negotiations can’t mask that public opposition is growing and that the United States seems to be having difficulty bullying its negotiating partners.

That does not mean that the TPP is dead — far from it — but the continued insistence of the Obama administration that the text will be complete by the end of 2013 is no more than wishful thinking. That Congress might not play its assigned role of rubber-stamping was strongly signaled last week when 151 Democratic Party members of the House of Representatives and more than two dozen Republicans signed various letters opposing “fast-track” trade authority. Many did so due to sustained grassroots activism.

“Fast-track” is a mechanism whereby Congress waives its right to debate and amend, instead binding itself to a straight up-or-down yes or no vote in a limited time frame. The worst trade deals, such as the North American Free Trade Agreement, have become U.S. law through this mechanism. The Obama administration is widely expected to introduce such a bill, passage of which would greatly increase the chances of the Trans-Pacific Partnership getting approved by Congress.

Activists have anticipated since early October that a bill for fast-track authority — formally known as trade promotion authority — might be introduced at any moment. That such a bill has been delayed is a sign that mounting opposition to the TPP within the U.S. has introduced an element of caution into the Obama administration’s thinking.

Demonstration against TPP in Salt Lake City (Photo courtesy of Citizens Trade Campaign)

Demonstration against TPP in Salt Lake City (Photo courtesy of Citizens Trade Campaign)

Strong opposition to draconian U.S. proposals by several of the 11 other Pacific Rim countries negotiating the text of the TPP has certainly played a role in slowing down the negotiations. The divergence of the negotiating positions became clear earlier this month when WikiLeaks published the full text of the TPP chapter on intellectual property. Despite being billed as a “free trade” agreement, this chapter, like most of the TPP, has nothing to do with trade. Rather, it — and, in particular, the U.S. negotiating positions — are the dreams of the most powerful multi-national corporations.

The same is true for the Transatlantic Trade and Investment Partnership, another “free trade” agreement simultaneously being negotiated between the United States and the European Union. The TTIP also just concluded a negotiating round, with similar opaqueness. What the U.S. is attempting to impose on Canada, Mexico, Australia, New Zealand, Chile and the other TPP countries on behalf of its multi-national corporations is undoubtedly the basis for what it seeks to impose on Europe. Corporate lobbyists have access to the text, but legislators and parliamentarians do not.

Sustained and organized mass opposition is the only thing that will stop these two extraordinary power grabs that will fatally undermine any semblance of democracy. If the TPP were to be implemented, labor safeguards, safety rules, environmental regulations and measures to rein in financial speculation would be struck down because a multi-national corporation’s profits might be affected — corporations would be able to bypass national laws and courts when they are in a dispute with a government, and instead can have their dispute adjudicated by a closed tribunal controlled by their lawyers.

Huge giveaways to pharmaceutical industry

The TPP intellectual property chapter, published by WikiLeaks, is crammed with corporate giveaways in its 96 pages. (This is only one of about two dozen chapters.) Japan is the country, at least in this chapter, most often in alignment with U.S. negotiating position, although frequently the U.S. is opposed by all other countries.

There are several sections that broaden what is patentable subject matter — if implemented, the TPP would make patents:

  • “Available for any new uses or methods of using a known product.”
  • Require patents to be granted if the patent “involves an inventive step,” even if there is no new use for it.
  • Allowable for living organisms, including plants and animals.

What these proposals would mean, if implemented, is that a name-brand pharmaceutical company, for example, would be able to claim a new use for high-priced medicines just before the patent was due to expire, thereby extending the patent and blocking a far less expensive generic equivalent from becoming available.

Under the North American Free Trade Agreement, the U.S. pharmaceutical company Eli Lilly sued Canada for $500 million because the Supreme Court of Canada upheld the invalidation of an Eli Lilly patent. Canada’s ability to enforce its own laws would be undermined by the TPP, according to a Public Citizen analysis:

“Canada’s decisions are based in its ‘promise doctrine,’ a patent rule which requires patents claiming a future usefulness to demonstrate or soundly predict that usefulness at the time of filing. The United States has proposed a rule for the Trans-Pacific Partnership negotiations that could undermine Canada’s promise doctrine. Whether purposeful or not, this would support Big Pharma’s plans to transform Canadian practice and even, seemingly, some of the goals of Lilly’s outrageous suit.”

Stop TPPCompanies like Eli Lilly would be in a stronger position to overturn any law they don’t like. The TPP’s intellectual property chapter would also attack rules such as the Indian Patent Act that protect access to affordable medicines worldwide, and would require extensions of patents on the demand of a corporation if it deems the period of time required to approve its patent “unreasonable.” Doctors Without Borders/Médecins Sans Frontières reports:

“The leak confirms our worst fears—the US is continuing its attempts to impose an unprecedented package of new trade rules that would keep affordable generic medicines out of the hands of millions of people.”

The return of SOPA

The defeat of the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA) — thinly veiled attempts at Internet censorship stopped by popular pressure — would be reversed under the TPP. A proposal by the U.S. and Australia would require Internet service providers to police their users, with ISPs required to cut off Internet access, block content and actively monitor usage to avoid liability if a copyright holder claims one of its copyrights is being infringed.

Monica Horten, a visiting Fellow at the London School of Economics writing on her Iptegrity.com web site, summarizes the TPP’s dangers to the free flow of information:

“[T]t is a toxic potion that would force the Internet Service Providers (ISPs) to police their networks, and turns current law on its head. … Where it concerns the Internet and digital content, much of the TPP intellectual property chapter looks like a cut-and-paste from ACTA. Certainly, it brings in similar secondary liability and criminal measures that were in ACTA. However, there are specific new proposals that give more reasons for concern. … Within the Internet section, is a  USA/Australian proposal that contains the core desires of Hollywood and the Motion Picture Association.”

Canada, back by several countries, is seeking less onerous restrictions, University of Ottawa law professor Michael Geist writes:

“From a Canadian perspective, the U.S. demands would require an overhaul of Canadian copyright law and potential changes to privacy law. For many other TPP countries, the issue is creating a clear divide, with the U.S. conditioning ISP safe harbours on subscriber termination and content blocking, while the Canadian model favours greater flexibility in establishing systems that create incentives to address alleged infringements online.”

Will Canadian negotiators hold firm or capitulate? Given the harsh policies of Prime Minister Stephen Harper — the George W. Bush of the North — much activism will be required to avoid SOPA getting in through the back door.

You won’t be able to know what is in your food

At the behest of corporations like Monsanto, which seeks to control the world’s food supply, labeling of genetically modified organisms would be illegal. Specific Trans-Pacific Partnership language on GMOs and GMO labeling has not yet surfaced, but because the goal of Monsanto and other U.S. manufacturers of GMO foods is to remove European restrictions against GMOs, this is likely to be an area where U.S. negotiators are pushing hard.

The European Union’s chief trade negotiator Ignacio Garcia Bercero, said “We are not in the business of lowering standards” in response to concerns that food safety rules will be lowered if the Transatlantic Trade and Investment Partnership comes to fruition, and European Union justice and rights commissioner Viviane Reding threatened this week that the E.U. would “freeze crucial data-sharing arrangements with the U.S.” if the U.S. refuses to acquiesce to European privacy standards.

But despite huffing and puffing from various European leaders, the latest round of TTIP talks proceeded smoothly. A European Commission press release happily declared, “A good atmosphere and the active involvement of regulators from both sides meant significant progress was made.” But, as usual, no details were forthcoming. The Office of the U.S. Trade Representative similarly reported “a very successful and productive set of meetings” about the TTIP and “significant progress” in the just concluded Salt Lake City round of TPP negotiations.

This latest round of TPP talks was even more secret than usual, with negotiators not bothering this time with the pretense of meeting with civil-society groups; thus much caution is advised. A potential turn for the worse is possible with the recent election of the right-wing Tony Abbott government in Australia, which may reverse some of the previous positions Canberra had taken against certain U.S. proposals. For example, previous Australian governments opposed investor-state disputes being adjudicated by secret tribunals controlled by corporate lawyers. It is unknown if the Abbott government will reverse that position.

The Australian television program Lateline reports that Prime Minister Abbott is in favor of “fast-tracking” the TPP and other trade agreements. A worrisome sign, as the U.S. is pushing hard for anti-democratic provisions such as investor-state disputes to be adjudicated in the secret tribunals. These mechanisms are in force in the North America Free Trade Agreement and many bi-lateral trade agreements. NAFTA, for example, uses a tribunal that is an arm of the World Bank in which only two of the more than 200 cases it has heard have been open to the public.

Agreements like TPP and TTIP have little to do with trade and much to do with imposing a corporate dictatorship. There is no time to waste.