Now that we can see the TPP text, we know why it’s been secret

The text of the Trans-Pacific Partnership can now be viewed by the public, thanks to the New Zealand government, and it is every bit as bad as activists have been warning.

The TPP, if enacted, promises a race to the bottom: An acceleration of jobs to the countries with the lowest wages, the right of multi-national corporations to veto any law or regulation their executives do not like, the end of your right to know what is in your food, higher prices for medicines, and the subordination of Internet privacy to corporate interests. There is a reason it has been negotiated in secret, with only corporate executives and industry lobbyists consulted and allowed to see the text as it took shape.

The threat from the TPP extends beyond the 12 negotiating countries, however — the TPP is intended to be a “docking” agreement whereby other countries can join at any time, provided they accept the text as it has been previously negotiated. Moreover, the TPP is a model for two other deals: the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, and the Trade In Services Agreement (TISA), an even more secret “free trade” deal being negotiated among 50 countries that would eliminate any controls on the financial industry.

Activists celebrate after the New York City Council declares the city a "TPP-free zone."

Activists celebrate after the New York City Council declares the city a “TPP-free zone.”

The elimination of protections is precisely what U.S. multi-national corporations intend for Europe by replicating the terms of the TPP in the TTIP, a process made easier by the anti-democratic nature of the European Commission, which is negotiating for European governments. Already, higher Canadian standards in health, the environment and consumer protections are under sustained assault under the North American Free Trade Agreement. The TPP is an unprecedented corporate giveaway, going well beyond even NAFTA, which has hurt working people and farmers in Canada, the U.S. and Mexico.

More than 300,000 manufacturing jobs in the U.S. alone may be eliminated by the passage of the TPP. The Wall Street Journal, in an article celebrating victory for multi-national capital, nonetheless estimates that losses in manufacturing and automobiles would add an estimated US$56 billion to the national trade deficit. The international president of United Steelworkers, Leo Gerard, using a U.S. Department of Commerce estimate that 6,000 jobs are lost for every $1 billion of added trade deficit, calculates that would lead to the loss of 330,000 manufacturing jobs.*

Bad news on both sides of the Pacific

The Canadian union Unifor estimates that 20,000 Canadian jobs in auto manufacturing alone are at risk from TPP. Canada will also be forced to open its dairy and poultry industries. There is fear that Canadian dairy farming may collapse and the outgoing Harper régime promised $4.3 billion to compensate farmers from expected losses.

The Australian Fair Trade and Investment Network, while acknowledging that community pressure forced governments to resist some of the most extreme measures, worries that the U.S. concession to Australia that the extension of monopolies on biological medications will be five years rather than eight will prove ephemeral. The group reports that the text “refers to eight years and to ‘other measures’ which would ‘deliver a comparable market outcome,’ and to a future review. It is not clear how this will be applied in Australia.” The U.S. will retain its 12-year exclusivity period, while other countries can choose five or eight years, so there will likely be continued pressure from pharmaceutical companies for all to adopt a longer period.

A product would not have to be produced locally to qualify as a locally made product. As much as two-thirds of an automobile’s components could be manufactured in China, for example, and it would still qualify for preferential treatment if one-third is made in any TPP signatory country. But “buy local” rules would become illegal, including for government procurement.

There are no enforceable provisions for environmental, health, safety or labor protection. Public Citizen, in its analysis of the TPP text, reports:

“The language touted as an ‘exception’ to defend countries’ health, environmental and other public-interest safeguards from TPP challenges is nothing more than a carbon copy of past U.S. free trade language that ‘reads in’ to the TPP several World Trade Organization (WTO) provisions that have already been proven ineffective in more than 97 percent of its attempted uses in the past 20 years to defend policies challenged at the WTO. In two decades of WTO rulings, [the articles purporting to protect laws necessary to protect human, animal or plant life or health] have only been successfully employed to actually defend a challenged measure in one of 44 attempts.”

The ratio under TPP is likely to be even lower as the TPP promises the most extreme rules in favor of corporations of any “free trade” deal. Even the extremely weak “exception” does not apply to the entire investment chapter of the TPP. Precedent here is bad — as the secret tribunals that decide cases brought by corporations against governments hand down their one-sided agreements, these decisions become a floor for the next decision, pushing the interpretation further in favor of corporate domination.

Democracy canceled by corporate power

Under the TPP, corporations are elevated to the level of national governments and, in practice, could be said to be elevated above governments. The TPP text mandates that “customary international law” be applied for the benefit of an “investor” — that law is not found in any statutes, but rather has been established by previous decisions of secret tribunals interpreting NAFTA and other “free trade” deals. Worse, the TPP places essentially no limits on who qualifies as an “investor” eligible to be compensated for potential profits that may not materialize due to a regulation or safety rule.

Although the rules codifying benefits for multi-national capital are written in firm language, there is no such language for protections. The Sierra Club reports that the TPP mandates that only one of the seven environmental agreements found in previous “free trade” deals be fulfilled, an alarming development as previous environmental requirements have been routinely ignored. Among the many deficiencies in the TPP, the Sierra Club said:

“Rather than prohibiting trade in illegally taken timber and wildlife — major issues in TPP countries like Peru and Vietnam — the TPP only asks countries ‘to combat’ such trade. To comply, the text only requires weak measures, such as ‘exchanging information and experiences,’ while stronger measures like sanctions are listed as options. … Rather than obligating countries to abide by [rules to] prevent illegally caught fish from entering international trade, the TPP merely calls on countries to ‘endeavor not to undermine’ [fisheries-management protocols] — a non-binding provision.”

The TPP fails to even mention the words “climate change”! More than 9,000 corporations would be newly empowered to sue governments because a law or regulation hurt their profits. Worse, the TPP would mandate that the U.S. Department of Energy automatically approve all exports of liquified natural gas to all TPP countries. This would guarantee more fracking; already under NAFTA the province of Québec has been sued in an effort to overturn its fracking moratorium. That may only be the beginning, according to 350.org:

“The agreement would give fossil fuel companies the extraordinary ability to sue local governments that try and keep fossil fuels in the ground. If a province puts a moratorium on fracking, corporations can sue; if a community tries to stop a coal mine, corporations can overrule them. In short, these rules undermine countries’ ability to do what scientists say is the single most important thing we can do to combat the climate crisis: keep fossil fuels in the ground.”

You’ll have no right know what you eat

Food safety would fare no better. The TPP’s race to the bottom would require that the lowest inspection standards of any country be applied, forcing a lowering of other countries’ standards, and end protections against untested genetically modified organisms (GMOs) in your food. Food & Water Watch reports:

“The TPP includes a new provision designed to second-guess the government inspectors who monitor food imports. … The food and agribusiness industry demanded — and received — stronger [rules] that make it harder to defend domestic food safety standards from international trade disputes. … Agribusiness and biotech seed companies can now more easily use trade rules to challenge countries that ban GMO imports, test for GMO contamination, do not promptly approve new GMO crops or even require GMO labeling. The TPP gives the food industry a powerful new weapon to wield against the nationwide movement to label GMO foods. The language in the TPP is more powerful and expansive than other trade deals that have already been used to weaken or eliminate dolphin safe tuna and country of origin labels.”

Health care will also come under direct assault, forcing other countries more toward the U.S. system, under which health care is a privilege for those who can afford it rather than a human right. Government programs to hold down the cost of medications are targeted for elimination in the TPP. Doctors Without Borders/Médecins Sans Frontières, which has been sounding the alarm for years, said:

“TPP countries have agreed to United States government and multinational drug company demands that will raise the price of medicines for millions by unnecessarily extending monopolies and further delaying price-lowering generic competition. … [T]he TPP will still go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies. For example, the additional monopoly protection provided for biologic drugs will be a new regime for all TPP developing countries. These countries will pay a heavy price in the decades to come that will be measured in the impact it has on patients.”

The text of the TPP is subject to approval by legislative bodies in various countries, and while time is limited and the approval process is streamlined to facilitate approval in several of them, the Trans-Pacific Partnership can be defeated. This is not a national issue. Working people will be hurt everywhere, with jobs disappearing in developed countries and sweatshop misery for other countries — this is why multi-national capital, where ever it is based, is pushing for the TPP. If it is to be stopped, it will be through the combined activity of activists on both sides of the Pacific. We have no time to lose.

* This paragraph has been revised to better reflect the source of the job-loss estimate.

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There is still time to defeat the Trans-Pacific Partnership

The task may be difficult but it is not impossible — there is still time to defeat the Trans-Pacific Partnership. Activists on both sides of the Pacific Ocean forced a couple of concessions in the final TPP text, agreed to earlier this week after years of negotiation, so we are not without hope.

More hard work by activists is the only power that can stop the TPP from becoming law in 12 countries. If we fail to stop it, the TPP promises to tighten further the dominance of the world’s biggest multi-national corporations with the implementation of nearly unlimited rights of corporations to overturn health, safety, labor and environmental laws through secret tribunals that bypass and override national legal systems.

Although the Obama administration, which had consistently pushed for the most draconian rules, yielded some ground on pharmaceutical-industry profiteering, the TPP is a thoroughly anti-democratic deal. Just how awful won’t be fully known until the text is published on the Internet in coming weeks. In the United States, there is a 60-day period after the text is published before President Barack Obama can send it to Congress for approval. Congress must act within 90 days, voting either yes or no with no amendments allowed (not even a comma can be changed) and limited debate. And even this “fast-track” process, voted into being by Congress earlier this year, represents concessions to persistent public opposition to the TPP — the text has been held as a state secret, hidden for years from members of Congress until public outcries embarrassed the Obama administration into letting elected representatives have a peak.

TPP cartoonParliamentarians in Canada, Australia, New Zealand and elsewhere have also not been allowed to see the text. The Canadian Parliament can’t take up the TPP until after the October 19 elections. The Harper régime is intent on passing the TPP, but if the Liberals or New Democrats unseat the Conservatives, there would be uncertainty. Neither opposition party, however, has openly opposed it, instead reserving judgment before seeing the final text.

In Australia, the Parliament doesn’t get to vote on the TPP, only on legislation necessary to implement its provisions once agreed to by the cabinet ministers. A committee of senators from parties in government and in opposition issued a report in June strongly condemning the TPP and the secrecy of it, but it remains to be seen what, if anything, opponents can do to block it. One glimmer of hope is that two small parties, Palmer United and the Greens, hold the balance of power in the Australian Senate, and the Greens are opposed to the TPP.

New Zealand parliamentary debate will be limited and no text may be changed; the Parliament would have to change national laws to conform with the TPP if passed.

The biggest compromise concerned biologic medications. This had been one of the main areas of contention, with the U.S. wanting to impose a 12-year period of exclusivity to pharmaceutical companies that originate biologics before other manufacturers could introduce generic versions (“biosimilars”) of the drugs. Other countries, including Australia, wanted that period cut to five years.

It is still not clear what agreement was reached, but reports indicate that the period will remain 12 years for the U.S., and either five or eight years for other countries. The longer period is seen as a means to guarantee pharmaceutical companies, especially those in the U.S., super-profits for a longer period of time and thus driving up the costs of medicines for public health systems in other counties, including Australia and New Zealand.

Activist work forces concessions but still a bad deal

Sustained public opposition to the longer period pushed the Australian and New Zealand governments to hold out against intense U.S. pressure on this issue, so activists can take credit for whatever better terms were attained. But that does not mean the TPP is a good deal for health care. Far from it.

Peter Maybarduk, the director of Public Citizen’s Access to Medicines Program, had this to say:

“The deal … fell short of Big Pharma’s most extreme demands but will contribute to preventable suffering and death. … [T]he deal includes mechanisms that would help the [U.S. trade representative] browbeat countries, now and in the future, to get what Big Pharma wants, and pull countries toward longer monopoly periods.”

Doctors Without Borders/Médecins Sans Frontières is no more optimistic:

“TPP countries have agreed to United States government and multinational drug company demands that will raise the price of medicines for millions by unnecessarily extending monopolies and further delaying price-lowering generic competition. The big losers in the TPP are patients and treatment providers in developing countries. Although the text has improved over the initial demands, the TPP will still go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies.”

New Zealand’s Pharmaceutical Management Agency, which provides thousands of medicines, medical devices and related products available at subsidized costs, is a particular target of the U.S. pharmaceutical industry because it is an example that drug companies do not wish to be emulated elsewhere. The agency says it has saved about NZ$5 billion in the past 10 years.

Don’t buy the snake oil proponents are selling

Although the U.S. trade representative is trumpeting the TPP as the “most progressive trade deal ever,” don’t buy that snake oil. To provide one example, the U.S. trade representative claims that “A Party may elect to deny the benefits of Investor-State dispute settlement with respect to a claim challenging a tobacco control measure of the Party.” This is a claim that corporations can no longer challenge government regulations on tobacco, as has happened to Australia, Uruguay and other countries. (“Party” means a government in the TPP text.)

Another snake oil salesperson, U.S. Senator Ron Wyden, who has been perhaps the senator most responsible for the advancement of the TPP in the Senate and a consistent liar on “free trade” agreements, packed quite a lot of misinformation into one paragraph this week:

“I’m pleased to hear reports that the deal reached today includes, for the first time, an agreement to curb currency manipulation and new and enforceable obligations on countries like Vietnam and Malaysia to uphold labor rights, including in the case of Malaysia enforceable commitments to address human trafficking. I also understand that the agreement will include commitments to stop trade in illegal wildlife and first-ever commitments on conservation. Importantly, I understand that this deal will ensure that countries that are part of it can regulate tobacco without fearing intimidation and litigation by Big Tobacco.”

Don’t be fooled. The Center for Policy Analysis on Trade and Health issued this correction:

“The precise effects of this ambiguously worded compromise are unclear. … Tobacco companies could still file charges [in secret tribunals] if they assert the regulation is ‘discriminatory’ to the trade interests of a particular country. For example, when the U.S. banned clove cigarettes, which are important in hooking kids, Indonesia filed a successful trade charge, as the main producer of clove cigarettes.”

Stop TPPSenator Wyden’s words are hollow, coming after the Obama administration cynically removed Malaysia from the State Department’s list of worst countries for human trafficking to keep the developing country eligible. People without hope of work at home or who are refugees are recruited to work in Malaysia, where they are subject to forced labor and sex trafficking. Jamie Kemmerer, regional organizer for MoveOn NYC, said:

“The TPP is a terrible deal for workers, but is even worse for those who are subject to forced labor and human trafficking. Granting favorable trade access to nations engaging in these barbaric practices would be a huge step back for humanity in the name of commerce.”

Language in the TPP that purports to provide protection for environmental and health laws are meaningless boilerplate without effect, just as such language has been in existing “free trade” deals. The real-world effect is that any corporate entity can move to overturn any government action, simply on the basis that its “right” to the maximum possible profit, regardless of cost to a community, has been “breached.” The TPP places no limits on who or what corporate entity or individual is eligible to sue for the “loss” of “expected profits,” and only corporations can sue, not governments.

In effect, corporations are raised to the level of national governments, and it might be more properly argued that corporations are raised above national governments. This is the future that awaits all of us, and only the united actions of activists in countries on both sides of the Pacific can stop it. And, once we do, we need to go on the offensive and begin to roll back existing deals. Democracy or corporate dictatorship: The choice we now face is that stark.

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.

More tobacco, less health care as Trans-Pacific Partnership secrecy tightens

The secret Trans-Pacific Partnership is about to become even more secret, perhaps seen as a necessity in light of plans to make it easier for tobacco companies to sue while making health care more difficult to obtain.

Stop TPPThe governments negotiating the draconian TPP still don’t want you to know what’s in it. Many of them issued cheery press releases congratulating themselves for the “progress” they made last week in Brunei. But you will search in vain for any information on what TPP negotiators are up to. They will now end their practice of “consultation” — the August 23 to 30 negotiations (the 19th round) are the last scheduled. Instead, negotiators will begin to meet in unannounced meetings.

In other words, not only is the text of the TPP to remain a secret, the negotiations themselves are to now be secret.

Formal negotiating rounds had occurred roughly every three months, but now negotiators henceforth will meet “intersessionally in the coming weeks” before meeting again at an Asia-Pacific Economic Cooperation (APEC) meeting in Bali, Indonesia, in early October. Although the good news is that, despite the efforts of several governments, most forcefully the Obama administration, it appears virtually certain there will be no deal to sign then.

The bad news is that obtaining details may become more difficult. The new, less formal format can reasonably be interpreted to mean that particularly harsh text is being discussed. Several of the 12 negotiating governments are balking at various proposals, but given that each remains inside the talks and issues content-free press releases, the secrecy shrouding the TPP text remains in place, with a stronger curtain apparently about to shut out any stray sunshine.

Yes to tobacco, no to medicine

The Obama administration has consistently pushed for the most draconian rules. Washington’s latest outrage concerns regulations on tobacco products, universally opposed by tobacco companies. Early drafts of the TPP included “safe harbor” provisions protecting national tobacco-control measures — such as package warnings and advertising and marketing restrictions — from corporate challenges. But the Obama administration has reversed course under tobacco industry and U.S. Chamber of Commerce pressure, intending to severely limit the ability of signatory governments to maintain their laws.

The Office of the U.S. Trade Representative said its counter-proposal would “contain a general exception for matters necessary to protect human life or health” and add a provision that a complaining “party” (that is, a corporation) must first meet with “health authorities … to discuss the measure.”

Note that there is nothing in the proposal that prevents a complaining “party” from suing to overturn a regulation following a discussion. And the “general exception” is meaningless as the arbitration boards that hear investor complaints (controlled by entities such as the World Bank) consistently rule that any environmental or safety rule that reduces a corporation’s profits be overturned. For example, Canada was forced to pay Ethyl Corporation $13 million and issue an apology because it had banned a gasoline additive that causes neurological damage and contributes to air pollution. This additive was already banned in the U.S., where Ethyl is based, but the chemical company claimed Canada’s ban “expropriated” its profits.

U.S. trade negotiators can write with a straight face that their proposals “work together to preserve the right to regulate tobacco products domestically,” but health advocates aren’t laughing. The Campaign for Tobacco-Free Kids and four other health care advocacy groups issued a joint statement condemning the cave-in to the tobacco industry:

“[T]his language is far weaker than [the] original proposal, would not cover lawsuits initiated by tobacco companies and would not provide nations that adopt strong tobacco control measures with the protection they need from tobacco industry challenges.”

Trade agreements wielded as battering rams

Already, tobacco companies, which must continually create new smokers to replace those who die, are not shy about using existing trade agreements to knock down regulations. The Campaign for Tobacco-Free Kids statement notes:

“The tobacco industry and its allies in government increasingly use trade and investment agreements to challenge legitimate tobacco control measures, and have done so specifically against laws adopted in the U.S., Australia, Uruguay, Ireland, Norway and Turkey. … Tobacco companies and several countries have filed trade challenges to Australia’s law requiring that cigarettes be sold in plain packaging, while Philip Morris International has used an investment agreement to challenge Uruguay’s tobacco control laws, including its requirement for large, graphic health warnings. These costly challenges are aimed not only at defeating tobacco control measures, but also at discouraging governments from enacting them in the first place.”

Philip Morris is also suing Australia for damages because of tobacco regulations, despite the country’s High Court ruling that it has no right to sue. Philip Morris moved assets to Hong Kong to be able to sue Australia under a bilateral trade agreement, and the TPP would open the floodgates to similar suits.

At the same time, U.S. intellectual-property proposals would make medicines more expensive through rules that would extend patents and data exclusivity periods for brand-name drugs, impeding trade in generic medicines, and putting new limits on how drug prices are set or regulated, according to the Council of Canadians. Already, Eli Lilly and Company, one of the world’s largest pharmaceutical companies, is suing Canada for C$500 million because Canada would not grant it two patents. Eli Lilly claims the denial is an illegal confiscation of profits under the North American Free Trade Agreement.

The Global Treatment Access Group, a coalition of Canadian civil society organizations, in a discussion of health issues, writes that the proposed TPP provisions concern public health policy and therefore do not belong in a trade agreement. These provisions would, inter alia:

“regulate countries’ drug pricing programs to the benefit of patented, brand-name pharmaceutical companies, undermining the ability of governments’ public insurance programs to negotiate reduced prices from manufacturers. … Undermining governments’ ability to manage costs of its public insurance schemes by ensuring value-for-money when it comes to pharmaceutical reimbursement is obviously of great concern.”

What you don’t know can hurt you

The more TPP negotiating governments proclaim their transparency, the more opaque the talks. Here’s a sampling of what governments had to say after last week’s Brunei round ended. The U.S. Office of the Trade Representative provided this happy talk:

“Buoyed by the ministerial engagement and their commitment to actively guide the negotiations, negotiators advanced their technical work this round on the texts covering market access, rules of origin, investment, financial services, intellectual property, competition, and environment. They also made progress on the packages providing access to each other’s markets for goods, services, investment, financial services, temporary entry, and government procurement.”

You’ll wait in vain for any details of said work. Apparently wishing to end any pretense of independence, the Australia Department of Foreign Affairs and Trade issued the same four-paragraph release, word for word. The New Zealand Ministry of Foreign Affairs & Trade couldn’t be bothered to issue a report at all, merely publishing the chief negotiators’ joint statement, which was similar pablum.

The Canada Ministry of Foreign Affairs, Trade and Development did manage its own statement, but, alas, is no more substantive than the others:

“During the 19th round, negotiators built on the progress made to date in several areas, including on goods market access, rules of origin, investment, services, financial services, temporary entry, intellectual property, government procurement and environment.”

No word from Ottawa, either, on what the negotiated text might include. The ministry did say that it saw no problem with the U.S. reversal on tobacco.

Signs of resistance?

Thus far, the only signs of resistance among TPP negotiators comes from Malaysia, which reportedly will not sign anything this year as it conducts a “cost-benefit analysis.” On August 27, Malaysia put forth a proposal to completely “carve out” tobacco regulations from the agreement. It is not known if any other countries have joined Malaysia in seeking to preserve tobacco regulations.

The Vietnamese newspaper Thanh Nien reports that the U.S. is the only TPP negotiating country not a signatory to the World Health Organization Framework Convention on Tobacco Control, which mandates policies to reduce tobacco usage. Passage of the U.S. tobacco proposal would put Vietnam and the other countries in violation of their WHO obligations. So much for the “rule of law.”

In the meantime, legislators around the Pacific Rim continue to demand access to the secret TPP text. Two years ago, in 2011, the New Zealand government denied a hearing on the TPP asked for by 13 organizations and there is no indication that any hearing will be held. A Canadian opposition member of parliament, Don Davies of the New Democratic Party, has asked the government of Stephen Harper “to give Canadian MPs the same information that US Members of Congress have about the ongoing Trans Pacific Partnership negotiations.”

Perhaps Mr. Davies should aim higher, as few members of the U.S. Congress have seen the TPP text, and then only because of loud demands and under condition that they not reveal any of the text in public. They haven’t.

Malaysia and, it is believed, New Zealand, are balking at U.S. demands aimed at dismantling state-owned enterprises; New Zealand and Australia are resisting demands on dairy and sugar products, respectively; and Japan is likely to resist U.S. demands that it open its borders for automobiles. And Chile’s former chief TPP negotiator recently resigned, expressing strong doubts about the wisdom of health-related proposals, although that country’s negotiating stands do not appear to have changed.

Another development that could delay any agreement is if Barack Obama fails to goad the U.S. Congress into re-approving “fast track” trade authority. If such an authority is granted, Congress can only vote yes or no with no amendments allowed. But if Congress does not vote to give away its authority, the process is significantly slowed down because amendments can be made, which would require the text to go back to the negotiators. Activists believe Congress might vote on fast-track authority the first week of October.

Stopping the TPP will happen in the streets, however, not in legislative bodies. It is impossible to overstate the disaster that would occur from an implemented TPP: Labor and environmental laws would be outlawed as fetters on the right to maximum profits; national sovereignty would be a relic of the past; and smaller countries would have no control over the plunder of their resources by the larger countries’ multi-national corporations. Under the TPP, the task of governments, codified in law, would be to maximize corporate profits.

Such is the dystopia that awaits us unless there is a massive international movement against the TPP, and then to overturn existing “free trade” agreements.

Hints of official Trans-Pacific Partnership resistance

A shroud of secrecy, by design, continues to envelop the Trans-Pacific Partnership negotiations. The latest statements from participating governments as usual offer nothing of substance, but that rebellion might be afoot is intimated in an article by Chile’s former chief TPP negotiator, who recently resigned his posts.

The article, published in the Peruvian magazine Caretas, did not contain any thundering denunciations; expecting such from someone who had been the director of Multilateral and Bilateral Economic Affairs for the Chilean Foreign Ministry would not be realistic. The ex-director, Rodrigo Contreras, quietly resigned recently without a public statement, but he did summarize his thinking in the Caretas article.

Codelco lands in Chile's Atacama desert. (Photo by Gerard Prins)

Codelco lands in Chile’s Atacama desert. (Photo by Gerard Prins)

Interspersed among two pages of soft language in which he praised the concept of trade agreements, he explicitly opposed Internet restrictions, expanding copyright terms, extending drug patent terms, restrictions on financial regulations and losing the ability to preserve biological and cultural diversity. Mr. Contreras wrote:

“The extension of drug patent protections beyond the current terms, or the restriction of challenges to frivolous patent applications, would delay the availability of generic drugs and increase the cost of medicines. Public health budgets and access to health services for the most vulnerable would be affected in our countries.”

Smaller countries such as Chile would be particularly vulnerable to corporate plunder as multi-national corporations would be allowed unfettered access to the resources of TPP signatories. Chile’s former chief TPP negotiator concluded his article with these words, likely as firm as anyone who had been a direct participant is likely to issue:

“It is critical to reject the imposition of a model designed according to realities of high-income countries, which are very different from the other participating countries. Otherwise, this agreement will become a threat for our countries: it will restrict our development options in health and education, in biological and cultural diversity, and in the design of public policies and the transformation of our economies. It will also generate pressures from increasingly active social movements, who are not willing to grant a pass to governments that accept an outcome of the TPP negotiations that limits possibilities to increase the prosperity and well-being of our countries.”

A secret, unless you are a corporate executive

It is precisely to minimize potential pressures from social movements that the TPP is being negotiated in complete secrecy, with no text publicly available. Not even the national legislatures of the 11 countries now involved in the Trans-Pacific Partnership know what is in it, even though many must vote on it. (By contrast, corporate executives do have access to the text and have significant influence in shaping it.)

The United States Congress, for instance, must approve the TPP for it to become effective in the U.S., and the Obama administration, which is pushing the most draconian rules, seeks a congressional vote on a “fast-track” basis — a straight yes-or-no vote with no amendments or changes allowed to the text. The reason for a fast-track vote is to increase the odds of passage — the vote happens far quicker than under normal rules, and no “free trade” agreement has been been voted down in the U.S. Congress under fast-track rules.

Following the latest round of negotiations, held earlier in May in Lima, Peru, once again no information was forthcoming. The Office of the United States Trade Representative issued its usual boilerplate language:

“[O]fficials reported that they continued to forge ahead toward their goal of concluding an ambitious 21st-century agreement in the timeframe envisioned by President Obama and the Leaders of the other ten TPP countries. … [T]he negotiators made progress across the agreement. The negotiating groups covering services, government procurement, sanitary and phytosanitary standards, trade remedies, labor, and dispute settlement moved their work forward significantly. The TPP countries also successfully advanced work on the other legal texts, including technical barriers to trade, e-commerce, rules of origin, investment, financial services, intellectual property, transparency, competition, environment and other issues.”

The Australian government’s report was almost word-for-word the same. In a similar Orwellian vein, Canada’s minister of international trade, Ed Fast, was quoted by the Canadian government as saying:

“The TPP is a key part of our government’s pro-trade plan to create jobs, growth and long-term prosperity in every region of the country.”

No details on what these agreements might be were offered, nor how eliminating workplace safety, labor and environmental regulations as part of an accelerated race to the bottom will create “prosperity.” Governments stripping themselves of sovereignty and allowing multi-national corporations to dictate laws and regulations, elevating corporate profits above all other human concerns, constitutes a perverse neoliberal definition of “prosperity.”

Swatting aside pesky notions of democracy

That anything at all is known about the TPP is because of leaks. Among the provisions under negotiation previously reported on the Systemic Disorder blog are:

  • Taxation and regulation constitute “indirect expropriation” mandating compensation (an asserted reduction in the value of an asset is sufficient to establish expropriation rather than a physical taking of property).
  • An expansion of who or what constitutes an “investor” — extending those eligible to file a claim to 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.
  • The U.S. is seeking to include government bonds as a covered investment; if that stands, speculators would have the right to recover the full face value of government bonds bought at discounted prices.
  • Significantly tighten corporate control of the Internet and force service providers to hand over personal data.
  • Energy export infrastructure projects, such as liquefied natural gas facilities, would be automatically approved as a matter of “right.”

The Trans-Pacific Partnership will go beyond, and supersede, the North American Free Trade Agreement and existing bi-lateral trade agreements, themselves already severely one-sided. The first dispute brought by a corporation against a government under the U.S.-Peru Free Trade Agreement, for instance, was by a mining company that demanded US$800 million from the Peruvian government because Peru refused to grant it a third extension of a deadline to install equipment to mitigate the toxic effects of a metal smelter that the company agreed to perform under a signed contract. Public Citizen reports:

“Renco v. Peru is a particularly egregious case, pitting one of the world’s wealthiest men, [U.S. multi-billionaire] Ira Rennert, on one side, and children in a poor and polluted community on the other. The case illustrates two deeply worrying implications of investor-state arbitration. First, it shows that corporations will use investor-state cases to put pressure on governments to weaken environment and health policies. Second, corporations are increasingly attempting to evade justice in domestic courts through the investor-state mechanism. And, if Peru loses the case, its taxpayers must compensate Renco. Governments have already been ordered to pay more than $2.5 billion in taxpayer funds to corporations in investor-state disputes under U.S. [free-trade agreements] and bilateral investment treaties.”

Disputes raised by corporations are heard in secret tribunals in which the judges are often corporate lawyers who specialize in representing companies in disputes with governments; each decision become a new standard leading to ever more one-sided results.

“Free trade” agreements don’t have anything to do with trade; they have everything to do with tightening the grip of corporate dominance over every aspect of life. Alisa Simmons of Global Trade Watch, speaking at a May 28 forum in New York City, said only five of the 29 TPP chapters concern traditional trade issues; the remainder cover other issues and three of the chapters are unknown because negotiators refuse to divulge the titles of the chapters.

Trade agreements like the TPP are specifically designed to override national laws by allowing corporations to sue in secret corporate-controlled tribunals empowered to order governments to do as corporate executives demand. Labor and environmental laws would be outlawed as fetters on the right to maximum profits; national sovereignty would be a relic of the past; and smaller countries would have no control over the plunder of their resources by the larger countries’ multi-national corporations. Links hands across borders before it is too late.

Trans-Pacific Partnership trade pact more draconian than NAFTA

By Pete Dolack

Imagine a world in which which labor safeguards, safety rules and environmental regulations will be struck down because a multi-national corporation’s profits might be affected. A world in which measures to reign in financial speculation are illegal. A world in which the task of governments, codified in law, is to maximize corporate profits.

Imagine a world in which corporations can 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.

Unfortunately, the above is not dystopian science fiction; it is the reality of the top-secret Trans-Pacific Partnership. If you like NAFTA, you will love the TPP.

Haven’t heard of the Trans-Pacific Partnership? There is good reason. It is a proposed trade agreement being secretly negotiated that would not only codify the one-sided rules heavily favoring corporate interests exemplified in the North American Free Trade Agreement, it would go beyond them. And many of the harshest rules proposed to be included in the TPP are being pushed by the Obama administration.

Nine countries — Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the United States — have negotiated for four years. No text has ever been released to the public, and even the U.S. Congress has been left in the dark as to the TPP’s contents. That we know anything at all about it is due to leaks. A portion of the text, the chapter covering investment rules, is posted at http://tinyurl.com/tppinvestment.

What the TPP represents is multi-national corporations going beyond lobbying for deregulation, bending rules and decisively influencing government policy to having their interests in profit maximization regardless of impact written into international law and controlling the tribunals that will adjudicate corporation/government disputes. “Free trade” agreements have become a favored route toward this corporate goal. In the nearly two decades that NAFTA has been in force among Canada, Mexico and the United States, there has been a steady procession of corporations filing complaints alleging that regulations “harm” them.

Thus we have had the spectacle of a U.S. corporate parcel-delivery service suing Canada in an attempt to have the Canadian postal system dismantled and chemical companies suing because a chemical they produce has been banned because it is poisoning water supplies. 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 act that might prevent the corporation from earning the maximum possible profit.

The usual result is either the complaining corporation wins its case or the defendant government settles on terms advantageous to the corporation to avoid a worse result. Multi-national corporations don’t win every time — for instance, Canada was graciously allowed to retain its postal service. The TPP is designed to tilt the scales still more heavily in favor of “investors” — not only via rules granting more “rights” to multi-national corporations, but further expanding the definition of “investor.” There are extensive rules governing the “right” to an near guarantee of profits, but no rules concerning labor, environment, public health or safety.

NAFTA, as draconian as it is, is a starting point. The TPP’s extraordinarily one-sided rules, which go beyond NAFTA in several ways, are intended to be a new floor in the ongoing effort to lock in the domination of industrialists and financiers through the multi-national corporations that they control. The TPP is intended to be “scalable” — that is, other countries can join but are forbidden to oppose any measure already agreed upon. Just two months ago, Canada and Mexico accepted invitations to join, so it is quite conceivable that TPP may supplant NAFTA.

The U.S. watchdog group Public Citizen issued an analysis of the leaked TPP investor chapter earlier this summer. Sounding the alarm, Public Citizen said:

“Over $350 million has been paid to investors by governments under the investor-state provisions in NAFTA alone over toxic waste dump permits, logging rules, bans of toxic substances and more. Currently, there are over $13 billion in pending corporate “investor-state” trade pact attacks on domestic environmental, public health and transportation policy. And, mere threats of such cases have repeatedly resulted in countries dropping important public interest initiatives, exposing their populations to harm that could have been avoided. Yet the leaked text shows that while TPP countries have agreed to impose binding obligations on themselves to provide foreign investors an array of extraordinary new privileges, the TPP countries have not agreed to health, labor or environmental obligations to be required of investors.”

The Public Citizen report notes that the use of international tribunals to overturn regulations has increased dramatically in the past decade:

“Over $719 million has been paid out under U.S. Free Trade Agreements and Bilateral Investment Treaties alone — 70 percent which are from challenges to natural resource and environmental policies, not traditional expropriations. Tobacco firms are using the regime to challenge tobacco control policies, including a case by Phillip Morris against Australia. Absent substantial changes to the leaked text, TPP would greatly increase the number of investor-state attacks on public interest policies and would expose governments to massive new financial liabilities.”

The use of international tribunals is an aspect of bi-lateral and multi-lateral trade agreements often overlooked. The TPP would require the use of the International Centre for Settlement of Investor Disputes (ICSID) — an arbitration board that is an arm of, and controlled by, 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 are most of the world’s countries.

Eight of the judges have been appointed by the United States. Each is a lawyer whose career has been spent in the service of 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. Five of the eight U.S.-named lawyers have been counsel to various Republican Party administrations and several of the eight specialize in representing corporations before international arbitration boards.

These are the U.S. panelists who are among those judging the merits of corporate claims against government regulations:

  • Fred Fielding: An attorney who bounces back and forth between Republican administrations and corporate law firms; among his clients has been the mercenary military contractor Blackwater.
  • William Park: Currently a law school professor but has practiced with three corporate law firms and has been an arbitrator on many business-arbitration boards.
  • Daniel Price: A corporate lawyer who represents companies in international arbitration and a former economic adviser to George W. Bush.
  • John M. Townsend: A corporate lawyer who represents pharmaceutical companies and specializes in representing companies in arbitrations against governments; he is also a trustee of a business lobbying group.
  • J. Caleb Boggs III: A corporate lawyer who specializes in representing financial institutions and other clients before regulators and helped write a law deregulating banks while a Senate aide.
  • William A. Burck: A corporate lawyer who specializes in representing companies and corporate officers in disputes with U.S. and other governments; he is a former legal adviser to George W. Bush.
  • Ronald A. Cass: The chair of a lobbying group that seeks to tilt international trade law further in favor of business; he was a trade representative for two Republican administrations.
  • Emmet Flood: A corporate lawyer who represents companies in disputes against government regulations and a former counsel to George W. Bush; among his past clients are the Koch brothers.

The rules that panelists will adjudicate would supersede national laws. 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.”

That exception, however, is meaningless. It specifically requires that excepted rules must be “not inconsistent with the Agreement” — and that is the towering thorn sticking out of the minuscule rose. 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 arbitration bodies concerning disputes under NAFTA and other trade agreements. Those decisions skew heavily toward corporate complainants.

Venezuela recently became the third South American country to withdraw from ICSID; in doing so, the country’s foreign ministry said ICSID “has ruled 232 times in favor of transnational interests out of 234 lawsuits received throughout its history.” A 2007 report issued by the Institute for Policy Studies and Food and Water Watch, “Challenging Corporate Investor Rule,” said multi-national corporations have won 70 percent of the cases (it did not specify how many of the remainder were a loss for the corporation nor how many were not decided or withdrawn). These tribunals are conducted in secret; only two ICSID cases have been conducted with public attendance in its history.

The World Bank is one of the principal bodies imposing austerity on countries around the world; it routinely conditions loans to governments of developing countries on the swift privatization of state-owned enterprises and public utilities, typically conducted at fire-sale prices as salivating corporate executives are aware of the hammer being held over the selling government. When the buying corporation decides it has not made the profits it expected, it can file a claim heard by ICSID, which is controlled by the very same World Bank.

In one notorious case, the World Bank forced the privatization of the water system in the Bolivian city of Cochabamba. Bechtel, the company that was handed the water system as the sole bidder in a secret process, charged a sum equal to one-quarter of city residents’ average household income and imposed a contract provision banning the collection of rainwater. After massive local protests backed by a global campaign forced it to leave the city, Bechtel sued Bolivia for US$50 million in damages and lost profits although its investment is believed to have been less than $1 million and Bechtel’s revenues are six times the size of Bolivia’s gross domestic product.

Bechtel settled without receiving a payment only because of massive international pressure and because Bolivians continued to resist in large numbers despite being repeatedly fired upon. That pressure was necessary as, according to Earthjustice, World Bank officials refused to disclose when or where the first hearing in the case would take place.

That is a very rare ending. Although developing countries are most often the targets of ICSID actions, regulations anywhere can be overturned. For instance, Canada was sued under the provisions of NAFTA by a U.S.-based chemical company after it banned the use of a gasoline additive already banned in the U.S. because it is a known toxic agent. Thanks to ICSID, Canada had to reverse its ban, pay millions of dollars to cover the company’s “lost profits” and issue an apology to the chemical company.

Among the features of NAFTA to be replicated in the TPP are that:

  • Governments pay attorney costs, win or lose, in addition to paying judgments.
  • 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 will be read as the “evolving standard of investor rights” required under the TPP.
  • No mention of labor rights, nor any standards for environmental, health or safety that must be met.

A London Court of International Arbitration panel, ruling in July 2005 for a unit of the Occidental Petroleum Corp. in a case heard under the U.S.-Ecuador bi-lateral investment treaty, declared that any change in business conditions constitutes a violation of “investor rights.” If such a ruling is accepted as precedent, any attempt at regulation is potentially illegal.

Among the features of the TPP that go beyond NAFTA are:

  • An expansion of who or what constitutes an “investor” — extending those eligible to file a claim to 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.
  • No language to block frivolous claims.
  • The U.S. is seeking to include government bonds as a covered investment; if that stands, speculators would have the right to recover the full value of government bonds bought at discounted prices.
  • Requiring new intellectual property laws that would criminalize many acts not currently classified as such.
  • Significantly tighten corporate control of the Internet and force service providers to hand over personal data.

A separately leaked section of the TPP, covering pharmaceutical products, contains this interesting item on its cover page: “Declassify on: Four years from entry into force of the TPP agreement or, if no agreement enters into force, four years from the close of the negotiations.” What is being hidden? New monopoly rights for pharmaceutical companies and the ability to overturn the policies of countries such as Australia and New Zealand that force much lower prices on drugs, policies that U.S.-based pharmaceutical companies wish to overturn. In addition, Citizens Trade Campaign reports:

“This U.S. intellectual property proposal, which rolls back initial reforms made in a trade pact that the Bush administration signed with Peru only four years ago, would lengthen pharmaceutical monopolies, eliminate safeguards against patent abuse, grant additional exclusive controls over clinical trial data and favor the giant pharmaceutical companies’ monopoly interests at every stage.”

Médecins Sans Frontières/Doctors Without Borders similarly reports that:

“The Obama administration is walking away from previous efforts to ensure that developing countries can access affordable medicines, setting a dangerous new standard that will likely be replicated in future trade agreements with developing nations. The administration is touting a so-called ‘access window’ as a mechanism to boost access to medicines. In fact, the administration is confusing access with affordability. The ‘access window’ is all about getting brand-name drugs to market faster, and giving their producers longer monopoly rights that prevent price-lowering competition and keeping medicines out of the hands of the millions of people who need them.”

The White House claims that “The Obama Administration has been working in partnership with Congress and consulting closely with stakeholders around the country to ensure TPP addresses the issues that American businesses and workers are facing today, and may confront in the future.” That clearly is not true, as senators and representatives are demanding disclosure. Nor does any of the agreement’s text appear on the Web page dedicated to the TPP.

Executives and lobbyists from some of the largest corporations on the planet — commanding revenues much larger than the gross domestic products of the smaller TPP countries — are meeting in secret with government officials to give themselves yet more power and control.

Corporate-written rules for self-benefit are intimately connected with financiers manipulating markets and benefiting from the austerity they insist governments impose. Industrialists extract the surplus value from their from their workers that becomes profit and financiers provide the whip that intensifies the process and create the speculative instruments that profits are poured into. We can have corporate dictatorship, or democracy. But not both.