This is such sad news, Diana. He was a presence of calm and reason in our discussions which were sometimes…
Trans-Pacific Partnership (TPP) and after
Written by Diana Thebaud Nicholson // December 1, 2017 // Global economy, Trade & Tariffs // 1 Comment
Jim Balsillie: Raise a glass to Canada’s TPP team for standing up to corporate bullies
(The Globe and Mail) The Trans-Pacific Partnership (TPP) trade deal roared back into the headlines earlier this month, with Prime Minister Justin Trudeau being accused of scuttling a deal brokered at the Asia-Pacific Economic Co-operation forum in Vietnam.
Less attention was given to International Trade Minister François-Philippe Champagne and his team, which succeeded in sending the original TPP12 automotive and cultural sections back to the negotiating table and in suspending many of its controversial intellectual-property (IP) provisions. Without these steps, our economy could have been substantially and permanently damaged.
By designing a trade strategy that benefits Canada’s current and future wealth drivers, Canadian negotiators focused on securing market access for traditional businesses and policy flexibility for our digital businesses to create new markets. This outcome is all the more significant because it was done against the backdrop of foreign corporate interests in Canada that dominate face time with our government, and also influence Canadian business associations. …
TPP12 received widespread criticism from innovation experts around the world who argued the deal presented the opposite of a flexible IP regime needed to allow new innovators to emerge. Nobel laureate Paul Krugman opposed the way in which TPP12 strengthened IP monopolies and dispute-settlement mechanisms. Médecins sans frontières (Doctors Without Borders) condemned the effects that extended IP standards would have on access to medicines for the world’s most vulnerable. Another Nobel laureate and pioneer of innovation economics, Joseph Stiglitz, called it “the worst trade deal ever.” Innovation and digital policy experts similarly warned it would make Canada a permanent underclass in the global knowledge economy.” (for subscribers)
10 – 11 November
Trump says U.S. won’t be ‘taken advantage of anymore.’ Hours later, Pacific Rim nations reach deal on trade without America.
(WaPost) On Saturday, the countries announced they had reached a deal to move ahead with the Trans-Pacific Partnership free-trade pact that Trump threw into question when he withdrew from it earlier this year.
The agreement represents something of a rebuke of Trump, coming near the end of his five-country, 12-day swing through Asia, and reflects the willingness of other nations to proceed without the buy-in of the United States.
APEC ministers publish joint statement after wrangling over language
The statement still refers to free and open trade, to fighting protectionism and to recognizing the world of the World Trade Organization, but it also refers to fair trade and to members “improving adherence to rules agreed upon.”
Asia-Pacific leaders say to fight ‘unfair trade’ in nod to Trump
(Reuters) – Asia-Pacific leaders agreed on Saturday to address “unfair trade practices” and “market distorting subsidies” in a statement that bore the imprint of U.S. President Donald Trump’s efforts to reshape the global trade landscape.
The summit of Asia-Pacific Economic Cooperation (APEC) countries in Vietnam has put on show the contrasting vision of Trump’s “America First” policy with the traditional consensus favoring multinational deals that China now seeks to champion.
TRANS PACIFIC DEAL LIVES
In a boost for the principle of multilateral trade pacts, countries in the Trans Pacific Partnership (TPP) trade deal agreed on the core elements to move ahead without the United States.
Their talks had looked in doubt in the face of last minute resistance from Canada, but ministers announced they were near agreement on a deal they rebaptised the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
A joint statement issued by the 21 APEC countries contrasted sharply with the group’s communique from last year.
“We will work together to make trade more inclusive, support improved market access opportunities, and address unfair trade practices,” the statement read. “We urgently call for the removal of market-distorting subsidies and other types of support by governments and related entities.”
Canada, 10 other Pacific nations agree on ‘core elements’ of new trade deal
(Globe & Mail) Canada and 10 other nations have agreed on the “core elements” of a new Trans Pacific Partnership trade deal, but some contentious areas – including culture and dispute settlement – were set aside for further negotiation.
The late-night deal was reached on the sidelines of the Asia-Pacific Economic Co-operation (APEC) forum in Danang, Vietnam. It came just hours after Prime Minister Justin Trudeau was accused of blocking an agreement earlier in the day.
The political drama included a scheduled meeting of TPP leaders that Mr. Trudeau did not attend and that was ultimately cancelled, leading to international media reports that Canada had “screwed” its TPP allies after getting cold feet.
Canada’s Trade Minister François-Philippe Champagne dismissed the reports as a “misunderstanding” and said Canada took the time it needed to push for stronger protections related to the environment and labour.
“This is Canada. We won’t settle for just any deal,” he told reporters Friday. “This is about making sure that Canada as a Pacific nation would have access to the markets in the Pacific region. This about setting also the terms of trade in the region.”
9 November
Trump brings tough trade message in vision for Asia
(Reuters) U.S. President Donald Trump set out a strong message on trade at a meeting of Asia-Pacific countries in Vietnam on Friday, saying the United States could no longer tolerate chronic trade abuses and would insist on fair and equal policies.
APEC, which has long championed free trade, has itself been convulsed by the changes under Trump.
Since Trump abandoned the Trans Pacific Partnership (TPP) trade deal early in his presidency, the remaining 11 members have struggled to build momentum to keep it alive.
Leaders of TPP countries are due to meet on Friday after talks among ministers ended in confusion on Thursday with Japan’s economy minister saying that they “agree in principle” and his Canadian counterpart saying that was not true.
19 October
John Ibbitson: Canada desperately needs a revived TPP as NAFTA talks falter
Since there is now a clear and present danger that NAFTA talks will collapse, Canada must look for alternative trading partners. And on this front, there is good and important news.
If things continue to go well, the 11 remaining members of the Trans-Pacific Partnership will commit to proceeding with the pact when leaders meet in Vietnam next month for the APEC summit, even though the United States is no longer part of the accord.
With the North American free-trade talks in disarray, a revived TPP is vital to Canada’s future trading interests. Canada badly needs this deal.
25 May
Simon Baptist: A TPP revival?
(Economist Intelligence Unit) Earlier this week, on the sideline of the latest APEC summit, the 11 remaining members of the Trans-Pacific Partnership (TPP) trade deal announced that they would continue discussions on the implementation of the already-agreed text. This was something of a surprise, as it seemed that, with the prospect of access to the large and lucrative US market taken away, other countries would not be willing to make the other concessions contained in the deal.
It will still be a big challenge to get the TPP going, and I think that if it does go ahead it will only be with the involvement of a subset of the 11—perhaps those more committed to free trade such as New Zealand, Chile, Singapore and Australia. Political will in, for example, Malaysia to push the deal without US access is likely to fall victim to domestic pressures. The TPP has its flaws, but I view it as a net positive, as it gets countries engaging on the new frontiers of trade, such as data, rather than on old-economy issues, such as goods tariffs. With the current political focus on old-school manufacturing, countries risk isolating themselves from the forces of technology that are going to dominate trading relationships in the future
2 May
Trans-Pacific Partnership salvage talks face a tall order as its 11 nations converge on Canada
(Financial Post) Negotiators and senior trade officials from 11 Pacific Rim nations gathered in Toronto Tuesday to discuss whether it’s possible to salvage the Trans-Pacific Partnership.
The goal of the preliminary talks, which conclude Wednesday, is to determine if their countries’ trade ministers should pursue a revival of the deal at a meeting in Vietnam later this month.
The TPP was thrown for a loop after U.S. President Donald Trump signed a memorandum formally withdrawing the U.S. from the multilateral trade agreement. It was one of the first things Trump did after he was sworn into office.
The U.S. pullout makes it impossible to ratify the agreement as currently written. The deal was to enter force once it had been ratified by six nations representing more than 85 per cent of the proposed trading block’s total gross domestic product. The U.S. alone would have represented 60 per cent of the proposed block’s GDP.
1 May
TPP Nations Meet in Canada to Discuss Fate of Pact Without U.S.
(Bloomberg) Canada is hosting a round of exploratory negotiations on the future of the Trans Pacific Partnership after the U.S. bowed out.
Senior trade officials from every remaining signatory country will convene the so-called TPP-minus-one talks in Toronto on Tuesday and Wednesday. While ministers won’t attend, the event is expected to set the stage for an upcoming Asia-Pacific Economic Cooperation summit of trade ministers in Vietnam.
This week’s talks are also the latest sign of Canada looking to pivot in part away from its biggest trading partner — coming amid escalating disputes with President Donald Trump’s administration over the North American Free Trade Agreement, softwood lumber and the dairy sector. Prime Minister Justin Trudeau’s government responded to U.S. lumber duties last week by saying it would in turn try to sell more of its product to Asia.
25 January
On Day 1, Trump starts making China great again: Bloomberg View
By Michael Schuman
… a successful TPP would’ve put pressure on China — which isn’t a signatory to the pact — to respond. In theory, to compete, it would’ve had to open its markets further to foreign companies and begin abiding by rules of trade and business written in Washington. (Indeed, at least some reformers in China privately welcomed the deal as a means of encouraging liberalization at home.) Trump’s threats of tariffs are unlikely to accomplish the same goal.
Trump claims that as a businessman, he intends to run the most business-friendly administration ever. But trashing TPP isn’t good for U.S. business. It isn’t good for U.S. farmers, who stood to gain access to the lucrative Japanese market, among others. It’s not going to make America safer or reduce the costs of maintaining security and freedom of navigation in Asia — quite the contrary.
Perhaps Trump will get a few public-relations brownie points from tweeting the news to his followers. Beyond that, he’s hurt American business, pulled the rug out from under U.S. allies, and damaged American prestige — perhaps irreparably — in the most economically critical region in the world. Happy new year.
23 January
Donald Trump signs order to withdraw from Trans-Pacific Partnership
(Global News) Setting itself apart from a never-say-die Japan, Canada resigned itself to the death of the Trans-Pacific Partnership on Monday after President Donald Trump made good on his promise to pull the United States out of the trade pact.
Trump called getting out of the TPP “a great thing for the American workers” as he signed an executive order formally removing the U.S. from the controversial 12-country Pacific Rim deal.
Canada had been taking a wait-and-see approach to the TPP, with the Liberal government launching a sweeping consultation that appeared designed to postpone a decision until the U.S. resolved the question of whether or not to take part.
Asked whether the government believes the deal can be salvaged, Freeland spokesman Alex Lawrence would only say, “The agreement cannot enter into force without the United States.”
Donald Trump Withdraws U.S. From Trans-Pacific Partnership
TPP agreement was aimed at curbing China’s advantages
(WSJ) President Donald Trump’s formal withdrawal from the 12-nation Pacific trade agreement, announced Monday, creates an American policy vacuum in a fast-growing region that includes China and longtime U.S. allies.
Mr. Trump’s move fulfilled a promise to end U.S. participation in the proposed TPP deal, which was intended in part to show Japan, Australia, New Zealand, Vietnam and other Pacific countries that the U.S. was doubling down on a region strained by China’s increasing economic and military assertiveness.
In one respect, Mr. Trump’s action was symbolic, because congressional leaders and the Obama administration had signaled after the November election that there was no path forward for the TPP.
Still, that symbolism was large for an administration that wants to show it is serious about jettisoning decades of mostly steady trade liberalization in favor of more confrontation with China and other trading partners, with the potential for big tariffs if those countries don’t come to the table ready to make concessions. Mr. Trump and his advisers have eschewed multilateral trade blocs.
2016
22 November
Trump to withdraw from Trans-Pacific Partnership on first day in office
President-elect says he will leave TPP, with Japanese prime minister Shinzo Abe warning trade deal would be ‘meaningless’ without US
Donald Trump has issued a video outlining his policy plans for his first 100 days in office and vowing to issue a note of intent to withdraw from the Trans-Pacific Partnership “from day one”.
In the brief clip posted to YouTube on Monday, the president-elect said that “our transition team is working very smoothly, efficiently, and effectively”, contradicting a wealth of media reports telling of chaos in Trump Tower as Trump struggles to build a team.
He said that he was going to issue a note of intent to withdraw from the Trans-Pacific Partnership trade deal, calling it “a potential disaster for our country”. Instead he said he would “negotiate fair bilateral trade deals that bring jobs and industry back”.
17 November
Vietnam said no to the Trans-Pacific Partnership. Prime minister Nguyen Xuan Phuc said the country won’t ratify the US-led, 12-nation trade agreement, because of uncertainty following the US election. The TPP now hangs in the balance: Donald Trump has called it a “disaster,” Japan wants to stick with it, and Malaysia has turned its focus to tying up a trade pact with China.
28 September
A Trade Deal With a Long Past and Uncertain Future
(Stratfor) Since the United States alone accounts for more than 60 percent of the 12 countries’ combined GDP, Washington’s consent will make or break the deal
Analysis
The TPP’s 12 parties signed the agreement in February after more than a decade of negotiations. In that time, the pact grew from a minor free trade agreement between four Pacific states into a monumental structure with economic and geopolitical implications. Once the United States and Japan entered into the talks — in 2008 and 2013, respectively — the TPP became a cornerstone of each country’s strategy for the Asia-Pacific region. The deal then became intertwined with the broader struggle among signatory nations to constrain China’s rise — or, at least, to ensure it adheres to established economic and political rules. And though that aspect of the TPP won over the U.S. national security establishment, other segments of American society and politics are critical of its social and economic consequences.
Although it was signed in February, the TPP will take effect only if no fewer than six member states representing at least 85 percent of the pact’s total gross domestic product have ratified it in their legislatures.
As the debate over the TPP, and free trade in general, rages in the United States, China’s leaders are doubtless watching with great interest. Whatever the deal’s stated goals, keeping China in check is among its core purposes. This is not to suggest that the TPP or its primary backers, the United States and Japan, are trying to undermine China. But agreements like the TPP, combined with increased regional security cooperation, aim to ensure that as China’s economic heft and military power grow, Beijing will abide by predetermined rules — or else risk isolation. The pact’s political failure would be a welcome development for Beijing.
How the Marrakesh Treaty makes the Intellectual Property system more inclusive
The new treaty comes into effect Sept. 30. Canada’s involvement shows leadership in creating more inclusive copyright rules, writes Bassem Awad.
As of Friday, as the Marrakesh Treaty comes into force, persons with perceptual disabilities can finally have access to copyrighted works, ending the global book famine for those requiring accessible versions of printed materials.
The agreement is historical because the international community has devoted a special treaty exclusively to facilitating access to published works for persons who are blind, visually impaired or otherwise print disabled. According to the United Nations Convention on Rights for People with Disabilities, “States Parties shall take all appropriate steps, in accordance with international law, to ensure that laws protecting intellectual property rights do not constitute an unreasonable or discriminatory barrier to access by persons with disabilities to cultural materials.”
The treaty does not reduce existing international copyright protections provided in earlier treaties. It obliges signatory countries to introduce or maintain the making of copies in accessible formats as well as the distribution of those copies both domestically and internationally.
2 April
Nobel Prize-winning economist Joseph Stiglitz warns Canada against TPP
(CBC) The warning from Nobel Prize-winning economist Joseph Stiglitz leaves no doubt about his assessment of the Trans-Pacific Partnership.
“TPP is a very bad agreement and will worsen inequality. I’m actually shocked that they’re actually seriously considering ratifying it,” Stiglitz told host Chris Hall on CBC Radio’s The House.
The former chief economist for the World Bank was in Ottawa this week to participate in a forum on the TPP.
“This is not a free trade agreement. This is a managed trade agreement, and it’s managed mostly for corporate interests in the United States without giving a little bit to the other TPP partners,” he said.
Stinglitz outlined several issues with the Trans-Pacific Partnership, which — if ratified — will form a trading block representing roughly 40 per cent of the world’s gross domestic product.
The economist and Columbia University professor said his biggest issue with the treaty revolves around the investment chapter and the right it would give corporations to sue governments if they think rules and regulations contravene the terms of the TPP. …
The Nobel Prize winner told The House he has shared his concerns with Canada’s International Trade Minister Chrystia Freeland, and that Freeland appeared to understand his arguments against the deal.
“I think the most likely outcome [in the United States] is a re-negotiation,” he said, pointing out that both Democrat presidential candidate nominees, Bernie Sanders and Hillary Clinton, oppose the deal, as does Republican frontrunner Donald Trump.
“And I think it would be terribly helpful if Canada came out with the same position — we’re in favour of good trade agreements, it’s not that we are protectionists,” Stiglitz said.
“But this is not about free trade. This is about changing the rules of the game for the market economy in ways that disadvantage ordinary people and advantage a few large corporations.”
26 March
Canada’s TPP negotiation strategy ignores a crucial piece of trade advice
By David Wolfe, co-director of the Innovation Policy Lab at the Munk School of Global Affairs and author of the introduction to the second edition of Trade, Industrial Policy and International Competition.
(Globe & Mail) As several commentators have written in The Globe and Mail in recent months, the sections on intellectual property rights, foreign investment rules and trade secrets are particularly troubling.
As Canada’s negotiation strategy for TPP, the previous government adopted the traditional approach to international trade agreements: They bargained for increased access to international markets in the economic sectors where Canadian trade performance is strongest, while sacrificing some protection in the domestic market, especially in key manufacturing sectors. The trouble with this approach is that it is a 20th-century trade strategy applied to a 21st-century economy. Canada negotiated TPP in the rear-view mirror.
Our key competitors, especially the United States, did the opposite in their negotiations. They aimed to secure competitive advantage for knowledge-based, high-growth sectors with the greatest potential for expansion in the 21st century. The 21st-century business world is less and less a material enterprise that builds physical products, and more and more a virtual enterprise that is driven by software and technology – think Google, Monsanto, even Tesla. In the 21st-century economy, it is the algorithms which drive the success of the enterprise and the intellectual property that underlies companies’ business models that are most critical for economic success.
Unfortunately for Canadians, the government that negotiated this agreement did not pay attention to these considerations.
10 March
Future of the Trans-Pacific Partnership?
(Seeking Alpha) With almost all presidential candidates voicing strong opposition to the Trans-Pacific Partnership in its current form, fellow countries involved in the deal are expressing worries about the trade pact’s future.
Japan’s chief negotiator told an Asia Society forum in Washington that trying to alter one aspect of the pact for the U.S. would open the door for 11 other countries to ask for changes.
“TPP to me is something like a delicate, fragile glasswork, so if we want to cut one part of it, that will destroy everything,” Hiroshi Oe said. “About renegotiation of the substance, that’s no possibility
2015
10 November
Trans-Pacific Partnership deal “an act of climate denial”
(National Observer) If a climate change policy interferes with a corporation’s business, under the terms of the recently signed, secretive TPP deal, the corporation could sue a state government.
“The TPP is an act of climate denial,” said Jason Kowalski, the U.S. policy director at 350.org.
“It denies the scientific imperative to leave fossil fuels in the ground by granting corporations incredible powers over the sovereign right of countries to fight climate change on their own.”
At issue is the investor state dispute settlement (ISDS) mechanism included in the trade deal. ISDS’s allow foreign investors to use a secret tribunal to launch a lawsuit if they believe government actions might affect their future profits.
The TPP could limit a country’s ability to put in place any agreement it reaches at the Paris climate change summit because of concerns over lawsuits, according to Pierre-Yves Serinet, coordinator of the Quebec Network on Continental Integration.
9 November
TPP is about many things, but free trade? Not so much
(Globe & Mail) Let’s be clear about the just-released, negotiated-in-secret Trans-Pacific Partnership deal. Despite how it’s being referred to by journalists, officials and academics, as Nobel prize-winning economist Joseph Stiglitz and economist Adam Hersh have noted, it is definitely not a “free-trade” agreement. It’s much more than that.
What are Dr. Stiglitz and others arguing, and why does it matter? Simply put, calling the TPP a free-trade agreement overplays its benefits, plays down its problematic aspects and fundamentally misunderstands what the deal is actually about.
Labels matter. Ever since the 1988 “free-trade election,” the virtue of free trade has been unquestioned in Canadian policy circles. Free trade’s victory in the battle of ideas has been so overwhelming that if you can persuade someone that the TPP is a free-trade agreement, then you’ve already won half the battle.
Free trade has a specific meaning for economists. The notion that free trade is good is grounded in the theory of comparative advantage. First developed in 1817 by David Ricardo, it states (simplifying quite a bit) that if countries specialize in what they are best at, they can make themselves better off through trade. Costs are lowered, production is maximized and people can buy imports at prices lower than would have prevailed had they produced everything themselves.
Many conditions have to hold (and they often don’t) for comparative advantage to work in the real world. Regardless, pro-free-trade arguments implicitly rely on the idea of comparative advantage.
The big problem is that TPP-like agreements are no longer exclusively or even primarily about reducing traditional trade barriers. As Harvard economist Dani Rodrik notes in his 2011 book The Globalization Paradox, with some exceptions (such as Canada’s dairy industry), tariffs have never been lower. Any gains from further reductions would be relatively modest.
Instead, agreements such as the TPP are about implementing policies that have nothing to do with comparative advantage, policies that are often designed to lead to higher consumer costs and concentrated corporate power. Treated as marginal issues, these policies are “free-trade free-riders,” coasting along on an unearned legitimacy.
Today, the free-trade free-riders are central to agreements such as the TPP. Take intellectual property. As Dr. Stiglitz, Dr. Hersh and groups such as Médecins sans frontières (Doctors Without Borders) have noted, greater drug-patent protection would “limit competition from generic drug manufacturers that reduce drug prices and improve access to treatment, and would accelerate already soaring medicine and vaccine prices.”
9 October
Up to 15 side deals possible in TPP
(Ottawa Citizen) “The purpose of a side letter is to clarify bilateral matters between two parties that do not affect the rights and obligations of the other TPP parties,” the official said.
They would cover “a range of different issues, like a bilateral agreement,” or could involve an exclusion “or a recognition of” a specific sector.
“Countries can request those after the fact,” the official said, adding that the countries can agree on the topics of side letters, and draft the actual texts later.
“It’s the same way with the negotiating text. You agree to what the parameters are and then the actual drafting has to take place.” (Globe & Mail) Several side deals to accompany final TPP pact, federal officials say
6 October
Making Sense of the TPP: Don’t Confuse Trade With Trade Deals
Jared Bernstein, former Obama administration economist
The thing you should know about trade agreements is that advocates oversell them and opponents exaggerate their downsides. And this problem gets amped up when few on either side have access to the actual terms of the deal.
(HuffPost) Trade and globalization have historically been a big, economic game-changer, reaping benefits for consumers and macro-economies from vastly increased supply chains. Trade deals, on the other hand, are nothing more than rules of the road for how trade is conducted between partner countries. Some of those rules are handshakes between investors across borders; other measures, often in opposition to the investor-favored ones, have the potential to benefit consumers, workers, and the environment.
What matters is the balance between those two forces (not, as many of the media stories tell it, whether we beat China to organizing the Pacific Rim). Historically, the investor class has called the tune, pushing patent protections, intellectual property rights, investment protections, and dispute settlement structures that protect multinationals from prosecution and allow them extra-national privileges. The U.S. negotiators tell us this time is different, and from what we’ve seen, the TPP includes more in the way of labor and environmental rights, along with consumer protections. Whether they are enforced is thus a critical matter. …
The TPP is a bigger deal than past agreements, which typically involve one or two other countries. Trade officials talk about it as the “last trade agreement,” meaning that instead of negotiating future agreements, countries will be able to join onto the TPP. Thus, when fast track was passed, the administration agreed that once the President announces his intention to sign it, 90 days must pass before he does so, including 60 days when the heretofore secret agreement will be public for all to read (though you’ll really need a trade lawyer to make sense of the language and references to past agreements).
5 October
TPP: The end of the beginning
(Brookings) Editors’ Note: Hammering out the political deal that has now brought Trans-Pacific Partnership (TPP) negotiations to a successful conclusion was a landmark achievement, but as Mireya Solis argues, there are still battles to be fought. This post originally appeared in Nikkei Asian Review.
The Trans-Pacific Partnership (TPP) deal that the United States and 11 other Pacific Rim countries struck in Atlanta today was five years in the making. More than once we heard that the end game had come, only to see deadlines pass us by as the negotiations continued to move at a frustratingly slow pace. The grueling work required to cinch this mega trade deal should not come as a surprise, however, given the sheer complexity of the negotiation agenda and the wide differences in the makeup of the participating countries.
Hammering out the essential political deal that has brought TPP negotiations to a successful conclusion is a landmark achievement. But we should not lose sight of the fact that more battles will need to be won before the TPP morphs from an agreement in principle to an agreement in reality. Success at the Atlanta ministerial, however, delivers immediate and portentous benefits.
Trans-Pacific free trade deal agreed creating vast partnership
(BBC) The US, Japan and 10 other Pacific rim countries have signed a controversial and sweeping trade agreement that covers about 40% of the world economy.
The Trans-Pacific Partnership (TPP) will create a new economic bloc with reduced trade barriers between the 12 nations involved.
The final round of talks were delayed by negotiations over how long pharmaceutical corporations should be allowed to have a monopoly period on next-generation drugs.
The US had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments.
Australia, New Zealand and public health groups had sought a period of five years to bring down drug costs and the burden on state-subsidized medical programs.
A compromise was reached but the agreed protection period has not been confirmed.
“The negative impact on public health will be enormous:”Statement by MSF on the conclusion of Trans-Pacific Partnership negotiations in Atlanta
The Trans-Pacific Partnership Is a Disaster
By Ian Fletcher, Author, ‘Free Trade Doesn’t Work: What Should Replace It and Why’
(HuffPost) As I’ve explained before, international trade isn’t just harmony, it’s largely rivalry, and mercantilism is how the winners play to win. But we naively refuse to play that game. Instead, we have faith in “free” trade, we think free-trade agreements will save us, and we lose.
And if the purely trade aspects weren’t bad enough, the TPP is also a profoundly anti-democratic agreement which signs away our right to govern our own economy. Despite being nominally a “trade” agreement, it contains provisions which interfere with areas well beyond the bounds of trade. To wit, it would (credit to Lori Wallach):
• Limit how U.S. federal and state officials could regulate foreign firms operating within U.S. boundaries, with requirements to provide them greater rights than domestic firms.
• Extend the incentives for U.S. firms to offshore investment and jobs to lower-wage countries.
• Establish a two-track legal system that gives foreign firms new rights to skirt U.S. courts and laws, directly sue the U.S. government before foreign tribunals and
• Demand compensation for financial, health, environmental, land use and other laws they claim undermine their TPP privileges.
• Allow foreign firms to demand compensation for the costs of complying with U.S. financial or environmental regulations that apply equally to domestic and foreign firms.
Taken to its logical conclusion, this all ultimately amounts to the idea that the profitability of investments must be the supreme priority of state policy–overriding health, safety, human rights, labor law, fiscal policy, macroeconomic stability, industrial policy, national security, cultural autonomy, the environment, and everything else.
THE ABCS OF TPP
Canada and 11 other countries have struck a deal to create a free-trade area spanning from Chile to Japan. Here’s a primer on what it is, how Canadian industries could be affected and what the federal leaders propose to do about it
Burney & Hampson: TPP deal a clear win for Canada
As with any trade agreement there are tradeoffs but, in this case, almost all sectors of our economy stand to benefit, including aerospace, agriculture (pork, beef, fruits, grains and canola oil), energy, seafood, chemicals, plastics, industrial goods, machinery, metals and minerals, forest products, IT, and financial and professional services. It will now be up to our exporters to aggressively seize new market opportunities open to them.
When combined with the Canada-Korea free-trade agreement and the Comprehensive Economic and Trade Agreement (CETA) with the European Union, Canada will have gained preferential access covering 90 per cent of our exports. Besides, once consummated, the TPP will serve as a template for a dozen or more additional partners like India, Indonesia, South Korea, Taiwan, and possibly China as well.
Access gained must be compensated to some extent by access provided. We will have to relax some protectionist measures propping up our least competitive entities, as will other TPP partners. The government has signalled its intent to compensate those, such as dairy and poultry farmers, who may be adversely affected, and the impact will be phased in gradually. Worth noting is that, once released from the constraints of supply management, New Zealand and Australian dairy farmers became highly efficient exporters.
If DEREK BURNEY AND FEN OSLER HAMPSON approve then it must be just fine – at least for Conservatives
2 October
Joseph E. Stiglitz and Adam S. Hersh The Trans-Pacific Free-Trade Charade
(Project Syndicate) As negotiators and ministers from the United States and 11 other Pacific Rim countries meet in Atlanta in an effort to finalize the details of the sweeping new Trans-Pacific Partnership (TPP), some sober analysis is warranted. The biggest regional trade and investment agreement in history is not what it seems.
You will hear much about the importance of the TPP for “free trade.” The reality is that this is an agreement to manage its members’ trade and investment relations – and to do so on behalf of each country’s most powerful business lobbies. Make no mistake: It is evident from the main outstanding issues, over which negotiators are still haggling, that the TPP is not about “free” trade.
New Zealand has threatened to walk away from the agreement over the way Canada and the US manage trade in dairy products. Australia is not happy with how the US and Mexico manage trade in sugar. And the US is not happy with how Japan manages trade in rice. These industries are backed by significant voting blocs in their respective countries. And they represent just the tip of the iceberg in terms of how the TPP would advance an agenda that actually runs counter to free trade.
For starters, consider what the agreement would do to expand intellectual property rights for big pharmaceutical companies, as we learned from leaked versions of the negotiating text. Economic research clearly shows the argument that such intellectual property rights promote research to be weak at best. In fact, there is evidence to the contrary: When the Supreme Court invalidated Myriad’s patent on the BRCA gene, it led to a burst of innovation that resulted in better tests at lower costs. Indeed, provisions in the TPP would restrain open competition and raise prices for consumers in the US and around the world – anathema to free trade.
The TPP would manage trade in pharmaceuticals through a variety of seemingly arcane rule changes on issues such as “patent linkage,” “data exclusivity,” and “biologics.” The upshot is that pharmaceutical companies would effectively be allowed to extend – sometimes almost indefinitely – their monopolies on patented medicines, keep cheaper generics off the market, and block “biosimilar” competitors from introducing new medicines for years. That is how the TPP will manage trade for the pharmaceutical industry if the US gets its way.
26 September
Quebec dairy farmers panicked over Trans-Pacific deal
Conservative candidates say they would protect Canada’s best interests in any trade deal
Trans Pacific Partnership trade negotiations resume in Atlanta
(Canadian Press) Negotiations on the TransPacific Partnership, a massive free-trade proposal involving Canada and 11 other nations, will resume in Atlanta, Georgia today.
Chief negotiators from the 12 countries, which have a combined population of 800 million people, will hold sessions through to Tuesday. And those meetings will set the stage for further talks involving TPP trade ministers on Wednesday, Sept., 29 and Thursday, Oct., 30.
Canada’s supply management system has been a significant sore point in the ongoing negotiations.
The United States and New Zealand, in particular, have been pressuring Canada to reduce its tariffs on foreign dairy products, which are among the highest of all TPP members.
Canada recently committed to increased imports of European cheese in a trade deal with the European Union, however, Prime Minister Harper has vowed that Canada will stand by its dairy producers in the TPP talks.
24 September
Obama contacts Mexico, not Canada, to help conclude Pacific Rim deal
U.S. President Barack Obama is reaching out to his Mexican counterpart, Enrique Pena Nieto, as Washington launches a charm offensive to close a massive Pacific Rim trade deal next week.
As of Thursday afternoon, he had not made a similar call to Canadian Prime Minister Stephen Harper.
The White House announced Thursday that Mr. Obama called the Mexican President on Wednesday regarding Trans-Pacific Partnership talks to discuss “the importance of bringing the negotiations to a swift conclusion.” Mr. Harper’s staff said the Conservative Leader had not received a phone call from the White House.
Both Canada and Mexico, NAFTA partners with the United States, are standing in the way of of a TPP deal because of a dispute with Japan over how much of each auto or car part can be made overseas and still qualify to be sold in North America without duties under the Trans-Pacific Partnership.
Mexico, though, is arguably a far more vital auto-sector ally for Mr. Obama in his quest to seal a TPP deal. Mexico ranks second behind the United States and ahead of Canada in annual auto production, and its output is growing every year. The country once considered the junior partner in NAFTA will be producing five million vehicles annually by 2020, while Canadian output is expected to be about two million vehicles.
23 September
Ed Fast confirms attendance at Trans-Pacific Partnership negotiations in Atlanta
While the Conservatives would undoubtedly use a TPP deal to bolster their economic record during an election campaign, Fast rejected the notion his attendance at the negotiations was to win votes.
“By no means is the fact that we’re at the table today a political gesture,” he said.
5 August
The TTP (Trans-Pacific Trade Partnership) talks in Hawaii stalled. Writing in Forbes, John Brinkley says TPP Is Still Alive But Prognosis Is Iffy at Best, adding that “Last week’s failure to close the deal on the Trans-Pacific Partnership set the clock ticking. Negotiators are running out of time to reach an agreement and get it ratified by the 12 governments involved.” For Canada, the continued negotiations are a bit problematic – some question whether the minister has a mandate to negotiate anything during the campaign. After an election writ is signed, the government of the day transitions into caretaker mode, with ministers limited to routine business unless there is an emergency. But according to guidelines released Monday by the Privy Council Office, which oversees the public service, ministers and officials may continue treaty negotiations. “When negotiations are at a critical juncture with timelines beyond Canada’s control, the failure to participate in ongoing negotiations during the caretaker period could negatively impact Canada’s interests,” the guidelines state. “Under such conditions, a compelling case may be made for ongoing efforts to protect Canada’s interests.”
1 August
Pacific Rim free trade talks fall short of deal
(Reuters) Pacific Rim trade ministers failed to clinch a deal on Friday to free up trade between a dozen nations after a dispute flared up over auto trade between Japan and North America, New Zealand dug in over dairy trade and no agreement was reached on monopoly periods for next-generation drugs.
Trade ministers … fell just short of a deal at talks on the Hawaiian island of Maui but were confident an agreement was within reach.
“The undergrowth has been cleared away in the course of this meeting in a manner that I would say is streets ahead of any of the other ministerial meetings that we have had,” New Zealand Trade Minister Tim Groser said.”You can see clearly that there are one or two really hard issues, and one of them is dairy.”
Australian Trade Minister Andrew Robb said the problem lay with the “big four” economies of the United States, Canada, Japan and Mexico. “The sad thing is, 98 percent is concluded,” he said.
Failure to seal the agreement is a setback for U.S. President Barack Obama, given the trade pact’s stance as the economic arm of the administration’s pivot to Asia and an opportunity to balance out China’s influence in the region.
26 July
Trans-Pacific trade negotiators face high-wire act in Hawaii
(CNBC) Pacific Rim officials meet in Hawaii this week for talks that could make or break an ambitious trade deal which aims to boost growth and set common standards across a dozen economies ranging from the United States to Brunei.
Trade ministers go into the talks, which run July 28-31 on the island of Maui, with high hopes of an agreement to conclude the Trans-Pacific Partnership (TPP), the most sweeping trade deal in a generation and a legacy-defining achievement for U.S. President Barack Obama.
But the toughest issues have been left until last, including monopoly periods for new life-saving medicines and preferential treatment for state-owned companies as well as more traditional trade issues such as opening protected markets to competition.
19 May
Jeffrey Sachs: Why Fast Track Is a Dangerous Gift to Corporate Lobbies
The Obama Administration is now on track to get “fast track” legislation through the Senate, heading towards a close vote in the House. The end goal is to conclude two major business treaties: the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) and the Trans-Pacific Partnership Agreement (TPP). The House Democrats are right to withhold their support until key treaty positions favored by the White House are dropped.
One of the key reasons to fight fast track is the Administration’s insistence on including Investor-State Dispute Settlement (ISDS) in the two draft treaties. ISDS is a dangerous policy that undermines the case for TPP and TTIP. The ISDS framework is an unjustified grant of exceptional power to multinational companies above and beyond the legal system in which the companies operate.
The alarming evidence from recent cases shows that investors are using ISDS to contest a virtually unlimited range of government actions including tobacco regulation, measures relating to taxation, environmental regulation, water and electricity tariffs, health insurance regulation, and health and safety restrictions on pharmaceutical imports, among others.
Under normal law, companies and individuals indeed can and do sue host governments regarding various government actions. Yet those lawsuits operate in a legal framework that evolves over time to balance the need to protect investors’ economic interests with the government’s need to regulate investors and their activities for the safety, health, security, and social interests of other parties. In the US and in many other countries, that balance is reflected in complex and detailed substantive and procedural rules governing who can bring claims against the government, under what circumstances, through what processes, for what types of harms, and for what remedies.
Under ISDS, none of those rules apply.
18 May
Sen. Elizabeth Warren escalates trade war with President Obama
(MSNBC) Warren escalated the war of words Monday, releasing a 15-page report attacking both Democratic and Republican administrations for decades of broken promises to labor groups in previous free-trade agreements, from the North American Free Trade Agreement (NAFTA) of 1993 to similar trade deals with Panama, Colombia, and South Korea in 2011.
“The history of these agreements betrays a harsh truth: that the actual enforcement of labor provisions of past U.S. [free trade agreements] lags far behind the promises,” the report claims. “This analysis by the staff of Sen. Warren reveals that despite decades of nearly identical promises, the United States repeatedly fails to enforce or adopts unenforceable labor standards in free trade agreements.”
The report, entitled “Broken Promises: Decades of Failure to Enforce Labor Standards in Free Trade Agreements,” takes the United States to task for consistently failing to enforce labor protections in its trade deals, and points to ongoing labor-related human rights abuses in 11 of the 20 countries with which the U.S. currently has free trade agreements.
Pacific trade deal could be two weeks away if US fast-track measure passes
Fast-tracking the Trans-Pacific Partnership would give the other 11 signatory countries confidence, says Australia’s trade minister
25 February
Elizabeth Warren: The Trans-Pacific Partnership clause everyone should oppose
The United States is in the final stages of negotiating the Trans-Pacific Partnership (TPP), a massive free-trade agreement with Mexico, Canada, Japan, Singapore and seven other countries. Who will benefit from the TPP? American workers? Consumers? Small businesses? Taxpayers? Or the biggest multinational corporations in the world?
One strong hint is buried in the fine print of the closely guarded draft. The provision, an increasingly common feature of trade agreements, is called “Investor-State Dispute Settlement,” or ISDS. The name may sound mild, but don’t be fooled. Agreeing to ISDS in this enormous new treaty would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty.
6 January
Robert Reich: Why the Trans-Pacific Partnership Agreement Is a Pending Disaster
(HuffPost World) The administration says the trade deal will boost U.S. exports in the fast-growing Pacific basin where the United States faces growing economic competition from China. The TPP is part of Obama’s strategy to contain China’s economic and strategic prowess. Fine. But the deal will also allow American corporations to outsource even more jobs abroad. In other words, the TPP is a Trojan horse in a global race to the bottom, giving big corporations and Wall Street banks a way to eliminate any and all laws and regulations that get in the way of their profits.
2014
28 March
Mercosur relevance at risk as Pacific Alliance flourishes
Pacific Alliance looks set to expand beyond its core territory
(Emerging Markets) The Pacific Alliance, which brings together Chile, Colombia, Mexico and Peru, is overtaking other more longstanding alliances such as Mercosur and looks set to expand beyond its core territory.
The alliance, which was officially launched as a trading group in June 2012 at a presidential summit in Chile, has been called the “most dynamic integration process in Latin America”.
Eduardo Ferreyros, a former trade minister in Peru and now head of an exporters’ group, said it had done more in two years than Mercosur (the Southern Cone Common Market), had done in two decades.
Jorge Gerdau, chairman of the Brazilian steel Gerdau group, said Mercosur was at risk of losing its relevance, as Latin American countries on the Pacific coast moved towards integrating their economies in the global value chain.
24 February
‘Trade’ Deals on the Ropes
By Robert Kuttner, co-founder and co-editor of The American Prospect
The globalization agenda of American financial elites that has dominated both parties’ trade policy for three decades is on the verge of crashing and burning. There is escalating, perhaps fatal, opposition to the proposed Pacific and Atlantic deals in both the U.S. Congress and among partner nations. …
The World Trade Organization, NAFTA, and a series of bilateral trade deals have been less about reducing barriers to trade (which are already very low in the U.S.) and more about dismantling the regulatory framework of managed capitalism both in the U.S. and abroad. These agreements have sought to achieve this longstanding goal of organized business by defining as illicit trade barriers and entirely legitimate forms of purely domestic health, safety, labor, financial, and environmental regulation.
The two proposed trade deals on the table, the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), would double down on that strategy. Both would create new rights for corporations and investors to sue to block regulations in special tribunals that could do end-runs around courts. Both would freeze existing regulations in such areas as banking, where abuses of capitalism continue to evolve. Even the most extravagant claims by sponsors show trivial gains to GDP.
The proposed Trans-Pacific Partnership is particularly bizarre in conception as well as execution, because it tries to link several different policy goals in a complex bank shot. First, TPP was advertised as a “pivot to Asia,” as if the U.S. had not been paying attention to China, Japan, and East Asia all along. The hope was to offer new trade benefits to nations in China’s trading orbit, such as Vietnam, Malaysia and Japan, as a counterweight to China’s regional economic muscle, and to send China a geo-political message. Second, TTIP hopes to pry open Asian markets long closed to American exporters due to the mercantilism of the East Asian economic model.
But the first goal is at odds with the second. Smaller Asian nations like the idea of the U.S. as a counterweight to China, but don’t want to liberalize their markets. We do need a trade deal to open Asian markets to American exports in exchange for the openness of the U.S. consumer market, but the TPP isn’t it.
In addition, the proposed TPP doesn’t address the genuine (and immense) challenges posed by China directly. We desperately need a grand bargain with Beijing, one that includes currency imbalances, geo-political conflicts, Beijing’s own mercantilist economic policies, and global climate change. The proposed TPP naively (or willfully) tries to get at these far more consequential issues by indirection. Mercifully, it is about to collapse of its own weight.
The TPP has been negotiated in secret. Its intellectual property provisions, for instance, don’t address the genuine problems of piracy on the part of some Asian firms, but do impose needless restrictions promoted by the drug industry on dissemination of affordable medicines in developing countries.
21 February
The Trans-Pacific Partnership — Try Procrastination and Prevarication
(Banyan | The Economist) NEGOTIATIONS for the Trans-Pacific Partnership (TPP), which enter a crucial phase this weekend with a ministerial meeting in Singapore, seem to take place in two parallel universes. In one, the 12 countries pursuing this ambitious “21st-century” plurilateral free-trade agreement, including America and Japan (but not China) and representing 40% of the world’s GDP and one-third of its trade, came tantalisingly close to meeting their deadline of finalising the deal last year, and are now one last big push—perhaps in the next few days—away from success. In the other, TPP talks are bogged down in intractable disagreements on the most fundamental issues. The notion that it might be signed—let alone implemented—in the near future seems a delusion. …
the reforms the TPP is seeking are politically sensitive in all of the 12 countries—to Japanese agriculture; the Vietnamese textile industry; New Zealand’s dairy farms; the procurement policies of state-owned enterprises in Malaysia, etc etc. (Here is a good summary of just some of what is at stake.) Domestic lobbies will be overcome only if it is clear that other countries are making big reciprocal gestures. So, to keep up the pressure on them, it is in every government’s interest to make it seem a deal is close.
19 February
The Trans-Pacific Partnership: Who wins, who loses, why it matters
(LA Times) As President Obama travels to Mexico on Wednesday to meet with Mexican President Enrique Pena Nieto and Canadian Prime Minister Stephen Harper, the one-day summit is expected to focus partly on the Trans-Pacific Partnership, an ambitious 12-nation trade pact being negotiated between North American and Asian countries. Here is a primer on the talks:
Q: What is the Trans-Pacific Partnership?
A: The Trans-Pacific Partnership, or TPP, is a free-trade pact being negotiated among 12 Pacific Rim countries. The TPP is an ambitious effort to shape a comprehensive agreement that would not only reduce tariffs and other barriers to open markets, but establish standards on a range of issues affecting trade and international competition. For instance, negotiators are working to set up rules on intellectual property rights, government procurement and the role of the state in private enterprise.
14 January
Partnership or Putsch?
(Project Syndicate) … trade agreements negotiated by members of the Commonwealth of Nations (formerly the British Commonwealth) contain just such a provision [the principle that the United States should sign trade agreements only with countries that are democracies.]. The logic is obvious: If we in developed democracies had lacked the right to protest, speak out, organize unions, and vote for representatives of our choosing, we would never have ended child labor or established the eight-hour workday. Having used these rights to raise our own living standards, we should not now put developed countries’ workers in direct competition with workers who lack the basic freedoms needed to improve their own conditions. …
Indeed, part of international investors’ attraction to countries like Vietnam and China is not simply that wages are low, but that the absence of democratic rights promises to lock in cheap labor for years to come. For example, when China revised its labor law in 2008, Apple, Hewlett-Packard, and other members of the US-China Business Council lobbied successfully to limit the expansion of Chinese workers’ rights.
7 January
Australians to Canadians: Beware TPP economic fallout
(rabble.ca) Over 125,000 people — including tens of thousands of Canadians — have now spoken out about the damaging Internet censorship proposals in the Trans-Pacific Partnership (TPP). We know from leaked drafts all about how the TPP would make your Internet more expensive, censored and policed.
Now, our friends in Australia are sounding the alarm about how the TPP could wreak havoc on Canada’s economy. Australians know well the economic damage that unbalanced and extreme Internet censorship rules can cause. Australia was forced to adopt extreme copyright rules as part of the Australia-U.S. Free Trade Agreement (AUSFTA) — rules which caused over $80 million dollars worth of damage to the Australian economy.
Here’s what Australian experts are telling Canadians about their experience:
“‘A net loss’ is how the Productivity Commission labelled the copyright obligations,” wrote Trish Hepworth, Executive Director at the Australian Digital Alliance. “The copyright extension alone was estimated to cost up to $88 million per year in revenue flowing overseas.”
The U.S. is trying to force Canada and the other TPP countries to agree to extended copyright terms, along with many other economically damaging Internet censorship measures in the TPP.
2013
U.S.-led Trans-Pacific Partnership talks end with no deal
(CTV) After four days of meetings in Singapore, ministers issued a statement Tuesday saying that “substantial progress” had been made on finalizing the Trans-Pacific Partnership. It said they had identified “potential landing zones” for most of the outstanding issues and would meet again next month.
Trans-Pacific Partnership: a guide to the most contentious issues
The free trade agreement is being negotiated in Singapore this week, with 12 countries jostling to secure the best deal
(The Guardian) The Trans-Pacific Partnership (TPP) free trade agreement is being negotiated in Singapore this week between Australia, New Zealand, the US, Peru, Chile, Mexico, Canada, Singapore, Brunei, Malaysia, Vietnam and Japan. The countries have a combined gross domestic product (GDP) of US$28,136bn on 2012 figures, which represents almost 40% of the world’s GDP. Australian trade within the TPP countries represents A$214,224m.
The attempt to create the partnership agreement builds on the Trans-Pacific Strategic Economic Partnership Agreement, established in 2006 between Brunei, Chile, New Zealand and ingapore.
There have been many contentious issues around the TPP: critics are particularly concerned about the secrecy around the agreement given it has the capacity to change many local laws and regulations.
9 December
Wikileaks exposes secret, controversial Trans-Pacific Partnership negotiations
(PC World) Global intellectual property (IP) legislation continues to be negotiated behind closed doors this week in Singapore where discussions are underway on a secretive international trade treaty that could have far-reaching effects on Internet services, copyright law and civil liberties. The negotiations, however, are covered in secrecy. Anyone not closely connected to the talks is being kept in the dark about the exact proposals being discussed. The Australian government, for instance, refused to give the Senate access to the secret text of the draft treaty being negotiated in a final round of talks in Singapore, the Sydney Morning Herald reported Monday. But texts of purported drafts of the treaty have been leaked to the public, most recently on Monday by Wikileaks, which published two documents said to show the state of negotiations after talks held in Salt Lake City from Nov. 19 to 24.
Obama’s Trans-Pacific Partnership May Undermine Public Health, Environment, Internet All At Once
The Obama administration since 2010 been leading negotiations on the international trade accord … , and urges countries to reach a deal by New Year’s Day. The U.S. has deemed negotiations to be secret — banning members of Congress from discussing the American negotiating position with the press or the public.
Memos obtained by The Huffington Post show the U.S. is having trouble gaining support for the agreement among the 11 other participating nations.
Ben Beachy, research director at Public Citizen, said the leaked documents show U.S. negotiators are isolated from other countries as well as from the U.S. Congress.
21 November
TPP secrecy in Salt Lake City: Public locked out of trade talks for first time
(rabble.ca) Arthur Stamoulis of Citizens Trade Campaign (pictured below) told the crowd, “Although TPP negotiations have long been been shrouded in secrecy since it began four years ago, the latest round of talks in Salt Lake City is the first which does not present any formal opportunity to the public and civil society to present their views.” He said the only thing that wasn’t a secret was who the TPP would benefit — big multinational companies.
Canada joined the 12-country TPP negotiations about a year ago after corporate lobby groups said they didn’t want to be left out of any new global supply chains created as a result. It certainly wasn’t because of the economic promise of the deal, which is almost insignificant for Canada, and most TPP countries for that matter.
13 November
WikiLeaks publishes secret draft chapter of Trans-Pacific Partnership
Treaty negotiated in secret between 12 nations ‘would trample over individual rights and free expression’, says Julian Assange
(The Guardian) WikiLeaks has released the draft text of a chapter of the Trans-Pacific Partnership (TPP) agreement, a multilateral free-trade treaty currently being negotiated in secret by 12 Pacific Rim nations.
The full agreement covers a number of areas, but the chapter published by WikiLeaks focuses on intellectual property rights, an area of law which has effects in areas as diverse as pharmaceuticals and civil liberties.
Negotiations for the TPP have included representatives from the United States, Canada, Australia, New Zealand, Japan, Mexico, Malaysia, Chile, Singapore, Peru, Vietnam, and Brunei, but have been conducted behind closed doors. …
“We’re really worried about a process which is so difficult for those who take an interest in these agreements to deal with. We rely on leaks like these to know what people are talking about,” says Peter Bradwell, policy director of the London-based Open Rights Group.
9 November
The Trans-Pacific Partnership Agreement (TPPA): When Foreign Investors Sue the State
One Comment on "Trans-Pacific Partnership (TPP) and after"
Re the Investor protection clauses in the TPP – of which only insiders have seen a text:– Sorry for the length….
Trade policy seems to divide pundits along doctrinal lines to the point that important facts are frequently overlooked.
One of the big reasons for the TPP controversy is the failure of the US to live up to its own ambitions when agriculture was included in the WTO after having been excluded from the GATT at US insistence. The upshot was that 3rd world countries pushed back against US ag protection during the Doha round, thereby grinding the process to a near complete stop. In its place, the US and its trading “partners” in the West began pursuing regional trade agreements (RTAs) in which they had more bargaining power. The result is a bunch of new trade barriers (among the different RTAs) that undermine the WTO and preserve many of the structural imbalances the WTO was designed to remove.
The main beneficiaries in all this are the big multinationals. They can now jurisdication shop on all sorts of points. One of these points is the so called investor protection rules. Since the Canada – US – Mexico NAFTA these have been a kind of boiler plate inserted into all subsequent trade deals – except that their scope has grown as the regional deals proliferated. Why?
The Investor Protection deals go back to the 19th century when Powers used to invade small countries to seek compensation for nationalizations. The so-called Calvo doctrine instead suggested third party resolution of such investor disputes. These clauses were generally restricted to trade deals with developing countries until the NAFTA which brought North America together including Mexico.
By that time there was a World Bank procedure overseen by ICSID (International Centre for Settlement of Investor Disputes). Its boiler plate allowed third party panels to handle disputes rather than the domestic legal system. Hence at a stroke big companies had their own courts outside the legal system for dealing with host governments – even in rich countries with well-developed legal systems overseen by democratic legislatures, since NAFTA.
Moreover, as regional trade deals have proliferated, so the concept of “takings” has grown, such that it now has at the very least a chilling effect on updating public interest laws such as labour codes and environmental rules, product safety standards, etc. (Most countries change regulations only with reference to the underlying laws and usually these have not been updated for generations and so might be vulnerable to a determined legal challenge.)
What makes their effect even more intense is that the famous Ricardo CA model is not a good predictor of how MNEs actually work. The main reason is economies of scale. Hence it may be more economical to locate parts manufacture in country X because it makes complementary products there, too. By using the investor protection rules, MNEs can reduce the scope for host countries to push back against company decisions in order to protect the public interest.
So for instance if a multinational thinks Canadian mine workers charge too much money or if the government wants to raise safety standards, it may threaten an investor protection action if the government seeks to block the import of low wage labour to work in substandard mines. Or it may wish to locate a dangerous industrial process next to a relatively safe one and can use the investor protection rules to dissuade governments from blocking the decision.
All this through panels that are not responsible to national political/legal mechanisms. So far however this power is mainly a threat for countries like Canada – but the cocked pistol seems to enlarge its calibre in every new regional deal. The chill effect however is real.
The TPP isn’t the only trade deal hanging up on this issue. The Europeans are pushing back in the trade deal with Canada because they want to exclude countries with a well-developed legal system from these clauses. That used to be Canada’s position until NAFTA and thereafter we have insisted on the boiler plate in every deal we sign – contrary to the advice of many Canadian trade experts of whom the most ardent opponent was probably Mme Sylvia Ostry and whose warnings have proved to be correct.
If you made it to the end, congratulations! Guy Stanley