The Trans-Pacific Partnership isn't about trade and it's certainly not about free trade. It's about entrenching the interests of major corporations at the expense of ordinary citizens, writes Ian Verrender.

Where is Cleisthenes when you really need him?

The man considered the father of democracy would be aghast at the turn of events last week, when 12 countries around the Pacific Rim gathered together and happily agreed to sell out their citizens, to elevate the interests of global corporations above their own sovereign law.

Before he rose to power, half a millennium before the birth of Christ, Athens was presided over by an aristocratic class that governed for the wealthy alone. Cleisthenes delivered power to the people, a concept that has formed the basis of modern Western states for the past several hundred years.

That could all be about to change, courtesy of the Trans-Pacific Partnership.

It's been variously lauded as a foundation stone for our future prosperity, a triumph for free trade and something about which we can boast to our children and grandchildren.

It is none of those things.

The Trans-Pacific Partnership is more about protectionism than trade. It was conceived as a regional defence pact, to corral Pacific Rim nations into a formal bloc in an effort to counter the rising military and economic might of China.

Driven by the United States, what measures were devoted to trade overwhelmingly were focused on exactly the opposite; extending monopoly powers of American corporations and maintaining tariffs and quotas for US farmers unable to compete in a free trade world.

Only a politician could be so cynical.

But it is the inclusion of the dreaded Investor State Dispute Settlement clauses that is of most concern for they are a direct assault on national sovereignty and the democratic rights of those who make up a nation.

A corporation is a legal entity run by appointed individuals whose primary responsibility is maximising benefits to the company. Generally, that is achieved by maximising profits for shareholders, for which management and directors are handsomely rewarded.

While a company is bound to abide by the laws in the countries in which it operates, shareholders and shareholder returns are all that matters. National sovereignty and democracy are only a concern when they interfere with earnings.

It would be a fair assumption that these clauses - that allow corporations to launch secret legal proceedings against nations with democratically elected governments in outside jurisdictions - weren't dreamt up by a bureaucrat slogging away in the bowels of some government department.

For while free trade negotiations are conducted in secret, business lobby groups - and a host of other vested interests - are consulted. Judging by the proliferation of these clauses in trade deals, clearly they are high on the business lobby agenda.

It's worth noting the extent of global corporate skulduggery that has been unearthed in recent years on tax avoidance and profit shifting.

The International Monetary Fund for years has been desperately trying to devise a system that could force multinationals to meet their basic tax obligations. Each time the G20 leaders gather, they loudly bemoan the power of giant corporations and the level of legal obfuscation that denies them much needed tax revenue to provide education and health services for their citizens.

Then they happily sign away their rights in a so-called trade pact.

There's an old saying in the legal profession that justice goes to the one with the deepest pockets. There is no better example right now of just how these clauses can be abused than the case by tobacco giant Philip Morris against Australia.

Incensed at the plain packaging legislation launched by the Rudd government, it fought all the way to the High Court of Australia. It went down in a screaming heap in every action.

That should have been the end of it. Fearing this could be the beginning of a global push, it then concocted a means by which it could launch further legal action. Philip Morris sold its Australian subsidiary to its Hong Kong operation, which conveniently was able to access an ISDS clause in a decades old free trade agreement we had signed.

This is the same company whose senior executives stood up in Congress in 1994 and swore under oath alongside six other corporate tobacco heads that there was no proof that cigarettes were addictive.

In that hearing, despite earlier denials, Philip Morris was forced to admit that its earlier studies into nicotine addiction had been suppressed.

Its case against Australia is being heard in secret, somewhere in Singapore, which so far has cost taxpayers more than $50 million.

Australia has a robust and open legal system that is independent of government and second to none.

It is one of the major attractions for foreign investors. There is absolutely no need and certainly no justification for subverting and diminishing its power.

If the TPP finally is ratified by all 12 member states, Australia will forfeit rights on a number of fronts. And highly litigious US corporations are likely to challenge on any number of issues, particularly around tax.

Who could forget former Rio Tinto boss Tom Albanese's argument that the imposition of a Resources Rent Tax was a "sovereign risk"? This from the man who proposed selling control of Australia's most profitable iron ore territory to the Chinese Government.

And as Macrobusiness commentator Leith van Onselen pointed out last week, while Australia's ban on foreign investors snapping up existing housing will remain because it has been grandfathered, it would not be allowed under TPP rules. New Zealand will have no hope of implementing such a ban.

The tragedy in all this is that anyone who has been even slightly critical of this deal has been dismissed as "anti-trade", whatever that means. A little like "un-Australian".

Let's be clear. Free trade is a goal that should be pursued. Australia has taken a lead, reducing protection across the economy which has driven efficiency and productivity gains. Our starting point in global negotiation is that other nations should do as we have.

As the Productivity Commission has found, however, free trade agreements - especially bilateral deals - do very little in improving trade. In fact, they can be downright damaging. The Australia-US Free Trade Agreement, signed a decade ago, now costs about $US53 billion in lost trade per annum.

Regional trade deals should be superior to bilateral deals. But the TPP isn't about trade and certainly not free trade. It's about entrenching the interests of major corporations at the expense of ordinary citizens.

It's about entrenching power and governance among the wealthy, the same injustice that Cleisthenes fought to overthrow.

Ian Verrender is the ABC's business editor and writes a weekly column for The Drum.