Negotiations TPP The Trans­Pacific Partnership: a neoliberal escalation

Flush the TPP | 31 August 2015

The Trans­Pacific Partnership: a neoliberal escalation

Jared Moore

In 1994 it was NAFTA. Today it’s the TPP.

The Trans-Pacific Partnership is the current project aimed at forwarding the political objectives of neoliberalism. And it’s a serious one, much larger than NAFTA and with a more ambitious scope. What started out as a relatively small partnership between three countries now includes twelve, spearheaded by the United States and together comprising forty percent of the world economy. Mexico joined the group in 2012.

Despite the enormous potential impact of the TPP, it’s likely you haven’t heard much detail about the deal’s contents. After campaigning as a champion of transparency, Barack Obama has ensured that the TPP be kept hidden from the public. This is a decision without precedent, leaving some to conclude: “Now that many people have caught on to the fact that free trade agreements have negative consequences, transparency has ended.” All of the countries involved, including Mexico, have reportedly agreed not to reveal its contents to the public until “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 we do know about the deal, we know from individuals who have taken great risks by illegally leaking portions through the webpage WikiLeaks. No journalist or even member of the United States Congress is allowed to possess the contents of the agreement. A copy exists in the basement of the Capitol building in Washington, DC, where members of the American Congress, after forfeiting their cell phones, cameras, or recording devices to security guards, may see the document, but they are not allowed to take notes.

It has been pointed out that what’s in the TPP is not a secret; it’s a half-secret. “It’s not secret from the hundreds of corporate lawyers and lobbyists who are writing the legislation,” Noam Chomsky told the Huffington Post. “To them, it’s perfectly public.”

Indeed, there are 28 committees “intimately involved in the negotiations. Of the 566 committee members, 480, or 85 percent, are senior corporate executives or representatives from industry lobbying groups. Many of the…committees are made up entirely of industry representatives.”

The outcome of such a process, based on what we know so far, is what one might reasonably expect: “a wishlist of the 1%–a worldwide corporate power”.

Even calling the TPP a “trade deal” is an obfuscation intended only to make it harder for any establishment person to oppose. For members of the world’s neoliberal regimes, to resist anything “free trade” is outside of the orthodoxy, certainly something no “respectable” person in Washington would do. So the TPP is a 29-chapter “trade deal” that contains only five chapters that have anything to do with trade. (Trade barriers between the TPP countries, after all, are already very low.) The other chapters, the overwhelming bulk of the TPP, instead focus on enshrining “new rights and privileges for major corporations while weakening the power of nation states to oppose them.”

One major corporate privilege in the TPP is the “Investor-State Dispute Settlement” provision, which is essentially a tribunal. Such tribunals are used by investors (i.e. transnational corporations) to haul up governments “for any move (e.g., a new regulation or policy fully justified in the interests of public health or other social concerns) which may be seen to deprive them of expected future profits”. Note that this is “not an actual loss that has been sustained, where there’s a desire to be compensated; this is a claim about the future.”

As a result of a similar tribunal under NAFTA’s Chapter 11 on investment, we’ve seen “over $300 million paid out to investors” challenging environmental and financial government regulation.

Mexicans will remember the case of Metalclad, the US multinational corporation that purchased a site in San Luis Potosí for a large waste depository. Already deemed unsafe by previous hydrological and geological studies, the company faced widespread community opposition from citizens and from local elected officials. This opposition succeeded and killed the project. So, Metalclad filed suit under Chapter 11, claiming discrimination as a foreign firm. Despite “findings by a Citizens’ Technical Committee that the company had violated federal environmental laws regarding site selection” and “amid charges of bribery and corruption”, the ruling, while criticized due to a lack of transparency, went in favour of Metalclad. The Mexican government “agreed to pay the panel-mandated $15 million” USD.

Such tribunals tend to have a “chilling effect” on local governments and any plans to implement programs that might come anywhere near encroaching on a transnational’s “expected future profits”. That’s because for each one of these cases brought against them, governments spend, on average, $10 million (USD) to defend themselves, even successfully.

Naturally, the TPP tribunals will be staffed “largely by corporate lawyers on leave from their corporate jobs.” Their procedures “violate basic precepts of due process.” All judgments, for example, are final; there is “no appealing to a real court of law.” And, of course, the TPP tribunals will “do much of their work out of public view…. The process is off limits to citizens and even state attorneys general.”

The gifts contained in the TPP for the world’s corporate powers are wide-ranging. All of these areas are at stake: environmental regulation, financial regulation, food safety, internet freedoms, public access to essential services, healthcare, state-owned enterprises, labour rights…

It’s possible you’ve heard politcians claim the exact opposite, that the TPP will facilitate great progress in these areas for all the peoples of Earth. We’ve been assured by the American president, for example, that the TPP “isn’t a race to the bottom for lower wages and working conditions” that would increase worker insecurity for the benefit of corporations. No–this deal written in secret by 480 corporate lobbyists is exactly the opposite: a “race to the top”; an attempt to level the playing field for workers by raising wages around the globe.

In a recent speech at the world headquarters of Nike Incorporated, a company with such a long history of profiteering from global worker insecurity that its checkmark logo is practically a symbol of it, Obama declared that “under this agreement, Vietnam would actually, for the first time, have to raise its labor standards. It would have to set a minimum wage. It would have to pass safe workplace laws to protect its workers. It would even have to protect workers’ freedom to form unions–for the very first time.”

Such statements, however, can only be intended to confuse. Much like in the NAFTA agreement, where even a decision in favour of workers often led to no actual changes on the ground, all of the wonderful things we hear about worker-rights in the TPP exist only on paper; superficial window-dressing.

But Obama claims that because the TPP “would include Canada and Mexico, it fixes a lot of what was wrong with NAFTA”, something he promised to do long ago as a presidential candidate.

The key issue, though, is would provisions in the TPP be any more enforceable than those in NAFTA? Would Vietnamese workers “be able to actually compel the government of Vietnam to make those supposed paper reforms a reality?” asks John Sifton of Human Rights Watch. “And that is where the Obama administration has been very disingenuous. They suggest the labor chapter is enforceable. What they mean is, if Vietnam fails to meet the standards, a nonexistent Vietnamese union would bring a claim in a nonexistent tribunal to compel Vietnam to improve its rights.”

That is not enforceability, and it certainly “is nothing like the rights that investors have to compel governments to change their rules. And that, at the end of the day, is what is wrong with the TPP. It creates rights for companies and investors but it doesn’t create new rights for workers or civil society.”

According to president and CEO of World Wildlife Fund, Carter Roberts, it’s the same problem with the TPP’s environmental provisions: “The lack of fully-enforceable environmental safeguards means negotiators are allowing a unique opportunity to protect wildlife and support legal sustainable trade of renewable resources to slip through their fingers.” On this front the White House has been “pushing for tough environmental provisions” but has faced opposition from virtually every other TPP country, including Mexico, Canada, and Australia. The outcome is potentially disastrous. Said Michael Brune, executive director of the Sierra Club: “This draft [environment] chapter falls flat on every single one of our issues–oceans, fish, wildlife and forest protections–and in fact, rolls back the progress made in past trade pacts.”

The fake altruistism of those pushing the TPP was exposed in a recent case involving Malaysia. In order to pass the TPP as a “fast-track” bill (meaning one that US congress can only approve or disapprove without any amendments), no nations with a “Tier 3″ human trafficking rating could be included–Tier 3 being the lowest rating the US government can assign. Malaysia is a signatory of the TPP, and–being home to many “professional slaving operations” who operate with impunity as they channel “refugees fleeing desperate situations in nearby countries” into “forced labor and sex trafficking”–has been a Tier 3 country.

So observers wondered, “Would Malaysia be thrown out of the deal?” Or perhaps a better question, since it is often explained to us that Western leaders have such close ties to so many of the world’s worst human-rights regimes only to better influence them: “Would the United States lean hard on the Malaysian government to crack down on human traffickers so it could sign the trade deal?” For some clue, the wondering observers may have looked to US Secretary of State John Kerry’s professed ideals. The Secretary was recently an honoured speaker at the Washington ceremony for the Trafficking in Persons Report, where he reminded us: “We must never, ever allow a price tag to be attached to the heart and soul and freedom of a fellow human being.”

But the Secretary was a bit liberal, it turns out, with his use of “never, ever”, as “the Obama administration appears to have chosen another path that has shocked the human-rights community: It will simply reclassify Malaysia.” So as of July 27 2015, less than three months after “police found 139 mass graves along the Malaysian border that contained migrant workers that had been trafficked or held for ransom”, that country is now Tier 2.

For one more illustration of the sorts of corporate-friendly yet generally destructive policies that would result from the TPP, a quick look at a controversial practice allowed under the agreement. As explained by Doctors Without Borders: “A drug company develops a new drug and is rewarded with a patent. The patent stops other producers making the medicine for 20 years. So the drug company can charge very high prices without anyone else undercutting them, for 20 years. When the patent ends, other producers can come in and compete with each other, and bingo, the prices come tumbling down. So the medicines become affordable for everyone. But the drug companies want more profits, so they make a tiny little change to their drugs and ask for another 20 year patent.” Slightly modifying the product in order to extend the patent life is what’s referred to as “evergreening”.

The result of these “ridiculous, unconscionable provisions on intellectual property” (in the words of John Sifton) will be severe for people in countries that rely on access to affordable generic drugs. In 2015 generic medicine represents about 87% of drug sales in Mexico, up from 30% in 1997.

“We are very concerned,” said Peter Maybarduk, director of Public Citizen’s Global Access to Medicines Program, “that the TPP would lead to preventable suffering and death….” Here, once again, “the hand of Big Business is evident” since it is big pharma that views the TPP “as an important vehicle to impose stringent rules to limit the production of cheap generic medicines.”

So what is our political leadership’s problem? Why would they be bent on something so harmful to the peoples of their nations? Likely it has a lot to do with “the long investment of big business” in our political representatives. Beyond the expected benefits to big business, though, the TPP represents geo-political aspirations for the TPP’s strongest backers in the White House. This became clearer “with the Obama administration’s policy announcement of a military and diplomatic ‘pivot’ or ‘rebalance’ towards Asia” in recent years after more than a decade of war in the Middle East. A 2013 research paper for the US Congress states that the TPP “could have implications beyond US economic interests in the Asia-Pacific. The region has become increasingly viewed as of vital strategic importance to the United States” because it has served as a “counterweight to the rise of China”. Chilean Undersecretary of Defense Marcos Robledo has noted that in China and Asia “the TPP is seen as an initiative relatively hostile to China….”

US Secretary of Defence Ashton Carter has called the TPP “probably one of the most important parts of the rebalance” toward the Asia-Pacific region. “Passing TPP is as important to me as another aircraft carrier,” he said. “It would deepen our alliances and partnerships abroad and underscore our lasting commitment to the Asia-Pacific. And it would help us promote a global order that reflects both our interests and our values.”

It is understandable, then, that to Obama any attempt at stopping the TPP is tantamount to “[surrendering] to the future”, something that mustn’t be done by those who “are meant to win the future”. If the United States doesn’t “shape the rules of the global economy” today while in a position of economic hegemony, he warns, “then China will write those rules.”

The TPP has the potential to become, over time, the world’s first “global trade agreement” since its provisions “would allow other countries to join in the future.” The present struggle against the TPP is crucial, given that “anything the original parties to the TPP accept is likely to be imposed later on other countries in the region, and quite likely, on the rest of the world.”

Any erosion to democracy caused by the TPP must be taken especially seriously due to its staying power. Once embedded into the laws of its respective member states, any component of the agreement will be “very, very hard to overturn”, warns Julien Assange of Wikileaks. If, for example, a desire manifested itself among the Mexican population to institute a certain reform–greater environmental regulations, for example; or more extensive public transportation–no matter how broad the democratic consensus in Mexico, the TPP still wouldn’t be easy to change because as a treaty “you have to go back and get agreement of the other nations involved.” This “new, ultramodern neoliberal structure” threatens democracy on a global scale.

In 2013 Chile’s chief TPP negotiator Rodrigo Contreras resigned, then published his criticisms of the agreement. “We need to reject the imposition of a model designed according to the realities of high-income countries,” he advised. “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 the design of public policies and the transformation of our economies.”

Perhaps the biggest challenge for those trying to sell this deal is that Mexicans, after 20 years of NAFTA, have heard the promises before and seen the results. In the decade following NAFTA, they saw that “1.1 million peasants lost their land, and another 1.4 million dependent on the farm sector were driven out of work.” Wages dropped “so precipitously that [in 2015] the income of a farm labourer is one-third of what it was before NAFTA.” In Mexico’s cities “the ‘informal’ sector”–those “selling candy and trinkets on the streets”–”has increased since 1994 to half of the workforce”.

Opposition to the TPP today is already formidable and grows as new information leaks, uniting a broad spectrum of activists. In his published criticism of the TPP, Contreras also provided a clear warning to the forces attempting to impose the TPP: “it will generate increasing pressures from active social movements, who will not allow governments to accept the result of the TPP negotiations to limit the possibilities to increase prosperity and welfare in our countries.” In 2014 a march of 65 000 people responded to the TPP by filling the centre of Mexico City. In 2015 the struggle continues.