While the world celebrated love and pride-filled rainbows last month, the US Congress granted ‘fast track’ authority to the US Government’s highly controversial new trade agreement, the Trans Pacific Partnership, known as the TPP.
You may be forgiven for asking what the hell the TPP is, for very purposely only those in the know, well know. The trade deal is both problematic and controversial for despite its far-reaching ramifications for all citizens of all participating countries, TPP negotiations have taken place amid great secrecy.
The TPP is a complex, large-scale free trade agreement being negotiated with Pacific Rim countries including the US, Canada, Mexico, Peru, Chile, Japan, Vietnam, Singapore, Brunei, Malaysia, Australia and New Zealand.
The TPP however, deals with far more than lowering trade tariffs. It fact, it is the measures aimed at reducing non-tariff trade barriers that are most concerning.
Top of the list of concerns is allowing corporate rights to undermine state sovereignty through a mechanism known as the Investor State Dispute Settlement (ISDS).
When a trade agreement has an ISDS mechanism in place, companies have the right to sue federal governments when national laws are not congruent with company rights under the treaty. This happened in Australia when Philip Morris, the tobacco giant, tried to sue the Federal Government for introducing its plain packaging tobacco laws. This is a disturbing example of multinationals challenging domestic laws even when domestic law works for the public interest.
ISDS poses two more risks. Firstly, it is seen by arbitrators rather than independent judges and these arbitrators are representing corporate clients. Secondly, it only allows one-way complaints – from investor to state. Governments cannot file suits against a company. When investors win, there are no appeals against the level of damages and governments can be forced to pay hundreds of millions of taxpayer dollars. Even when governments lose, they must pay the legal costs for the process, averaging around $4.5 million in each case.
While rich, industrialised nations may be able to absorb these costs, it is not the case for developing nations and such a mechanism may actually prevent governments from enacting legislation beneficial to their populace citing fears of prosecution from unruly corporations.
Thus, agreements like the TPP potentially protect corporate interests at the cost of sovereignty, democracy and human rights.
Then there is the issue of intellectual property. Proposals put forward in the TPP seek to extend the patents of existing drugs, delaying the introduction of generic drugs, ultimately increasing the price of medicines and potentially costing lives. For this reason, health organisations like Doctors without Borders and AIDS groups are strongly opposed to the TPP.
The TPP also has a strong focus on copyright laws and will increase the minimum copyright term of life plus 70 years. As a result, six nations would need to increase copyright duration by 20 years. Undoubtedly this will benefit major US entertainment firms who are net exporters of creative content and will see consumers in other nations paying hundreds of millions of dollars per year in additional US royalties. It will also keep important creative works out of the public domain longer and inhibit the creation of derivative works.
Proponents of the TPP are using the economic benefits of free trade as a well-crafted smokescreen for implementing an underhanded and non-reversible treaty that forces countries to conform to rules of a privatised, global economy.
It seems the main beneficiaries will be transnational organisations in banking, communications, pharmaceuticals, resources, insurance and entertainment working through lobby groups like the US Coalition of Service Industries to enforce their global intellectual property rights under the agreement. The losers will most certainly be consumers, small businesses, workers and state sovereignty, even in democratic countries.