TPPA: No ordinary corporate exploitation
Negotiations on the Trans-Pacific Partnership Agreement (TPPA) begin in Auckland today and will run until 12 December. Here’s what you should know about the TPPA.
Negotiations on the Trans-Pacific Partnership Agreement (TPPA) begin in Auckland today and will run until 12 December. Contrary to its sales propaganda, the TPPA is not really about trade. It is a global governance system of which trade is only a small part. The TPPA negotiations include 11 countries: Brunei, Chile, Singapore, New Zealand, United States, Australia, Peru, Vietnam, Malaysia, Mexico and Canada.
The entire text of the agreement is secret: 600 corporate advisors have access to the text while the public, Members of Parliament, journalists, and civil society are excluded. Lists of the chapter titles and the contents of a few of those chapters have been leaked. Only five of the nearly 30 chapters are about trade; the remaining chapters cover all aspects of life including the food, health, environment, labour laws, financial regulation (or lack thereof), government procurement (the process of government agencies buying things), and internet regulation (specifically in relation to intellectual property).
The government view is that the TPPA is “A comprehensive 21st century agreement (that) would provide many more opportunities to New Zealand businesses to grow their trade and investment footprint in the region,” says Trade Minister Tim Groser. On the contrary, the portions of TPPA that have been leaked show that it will significantly limit the ability of government to regulate business, and give multinational corporations unprecedented powers to sue the government for any policies, regulations or laws which impede their profits. Moreover, access to US markets for NZ dairy–largely understood to be the main ‘opportunity’ in any NZ trade deal–is extremely unlikely to transpire (except possibly as a token quantity) because of widespread support within the US for the continuation of subsidies to US dairy farmers.
Corporate power grows
The TPPA is an enormous project, and all aspects have potentially devastating impacts. A good place to begin is with the Investor-State Disputes Settlement Clause (ISDS). This clause would allow multinational corporations to sue any of the member states in secret offshore tribunals for loss of future profits by claiming that laws and regulations have affected the value of their investments. “Under the leaked text, ‘investment’ is defined extremely widely to include almost anything a foreign company has spent money on in New Zealand – including shares, businesses, contracts, land, intellectual property rights and even government bonds” says Dr Jane Kelsey, leading critic of the TPPA.
“Foreign investors can skirt domestic courts and laws, and sue governments directly before tribunals of three private sector lawyers…to demand taxpayer compensation for any domestic law that investors believe will diminish their ‘expected future profits.’ Over $675 million has been paid to foreign investors under US trade pacts, while over $12 billion in claims are pending on environmental, safety, and public health policies under US trade deals.” —Public Citizen
One of the consequences of the ISDS is that New Zealand firms will move offshore to get around domestic laws and regulations that would have otherwise applied to them. “The leaked text reveals a two-track legal system, with foreign firms empowered to skirt domestic courts and laws to directly sue TPP governments in foreign tribunals.” Indymedia has received information that this is already happening with NZ firms relocating offshore to exploit the greater corporate rights available.
Australia is the only TPPA country so far that has refused to sign the ISDS clause in the TPPA. This is because they have experienced the effect of such corporate power (a similar clause is part of the US-Australia ‘free’ trade deal) and have recognised that there is no benefit to Australian business. Meanwhile the Australian government’s ability to ban tobacco advertising has been challenged by Philip Morris tobacco under this sort of clause.
The full text of the leaked text of the Investor-State Disputes Settlement chapter is here.
Another chapter of grave concern in the TPPA is that around capital controls. New Zealand already has one of the most traded currencies in the world, making the country subject to the whims of the international currency market. Public Citizen writes, ‘the leaked TPP text requires that governments “shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory.” This forbids countries from using capital controls or financial transaction taxes, even as the International Monetary Fund has reversed its opposition to the use of capital controls following the global financial crisis.’ (Public Citizen)
“Overseas investment makes up a significant part of our economy and the mainly foreign-owned banks operating in New Zealand have at times held massive levels of short-term foreign debt. This makes New Zealand extremely vulnerable to destabilising flows of capital in and out of the country. The proposed TPPA will seriously fetter New Zealand’s ability to follow the lead of other countries and apply capital controls to protect our economy. What’s more, foreign banks, insurance companies, money traders, and overseas property dealers from the other 10 countries would gain special powers to challenge laws and policies designed to shift the focus of investment away from speculation and grow our productive economy.” (Jane Kelsey)
While the TPPA is all about removing any remaining restrictions on the flow of money, it does nothing to remove restrictions on the flow of labour. One of the ways in which these trade deals have concentrated power into the hands of multinational corporations is by allowing them to shop around for the cheapest labour and create ‘race to the bottom’ of workers’ pay and conditions where the countries that provide the cheapest production costs are the ‘lucky’ recipients of sweatshop factories and other low wage work.
Economist Geoff Bertram noted that the economic benefits of the removal of restrictions on the movement of labour would be three to five times that of the removal of restrictions on the flow of capital. The free flow of capital simply allows for the greater concentration of wealth and power into the hands of the international capitalist class that then use that to extract further concessions from nation-states on all manner of labour and environmental regulation and taxation.
The TPPA has specific implications for Māori in terms of their rights under Te Tiriti o Waitangi. Te Wharepora Hou, a group of Māori women based in Auckland is opposing the proposed Trans-Pacific Partnership Agreement (TPPA) on a general level because it simply entrenches more of the neo-liberal economic system that has had disproportionately negative effects on Māori in terms of poverty and unemployment.
Specifically, the TPPA could have very serious implications for the resolution of claims by iwi and hapu under the Waitangi Tribunal process. The WAI262 report which was specifically about Māori rights to their intellectual property said that, “Current laws, for example, allow others to commercialise Māori artistic and cultural works such as haka and tā moko without iwi or hapū acknowledgement or consent. They allow scientific research and commercialisation of indigenous plant species that are vital to iwi or hapū identity without input from those iwi or hapū. They allow others to use traditional Māori knowledge without consent or acknowledgement. They provide little or no protection against offensive or derogatory uses of Māori artistic and cultural works.”
The TPPA would simply embed the current status quo while giving multinational corporations more power to own Māori intellectual property. Singer Moana Maniapoto discovered that, “Intellectual property laws meant I couldn’t use my own name to sing in Germany! Then I discovered that Ford, Sony and other US companies had exclusive rights over Maori language, cultural icons and other taonga that were guaranteed in our own Treaty. A TPPA will make that ten times worse.”
In other US-‘free’ trade deals negotiated with countries like Peru, indigenous communities were targeted by a suite of new laws passed in order to allow large biofuel estates to be established on indigenous lands.
Te Tiriti o Waitangi was NZ's original trade deal and the colonisers have never adhered to it. They regularly and routinely ignore Te Tiriti and another trade agreement will make it more difficult for Māori to have what is rightfully theirs: tino rangatiratanga over their lands, forests, fisheries and taonga.
Any type of international agreement requires that some amount of national sovereignty be relinquished. If it doesn’t then the agreement doesn’t really mean anything. It requires the conformity of local law to the signed agreement.
Commentators have said that if there are going to be binding international agreements requiring that New Zealand give up some of its sovereignty then the underlying basis for that should not be to increase the rights of international capitalists.
Rather, the priorities for New Zealand and indeed all nation-states should be addressing the urgent priorities of climate change, loss of biodiversity and sustainable economic development for the people of the world. These are the things the government should be willing to sacrifice nation-state sovereignty to achieve, not greater investor rights. Instead, the NZ government in the past week has announced that it will not sign up to the second phase of the Kyoto Agreement. Rather than seeking a better world, the NZ government continues to enhance the power of dirty businesses and exploitative multinational corporations.
Image: Treason Seditio: One trade agreement to rule them all