The Washington Post has joined the chorus of experts warning about the dangers lurking in the Trans-Pacific Partnership (TPP) trade agreement – the US-led trade deal between 12 Pacific-rim nations (including Australia) – which is expected to be signed within the next month:
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… 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.
ISDS would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages…
ISDS could lead to gigantic fines, but it wouldn’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next…
Recent cases [of ISDS] include a French company that sued Egypt because Egypt raised its minimum wage, a Swedish company that sued Germany because Germany decided to phase out nuclear power after Japan’s Fukushima disaster, and a Dutch company that sued the Czech Republic because the Czechs didn’t bail out a bank that the company partially owned. U.S. corporations have also gotten in on the action: Philip Morris is trying to use ISDS to stop Uruguay from implementing new tobacco regulations intended to cut smoking rates…
If a final TPP agreement includes Investor-State Dispute Settlement, the only winners will be multinational corporations.
I couldn’t have said it better myself. When combined with the increased power that would be granted to US pharmaceutical and digital firms (see here), which threatens to push-up the cost of access to medicines and digital content, one wonders why the Abbott Government is pursuing the TPP at all?
Indeed, several notable experts have voiced strong opposition to the TPP fearing that it represents grave risks for the global trading system and citizens of countries operating within it.
Former World Trade Organisation (WTO) director-general, Supachai Panitchpakdi, claims the TPP represents a step backwards to the days before the WTO when the US and Europe controlled the global trading system to the detriment of other economies.
Nobel Prize winning economist, Joseph Stiglitz, raised similar fears in an open letter posted in late 2013, whereby he questioned negotiators’ secrecy and warned about “grave risks on all sorts of topics” posed by the TPP, as well as claiming that it contains “many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible”.
Paul Krugman, another nobel prize winning economist and trade expert, has also slammed the TPP, noting that it would “increase the ability of certain corporations to assert control over intellectual property [including] drug patents and movie rights”. Krugman also claimed that “there isn’t a compelling case for this deal, from either a global or a national point of view” and that the “economic case is weak, at best”, with “the push for T.P.P… weirdly out of touch with both economic and political reality”.
As I keep saying, Australians should be very concerned about the secretive sell-out that is occurring, which seeks to place US corporate interests ahead of our own.
