TPP so bad even the US congress is shocked

By Leith van Onselen

More worrying details have emerged about the the Trans-Pacific Partnership (TPP) – the US-led regional trade pact between 12 nations (including Australia) – with the New York Times revealing that members of the US Congress have been viewing the secretive document and are disgusted by its contents:

Members of Congress have been reviewing the secret document in secure reading rooms, but this is the first disclosure to the public since an early version leaked in 2012.

“This is really troubling,” said Senator Charles E. Schumer of New York, the Senate’s No. 3 Democrat. “It seems to indicate that savvy, deep-pocketed foreign conglomerates could challenge a broad range of laws we pass at every level of government, such as made-in-America laws or anti-tobacco laws. I think people on both sides of the aisle will have trouble with this”…

“U.S.T.R. will say the U.S. has never lost a case, but you’re going to see a lot more challenges in the future,” said Senator Sherrod Brown, Democrat of Ohio. “There’s a huge pot of gold at the end of the rainbow for these companies”…

Senator Brown contended that the overall accord, not just the investment provisions, was troubling. “This continues the great American tradition of corporations writing trade agreements, sharing them with almost nobody, so often at the expense of consumers, public health and workers,” he said…

Critics say the text’s definition of an investment is so broad that it could open enormous avenues of legal challenge.

The article is, of course, referring to the TPP’s Investor-State Dispute Settlement (ISDS) clause, which according to an earlier leaked draft from Wikileaks, would give authority to major corporations to challenge laws made by governments in the national interest in international courts of arbitration, effectively limiting Governments’ ability to form public policy.

Writing in The Nation, Mike Konczal has explained in no uncertain terms what the TPP’s ISDS clause could mean for Australia:

Let’s dig into an example. In 2011, Australia passed the Tobacco Plain Packaging Act 2011, designed “to discourage the use of tobacco products” by, among other things, requiring cigarette packages to have larger warnings, ugly colors, and no logos or advertisements. This act is clearly a “predatory intervention” against tobacco companies, designed explicitly to reduce their business in Australia by lowering smoking rates. As a result, Philip Morris Asia, a part of the American company Philip Morris International, is using an investor-state dispute settlement to stop enforcement and demand compensation, claiming this is a discriminatory “expropriation.” Instead of just the bureaucrats at the Australian government creating and administering rules for the selling of cigarettes, there’s an additional layer of international bureaucrats—positions created by trade agreements—who can overrule them…

Prior to the trade agreements that gave corporate investors these powers, the Australian democratic state had the final say in setting the terms for its economic markets, and those arguments had to be created by elected public officials held to some standard of transparency and public service…

Now the rules of the market are settled by a private tribunal, in this case run by the United Nations’ Permanent Court of Arbitration, with virtually no formal transparency. Philip Morris and Australia each hire a battery of lawyers to make their cases, in secret, before an organization accountable to no electorate.

The ISDS case that Konczal is referring came about via an obscure investment agreement that Australia signed with Malaysia in the early-1990s, which Philip Morris is now cleverly using to sue the Australian Government (read taxpayers) for enacting laws to limit the damage caused by cigarettes.

Just imagine the proliferation of these types of frivolous law suits once the TPP comes into force! How is this agreement in anyway in Australia’s national interest?

And then there are the multitude of costs to Australia’s health system from having to pay more for pharmaceuticals due to the TPP’s strengthening of intellectual property rules, such as longer patent terms (see here, here and here).

Seriously, the TPP is shaping up as an unmitigated disaster, and Trade Minister, Andrew Robb, should run a mile, rather than seeking to sell Australians out.

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Unconventional Economist


  1. Thanks again Leith for bringing this issue to the public’s attention. Democracy being replaced by corpocracy. And the shame is that it is being handed over so easily.

  2. Google “EU TTIP” and you will see loads of articles voicing similar concerns regarding the Trans-Atlantic version.

    … particularly in regards to the Investor Dispute clause and through it the introduction of an “American claim culture”.


    “Australian health, environment and public welfare regulation, including plain tobacco packaging legislation, will be open for challenge from largely US-based corporations, if a new deal that is part of the Trans Pacific Partnership goes through.

    WikiLeaks has revealed that the Australian government is close to agreement on a wide-ranging trade deal that could allow multinational corporations to challenge these regulations as well as local food safety standards. The new TPP free trade agreement will cover approximately 40 per cent of the world economy.

    A secret draft chapter of the TPP free trade agreement, published by WikiLeaks on Thursday, shows that the Abbott government is prepared to accept a controversial Investor State Dispute Settlement (ISDS) process if “certain conditions” are met in a broad agreement that it hopes will enhance Australian access to US and Japanese agricultural markets. “

    “TPP Leak Reveals Extraordinary New Powers for Thousands of Foreign Firms to Challenge U.S. Policies and Demand Taxpayer Compensation
    Unveiling of Parallel Legal System for Foreign Corporations Will Fuel TPP Controversy, Further Complicate Obama’s Push for Fast Track”

  4. adelaide_economist

    The reality is that Robb will do nothing to protect Australian interests. For whatever reason this Government seems very keen with all of our trade agreements to give away our sovereignty at great speed. The irony of simultaneously complaining about the United Nations and demanding it ‘get off our backs’ is almost sublime.

    Our best bet through the whole TPP process has been that the US Congress isn’t completely corrupted and comes to its senses. Australia will then effectively be ‘forced’ to do the right thing. Sad but true.

    • ” US Congress isn’t completely corrupted and comes to its senses”

      I would suggest this isn’t a case of congress coming to its senses. Its more a case of in previous circumstances it was always benefiting American corporations and America, and screwing other countries. Now suddenly its the other way round and America could find itself on the receiving end of a legal screwing so of course they are not in favour of that.

      Frankly i dont care what the reason is, as long as this abomination is killed off.

      My fear is the cretins in our government will try to sign a TPP with other countries even if USA backs out.

  5. What is curious is why Obama is pushing this as his signature trade policy; he has become a glove puppet for US corporations. Additionally, the US has been very angry with the UK over its intention to join the China development bank and the Asia/Europe trade deals show US acting like a cornered rabid dog. They would wish for fools like Robb to enact their preferential trade deals.

    • “with Uncle Sam at the reigns.”
      It seems that its more like International private corps at the reigns!

  6. Lol. Of course the parties below distrust it for reasons not all shared above. Obama loves it tho.

    ‘The trade agreement that is the linchpin of President Obama’s Asia policy is in jeopardy of breaking apart because of a lack of trust on Capitol Hill on both sides of the partisan aisle, with opposition mounting from tea party Republicans and rank-and-file Democrats who don’t have faith in the president’s ability to negotiate a good deal.’

  7. TTP – TIPP et al free trade agreements should be seen for what they are…. ***Corporatist Constitutionalism***

    Skippy… in that – frame of reference – the ideological machinations and political agendas become much more accurate.

  8. Hmm, now there’s a nice business plan…
    Commence selling some form of synthetic weed into some country with no current law against it It’s a nice big market – you could expect to generate $20 billion or so profit over say 5 years with decent marketing in the media (especially TV). There’s no law to prevent it.
    Of course it wouldn’t be long before your drug pushing in the media generated general outrage and forced the government to act… with legislation….
    Hello $20 billion windfall for little investment other than a few adverts 🙂
    How long before the world’s favorite Genetic Modification company cottons onto that nice little earner?

  9. shemwatsonMEMBER

    Great news, about time there were some checks and balances on these fascist bureaucrats implementing all sorts of infrigments on our personal freedoms under the thinly veiled disguise of ” the public good”. At least these corporations are taking proactive action against them.