Is this Australia’s future under the TPP?

By Leith van Onselen

Boing Boing has reported that the US has used special trade powers to block a massive Indian solar project because it planned to use domestically sourced solar panels:

The Jawaharlal Nehru National Solar Mission was on track to deliver deploy 20,000 MW of grid connected solar power by 2022 (“more than the current solar capacity of the world’s top five solar-producing countries combined”) but because India specified that the solar panels for it were to be domestically sourced, the USA sued it in WTO trade court and killed it.

The USA has its own domestic solar initiatives that generally have “buy local” rules, but those are permissible under the WTO. The WTO court ruled that India’s buy-local rules were not [permissible]…

By putting pressure on India’s solar program, and by hiding behind the biased WTO agreements, the United States wants to boost its solar exports to India, which it argues have fallen by 90% from 2011, when India imposed the rules…

As noted in the article, the Trans Pacific Partnership (TPP) trade agreement expands these types of powers via its Investor-State Dispute Settlement (ISDS) chapter, which allows multinationals in signatory countries to sue governments to repeal policies that undermine their profitability.

So, does the above ruling mean that the TPP could be be used to prevent the building of Australian Defence assets (like submarines, cruiser ships and personnel carriers) or  public transport assets (e.g. train rolling stock) in Australia?

These are legitimate questions that need to be answered before parliament ratifies the TPP.

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Leith van Onselen

Comments

      • You may want to re-edit the above! The WTO dispute panel ruled that several provisions of India’s source local was “inconsistent” with international trade norms. The main inconsistency was that any US investor into the solar industry had a requirement that 90% of cells and panels had to be manufactured locally.

        Ikea has had the same problem and is now considering pulling out of India, as are a number large companies. I can see what India is trying to do – but its inconsistent, because they cannot expect to be treated differently by trading with us!

        Seriously, check the facts before you rely on some BS website. MB is far far better than that – and so are you UE. Imagine if you were still at GS and you told this story to client!, mate, they would take you behind the woodshed and give you a hiding…

        And as for many of the comments below – utter diatribe…

      • What are you garbling on about RT? – the point is about the TPP to import the ISDS provisions to allow corporate litigation of community decisions reflected in Government Executive decisions.

      • Aj – the rule is, the same rule for me applies to you! If you don’t want to run by that basis, then we are all at sea. And as a trading nation, hurst Australia more than most!

      • Don’t be absurd. This is fundamentally about a corporatist attack on national sovereignty. The laws of contract apply as they always did, this is about corporates attacking policy that doesn’t suit their profit motive.

      • Where are our national rights??? Get with the facts buddy – you are dissembling. It was investment into India! They are ultimate losers in this exercise – because the investment dollars went elsewhere. Yes, India is exercising its national sovereignty… and thats fine. It doesn’t mean we have to put up with their antics. They expect to have the same rights as us here, and if they didn’t get that – they would be off to court in a jiffy, but don’t give us the reciprocal opportunity in their backyard.

        Cut them out I say… When they complain no one will invest, their country, their rules, their responsibility.

      • RT, you want to talk inconsistent? Why are the US allowed to have ‘buy local’ provisions, while India isn’t?

  1. Who in their right mind would want market competition? It’s all about confidence and certainty, didnt you know?

    • Mate, your presentation and the smart.org.au are bloody marvellous pieces of work. Good show.

      • Thanks Geordie, one of our guys has a full trade/earth systems /finance/neuro behaviour model going as part of his PHD.
        It’s just simply crazy that we don’t use these types of 21st century models which use validated knowledge about the world, systems and actions, yet stick to the old growth models as if they were the answer to the world’s problems, when they’re the reason we are in this mess.

    • I have access to a system that was developed to make the US competitive. The scope and scale of the systems mission, to restore U.S. ability to compete, meant that the solution had to literally find and identify the single most fundamental foundation for that which determines all advancement, growth and thus “advantage”. In a world of finite resources a “competitive advantage” is what enables one individual, or one organisation or one nation to excel over another.

      The single most fundamental foundational principle – the starting point for all planning, decision-making and subsequent action, that dictates all competitive advantage is the laws of physics. The tangible manifestation of the laws of physics is technology. Human beings convert and translate the laws of physics into technology to advance past adversaries and competitors.

      So by “grasping” these principles the system selects, controls and manages the proper method as opposed to something based on the useless innovation model that is based on statistical probability, market assessment, correlations and “expert” (who ever these people are) opinion. The methods of these people ignore the one single basic foundation principle that dictates all competitive advantage, technology as the starting point based on the laws of physics. This is what underpins the system.

      It is what Australia needs – technology planning as a opposed to the failed ‘financial planning’ that underpins the current laughable innovation approach.

      • Absolutely agree.

        Max power principle, second law of thermo is potentially what drives us at the moment.

        I guess my major inference has been that we need to define both “hard” and “soft” technologies.

        Our hard tech being physical manifestation of tech such as phones, wifi, resource extraction.

        Social technology being how we mobilise, create sustaining and meaningful existence, and progress without conflict, pain and suffering, not to utopia, yet to a form of existence that is less brutal.

        Our social technology seems to be letting us down at the moment.

        However, who know?

    • robert2013MEMBER

      Reminds me of the case where the judge ignored an argument because he couldn’t accept the monty hall problem as fact. He said that “common sense” should apply.

      Also what is X in 1, 2, 12, 288, 34560, X? My best guess is 24883200

      • I do wonder what gets discussed in Australian universities?… probably not Monty Python like logic unfortunately.

        Yes on the maths – superfactorial!

    • Have solved the social issue…social media is a nightmare and actually divides us (been designed to do that). Working with an Australian company that has developed what could be described as a Community-as-a-Platform that connects everyone and ever thing in society. Soon as you mention community investors turn off.

  2. Today's Empire Tomorrow's Ashes

    Can I ask a silly question?

    India ignores WTO ruling (or opts out) and builds anyway.

    US Sues.

    India doesn’t turn up to court or pay fines.

    • Tassie TomMEMBER

      Trade sanctions? No more Tatas or Mahindras entering the USA? Cut off the phone lines to the Indian call centres? Visa restrictions for Indian citizens? Hell, defying the TPP and WTO might even qualify on the terrorism spectrum. Lots of muslims live in India after all.

      • Today's Empire Tomorrow's Ashes

        I amconfused how the US can have similar provisions and get away with it.

        Simple solution

        Open tender

        Then choose Indian tenderer.

        Simples/

      • ErmingtonPlumbingMEMBER

        “Simple solution

        Open tender

        Then choose Indian tenderer.

        Simples/”

        Problem is the Indian Burocracat who gets to sign of on the deal gives it to whoever gives the biggest back hander.

        Greasing the wheels of capitalism and all that.

      • “I amconfused how the US can have similar provisions and get away with it.”

        Military industrial complex.

  3. This is a joke right?
    You know that Neither the US nor India is likely to be the actual producer of the panels. From rumors I’ve heard Indian PV panels are about as much use as a chocolate tea pot, whereas US panels while being technically OK are completely uncompetitive.
    That leaves China to actually supply the panels which is political dynamite in India. In the end analysis a political impasse is the most likely outcome. For a while now I’ve been seeing unfortunate shifts in Indian domestic/foreign policy that’ll return to it to the past Gandi style thinking (visavis English cloth). IMHO India needs to find it’s own path to global success and this probably wont come from copying China.

    • Hence the reason why India promotes domestic product. This will give the local companies economy of scale and allow them to spend more on research and development so they can catch up with rest of the world. If India was looking for best technology then I think they would have buy German (I think Germany is the world leader atm).

      • No disrespect towards Indian’s, I’ve got a lot of experience working with Indian engineers unfortunately I don’t think they have the right mentality to succeed at an endeavor that requires extremely low defects and long term product reliability. This route to riches needs skilled and dedicated Product Engineers supported by a government willing to throw enough money at the problem to make them successful.
        The Indian gov’t seems to flip-flop worse than even Australia and most Indian engineers don’t want product Engineering jobs…they’re too focused on Design lead positions or Management track positions.

      • China is world leader, stole German technology, and then put them out of business. Now produce German designed panels at half to two-thirds of cost. In fact they have put everyone out of business globally. its the Chinese way.

        So if an American company wanted to invest in solar panels, they couldn’t be built in India in any case without Germany taking them to WTO. Germany decided not to pursue action with China because they export so many cars and high-tech manufactured goods. Therefore, after an official protest, it was decided to be pragmatic and let China get away with it.

        Given India is not an economic power house for German goods, WTO action would be inevitable and Germany would throw the kitchen sink at it.

        In either case, (a) it wouldn’t be cost effective because Indians don’t produce below cost as the Chinese do; and (b) manufacturing basis for high-tech panel production don’t even exist in India, in any case.

        This socialist mantra will get India nowhere. It will take decades for India to wake up. Once they do – it will be transformative.

    • Consulted in the past for US/French Sunpower/TOTAL, who have the highest yield transfer of all panels on market, mostly manufactured in Phillippinnes, yet getting smashed by the Chinese now on price per KW and the yield transfer margin doesn’t offset.

      Graphene+solar a game changer. Mcu graphite actually located in China, so don’t expect to see this industry turned over any time soon, yet the actual solar pie will continue to go exponential, and a potential source of new debt funding.

      Whether India should be able to protect their new companies until they become competitive? Well that’s the only way South Korea could develop Hyundai, Samsung etc. So as a development model, it’s clear that Free Trade has no empirical validity for bringing countries along the development curve, yet rather protectionist policy is the best way for countries to develop new and advanced industry of their own.

      • Exactly! I’m sick of “protectionism” being considered only as a bad word.

        Modularity is essential in complex systems. Modularity requires borders with regulated import/export channels so that reactions inside the system can be isolated from reactions outside the system. Pockets of low entropy that can only remain so by maintaining a strong border and pumping entropy out.

        This drive towards “Open Society” / “Free Trade”, tearing down all borders in an attempt to create one big open system, is utterly naive, dogmatic nonsense, not based on anything in reality. If running a complex system as one, open system was more robust, higher power producing and more optimal than a highly modularised “message passing” system, then nature would be doing it. Yet complex systems (organisms) in nature (far more complex than anything humanity has ever constructed) are MODULAR.

        If a country wants to protect its domestic industries to allow development to occur (decrease local entropy within the industry) then it should do so without constraint.

        Thank goodness these “Free Trade” clowns don’t write software! Let’s just do away with Object Oriented Programming shall we? Because a monolithic spaghetti-mess with a single namespace was SO much better wasn’t it?

      • Young Ok – that is factually incorrect… at least not yet. Its not graphene that will be key for solar panels, but Organic Solar Cells (i.e. Fullerenes). Related to graphene – but not… its true that significant fraction of the cost of current solar panels comes from the photoactive materials and sophisticated, energy-intensive processing technologies. And its is also true that fullerenes via these inorganic components can be replaced by semiconducting polymers capable of achieving reasonably high power conversion efficiencies, which are inexpensive to synthesise via solution processing in a roll-to-roll fashion with high throughput. A downside is that, because they are not crystalline (like silicon), but instead are produced in a purposely-disordered blend of electron-acceptor and donor materials they display poor conversion efficiency, due to low exciton diffusion lengths and mobilities. Silicon crystals allow electrons to move almost freely, whereas in disordered matter the lack of long- range order leads to electrons hopping from one localised state to the next.

        The inherently poor polymer properties, such as dead ends and isolated domains that trap charge carriers and prevent them from being extracted, is thought to be able to be overcome by nanoscale morphology. The side-chain length of the polymer, weight percentage of materials and solvent choice, can lead to vastly different morphologies that strongly affect exciton harvesting. Structuring one of the components into vertically aligned rods or pores with a diameter less than the exciton diffusion length is theoretically thought to be able to alleviate this problem. However, ordered organic–organic solar cells have yet to yield an efficient device. Replacing the disordered electron acceptor with an ordered nanostructured oxide is also a viable route. But again not yet!

      • Medi, it’s worth a debate about why all parties including the greens are so pro Free Trade when ricardo himself says that free trade will allocate wealth differently within societies – and our parties have not provided any modelling as to the wealth shifts.

        Countries with high rates of manufacturing and R&D associated with it, have cluster synergies as well.

        RT – you know more about the graphene step-up than me, what’s for sure, is that whoever gets the IP will make a killing!

      • Nah mate – just unlucky, guess what I have been writing about for the past two to three (off and on) months!!! Should finish this week actually.

        Ask me in six months and I will remember none of it…

    • Ronin8317MEMBER

      The Chinese-made solar panel will be imported into India, and become ‘India made panel from imported parts’, then sold with a markup.

  4. bolstroodMEMBER

    Is the TPP in effect yet? As far as I am aware it has not been ratified by 50% of countries that signed on.

    • Good point, and No… not only that, vested interests in the US (Large drug corps and manufacturers don’t want it passed either – increases competition for them). Republican Party which has become very protectionist have refused it passage. I am not up to speed with American politics, but i think they control a certain section of its approval. Given this up coming election, Sanders is against it, as is Trump. So the chances of it being passed is poor… its always the radicals that think they can control things…

      Not good for an Aussie inventor (assuming we have one!) trying to get access to the worlds biggest markets… bad news for us when we hit 50c and we think we can export our way out of trouble too…