The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement currently being negotiated between 12 countries. The negotiations started in 2006 and involved only four countries – Chile, Brunei, New Zealand, and Singapore – with the aim of reducing tariff and non-tariff trade barriers and increasing trade and investment in the Asia-Pacific region. However, with the growing economic importance of the Asia Pacific region as a motor for economic growth, eight new members have since joined the agreement: Peru, Mexico, the United States, Australia, Canada, Japan, Vietnam, and Malaysia. If signed, the TPP will become the largest international trade agreement since the creation of the World Trade Organisation (WTO) in 1995, encompassing 800 million people, a third of world trade and 40% of the global economy.
Countries enter free trade agreements because of their potential to raise living standards, giving poorer countries access to overseas markets and attracting foreign investment that will reduce prices, create jobs, and increase tax revenue. In his book ‘Making Globalization Work’, renowned economist Joseph Stiglitz states that China’s economic growth, based on exports, has lifted 700 million people out of poverty. However, far too often free trade agreements are controlled by developed countries and, more particularly, by special interest groups within these countries, which impose their agendas on less economically developed member nations.
The TPP is an example of increasingly prevalent, far-reaching agreements, which not only address conditions for trade, but also put other topics on the table, such as intellectual property and investment protection. Although leaders of the countries involved are pushing for a deal to be signed by the end of the year, the TPP has sparked fierce protests from a number of groups that accuse governments of putting corporate interests before citizens’ rights, damaging human rights and the environment, and signing away countries’ sovereignty.
The TPP negotiations are taking place behind closed doors and this secrecy is one of the greatest sources of discontent for groups opposing the agreement. No details of the agreement have been published and the only information in the public domain has been leaked.
Even in participating countries, such as the US, Chile, and Peru, Congresses have complained of being kept in the dark about the contents of the TPP and excluded from the negotiations. In spite of this secrecy, according to US news programme ‘Democracy Now’, more than 600 corporate advisors, including representatives of the controversial seed company Monsanto, have had access to the TPP agreement.
In an interview with ‘Democracy Now‘, Lori Wallach, director of US-based advocacy group Public Citizen’s Global Trade Watch, which monitors the WTO and other trade agreements, revealed that until last June, despite having constitutional authority over US trade, members of the US Congress were denied access to the draft text. Only after a written protest were members of Congress allowed sight of particular chapters, under restricted conditions. “They had no help to understand the technical language. They couldn’t take detailed notes and they were not supposed to talk about what they saw,” says Wallach.
The Congresses of Peru and Chile have also expressed their concerns about the secretive manner in which TPP negotiations are being carried out. After a public outcry, in August 2013 the Chilean Senate unanimously approved a motion for President Sebastián Piñera to hold a “public, technical, and genuine debate about the implications of the TPP for Chile’s economy and international relations.”
Inspired by Chile and spurred on by the concerned and concerted voices of citizens and organisations involved in ‘No negociable’, a public campaign against the TPP, a delegation from the Peruvian Congress presented a similar motion in August.
There are several theories about why the TPP negotiations are being kept under wraps. Some groups opposed to the TPP have suggested that after negotiations on the FTAA (Free Trade Area of the Americas, known as ALCA in Spanish) broke down in 2005, negotiators have tried to make TPP negotiations run more smoothly. By making the TPP text far less accessible than that for the FTAA, they hope to reduce scrutiny and avoid the public backlash that the FTAA agreement received.
From a US perspective, Wallach contends that corporate players are keen to keep the text of the TPP secret because it places their interests above those of the public and because it includes some provisions that have previously been considered and rejected by US Congress. She believes that negotiators hope to slip such provisions past a poorly informed Congress via the TPP. “The binding provision is that each country shall ensure the conformity of domestic laws, regulations, and procedures,” says Wallach, “so every country would be required to change its domestic laws to comply with these rules.” According to Wallach, SOPA, the highly controversial Stop Online Piracy Act which addressed copyright laws and internet censorship, is an example a law that failed in the US Congress because of mass public opposition but which is now bundled into the TPP.
Because the TPP text remains unpublished, little of its content is known outside the negotiations. However, a few chapters of the TPP have been leaked and these have raised concerns among opposition groups. According to Wallach, of the 29 chapters in the TPP only five concern issues traditionally addressed in trade agreements, such as the elimination of tariffs. Other chapters address issues such as food safety, internet freedom, the cost of medicine, financial regulation and the environment.
According to the website ‘Expose the TPP’, the TPP includes the controversial ‘Investor State System’, which opponents have branded, “a tool which undermines democracy”. Under the Investor State System, where investors and corporations believe individual or corporate investments are being threatened, they can take countries to International courts without first passing through national justice systems.
In many cases, this mechanism has undermined national legislation concerning health, safety, and the environment. For example, it was using the Investor State System provided for in the US-Peru Free Trade Agreement that Renco Group Inc, a US holding company, took the Peruvian government to court for US$800m, claiming violations of the US-Peru FTA. The case was initiated in response to the Peruvian Government’s closure of the holding’s highly polluting metal smelter in the city of La Oroya, which did not meet national environmental standards. La Oroya is said to be one of the ten most polluted cities in the world.
Furthermore, there are fears that the TPP would give increased powers to banks and provide for the rollback of banking regulations introduced after the global financial crisis.
Those who oppose the TPP have also criticised the chapter on intellectual property. Through an extension of monopoly drug patents included in the agreement, pharmaceutical companies would be granted new rights and powers to increase the price of medicines and limit access to affordable generic drugs. In developing countries, these new powers could affect access to vital HIV, cancer, and tuberculosis drugs. The agreement would also empower foreign pharmaceutical corporations to challenge national patent and drug-pricing arrangements in international courts.
The Intellectual Property chapter also proposes to extend the length of the copyright period for books, films, and music. If incorporated into the TPP, this measure could limit affordable access of these materials in schools, for example. A draft of the chapter, leaked yesterday by Wikileaks, revealed that Mexico has proposed an extension of copyright from 70 years after the death of the creator to 100 years. Although this increase may seem insignificant, it highlights the way in which intellectual property measures of this kind can been seen as incompatible with promoting free trade. In relation to this, Stiglitz argues that trade agreements are supposed to liberalise the movement of goods and services between countries instead of, in this case, closing them down.
As well as concerns over the non-trade measures included in the TPP, fundamental concerns over the impact of a liberalised trade market remain. For example, protestors in the US worry that the TPP will make it easier to move US jobs offshore, to countries with lower production costs. And in other countries, such as Mexico, there is continuing concern that farmers will be unable to compete with heavily subsidised US agricultural products.
With the TPP surrounded by so much controversy, it is interesting to consider who may benefit from the agreement.
According to Friends of the Earth activist Bill Warren, large multi-national corporations in all TPP countries have much to gain from ratification of the TPP. “Now that the WTO trade agreements have come to a standstill, the United States is trying to draw up an agreement for a global economy which is even more favourable for corporations and less respectful of democratic institutions, fair trade, and human rights,” Warren contends.
An article published in the East Asian Forum analysing the implications of the TPP for the East Asian region, argues that the US’ main reason for joining the talks is to increase its influence in Asia and, at the same time, contain China’s growing influence in the region. Since the US does not yet have bilateral agreements with Japan, Malaysia, Vietnam, or Brunei, the TPP would provide an opportunity to shift the power relationship in Asia in favour of the US. Some suggest that excluding China from what will be the largest Free Trade Zone, could eventually force it to join the TPP and, thus, to incorporate the TPP’s US-dominated trade system into its national laws.
However, for other countries, such as Chile and Peru, which already have bilateral agreements with many of the TPP countries including the United States, incentives for joining the agreement are less obvious. The incorporation into the agreement of Vietnam and other developing nations that present similar investment opportunities could result in Chile and Peru losing the preferential treatment afforded to them through their existing bilateral agreements.
Marcos Robledo, a Chilean expert in international relations, stated in an interview with newspaper Diario Financiero that Chile must recognise that in China and Asia, “the TPP is considered to be a hostile initiative towards China.” He warned that membership of the TPP could damage Chile’s export trade to China, which, currently, is one of the biggest importers of Chilean copper and agricultural products.
A Modified TPP: Recognising Differences Between Nations
In an article published in the Peruvian paper Caretas, Rodrigo Contreras, former Chilean TPP negotiator who stepped down in 2012 because of disagreements with the negotiation process, said that, if well-negotiated, the TPP had the potential to bring benefits to Latin American nations.
He described, for example, the benefits of Latin American countries working together with partner countries in Asia. “Our countries have similar goals and in some areas we share the same interests as Asian countries,” says Contreras, “which would give us a stronger negotiation stance when dealing with the bigger countries in the TPP.” However, he expressed his regret that the current TPP failed to reflect the interests and needs of Latin American countries. “The TPP can be a good idea,” he says, “but it must be transformed to provide real opportunities for our economy. We must reject a model designed to suit the priorities of high-income countries, which are very different to those of the other participating countries.”
In a similar vein, other partnership countries have come forward to challenge aspects of the TPP. In an article published in the Network for Justice in Global Investment, Kevin Gallagher, a specialist in trade and investment policy, explains that following the example of TPP countries Chile and Malaysia, which successfully regulated cross-border finances in the 1990s, other nations have rejected the TTP clause limiting countries’ capacity to adopt measures to prevent financial speculation. Instead, they have proposed revisions that safeguard cross-border financial regulations. And, earlier this year, seven TPP countries, led by Chile and New Zealand, proposed a more flexible alternative to the pharmaceutical intellectual property model proposed by the US.
With growing awareness within the TPP countries that this agreement has the potential to undermine many aspects of life that they now take for granted, such as internet freedom and the supremacy of national laws, the form that the final draft of the TPP will take is still unclear. It remains to be seen whether developing countries will be able to challenge the power that big corporate interests allegedly weild over the negotiations and achieve a TPP that reflects their needs. Similarly, we do not know the extent to which lobby groups and political allignment will influence the lawmakers’ decision to pass a free trade agreement without analysing fully the implications of the agreement for their nation.
In a political climate in which nations seem intent on defending their right to surveillance, claiming it is in the interest of their people’s security, it is worrying that such significant negotiations should be allowed to take place behind closed doors.
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Lead image: anti-TPP protest in the US, courtesy of Caelie Frampton on Flickr.