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Trans-Pacific Partnership

Trans-Pacific Partnership agreement doesn't look like such a great deal, except for big business in the US and Japan

Kevin Rafferty says amid the secrecy surrounding the TPP trade pact, big business is the only winner

PUBLISHED : Thursday, 08 October, 2015, 5:43pm
UPDATED : Thursday, 08 October, 2015, 5:43pm

The much-heralded 12-country Trans-Pacific Partnership (TPP) deal, announced this week, is a major blow against democracy and good governance, studded with measures distorting capitalism and free markets. Above all, it is a triumph for giant corporations in the US and, to a lesser extent, Japan.

READ MORE: Trans-Pacific Partnership: Who stands to benefit, suffer in the Asia-Pacific

Normally when a major deal is struck, there is a press conference with a text available. Ministers face questions about the achievements, implications and details, down to a mini-clause in a sub-chapter or a parenthesis in an appendix.

But, as yet, this TPP has no public text. It runs to 30 chapters and thousands of pages, not surprising when it covers everything from cars to cough medicines, as one newspaper put it. Actually, it goes far beyond traditional trade in agricultural and manufactured goods and into services, intellectual property rights and the settlement of international disputes, as well as labour and environmental standards.

The criticism of Nobel laureate Joe Stiglitz rings true - the TPP is not free trade but managed trade and done 'on behalf of each country's most powerful business lobbies'

Trade ministers, visibly weary after their marathon sessions in Atlanta that turned a day of negotiations into five, congratulated themselves for reaching "the largest free trade deal in a generation" that will link countries representing almost 40 per cent of the global economy.

They proclaimed the TPP an "ambitious" and "challenging" negotiation slashing through red tape to "set the rules for the 21st century for trade". New Zealand's trade minister Tim Groser boasted that the achievements of Atlanta would lead to even greater things: "It remains inconceivable that the TPP bus will stop at Atlanta." It was "just a start", added Japan's prime minister, Shinzo Abe, from Tokyo.

We should be suspicious of a deal, for which ministers are congratulating themselves, but dare not release the full text. Each country released bits favouring its own interests.

US President Barack Obama claimed, in a statement, not at a press conference: "This partnership levels the playing field for our farmers, ranchers and manufacturers by eliminating more than 18,000 taxes that various countries put on our products … It includes the strongest commitments on labour and the environment of any trade agreement in history, and those commitments are enforceable, unlike in past agreements."

In the US, members of Congress may get the documents this week or early next, and they will then have 30 days to study them before they are made public.

In spite of the celebrations and media headlines of a "massive trade deal", it is not yet a done deal. As Lambert Strether of Corrente noted in the Naked Capitalism blog, "TPP: It's not a deal, it's not a trade deal, and it's not a done deal." The "deal" still has to be signed by leaders of each country and ratified by lawmakers in each country. Strether added: "And what are the lawmakers? Chopped liver?"

In the US, Obama has the protection that Congress cannot nickel and dime the TPP. It will have to give a straight up or down, yes or no vote, without being able to delete or change anything. Judging by the pro-TPP propaganda being pumped out by the White House website, including a cutesy video about a US cherry, Obama is worried about whether he will win in Congress.

READ MORE: Trans-Pacific trade deal welcome despite some disturbing rhetoric

According to its newspapers, Japan has agreed to raise its tariff-free annual import quota for American rice from 50,000 tons to 70,000 tons and for Australian rice from 6,000 to 8,400 tons, both over 13 years. Japan's tariffs on imported beef will go from 38.5 per cent to 9 per cent over 16 years. It's tempting to say: big deal, even a snail could move faster.

The TPP negotiations went on for more than five years. Media reports typically declared the talks to be "shrouded in secrecy". Indeed they were as far as members of the public, media and elected lawmakers were concerned. But big business groups were key players, allowed to read the texts and influence the nitty-gritty details as they were haggled over. Big business and trade-related bodies dominate all 28 of Obama's trade advisory committees, from aerospace and agriculture to chemicals and pharmaceuticals, services and finance, technical and standards and telecom and e-commerce.

US corporations spend US$2.6 billion a year on reported lobbying expenditure. They are not alone. Toyota and other Japanese carmakers, which will be the big Japanese winners if the TPP goes through, have been spending millions of dollars in the US as well as at home.

The criticism of my former World Bank colleague and Nobel laureate Joe Stiglitz rings true - the TPP is not free trade but managed trade and done "on behalf of each country's most powerful business lobbies".

The worry about having big business so closely involved, and lawmakers and media excluded, is particularly strong because the TPP strays beyond trade.

Julian Assange, co-founder of WikiLeaks, which leaked chapters on intellectual property proposals, put it graphically: "If you read, write, publish, think, listen, dance, sing or invent; if you farm or consume food; if you're ill now or might one day be ill, the TPP has you in its crosshairs."

Besides arguments over intellectual property, TPP provisions for investor-state dispute settlement (ISDS) allow for secret arbitration panels to effectively overrule national regulations by permitting foreign investors to sue governments over lost potential future profits - now there is a nebulous concept.

There were some small achievements from the light of public scrutiny intruding on the secrecy. Big tobacco companies have been specifically prohibited from enjoying ISDS panels. Debate over protection for biologic drugs, next-generation genetically-engineered drugs, led to a pushback against big pharmaceutical companies.

READ MORE: It's not checkmate yet: Beijing to counter US-led Trans-Pacific Partnership trade pact

Or so we think, but we are not sure because the text has not been released and is still being tweaked, and Strether warns of secret side-deals and differences in interpretation.

Obama himself gave the game away, presenting trade as part of modern warfare. "When more than 95 per cent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting standards for protecting workers and preserving our environment," the president said in a statement.

For all the ballyhoo about 40 per cent of the global economy coming together for TPP, the world's two most populous countries, China and India, are excluded. In reality, it is the last throw of imperial America's dice. The problem is that if Obama cannot get it through Congress, he will reveal himself as America's most naked emperor.

Kevin Rafferty is a political commentator