The Trans-Pacific Partnership (TPP) Part 1: What’s all this, then?

In Part 1, I’ll outline the broad framework and some key provisions of the TPP. In Part 2, I’ll address the secrecy issue, the  corporate make-up of the advisory committees, and offer some brilliant thoughts.

The Trans-Pacific Partnership (TPP) is an international trade agreement under negotiation among 12 member countries/Parties: the US, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. This agreement, if approved, would encompass 40% of world GDP, one-third of all global exports, and almost half of the world’s foreign direct investment. If it goes through, it will end up covering about 60% of our own foreign trade. Due to this enormous scope, what’s agreed upon here will have impacts on trade rules for decades to come. I’m going to explain what I know about the major provisions of the TPP, and give you a rundown of points of interest and/or controversy.

But before I do that, you need to know this: I can’t read the official text of the TPP. It’s secret. Not classified, exactly, but secret from the general public. In fact, those who are cleared to read it have to agree that they won’t talk about it. So, as Michael Wessel explains, this presents a hilarious Catch-22: you can’t criticize what you can’t read. If you’re cleared to read it, you can’t talk about the specifics of what you’ve read. If you can’t talk about the specifics, President Obama can slam you for not being specific in your criticisms. BAM. SUCK IT, CRITICS

So, everything I know about the TPP I’ve gotten from one of three places: the Office of the US Trade Representative website, where there’s a broad, vague, and suspiciously rosy-sounding outline of its features; articles by people who’ve read parts of the agreement but can’t disclose specific details; or, finally, what’s been leaked to WikiLeaks. What’s posted there is, admittedly, outdated—working chapters from 2011-2013 that don’t contain any updated provisions. Make of that what you will. As a blanket disclaimer: if I got it off WikiLeaks, I’ll make sure you know that, and I’ll say right here that I don’t take that information to be authoritative or definitive of the final provisions of the TPP. If you want to know more about the secrecy issue, you can skip ahead now to that discussion in Part 2. Otherwise, stay here for the major provisions.

I’m going to stray from my usual order of operations here and start with a widely-shared criticism of the TPP. I think you’ll understand some of the details better if you hear this first. One of the major points of criticism is that it includes provisions that may allow individual corporations to sue sovereign nations over “non-tariff trade barriers.” Non-tariff trade barriers refer to laws or regulations that impose such a big burden on the import of a product that it effectively prohibits a company from entering that market. A lot of the TPP is about making it easier for companies and investors to have disputes about these sorts of things arbitrated.

Here’s an example: in 2011, Philip Morris sued Australia under the terms of a trade agreement over that country’s super stringent tobacco product labeling requirements. Australia’s “plain-packaging” requirements say your brand log has to be minimal, and your packages have to have gruesome photos of carbonized organs and tumors and dire warnings (“Even one cigarette has now been shown to cause instant death, probably at an awkward moment. Plus, you, personally, Jen Rowland, are a fucking idiot for smoking so PUT THAT OUT RIGHT NOW). Philip Morris said that these requirements are unreasonable and discriminatory, making it so difficult to send cigarettes to Australia that they might as well not send cigarettes there at all. So, they said, the law amounts to an “unlawful expropriation” of PM’s potential profits. I wish I could tell you how that turned out, but the details are, interestingly, confidential and not available to the public.

Other “non-tariff trade barriers” include environmental, health, and safety regulations, labor laws, and investment regulations. Any of those regulations might be considered an unreasonable trade barrier amounting to expropriation. The trade agreement would make it easier for companies to sue over those regulations. To speculate, if one country has different prescription drug patent laws, a pharmaceutical company might not be able to extend its patent for very long in that country, which would let generics compete against it sooner. That might constitute an expropriation, right? So you want to hammer out agreements in advance. This is where a great deal of the criticism of TPP focuses.

Major provision areas under negotiation, with my comments interspersed:

1. Trade in goods: Removing tariffs to make member nations’ goods compete on a “level playing field” (USTR). One interesting take on this comes from Sean Starrs, at Jacobin He points out here that China is noticeably not invited to this deal. Why? Because that’s who we’re trying to compete against. For example, there’s a high tariff on American electronics coming into Malaysia that makes it so American electronics can’t compete against Chinese electronics. Remove that tariff, and we can compete on a level playing field… with China, even though they’re not in the TPP. But you let China into the negotiations, and your hopes on that score go out the window. So, Starrs argues, China wasn’t invited so they wouldn’t be able to alter the terms on tariff removal.

2. Labor: The USTR says there would be requirements that each member nation follow fundamental labor rights as set out by the International Labour Organization. Elizabeth Warren’s office released a fascinating report called “Broken Promises” that details “decades of failure to enforce labor standards in free trade agreements.” It’s breathtaking. You should look at it. One nugget of whoa: Ten countries with whom the US has free trade agreements produce goods using child labor or forced labor in violation of international law. But before 2008, no formal complaints were received, largely because (says the GAO) no one knew how to submit a complaint correctly. Since 2008, the Department of Labor has accepted all of five complaints, and has resolved exactly one of them, well past the deadline for resolution. So, good luck enforcing your “progressive” labor agreements, yeah?

3. Services: Setting up express delivery service routes and infrastructure for supply chains. I’m guessing that’s where we help other countries bolster their export infrastructure.

4. E-Commerce and Telecom: Removing customs duties from digital products, supporting a “single, global internet,” addressing international roaming costs, and removing localization requirements so you don’t have to place computer infrastructure in every market where you operate.

5. Intellectual Property: protections against counterfeiting and piracy, and rules about pharmaceutical drug provisions (this would, presumably, protect against counterfeit drugs, but in practice it will probably make it harder for generics to compete. Just sayin). Because this will effectively define intellectual property and its handling, this is one you really want to watch out for. It’s getting some serious pushback from tech companies, because, they say, this seriously impinges on net neutrality rules and because it may allow some countries to criminalize exposure of corporate wrongdoing on the Internet due to intellectual property agreements. That’s a huge problem.

6. State-Owned Enterprises: This would establish transparency rules about the extent of government control over and preference for state-owned enterprises (SOEs), and rules for competitive fairness of our products against SOEs. I’m wondering if this is about Mexico’s state-owned oil and gas enterprise?

7. Technical Barriers to Trade: specifically addressing non-tariff barriers to trade, specifically, duplicative testing and “unscientific regulations” imposed on food and agricultural goods. That word “unscientific” leads me to believe, though I have absolutely no grounds for this claim, that there might be something about GMOs in here. If countries are resisting GMO imports, it might be due to what the government has called “unscientific” requirements that they pass additional health and safety checks beyond what the US requires.

8. A Very Special Episode: Bilateral negotiations between the US and Japan on motor vehicle trade. That’s pretty interesting in itself.

9. Investment: This area will probably have the most impact in the long run. The goal is to ensure a “stable investment environment” among member nations. One issue on the table is regulation of investment in sovereign debt (long time followers of RowlandDeep will remember that credit default swaps on sovereign debt are pure, unadulterated madness).What’s basically being agreed upon here are the terms for most foreign investment in the world, which is effectively remaking of most of the world’s foreign investment market in the image of American-centered investment markets, if not effectively shifting investment entirely to Wall Street. I’ll let you ponder the ramifications of that.

10. Finally, Environment: I’ve read this chapter on WikiLeaks in the most depth, so here’s what I got from that (it’s an early draft, from 2011, so not many specifics):

  • The Parties are totally committed to promoting conservation and sustainable use of biological diversity and sharing the benefits arising from the utilization of genetic resources and… wait, what? Genetic resources? Like gene patenting? Hmmm.
  • Commitment to protecting indigenous and local knowledge, innovations, and practices “relevant for the conservation and sustainable use of biological diversity,” and encouraging sharing of this information.
  • Improved invasive species control, data-sharing, and cooperation.
  • Reaffirming “commitments in APEC to rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption, while recognizing the importance of providing those in need with essential energy services.”
  • Better regulation of marine capture fisheries: This will require regulations in each country designed to prevent overfishing and overcapcity, and to reduce bycatch. Now, it doesn’t give specifics about that in the (early) document I read, but it does say it may include prohibition of finning and commercial whaling. That’s kind of huge. It also included something about sharing data on overfished marine stocks—that would be awesome.
  • Preventing and sanctioning poaching and illegal trade in wild flora and fauna.
  • And a weird one that sounds good but probably isn’t: Lifting customs duties on “environmental goods.” What’s an environmental good? Well, that’s what will be determined. As it stands in most trade agreements, environmental goods and services (EGS) are goods and services that reduce pollution in certain industrial practices, or that address/solve environmental problems resulting from pollutions. But it doesn’t, at this point, include products that are made through sustainable practices already. So, say the logging industry in Mexico is pretty sustainable. Wood from that sustainable practice ought to be considered an environmentally preferable good, right? Enrique Lendo argues convincingly that products of locally sustainable practices should be added to the list of goods that have no customs duties under “environmental goods.” Otherwise, pollution-heavy practices will end up being favored over sustainable ones. I agree.

So that’s about it for the broad strokes. I warned you that there wasn’t much available. That said, let’s talk about the secrecy problem, shall we? This will also aid our understanding of the controversy over “fast-track” authority. I’ll talk about this in Part 2, as well as giving you my take on the agreement.

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