As someone who’s been warning for a while about the Trans-Pacific Partnership (TPP – see my previous posts on the issue here and here), I’m pleased to see a large activist group like GetUp! come out against it.
As the video explains, the TPP could establish among other things an investment-state dispute settlement (ISDS) tribunal, giving multinational corporations the power to sue a government for any policy that hurts their “expected future profits”. The tribunal would be run by trade lawyers and its rulings based on whether the policy hurt investment, with little regard to the policy’s reason for existence. Australia’s Abbott government is likely to agree to this in return for greater access to sugar markets. We know about this mainly through WikiLeaks, because the negotiations have been kept secret from all but a few hundred American corporations.
ISDS has a gagging effect on the ability of governments to introduce laws to hold corporations accountable. It is an attack on democracy, a radical transfer of power from elected governments to corporations. Australia has already signed two agreements containing ISDS (the Hong Kong Agreement, under which Philip Morris is challenging Australia’s plain packaging laws, and the Korea-Australia Free Trade Agreement), but the TPP is much bigger.
This is very relevant to climate activists, because it’s hard to imagine an effective climate policy that wouldn’t hurt corporate profits and hence potentially fall foul of ISDS. Any number of policies in the public interest could threaten corporate profits. At a time when human-caused global warming threatens to spiral out of our control, we need accountable government more than ever. If governments sign away their power to regulate multinational corporations, then it will become virtually impossible to solve climate change and other 21st-century problems.
At the same time, Australia is also involved in negotiating the equally secretive Trade in Services Agreement (TiSA) which would deregulate financial services. WikiLeaks has revealed that in TiSA, the US proposes opening up the Australian market to foreign banks from countries with less financial regulation (including the US and Panama); bringing Australian financial data under American surveillance and national security laws; and ISDS provisions undermining the Australian government’s ability to regulate financial services. Remember, it was financial regulation that shielded Australia from the global financial crisis.
You might think that sovereign governments would never cede power in an international agreement. And you’d probably be right if the agreement was about say, the environment or human rights or arms control. But trade agreements are the one type of treaty that are enforceable, a backdoor route to sneak through policies advancing corporate power that could never be achieved through democratic domestic politics. And as much as our politicians rave about the benefits of international trade, the Fairfax newspapers revealed this morning that over half of Australia’s foreign trade consists of tax avoidance.
Standing up to the “free trade” juggernaut may seem hopeless, but public opposition has contributed to the repeated stalling of the TPP talks, and united the US Congress to oppose President Obama’s attempt to fast-track the deal. In the European Union, public pressure over the similar Transatlantic Trade and Investment Partnership (TTIP) has led the European Commission to announce it will publish the full text for public debate before it is signed. And public protest is also a reason why the multilateral World Trade Organization (WTO) talks have stagnated this century.
There is currently a Senate inquiry into Australia’s trade agreement process, initiated by the Greens and Labor. Submissions close on 27 February.