The Trans-Pacific Partnership: the dirtiest trade deal you’ve never heard of

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.

1 comment

    • Yvonne & Reto on 8 February 2015 at 19:02
    • Reply

    Hi James
    Interesting blog site you have
    Some interesting info regarding the TPP. As you know Victoria and in fact over half of Australia’s landmass is under some sort of mining exploration license including Unconventional Gas (Fracking).
    As there is increasing concern from the public on this so called Onshore Natural Gas Industry development threat, groups are also concerned about wider implications such as the TPP. One of the Gasfeld Free Groups has written to local Federal Minister Dan Tehan regarding the TPP, bellow the response received for your interest, time will tell how open and transparent this agreements are.
    Cheers Reto

    Dear Garry

    Thank you for your call to Mr Tehan’s office earlier today regarding the Trans-Pacific Partnership agreement (TPP).

    Please be assured your concerns have been conveyed to Mr Tehan.

    I have sought some information from the office of the Minister for Trade and Investment, the Hon Andrew Robb, and have been provided the following advice:

    The TPP offers an opportunity to strengthen job-creating trade and investment, and to further integrate Australia into the fast-growing Asia-Pacific region by pursuing common and liberalising policy outcomes.

    Investor-State Dispute Settlement (ISDS) provides an opportunity for Australian investors to protect their investments overseas against expropriation and to ensure that they are afforded a certain minimum standard of treatment, and treated in a non-discriminatory manner. ISDS provisions have been included in agreements over the past three decades to provide protection for those who choose to pursue new opportunities for Australia by investing abroad. Australia has ISDS provisions in place with 28 economies.

    The Government is considering the inclusion of ISDS provisions in Free Trade Agreements (FTAs) under negotiation on a case-by-case basis. Contrary to some public commentary, ISDS does not protect an investor from a mere loss of profits and does not prevent a Government from changing its policies or regulating in the public interest.

    A loss of profits, by itself, does not amount to a breach of an FTA. Should the Government agree to the inclusion of ISDS provisions in any of the FTAs under negotiation, we will seek to ensure that the Government is not restricted in its ability to protect public health and the environment. Further information can be found at

    The Phillip Morris case is being taken under a relatively old investment agreement with Hong Kong which does not have all the explicit safeguards that we would expect to build into ISDS provisions being negotiated today.

    As is standard practice with the negotiation of international treaties, draft TPP negotiating texts are not public documents. The Department of Foreign Affairs and Trade is however taking every opportunity to ensure that stakeholders are adequately consulted and able to express their views. There will be an opportunity for full public and Parliamentary discussion prior to any agreement being ratified. In accordance with the Government’s treaty-making process, once the TPP text is agreed it will be tabled in Parliament for 20 joint sitting days to facilitate public consultations and scrutiny by the Joint Standing Committee on Treaties (JSCOT) before any binding treaty action is taken. Once tabled, the treaty text and an accompanying National Interest Analysis will be published on the JSCOT website and in the online Australian Treaties Library. Further information about the TPP can be found on the Department’s website, at

    Australia’s negotiating positions have been, and continue to be, guided by consultations with a range of stakeholders. The Government will continue to take every available opportunity to consult with stakeholders and is always open to receiving written submissions and meeting with interested parties.

    Again, thank you for making contact and registering your concerns with Mr Tehan.


    Lizzie Hallam
    Electorate Officer

    190 Gray Street Hamilton VIC 3300
    T: 03 55721100 M: 0427 724 372

    R1 32 Parliament House, Canberra ACT 2600
    T: 02 6277 4393

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