Wednesday, October 7, 2015

Today by Michael Lucy

Down with TPP?
After seven years of fierce negotiation, the Trans Pacific Partnership is a still an enigma

Late on Monday evening, Australian time, it was announced that negotiators from 12 countries – including Australia, the US and Japan – had agreed on the text of an agreement called the Trans Pacific Partnership at a marathon meeting in Atlanta. The TPP will cover some 40% of the world’s economy. It has been hammered out over seven years of wrangling and contains far-reaching provisions on trade, employment, copyright and many other areas of economic policy and governance.

The TPP is usually described as a trade deal, which we think of as describing tariffs on imports and regulations of exports and so on, but this is a much broader agreement. We might better regard it as something like a constitution for business activity in the region, which will allow companies to operate across multiple nations under a common set of rules about things like property and employment.

Malcolm Turnbull called it a “giant foundation stone” for future prosperity, and his trade minister Andrew Robb said it will “create all sorts of wonderful opportunities”. Labor, who were in favour of the TPP throughout the Rudd-Gillard-Rudd era, offered qualified support on the assumption that the deal would not affect the Pharmaceutical Benefits Scheme or the cost of medicines in Australia (this was apparently a sticking point in the final days of discussions). The Greens were concerned that the economic benefits might be less than promised, and that investor-state dispute settlement (ISDS) provisions, which will allow corporations to sue foreign governments in some circumstances, could limit future policy options.

ISDS is a real concern: introduced to give recourse to companies harmed by corrupt governments and reduce the risk to investors of rapid changes in policy, it can also make it hard for any government to create legislation that harms the interests of a business.

One example of how ISDS can affect policy is playing out at the moment: Australia’s plain packaging legislation, widely viewed as a public heath success story, has undoubtedly harmed the interests of tobacco companies. That was the point. Nonetheless, Philip Morris is currently attempting to have the legislation struck down under a 1993 trade agreement between Australia and Hong Kong, on the argument that it is bad for their business. Whether or not this case succeeds, similar claims might well be brought by miners or polluters in the event of future limits on carbon emissions, say. (In the case of the TPP, tobacco companies have been specifically barred from accessing ISDS provisions, the only industry to be singled out like this.) Offering certainty to business by limiting the options of sovereign governments is a dismal prospect. Some degree of uncertainty is a cost of doing business in a democracy. Being able to predict the actions of a government is not entirely different from being able to control them.

Of course, it’s hard to predict how the final treaty will look, or what its long-term effects will be. This is not only because we can’t read the future but because we can’t read the agreement. The negotiations have been notoriously secretive: not only have the documents been unavailable to the public, they have only been shown to most MPs under strict conditions, including an agreement not to discuss the contents for four years. Most of what we know about the details comes from working drafts obtained and released by WikiLeaks.

Successive governments have in effect simply asked us to trust them to know what’s best. They have blown up the farce of “commercial in confidence” government contracts to global proportions, and it’s no way to run a country. We can hope that more information is made public before the TPP is ratified by parliament. Not that it will make much difference – with Labor’s support almost guaranteed, the crossbenchers who have been the only real parliamentary critics of the agreement don’t stand a chance.


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Michael Lucy

Michael Lucy is a writer based in Melbourne.



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