Thursday, October 8, 2015

TPP degrades democracy results in less competition

- The announcement that an agreement was reached by the 12 nations negotiating the Trans-Pacific Partnership(TPP) has resulted in considerable discussion and debate on the pact.
The text of the agreement has never been made public and it is not clear when the text will be released. The details released are probably released by parties whose interests are involved. Many critics of the TPP complain about the secrecy and lack of transparency in the process. There is much discussion of the impact of the deal on agriculture sectors such as dairy farmers who have a supply-managed system. While the agreement does open the system somewhat to allow more imported products into Canada, the basic supply management system remains. The negative impact of the changes will be muted through compensation paid to the industry courtesy of the Canadian taxpayer. The auto parts industry will also be hurt with many jobs lost. Again Harper promises billions of taxpayer money to mute the negative impact.
There is less discussion of other significant aspects of the agreement. The TPP, as with other trade agreements such as NAFTA, is less about free trade and more about placing the power of global corporations beyond the reach of democratic governments. Ironically, our government quite consciously bargains away our right to pass laws and regulations as we see fit. If we pass laws or regulations which are considered inconsistent with the TPP, a foreign corporation can sue Canada.
A leaked text of part of the TPP includes an investor-state dispute settlement(ISDS) very much like the already existing mechanism in Chapter 11 of the North American Free Trade Agreement. Wikipedia describes an ISDS as follows: Investor-state dispute settlement (ISDS) is an instrument of public international law, that grants an investor the right to use dispute settlement proceedings against a foreign government. Provisions for ISDS are contained in a number of bilateral investment treaties, in certain international trade treaties, such as the North American Free Trade Agreement (Chapter 11)...If an investor from one country (the "Home State") invests in another country (the "Host State"), both of which have agreed to ISDS, and the Host State violates the rights granted to the investor under public international law, then that investor may bring the matter before an arbitral tribunal.As mentioned, NAFTA contains such a provision.
There have been many cases in which Canada has been sued by foreign corporations. In August 2008 Dow Chemicals submitted a claim for losses caused by a Quebec ban on the sale and certain uses of pesticides containing 2-4 D. In this case, the two sides reached a settlement accepted by the tribunal. States cannot sue corporations under the ISDS nor can they receive any compensation should a corporation lose except for their legal costs in some cases.
Canada has already lost seven cases under the ISDS process and paid out damages of $190 million and who knows how much in legal fees. One case filed against Canada challenges a Quebec ban on oil and gas fracking in the province. An analysis of cases under the NAFTA provisions can be found here:This study documents the 77 known NAFTA investor-state dispute settlement (ISDS) claims up to January 1 2015. These include 35 against Canada, 20 against the U.S., and 22 against Mexico. Canada has paid out NAFTA damages totaling over $CAD172 million, while Mexico has paid damages of $US204 million. The U.S. has yet to lose a NAFTA chapter 11 case. All three governments have incurred tens of millions of dollars in legal costs to defend themselves against investor claims.
In Europe, the issue of ISDS mechanisms has been hotly debated The EU parliament has passed a resolution that will require replacing an ISDS system in the Transatlantic Trade and Investment Partnersip(TTIP) ".. by a new public and transparent system of investment protection, in which private interests cannot undermine public policy and which is subject to public law." Brazil refuses to sign any treaty with ISDS clauses. South Africa intends to withdraw from any treaties that have ISDS clauses. In Canada the politicians of the major parties appear to think the issue is not worth bringing into public debate. What is significant are issues that impact specific interests such as the dairy industry or auto industry, where the parties might win or lose votes if they take the wrong position. That the democratic system itself is endangered and more power given to global corporations does not seem important.
If provisions in the TPP allow more penetration of global corporations into new markets such as the Canadian dairy and auto industry then competition will be fostered but in general the exact opposite is the case. In any free trade deal there are always clauses extending copyright and patent lengths, giving corporations monopoly rights over their products. We can expect the costs of drugs to our health care system to increase dramatically as a result of the TPP. It will become more difficult for producers of less expensive generic drugs to be able to replace drugs protected by patents. Protection of copyright terms in the TPP will prevent free or less expensive copied version of items:In the area of copyright, the TPP would require far longer terms of protection than what Canadians agreed to in a parliamentary copyright law review that only wrapped up recently. To smooth the way for the TPP, the federal government has already agreed, in the latest omnibus budget bill, to extend copyright terms for audio recordings from 50 to 70 years. The TPP could also require protection for controversial “digital locks,” which allow copyright holders to encrypt software in computerized devices and criminalize its circumvention.We do not know exactly what will be in the final text. With provisions such as these in the leaked text, it is not surprising that the final text will probably not be released until after the election.

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