Daily Visual 04.02.16: Trans-Pacific Partnership Signed

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At a ceremony in Auckland on Thursday, twelve countries of the Pacific Rim – the United States, Canada, Mexico, Chile, Peru, Australia, New Zealand, Japan, Malaysia, Vietnam, Singapore, and Brunei – signed the Trans-Pacific Partnership, one of the largest multinational trade deals ever negotiated. Together these twelve signatories make up 40% of the world’s economy.

The Trans-Pacific Partnership aims to cut tariffs between member states, with 18,000 tariffs affected in all and a focus on agricultural products and industrial goods. The agreement will also establish an investor-state dispute settlement mechanism (ISDS), with an opt out for tobacco-related measures. The full text of the TPP agreement covers 30 chapters, and is considered a counterpart to the Transatlantic Trade and Investor Partnership (TTIP), a proposed agreement between the United States and the European Union which remains at an earlier stage of discussion.

The debate around TPP has persisted for more than seven years, negotiations extending back to 2008 when the United States, Canada, Mexico, Peru, Australia, Japan, Malaysia, and Vietnam sought to expand the scope of the Trans-Pacific Strategic Economic Partnership Agreement, which had been signed by Chile, New Zealand, Singapore, and Brunei in 2005. After several missed deadlines, the twelve countries finally reached a deal last 5 October.

The stated goals of TPP are to ‘promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections’. United States Trade Representative Michael Froman has said the deal could add $100 billion a year to US growth. Yet the agreement continues to face criticism from politicians, trade unions, rights groups, internet and environmental activists, and leading academics, the extent of which has sometimes been masked by populist politics around immigration and national elections.

At the forefront are concerns about the impact of TPP on intellectual property rights, with critics claiming the agreement will entrench the rights of copyright holders while restricting fair use. Such provisions have been especially controversial among artists in Japan, where there is a rich culture of Dōjinshi, self-published works which often take the form of derivative manga or pulp fiction. But TPP will cut equally across the arts, extending copyright protections for authors, songwriters, filmmakers, and corporations, consolidating the use of digital locks, and adopting criminal sanctions for acts of copyright infringement such as file sharing.

These concerns become especially pointed in the realm of healthcare, with the move to extend drug patents seemingly playing into the hands of large multinational pharmaceutical companies. When the full text of the TPP agreement was released on 5 November last year, Médecins San Frontières said it was ‘extremely concerned about the inclusion of dangerous provisions that would dismantle public health safeguards enshrined in international law and restrict access to price-lowering generic medicines for millions of people’.

Condemning TPP as ‘full of sweetheart deals’ for businesses and investors, the economists Joseph E. Stiglitz and Adam S. Hersh have taken aim at its mechanism for investor-state dispute settlement, writing ‘The obligation to compensate investors for losses of expected profits can and has been applied even where rules are nondiscriminatory and profits are made from causing public harm […] Imagine what would have happened if these provisions had been in place when the lethal effects of asbestos were discovered. Rather than shutting down manufacturers and forcing them to compensate those who had been harmed, under ISDS, governments would have had to pay the manufacturers not to kill their citizens’. TPP also raises the possibility of private companies being able to sue governments as a means of opening up access to state-provided healthcare.

Beyond the provisions themselves, TPP has been criticised for the secrecy of its negotiation process. In the United States Senate in May 2012, attempting to pass a bill which would have forced the Office of the United States Trade Representative to reveal its TPP documentation to Congress, Senator Ron Wyden said ‘the majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of US corporations – like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America – are being consulted and made privy to details of the agreement’. And in December 2014, Senator and Democratic presidential candidate Bernie Sounders rounded on TPP, stressing:

‘Let’s be clear: the TPP is much more than a ‘free trade’ agreement. It is part of a global race to the bottom to boost the profits of large corporations and Wall Street by outsourcing jobs; undercutting worker rights; dismantling labor, environmental, health, food safety and financial laws; and allowing corporations to challenge our laws in international tribunals rather than our own court system. If TPP was such a good deal for America, the administration should have the courage to show the American people exactly what is in this deal, instead of keeping the content of the TPP a secret.’

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As New Zealand’s Minister of Trade Todd McClay added the last signature to the agreement in Auckland, protesters gathered round the city’s central business district, creating a blockade at the corner of Victoria Park and Harbour Bridge. Some analysts have argued that the deal could mean a transfer of jobs from the United States to developing countries, but President Obama heralded the signing of the agreement, suggesting it ‘puts American workers first’.

And making plain one of the more tacit aims of the agreement – to neutralise the economic power of China – Obama added, ‘TPP allows America – and not countries like China – to write the rules of the road in the 21st Century, which is especially important in a region as dynamic as the Asia-Pacific. We should get TPP done this year and give more American workers the shot at success they deserve and help more American businesses compete and win around the world’.

The Trans-Pacific Partnership will not enter into force until it has been ratified by the national legislatures of all twelve member states. They have two years to complete the process. The endeavour to get TPP through Congress will be one of the Obama administration’s last battles, although last year Congress granted Obama ‘fast-track’ authority over the deal, which means that lawmakers can only ratify or reject the agreement within 90 days after it is formally submitted.