TPP: The Devil’s in the Details


Think ‘property.’ Now think ‘treaty’ … as in those instruments that transferred land from people who belonged to it, to people to whom it then belonged. Pretty good deal for us, not so much for First Nations. (A stony outcropping of land called the Bruce Peninsula was evaluated not so long ago as being worth some $50 billion —just imagine what the rest of Canada is worth.)

Now you’re in the proper frame of mind to consider the Trans-Pacific Partnership (TPP). That’s the instrument that the Conservatives negotiated and the Liberals have yet to ratify.

The TPP is a massive trade and investment agreement that dwarfs, but does not replace, NAFTA in its scope. It’s the rule book for many things: investment (a troubling chapter that allows foreign companies to sue countries if national laws get in the way of corporate profits), textiles and apparel, customs administration, financial services, entry for business persons, telecommunications, electronic commerce, government procurement, intellectual property and more.

Put aside for the moment that the deal takes another bite out of the Canadian market for our dairy farmers. They’ll lose some 3% of market share and we’ll lose some tax revenue. That loss doesn’t count the $4.3 billion worth of compensation promised to dairy farmers or the $1 billion for innovation in the auto industry – if there’s one left after the TPP. The benefit of the TPP to the Canadian economy? According to former Trade Minister Ed Fast: $3.5 billion.

And let’s not look at the 58,000 lost jobs some economists are forecasting, partly because Japanese cars and trucks will be allowed for sale in Canada with much higher ‘foreign content’ (parts made outside the country) than previously.

By the way, before the North American Free Trade Agreement came into effect, we had a trade surplus in the auto sector of over $14 billion a year. Now, owing to the loss of jobs to Mexico and of business to the Great Recession, we have a deficit of $10 billion. NAFTA was a pretty good deal for Mexico and a posse of trade lawyers, not so much for US and Canadian auto workers. Under the TPP we’ll have to accept cars with even more parts that used to be made here, but are now made in Mexico. How’s that for free trade?

Let’s look at the section of the TPP that deals directly with property – intellectual property or IP. That’s Chapter 18. You can find it and the rest of the text of the TPP. Canada’s free trade agreements are at Global Affairs CA:

The TPP doesn’t replace any other agreement — it adds its own rules to over a dozen other agreements on intellectual property alone, including one under the WTO which, in 2000, forced Canada to change its Patent law with respect to the manufacture of generic drugs.

Chapter 18 sets the ground rules for the IP industry in any country that signs on. And those rules pretty much dictate how nations are to deal with everything from songs on the Internet to prescription drugs to GMOs. It even includes – and First Nations should be aware of this — a section on traditional knowledge, how to acquire it and how to patent it.

Nothing, it seems, has escaped the attention of whomever it was that drafted Chapter 18. It even lays down the law — literally setting out the sort of punishments that we will have to levy against those who violate its terms. If there’s a dispute — if a foreign multi-national doesn’t like how it’s being treated — it will go, not to Canadian courts, but to a secretive trade tribunal for arbitration. All this helps to cement corporate control of our economy.

This is no small matter. The IP industry (which include the Googles, and Facebooks and Apples of the world, as well as Big Pharma corporations and emerging Financial Tech companies) is the one that’s growing, at least in the US. Manufacturing is accounting for less and less of the GDP there, and here. It’s no coincidence that the IP rules in the TPP best serve US-based multi-nationals.

“We’re a trading nation” as Mr Trudeau likes to say. Well, we export commodities but we import intellectual property and with commodities tanking in a global slow-down, we have to turn our economy toward IP and innovation.

And there’s the rub. As Jim Balsillie, the co-founder of the company that gave the world the Blackberry, points out in a recent article for the Globe and Mail, we are not prepared to compete in the IP game and he quotes the data to back up his claim. In general, Canadian companies are not very good at commercializing innovation. The title of his article asks the right question: “Will TPP mean protection – or colonialism?”

In an earlier piece, Mr Balsillie quotes a lead strategist for one of the world’s most valuable technology companies: “We don’t sue Canadian companies until they start to matter to us. The money is not worth it when they’re small and we don’t want to look like a bully. We wait until they get big enough, then we go after them. And we kill them.”

We would do well to remember the treaties of two centuries ago and think on what we promised and what we took, and do it before we ratify the TPP. 

The TPP is one of 3 massive Trade & Investment agreements being negotiated …

The US is currently negotiating another major trade and investment deal: the TTIP (Trans-Atlantic Trade & Investment Partnership) with European countries. It does not include the UK or Canada – we signed our own deal with the EU, the Comprehensive Economic Trade Agreement (CETA). We have not ratified that one either, largely because Germany is worried (with good reason) about its Investor State Dispute Settlement  (ISDS) provisions.

The principal worry is that trade agreements with ISDS chapters pretty much lock a country into doing business in a certain way. If, for example, a nation wants to change the packaging of cigarette cartons to reflect their health hazards, a company (the Investor) can sue the nation (the State) for erecting a barrier to trade. The dispute doesn’t go to the State’s courts, it goes into secret and very lucrative (for lawyers) Dispute Settlement.

Phillip Morris tried this with Australia. Fortunately, Australia won, but not all disputes are settled in the nation’s favour.

Canada has been successfully sued by a number of corporations for laws and regulations we have tried to pass that were deemed to ‘interfere’ with corporate profits. These suits and complaints have come from a variety of sources already, including the NAFTA and the WTO (World Trade Organization) which successfully forced Ontario to drop its requirement that renewable energy equipment be manufactured in the Province.

There’s a good video from Germany that concisely and accurately lays out the Germans’ worries about ISDS provisions in ‘free trade’ agreements: They mirror the concerns those of us who opposed the NAFTA had about Chapter 11 of that agreement, back in 1988. History has borne us out.

Here’s another quicker, cheekier briefing on ISDS from Lead Now

So, think of the TTIP as the US-EU version of our CETA. Negotiations on TTIP are  scheduled to wrap up in 2020.

But don’t let anyone tell you it’s not possible to open up sections of these trade agreements for review and revision before ratification. At the urging of the EU (ie, Germany) the ISDS chapter of the CETA is being re-negotiated.

The TISA (Trade in Services Agreement) is another US initiative. It is being negotiated among 23 members of the WTO (including the EU although that’s not reflected in the graphic). Counting the 28 countries of the European Union who sit as a block, some 50 countries, including Canada will be subject to the TISA.

It is based on the WTO’s General Agreement on Trade and Services – the thing that obliged Ontario to stop preferring provincially-based manufacturers of green energy technology under the Green Energy Act. However, the TISA will cover services, not goods, and include banking services, education, water, social services and healthcare.

Some critics see the TISA as an attempt to privatize services now provided by (some) governments such as education and health care. It does seem as though the US is looking for foreign markets for its private service sector. For example, the provision on ‘National Treatment’ states that once a country lowers trade barriers for any service, as it committed to under TISA, it cannot then raise them again. That might protects corporate profitability, but the public good, not so much.

However, the EU has so far been firm in asserting that no trade agreement will prevent its governments, at any level, from providing services in water, health, education and social services. And companies outside the borders of the EU will not be allowed to provide publicly funded healthcare or social services. (But the door may remain open for privately run penal and education services.)

Bottom line: Governments beware, Citizens be alert.


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