By Bill Davis and Dr Matthew Mitchell. First published by Independent Australia.
On June 24, as the US Senate resolved to ‘fast- track’ the Trans-Pacific Partnership, the Australian Productivity Commission declared the ‘free’ trade agreement ‘preferential’ and ‘dangerous’. These two events occurring on opposite sides of the Pacific should ring alarm bells with the Australian public. They warn that Abbott government is on the brink of signing away our sovereign rights.
The US trade representative’s describes the TPP as "an ambitious,21st-century agreement that will enhance trade and investment among the partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs".
The economic growth claims have already been debunked by a study conducted by the US Department of Agriculture. But if it does not deliver GDP growth, then what is the purpose of the TPP?
Professor Jane Kelsey from the University of Auckland explains the real intention of the TPP to "revive US geopolitical, strategic and economic influence in the Asian region to counter the ascent of China, in part through constructing a region-wide legal regime that serves the interests of, and is enforceable by, the US and its corporations".
The proposed TPP “agreement” involves Australia as well as a host of other potential member nations including Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Canada, Japan, Mexico, Vietnam and the United States. South Korea has also indicated it may sign up.
The deal could be signed by end of the year.
‘Fast-tracking’ the TPP has removed a major impediment in the United States. Fast-tracking, according to journalist Dave Johnson enables Congress to agree "to set aside its duties under Article 1 Section 8 of the Constitution and vote on TPP within 90 days of it being signed, to severely limit discussion and debate, not to filibuster the agreement in the Senate and not to amend it not matter what problems turn up after the agreement is revealed".
"Fast track essentially pre-approves the TPP agreement (and future trade bills) before the public gets a chance to know what is in it."
Reuters report that the Senate voted 60 to 38 giving Obama the power to negotiate the TPP and other trade deals and fast track them through Congress. The bill goes next to President Obama for his signature.
Australia’s process for approving trade agreements is not so different from the US fast-track process.
The Australian Fair Trade and Investment Network (AFTINET) explains that our own process begins when the Trade Minister presents the text to the Cabinet, which is made up of the Prime Minister and other Cabinet Ministers. The decision to sign the text is made by Cabinet, not the whole Parliament.
The text cannot be changed after it is signed. Parliament only votes on the implementing legislation, not on the whole text of the agreement.
Only a few of the TPP's 29 chapters will require changes to legislation. However many other chapters will restrict the ways in which current and future Australian governments can legislate, but will not require legislation. For example, the inclusion of the right of foreign investors to sue governments over domestic legislation (investor-state dispute settlement or ISDS) does not require a change to Australian legislation. Other changes, like changes to the Pharmaceutical Benefits Scheme (PBS), could be made by changing regulation rather than through legislation.
As many journalists and commentators have argued, agreements like the TPP have dubious benefits for citizens of the countries involved.ISDS provisions have been criticised by U.S. Constitutional lawyer Lori Wallach for “empowering corporations to sue governments—outside their domestic court systems—over any action the corporations believe undermines their expected future profits or rights under the pact by reporting breaches, removing online content and even denying access to Internet users”.
ISDS is the controversial mechanism by which Philip Morris is suing the Australian Government over tobacco advertising under an obscure Hong Kong trade treaty. ISDS is becoming a standard request in trade agreements, including our recently announced FTA with China and Korea — but not Japan.
In an article entitled “ISDS: The trap Australia-Japan Free Trade Agreement escaped', the Sydney Morning Herald reported that "the United States loves investor state dispute settlement procedures. It has insisted on them in every one of the 14 free trade agreements it has signed and the 17 it wants to sign. Its companies use them to browbeat and potentially bankrupt governments that introduce environmental or health-related laws they don’t like, a practice Australia’s productivity Commission refers to as 'regulatory chill'".
One of the serious ramifications of ISDS is this chilling effect on the local legislature.
For instance, in February 2013, New Zealand's Ministry of Health announced that the government planned to introduce plain packaging legislation, but indicated that it intended to wait until the ISDS case by Phillip Morris was decided. The legislation has been introduced since then, but has not been enacted.
It is noteworthy that former Australian Prime Minister John Howard was strongly against ISDS and refused to allow it to be included in the 2004 US-Australian Free Trade Agreement. Our own conservative Productivity Commission examined ISDS procedures in 2010 and found no evidence that they boosted investment in nations likely to be sued. It recommended the Government "seek to avoid" them in the future.
The TPP negotiations have been going on since 2008. Like the Howard government, the Gillard government ‘flatly refused’ to support the inclusion of an ISDS clause. But not so the Abbott government, which appears reckless in its rush to finalise trade agreements by agreeing to provisions it has been warned against.
In 2014 Trade Minister, Andrew Robb, negotiated the Japan FTA without the ISDS provisions, but included them in the Chinese and Korean agreements.
We know the Abbott Government can respect Australian sovereignty if it so chooses.
The government’s inclusion of ISDS provisions in FTAs prompted a blistering rebuke from the Productivity Commission, which re-entered the debate following the US fast-track announcement.
The Sydney Morning Herald reported that the Commission "launched a scathing attack on Australia's latest series of free trade agreements, saying they grant legal rights to foreign investors not available to Australians, expose the government to potentially large unfunded liabilities, and add extra costs on businesses attempting to comply with them".
The Commission first issued warnings the TPP negotiation process in 2010, stating ‘a more transparent and strategic approach is required to ensure that there is an appropriate focus on policies that are most in Australia’s interests’.
The TPP is being negotiated in complete secrecy. Our only access, so far, is via leaks published by WikiLeaks. Australian politicians who asked to see the text were told if they did, they could not talk about the text for four years.
It seems no-one thinks that trade agreements like the TPP are a good idea — except the Abbott Government (alone among Australian politicians and former federal governments), the U.S. and multi-national corporations.
The question is: "What are we going to do about it?"