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The TPP Is Dumping on Democracy

Photo by Cailie_Frampton/Flickr

AFL-CIO Trade Policy Specialist Celeste Drake recommends this recent post on the global news website Equal Times, by Yorgos Altintzis of the International Trade Union Confederation (ITUC). In the post, Yorgos explains various dangers workers may face—including a weakened democracy—if negotiators let global corporations have too much influence over the rules of the Trans-Pacific Partnership (TPP) trade agreement. Trade only works for workers when negotiators put people and their lives first. Like what you read? You can read the whole post here. View the AFL-CIO’s new video on the TPP, made in conjunction with workers across the Pacific Rim, here

On 22 August the government of Brunei will kick off the 19th round of negotiations of the Trans-Pacific Partnership Agreement (TPP), a massive trade and investment pact among 12 Asia-Pacific countries, including all of North America, Australia, Malaysia and Vietnam. The latest country to accede is Japan.

Although the 12 governments are keen to wrap up the agreement by the time of the [Asia-Pacific Economic Cooperation] Leaders’ Summit in October in Indonesia, the odds for a conclusion are slim.

With a view to Japan’s accession, the U.S. announced on Monday that they are doing their best to make a tariff-reduction offer to Japan as soon as September.

The stress is also high in Japan: the government has prepared an army of 100 negotiators in an attempt to catch up with the negotiations that have already taken place between the other governments.

Photo by Jeremy Malcolm

But, no matter how important tariffs are to trade, the negotiations are centered on non-trade issues such as achieving “regulatory coherence” and “competitive neutrality.”

The agreement is not only intended to open the markets of goods and services between the 12 partners, but it will also establish “horizontal guidelines” to dictate how a regulation is put in place and what regulation is unnecessary.

For example, if a government wants to set stricter rules on pesticide residues in fruit, it will have to prove that the desired result cannot be reached with non-regulatory means.

The government will then be encouraged to conduct a “regulatory impact assessment” (RIA) to measure the costs and benefits of the regulation.

The RIA is a hangover from the deregulatory agenda of the Reagan era, intended for use at a national level.

One of the problems is that, although business costs are easily assessed in monetary terms, social benefits like public health and environmental protection are not.

On these matters, governments should be free to make decisions using political, cultural and social criteria, not only economic ones.

Shadowy tribunals

The TPP will also establish ad-hoc tribunals where private investors can file complaints against sovereign governments that implement policies, which directly or indirectly impact their investments or expected profits.

Measures like increasing wages, protecting public health through anti-smoking legislation, the implementation of clean energy policies or even the enforcement of national laws can be appealed.

The tribunals are to be run by a shadowy clique of legal firms who will act as judge one day and jury the next. History shows that just by threatening to use such a tribunal, a company can achieve a “chilling effect” on a government that wants to design or enact new regulations and policies.

Foreign investors will have enormous power through the TPP, yet it lacks any mechanism to enforce investor responsibilities.

To read more from the ITUC, click here

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