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The Trans-Pacific Partnership or Goodbye “Fair” Trade

— April 20, 2015

The Trans-Pacific Partnership (TPP), on its face, sounds like the best idea since sliced bread. It gives the U.S. access to many more developing markets, a larger say in the trade rules of the Pacific Corridor and more enforceable mechanisms to crack down on environmental issues and abuses. In a perfect world, the TPP would solve a great many problems. Unfortunately, we do not live in a perfect world.

Based on the NAFTA and the Korea Free Trade Agreement, the TPP makes it much easier for cost-cutting U.S. corporations to outsource American jobs to overseas companies willing to do them for a lot less money. Of course, since some of the TPP member countries are low-wage payers, American wages are at risk of being lowered, too. If we’re competing with Vietnamese workers making less than sixty cents an hour, how can we demand the wages we receive now?

In addition, since the TPP member countries must remove tariffs on virtually everything, local producers and farmers may end up competing with tariff-free imports resulting in further loss of market share and possible bankruptcy. There are no agricultural subsidies under the TPP, either.

Another grave concern about the TPP is that, like many other Washington D.C. policy “masterpieces,” much of the text isn’t even on-topic. There are numerous non-trade issues covered in the TPP. In fact, of the 29 chapters only five deal directly with trade. One chapter greatly curtails Internet freedom, while another (the copyright chapter) is filled with pieces of the Stop Online Piracy Act (SOPA) despite it’s earlier demise.

If that’s not bad enough, the chapter on patents could’ve been written by big pharma and, in fact, may have been heavily influenced by big pharma’s lobbyists. Congress isn’t allowed to see the text of the TPP yet, but some lobbyists already have, by invitation of the U.S. Trade Representative. The extension of patent protections under the TPP would effectively ban imports to the U.S. of certain generic drugs. That’s a great way to ensure profits for big pharma, while at the same time making it even more difficult for the average American to have access to affordable medicine.

Remember all of the “Buy American” and “Buy Local” campaigns? They were designed to encourage everyone, including the federal government, to support local sources. Under the TPP, you can kiss them goodbye. The TPP opens up government procurement to member nations’ companies and, if a department decides it still wants to “Buy Local”… well, a member nation’s company can file suit against that department in one of the TPP tribunals for restriction of trade.

Wait! I hear you saying. How can that happen? The TPP would give about 9,000 foreign corporations the right to sue in one of its extrajudicial tribunals. The tribunal panels are composed of three corporate attorneys and can rule that a foreign company is entitled to U.S. taxpayer money in a claim that the foreign company lost future profits if they think a U.S. law has violated their trade rights. It should also be noted that there is no appellate function in the TPP’s tribunal system. Once the panel decides, that decision is binding. Period. Oh, before I forget: The members of these panels rotate out, meaning that one week, they’re panel members and the next, they’re attorneys arguing in front of a panel of different attorneys. The TPP has zero conflict of interest rules.

Essentially, the TPP gives nation status to these 9,000 corporations. More information can be found a The site shows cases under other trade agreements where companies have filed against sovereign governments. Of course, we have cases like the ones showcased on the site already, so what’s the big deal, right? Most of the previous agreements are with developing nations and all 50 agreements include some 9,000 companies total. The TPP brings in another 9,000 companies from developed nations. These companies have deeper pockets and better legal teams.

But it’s fair, isn’t it? Sorry, Virginia, there is no Santa Clause in the TPP. We’ve worked hard in the U.S. to get environmental regulations where they are now and we still have a long way to go. However, under the TPP, if a foreign company decides that our environmental law is keeping it from a fair chance at making a profit, it can bring a claim to a TPP tribunal. The end result could be a chilling of our own environmental protections. Don’t believe me?

Check out this fact sheet from the Sierra Club. The Bilcon case was brought against Canada by a U.S. company (Bilcon). The company was unhappy because Canada said its policy regarding open pit mining and keeping the environment safe trumped Bilcon’s need for profit. Sadly for Canada (and its taxpayers), the NAFTA three-lawyer tribunal did not agree. The one dissenting panelist said, “If we keep doing things like this—I have to break with the rest of you. If we keep doing this, this investor-state system is going to chill all our environmental laws.”

It won’t just chill environmental laws it’ll hit food safety, too. Along with prescription drug availability and more. If the U.S. is going to allow one of its own corporations to file a claim against the Canadian government, what’s to stop a Chinese or Japanese corporation from filing against the U.S. government?

It remains to be seen how this will all play out. We will be keeping an eye on it and reporting back to you.


“A Corporate Trojan Horse”: Critics Decry Secretive TPP Trade Deal as a Threat to Democracy

Trans-Pacific Partnership Agreement Could Hurt Developing Countries

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