Speaker by Various Artists


TPP: Error Correction

by Mark Harris

On Friday, Stuff published an opinion piece about the Trans Pacific Partnership by Pattrick Smellie headed Ten things TPP critics do not want you to grasp. I was appalled by it it and felt it warranted a rebuttal. This is that rebuttal.

1. The secrecy surrounding TPP negotiations is typical of any such exercise.

While bilateral trade agreements are generally held quietly between the negotiating teams, multi-lateral agreements that will impact the sovereignty of nations, require changes to legal structures and change the way international business is undertaken are not done secretly. The negotiations to set up the World Trade Organisation itself is the classic example, not to mention the various agreements that have been conducted under its aegis. Indeed, one has to ask why the WTO is not the place for this treaty process to be conducted. Perhaps the very openness of its processes is anathema to the country driving this treaty, the USA, as it was for its failed predecessor, the Anti-Counterfeiting Trade Agreement - not so much a "trade agreement" as an attempt to push US "intellectual property" laws on other nations.

In addition, by this stage of the negotiations, many parts of the treaty should be agreed and concluded, while the remaining time is spent on the points of difference. Why aren't we being told the details of the stuff that is not under contention? Perhaps because of former US Trade Representative Ron Kirk's words “If people knew what was in the TPP it would be impossible to get it passed.” It's also important to note that even Obama's own party in the US Senate is concerned and refusing to give the President the "fast-track" authority he needs to approve this treaty without their oversight, traditionally required for international treaties.

2. The bogey of corporations being able to sue governments is not only overblown, but corporations can do that now, without a TPP.

No, they can't, unless a country has signed a trade agreement that allows it, such as the one that Australia signed with the US, or the NAFTA agreement, or the U.S.-Ecuador bilateral investment treaty by which Chevron Oil was awarded a payment of $US96.4 million by one of these private tribunals. Without such an agreement in place, corporations cannot sue for lost profits or any other thing, except under the laws of the country concerned.

3. Corporations might try to sue but they'll be whistling if the government is acting in the public interest. Raising new taxes, protecting the environment, or regulating for public-health reasons won't be excuses to mount court action.

See number 2. There is no activity, as far as we are aware, that is exempt from this. If there is, why won't they tell us about it. If they have nothing to hide, surely they have nothing to fear. That's the excuse that governments are using to apply more surveillance to civil society - it's just as validly applied to them.

4. United States corporate interests are obviously among those seeking influence on the TPP agenda, but that doesn't mean the US Senate and Congress are on board. That's why US President Barack Obama is having such trouble getting "fast-track" authority to negotiate TPP.

I'm pleased, if surprised, to find at least one point I can agree with. But Smellie doesn't bother to analyse this point in any detail. WHY is the US Senate against this "fast-track" authority? Because it's very much NOT how these processes are undertaken in the US. Obama and the USTR do not want the treaty to be properly analysed by the Legislature because they know that, if the Legislature disagrees with a single clause, the treaty is nullified, and negotiations have to start again. This is why you have open processes from the start, so that the approval is only technical at the end of the game, because everyone knows what has gone before.

5. US politicians know less about what's in the TPP negotiating documents than US corporate lobbies.

This is absolutely correct, though Smellie tries to dismiss it as irrelevant. It is telling that the USTR, in calling an emergency meeting to discuss issues with the "fast-track" approval process in January, only called in the US corporate advisors, not the elected representatives of the people and not (as far as we know) any non-US-based corporates -- if anyone from Fonterra was asked to the meeting, please let me know.

"So it must be a plot, right? Well, actually, no."

Well, actually, yes. From the beginning, ACTA and the TPP have been driven by the corporate interests and not by the governing structures. They have been attempting to enact treaties that would require legislative change signatory nations in order to comply with 'international obligations", that is to force nations to change their laws to allow the corporations to make more profit. While that may be "business as usual" in the US, it's also pretty much a definition of a plot.

Smellie can't (or won't) tell us how many NZ politicians have agreed to silence themselves to get a peek at something they can't do anything about, but he's sure they can, and somewhere along the line he's missed the fact that the party in the House is a subset of the party at large, which may or may not agree with this, and that the members in the House are representatives of the population at large.

6. No-one knows what the TPP could be worth to the New Zealand economy, so the Sustainability Council is right to question the $5.16 billion figure the Government has used.

Absolutely correct. But again, Smellie does not inquire into the relevance of this small fact -- the Government has used that figure to justify its involvement even while Groser admits it may bear no resemblance to reality. There may be a huge windfall, but we may just as easily be reduced to economic vassalage. Without the detail of the treaty before experienced and independent economists there is no way to know what we are getting into. It's the equivalent of buying a car from a salesman who insists that the 0000001 odometer reading is because it's just been driven off the boat but no, you can't lift the bonnet to look at the engine.

Groser and others are holding out the promise of untold potential wealth at having trade barriers whisked away, but they don't mention that NZ already has an export meat quota to the US, for example, that we have never come within a bull's roar of meeting, let alone exceeding, or that Fonterra is already exporting to and marketing in the US for cheese and other products. Just what are we going to be exporting there that's going to make so much money?

Crickets ...

7. The US is railroading its agenda because it's just a big bully. [...]]Wikileaks versions [...] show the US on the back-foot on many of the most contentious issues.

The fact that there's so much pushback shows that the US have indeed been the bullies pushing things along and shaping the agenda. The USTR is the driver for this process, and for the secrecy, and the conduit to the US corporate interests behind it, just as it was for ACTA. What little has become public knowledge leaves no doubt on this matter.

8. This is the end of Pharmac. Balderdash.

Without seeing what's in the treaty document, it is simply not possible to say what the impact on Pharmac will be. We've recently seen India criticised by Bayer for allowing a generic drug that mimics one of its own to be produced, threatening to take the Indian Intellectual Property Appellate Board to court, while Bayer's CEO was quoted (and controversially mis-quoted) as saying "we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product." John Key has stated, more than once, that "everything is on the table". As Key outranks Groser, it's a little naive of Smellie to think that Groser's protestations will be the last word. It's also instructive to note that Pharmac has been quietly restructured in recent months, with many of the people experienced in managing the Schedule no longer having jobs.

However, points for style in using "balderdash" in an article, though it would gain more gravitas with an exclamation mark or two. Definitely two.

9. The deal will be done behind closed doors. It can't be. Every Parliament of every country involved will have to ratify any deal signed by leaders. That could take years. It will ensure public scrutiny of the detail.

This really is the big error (I use the word advisedly) in the piece and shows that either Smellie doesn't know how to read the legislative requirements for ratifying treaties, or he's been told to spout this line precisely.

I quote Steven Joyce from the House on 11 December 2013:

Hon STEVEN JOYCE (Acting Minister of Trade) : The Minister for Economic Development, as Acting Minister of Trade yesterday, may have been a little imprecise in his phraseology on behalf of the said Minister of Trade. As a result, the Minister of Trade has asked the Minister for Tertiary Education, Skills and Employment to act on his behalf and make the following clarification today: it was not, strictly speaking, correct to speak of Parliament ratifying the agreement per se. In fact, Parliament examines the treaty and then considers any subsequent legislation that may arise from the treaty, but it is the Government that finally ratifies the treaty once Parliament has given its consideration on the treaty and on treaty-related legislative matters.

(Note for the punctilious: Joyce was also the errant "acting Minister for Trade" referred to and has used the practice of multiple "hats" to avoid being accused of misleading the House, in my opinion).

Further, from Werewolf:

"Treaty making is a heritage, believe it or not, of the royal prerogative,” says Auckland University constitutional law expert law professor Bill Hodge.

“Indeed in the American Constitution it is expressly given to the President to sign treaties and declare war, but there is a check and balance and they have to be ratified [by Congress]. ” That’s not the case here. “It is a direct lineage of unfettered, totally discretionary royal prerogative to exercise treaty making power overseas, because that’s something the executive does, historically.” Ultimately that ability is based on holding a majority in Parliament. Parliament’s main role will be to subsequently bring laws into alignment with such treaties – whose provisions, Hodge adds, are increasingly being recognised by the courts as forming a part of the notional, common law, even without those provisions being explicitly embedded in domestic law. The level of degree of secrecy surrounding the TPP text and negotiations would….render any informed debate on the TPP in Parliament impossible. "

Other Parliaments will indeed be able to scrutinise the detail - ours will not. For Smellie not to understand this vital point is, quite simply, astounding.

No 10: It's a done deal.

The only reason it's not a done deal at this time is the reluctance of the US Legislature to hand over their constitutional authority to the President to commit the US to this treaty. If that had been possible, this would have been completed by Christmas 2013 as anticipated. Once other countries became aware that the US faced difficulties domestically, they stood firmer on the points of difference they had and it seems it is now the US who faces having to backtrack just to get the deal done. But that won't be the end of the process. There will be clauses allowing changes and adjustments to this matter and that and, in the end, the US will get the deal it wants and, more importantly, the control over the global economy that its corporations want.

Smellie notes the Doha failure to come to agreement as the rationale for the emergence of this type of secretive agreement. What happened at Doha is that the undeveloped world said "we want a share of the pie, too!" and the developed world didn't and doesn't want to give them one. It has nothing to do with global vs regional, because there are a number of countries in or bordering the Pacific that are not included in this "regional" agreement.

MFAT have been convinced of the "free trade" argument for years, holding it as holy writ, and have actively pursued any avenue that appears to lead there, under both National and Labour. On paper there's a good argument, but NZ opened its doors from the 80s on, and it hasn't served us well because our trading partners haven't opened theirs as wide. Free trade needs to be fair to both parties and a mouse is at a disadvantage "negotiating" with a gorilla.

There is no guarantee that this treaty will do anything to change that. I'm privately aware of the efforts of our non-political negotiators trying their hardest, and I applaud them for it, but ultimately it's a rigged game they're playing.

We don't have a manufacturing base anymore -- decades of government neglect in pursuit of the free trade kool-aid have ensured that we can't make enough of anything worth exporting, apart from electronics, which is quite a portable industry, and not one actively encouraged or assisted by government. Deliberate policy (I hesitate to call it planning) has ensured the only thing we produce enough of to sell overseas is stuff we grow and, really, we just are not big enough in land mass or people to do that sustainably into the future.

It is also intensely and increasingly risky to put all our eggs in Fonterra's milk crate, as the last 12-18 months have shown. To go blindly into a treaty that may or may not change that is insanity. The US, particularly, and the other parties involved are not doing this for NZ's benefit.

I'm pleased that Fairfax decided to label Smellie's piece as opinion, because it most definitely doesn't stack up as journalism.

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