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Apr 1, 2015

New TPP leak reveals how we're trading our sovereignty for cheap tariffs

WikiLeaks has published the secret investment chapter in the Trans-Pacific Partnership. Dr Matthew Rimmer, associate professor at ANU College of Law, explains its insidious implications.

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Last Wednesday, WikiLeaks once again broke the secrecy surrounding the Trans-Pacific Partnership (TPP), releasing the draft text of the investment chapter of the Pacific Rim Treaty. WikiLeaks founder Julian Assange issued a dire warning about the agreement:

“The TPP has developed in secret an unaccountable supranational court for multinationals to sue states. This system is a challenge to parliamentary and judicial sovereignty. Similar tribunals have already been shown to chill the adoption of sane environmental protection, public health and public transport policies.”

The story was discussed in Australia in the Fairfax papers.

The leaked text reveals the ulterior purposes behind the shadowy TPP, parts of which have already been released by WikiLeaks. The investment chapter serves to boost the corporate rights and powers of multinational companies with an investor-state dispute settlement mechanism — at the expense of democratic governments and domestic courts. The leaked text shows that this agreement is more about corporate power than “free trade”. Investor-state dispute settlement is really a form of corporate sovereignty. Investor clauses will be able to be used as Trojan Horse clauses against a wide range of government regulation — including public health, access to medicines, tobacco control, labour rights, environmental regulation and climate action.

The latest leak will further galvanise resistance and opposition to the fast-tracking of this mega trade deal. Members of the US Congress like Senator Elizabeth Warren have demanded that the investment chapter be dropped altogether. Warren said: “If a final TPP agreement includes Investor-State Dispute Settlement, the only winners will be multinational corporations.” A significant number of members of the United States Congress have refused to fast-track the TPP because of such concerns about the impact of the deal upon democratic law-making.

In the Australian Parliament, there has also been a lively debate over investor-state dispute settlement. The Coalition government have been willing to enter into trade agreements with investor-state dispute settlement clauses on a case-by-case basis. Minister for Trade and Investment Andrew Robb has sought to drive a hard bargain on investor-state dispute clauses. Australia entered into trade agreements with South Korea and China with investor clauses. However, the trade agreement with Japan did not contain an investor-state dispute settlement clause.

The WikiLeaks publication reveals Australia’s bargaining strategy for investor-state dispute settlement. Footnote 29 says: “Notwithstanding any provision of this Agreement, Australia does not consent to the submission of a claim to arbitration under this Section.” However, it notes this footnote can be deleted subject to certain conditions. It would seem that the Australian government is only willing to sign up to an investor-state dispute settlement scheme if it can obtain other benefits in the negotiations over the TPP.

In its public rhetoric, the Coalition government has maintained that the TPP has safeguards for public health, the environment and safety, with Robb fobbing off criticism as being merely scaremongering on 7.30. The WikiLeaks’ publication reveals the weaknesses in respect of such promises. Public Citizen commented: “There are no new safeguards that limit ISDS tribunals’ discretion to create ever-expanding interpretations of governments’ obligations to foreign investors and order compensation on that basis.” Lori Wallach and Ben Beachey commented: “The TPP provision on environmental, health and other regulatory objectives is meaningless.”

Moreover, there are further qualifications and exclusions in the annex of the investment chapter of the TPP. Australia — as well as Canada, Mexico and New Zealand — has also sought to protect its rules in respect of Australia’s foreign investment policy. For Australia, the text has said that the following measures would not be subject to the investment chapter: the Pharmaceutical Benefits Scheme; Medicare; Therapeutic Goods Administration; and the Office of the Gene Technology Regulator. Canada has sought to protect cultural industries, but Australia did not have any similar reservations.

The Australian Labor Party has not responded to the publication of the investment chapter of the TPP, and there is much internal debate within the party over trade matters. Under the Gillard-Rudd governments the ALP’s position was that investor-state dispute settlement was unacceptable, but Labor was willing to provide support for the Korea-Australia Free Trade Agreement, even though the deal contained an investor clause.

Senator Peter Whish-Wilson of the Australian Greens emphasised that the WikiLeaks publication reinforced his call for a prohibition on investor clauses in trade and investment agreements. He said such clauses “represent a clear threat to the sovereignty of our nation, simply in order to satisfy powerful corporate interests and their deregulation agendas”.

In addition to political concerns about investor-state dispute settlement, there has also been much disquiet from the judiciary. Chief Justice Robert French of the High Court of Australia has expressed his concerns that the “judiciary, as the third branch of government in Australia, has not had any significant collective input into the formulation of ISDS clauses in relation to their possible effects upon the authority and finality of decisions of Australian domestic courts”.

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22 comments

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22 thoughts on “New TPP leak reveals how we’re trading our sovereignty for cheap tariffs

  1. dennis

    News like Crikey’s will be able to be silenced, any one without the money to take on the Corps are finished, now.
    Suppose Crikey journalist write something the corps don’t agree to, come on you stupid bastards what do you think will happen. NO more Crikey’s that’s for sure, you all take freedom for granted you have some notion it’s your right, How long has Humans had enlightenment and how long have we had slavery, enlightenment is a fart in the wind
    or it will be soon. I cant understand the mass stupidity of most western, working and middle class people

  2. col gradolf

    The TPP is not about a FTA between nations but rather a means to de-legitimise and disempower governments everywhere in favour of the real Masters of the Universe; the mega-corps.
    Nations which endorse the TPP, and it’s webbed in co-conspiracies around the world, are effectively handing legislative, administrative and judicial authority to the big end of town and, let’s face it, they don’t hold any kind of national allegiance anywhere. Unless it’s to the lowest corporate tax regime, and that’s a moveable feast.
    So, these ‘treaties’ are a giant grab for global power by the major corporations over the people of the world. This is a class struggle in a real sense and not just about one nation’s interests being preferred over others’.
    This is very scary stuff.

  3. The Pav

    John Howard made a statement along the lines “we will determine who will come to our country” in reference to refugees and “boat” people

    Tony Abbot said that everybody has there place but it isn’t Australia

    It would seem that these two stalwart defenders of Australia’s borders quali in front of the USA and are only too happy to bend over and sacrifice our independence and sovereignty on the altar of pro USA FTA’s

  4. Dan B

    Well done, Crikey for staying on top of this.

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  6. Aidan Stanger

    Scott, I don’t understand why you think plain packaging constitutes “acquiring trademarks and Intellectual property”. What intellectual property does the government gain? What intellectual property does the tobacco company lose?

    Plain packaging legislation restricts the way certain intellectual property can be used, and you could sensibly argue that’s unjustified, but it doesn’t change the intellectual property’s ownership or allow the government to use it.

  7. David Camfield

    the most disturbing thing is that cabinet signs off on it without parliamentary debate.

    The best we can hope for is that shorten grows a pair and refuses to support any aspects of the TPP that involve ISDS clauses

  8. AR

    And of course data retention is no part of this behemoth about to shit on us all from a great height.

  9. drsmithy

    How ironic that the political right will be the ones to sacrifice our sovereignty to multinational foreign powers.

    It’d be funny, if it wasn’t so serious.

  10. Justin Harris

    Not happy enslaving the world with “Corporate Capitalism” and putting country after country in debt and misery, The US bankster elite seeks to use a “Corporate Dictatorship” to rule all the lands with a typical (coup d’etat) style takeover in secret using all the wall street Lawyers available. The NWO Juggernaut steadily rolls on one step closer to world domination and its prime objective to the rule by absolute fascism. All it requires is approval from the same government that did the last free trade agreement with the US on farmer tariffs that have put so many of our farmers out of business and seen others suicide. That’s right folks Mark Vaile sent as Howard’s emissary where US farmers kept their tariffs and ours were taken away. Where art thou now Vaile you treacherous sh#t. A trade deal with our “friends” as the PM likes to call them that charges us twice as much for things like software than US citizens pay under this wonderful deal.

    @Scott where have you been for the lat 35 years have you not been watching the slow but relentless destruction of every industry in Australia and around the globe?? What is the Neo-Cons response to this make more cuts, and will both the Fiberals and the ALP :- (alternative liberal party) sign off on this TTP deal? You can absolutely bet you bottom dollar, cause I can tell you Bill Shorten was in the “big 60 shekels club” years ago and has about as much integrity as Mark Vaile:- former chief protector of Australian farmers.

    Get ready folks as the TPP (Traitorus Politicians Pact) is just the vehicle to speed up the fascist process, next comes private prisons just like the US where it is profitable to throw you in them to work for these Corporations for a couple of dollars a day. This country is under attack like never before, I have seen their doctrine and Australia is to become a 3rd world economy and reverted back to it’s former glory as a penal colony, great for huge prisons and nuclear dumping sites.

    Stop looking step by step at these changes and look ahead to what the end goal is whist paying hindsight to what has already happened to this point. Good luck everybody were gonna need it.

  11. pinkocommierat

    It’s not as though we were using our sovereignty anyway 🙁

  12. Neutral

    Yep. Australia will become a litigation lawyers paradise.

    Just like the US where the price of justice might be high but at least life is cheap.

  13. klewso

    After watching Lateline last night :-
    With typical Pollyanna propaganda, the main beneficiaries of this are going to be those minorities in markets that are going to be opened – while everyone else is going to be at risk of paying for it in some manner not yet realised?
    Huge companies with huge bank resources (based on profits, which can be raised to pay for such suits, by raising prices) can sue government for impeding on their trade, when those “unfair” governments enforce their laws enacted to protect that country’s people and environment? What The Frack?
    [All under the ever-vigilant eagle eye of the country that gave us the GFC and NSA? The country where none of those responsible for the GFC that ruined so many lives around the world have gone to gaol?
    So what could possibly go wrong?
    And anyway if something unforseen does go wrong, we’ll all be in the same boat … or a smaller, but similar one, to Uncle Sam’s?]
    But it’s all right, because both Labor and the Limited News Party said it was all right?……
    Pssst have you ever listened to what they think of each other’s judgement and fiduciary responsibility management skills?

    [And has Uncle Rupert’s viewsmedia (with their dominant US interest) been discussing it …..? Impartially? ie in a manner not as PR mitigation assuagment “petroleum jelly” managers?]

  14. Neutral

    The TPP is an apprenticeship for our elected Lib Leaners and their parasitic public servants to score boom points for ‘think tanks’ and lobby jobs once they are de-elected and rightsized by the ‘new’ lot of elected Lab Leaners.

  15. Andrew Craick

    @Scott

    It ends up being exactly the same thing. After this is signed and our local neo-cons get kicked out at the next election, every time the left or center tries to implement any type of protections that disadvantage US companies the opposition will bleat and cry and tell the government of the day ‘you can’t do that because it will cost you billions’ you are ‘economic vandals’ (we have stitched you (forever)). The law that should have got made never gets made.

    OK you agree about IP but what about everything else ? Environment, labor, medicine, patents or any new technology that comes up in the next few lifetimes ?

    Governments should not be able to enter into secretive contracts during their term that will effect their constituents forever. Imagine the secretive Victorian highway contract debacle being taken out on the international stage because one government is only interesting in leaving a nasty political time bomb for the incoming government with the tax payers footing the bill.

  16. Charlie Maigne

    @Scott, Phillip Morris ran the ‘acquisition of property’ argument in the highest court in Australia and lost – the High Court ruled by a 6-1 majority that the legislation did not constitute an acquisition of property. If they succeeds under the Hong Kong treaty, it would be on a basis, and in a forum, not available to domestic investors.

    Far from ensuring that foreign investors have the same protection as domestic, the ISDS regime in the Hong Kong treaty – a treaty between two developed countries with respected systems of law – is being (ab)used as an avenue for recourse that is exclusive to foreign investors. Phillip Morris had to restructure just to gain access to it. So let’s not kid ourselves that any ISDS mechanism in the TPP is there to protect our companies from a rogue government.

  17. Scott

    Mate, there is a legitimate concern around plain packaging. I thought at the time that plain packaging legislation was acquiring trademarks and Intellectual property without compensation. I still do.

    Sure, High Court said it was fine to do this on health of the populous grounds, based on our constitution. And governments can still do it. Phillip Morris will not be able to stop the Government from doing it, regardless of whether they win the court case or not (they are trying to, but the court will throw that out 100%). The issue is whether the tobacco companies should be compensated for the loss of IP/trade marks as a result of the legislation.

    I think they should be. And that is what the investor provisions are all about. Not stopping Governments from acting. Only compensating investors if those actions take property and assets away from their investment without fair compensation for the loss.

  18. James O'Neill

    “Senator Peter Whish-Wilson of the Australian Greens emphasised that the WikiLeaks publication reinforced his call for a prohibition on investor clauses in trade and investment agreements. He said such clauses “represent a clear threat to the sovereignty of our nation, simply in order to satisfy powerful corporate interests and their deregulation agendas”.

    That says it in a nutshell. This is one of the most insidiously dangerous treaties that Australia is involved in. It is no wonder that the government has been operating in extreme secrecy, and the woeful media have let them get away with it for too long.

  19. Andrew Craick

    Thankfully its getting traction after last nights Lateline.

    http://www.abc.net.au/lateline/

    The debate was very amusing with Alan Oxley. What a waste of time that guy was. Most ugly type of corporate PR shill. Just spent the whole time to downplay any issues with it. Has he even seen it ? Apparently has a history of PRing for the worst of the worst:

    http://www.redd-monitor.org/2010/10/27/who-the-hell-does-alan-oxley-think-he-is/

    @Scott

    You missed the larger issue. You are aware that the Australian government is currently being taken to Court in Hong Kong (of all places) because of our plain paper packaging laws under similar agreements ?

    That is the exact problem with the TPP as it stands. It actually gives corporations (mostly American) the power to take on larger countries like Australia and Canada. If you think we’re swimming with the big boys you’re out of your mind. We are the target. This is just a way for the US to standardize global laws for their own interest. Not ours.

  20. Interrobanging On

    ‘It’s just providing protection to the foreign investor that they will be treated the same as a domestic investor’

    What are you talking about, Scott? It gives them much more ‘protection’ as you euphemistically put it. As I understand it, Philip Morris went through the courts in Australia to the High Court, before it did its corporate restructure to suddenly be a Hong Kong company to try on the ISDS rort.

    No domestic company has the extra step to try to trump the High Court by shadowy tribunal, hence the deliberate shift to being a selected foreign company by Philip Morris. You might read the last paragraph again.

    That plain packaging is lawful, constitutional, for good motives (public health) and effective is irrelevant. That is the danger.

    ISDS is pointless for us, even if the old excuse applies somewhere or other. It is only damaging. And you are bit naive to imply there is no corporate bastardry out there (not only tobacco firms), nor full intent by the USA in pushing this because they will benefit most at the expense of others.

    You might be surprised to know that there is lots of foreign investment in Vietnam, say. It is rising fast too.

  21. Scott

    “The investment chapter serves to boost the corporate rights and powers of multinational companies with an investor-state dispute settlement mechanism — at the expense of democratic governments and domestic courts.”

    Oh come on. It’s just providing protection to the foreign investor that they will be treated the same as a domestic investor…and you know, its less about Australia and more about those countries that don’t have a good track record of the rule of law. That is why we didn’t need investor protection with Japan, but we definitely needed one with China.
    No one will invest in countries like Vietnam, Peru, Chile or Mexico without the protections the TPP will offer with these investment clauses. Its for the rich countries, like the US, Australia, Japan and Canada to ensure that the money that is invested isn’t just pocketed by the governments of those smaller nations facilitated by a compliant judiciary.

  22. Jim O'Pines

    Thanks for being one of the few publications to provide coverage on this deeply unsettling issue, Crikey.

    As much as I find these ISDS clauses sinister, the secrecy surrounding the TPP is understandable (though not the media lethargy on reporting on it). To know these clauses is to dislike them. Lefties and righties alike would be up in arms if they were front page news: lefties at the hollowing out of regulatory standards that is sure to follow litigious US companies through the door, and righties (one would hope) for the deep damage these clauses have the potential to inflict on the integrity of our judicial system, and our freedom to regulate as we please.

    These clauses were supposed to provide protection for companies operating in dodgy jurisdictions. Now they are more often than not a means of circumventing regulation even in places where domestic courts are perfectly capable of arbitrating fairly. Canada has had an unhappy and very expensive time with these clauses as a result of the NAFTA. Australia is getting sued by Phillip Morris for the plain packaging business. Germany is being pursued by a Swedish power company for banning nuclear power after the Fukushima disaster. El Salvador is being taken to the cleaners by a Canadian gold mining company for daring to declare a moratorium on mining licences.

    Companies have pushed ISDS clauses well beyond their original remit and my money’s on Australia getting intimately acquainted with shady international arbitration tribunals in the not too distant future.

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