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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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