In “The U.S. needs a full debate on TPP” (Sept. 7), the Star Tribune Editorial Board missed the point on why the Trans-Pacific Partnership has almost no support outside of large corporate interests.
The word “trade” conjures up images of Adam Smith and fundamental laws of economics. But let’s be very clear on what trade policy is: Trade policy is international lawmaking that overrides all conflicting federal, state and local policies.
The Editorial Board talks about trade in terms of tariffs, but tariffs are already at an all-time low. What the TPP targets are the elimination of “nontariff barriers to trade,” which means regulations that protect workers, consumers and the environment.
Under the TPP, if a corporation doesn’t like a law in any participating country, at any level of government, it has the right to sue. But they don’t sue in the normal court system. Instead, they take their case to a private global trade court, where a panel of corporate lawyers decides the law’s fate. If the corporation wins the arbitration, it can collect not only lost profit, but future expected profits it would have made had the law been different. We, the taxpayers, pick up the bill.
This process, called Investor State Dispute Settlements (ISDS), has been used to challenge everything from laws that protect water quality from mining in El Salvador to policies designed to reduce childhood obesity in Mexico to plain packaging for cigarettes in Australia. Currently, the U.S. is being sued by the Canadian corporation TransCanada, using the ISDS chapter of NAFTA, to challenge the rejection of the Keystone XL pipeline. If that suit is successful, it could cost the U.S. taxpayers $19 billion.
ISDS doesn’t just challenge existing laws. More insidiously, it stops elected governments from implementing regulations in the first place. Failure to regulate could have potentially drastic consequences as the world grapples with climate change. A new report by the Minneapolis-based Institute for Agriculture and Trade Policy (IATP) demonstrates how the TPP would make it nearly impossible for countries to meet the commitments laid out in the Paris Climate Agreement.
In order to address climate change, countries are going to have to seriously rethink how they get energy. But under the TPP, attempts to incentivize renewable energy will be subject to ISDS challenges by oil, gas and coal companies. This has already happened through other trade agreements. In a similar process, the World Trade Organization ruled recently that India’s renewable energy and green jobs programs unfairly treated foreign dirty-energy companies. A similar program in Minnesota was cited by India as part of its defense.
Countless other examples exist where corporate interests have overridden democratically produced laws, including food safety regulations and environmental protections.
These findings should not be surprising. For decades, the IATP and many other civil society groups have taken issue at the way trade agreements are conducted. The U.S. trade representative is a diplomat and not subject to normal government department oversight. That means the negotiations on the TPP are deemed classified. We only get to see the final text. However, those who lobby the executive branch can be named cleared advisers to negotiations. For the TPP, there were over 600 cleared advisers — 90 percent of whom represented corporate interests.
Big business benefits while communities lose out. Despite agricultural markets being more open to free trade than ever before, farmers are facing below-cost-of-production prices for their commodities. Simply expanding exports does nothing to ensure that any benefits of trade are felt equally. The current system makes the rich richer, while leaving governments powerless and the rest of us behind.
What is needed is a new way forward for trade — where the public interest is put first. A way where communities around the world are empowered to interact with each other in a way that lifts everyone up.
Trade can be a powerful tool for good. Unfortunately, we have seen time and time again where trade agreements only further serve to increase inequality and protect corporate interests. The TPP is no exception.
Josh Wise is development and communications director for the Institute for Agriculture and Trade Policy.