Sunday, October 4, 2015

Told you so: TPP

Update at bottom: Scoop! And another update 10/7

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Well, really? How? The link leads to a an editorial at Common Dreams that links in turn to a Reuters story from last week about how a supergroup consisting of the American Farm Bureau Federation, U.S. Chamber of Commerce, National Association of Manufacturers and other groups has sent a letter to the negotiators in Atlanta asking them not to go through with a plan to exclude certain dangerous products, like tobacco, from the ISDS dispute settlement mechanism:
"As you all enter the potentially final hours of negotiation, we ask all of the TPP governments to reject the exclusion of products from the coverage of the TPP and its enforcement mechanism," said the letter.... Such exclusions are unnecessary and would be highly damaging to the international rules based trading system and the prospects for the TPP." 
The products in question being at least tobacco, and according to sources on the Australian position anything affecting health and the environment. The Common Dreams writer comments,
An agreement that lets tobacco companies sue governments for trying to help citizens stop smoking? An agreement that elevates corporate profits, like those made by tobacco companies, to be more important than the health and life of citizens? An agreement that says companies can sue governments for passing laws and making regulations that try to protect citizens from corporate harm to their health and environment?
Well, wait just a minute! That's what you've been telling us the TPP was all along! You guys specifically said, and it was practically your favorite example, that the famous ISDS case where Philip Morris Hong Kong sued Australia over their plain packaging law (no, they haven't won yet, and Australia won an important skirmish in postponing the main case for a separate test of whether the company has a right to sue at all, which it might well win), was an example of what all the TPP countries were going to face under the agreement—and now we know IT'S NOT IN THE AGREEMENT and the US industry groups are making a last desperate push to get it in.

Which will fail, because SOVEREIGN GOVERNMENTS IN OTHER COUNTRIES DO NOT LIKE TO BE TOLD WHAT TO DO BY UNITED STATES CORPORATIONS. Australia will never agree to this one in particular, nor will Japan or Singapore, and I doubt that Chile and Peru or Canada and New Zealand are any more interested. It's not going to happen.

The idea of TPP opponents (gazing horrorstruck at the leaked bracketed documents without bothering to read the brackets) seems to be the that negotiations are a kind of restaurant, where the various industrial and financial private interests make their orders, and the trade ministers cheerfully whip it up for them and then serve it up on a silver charger. But this is not how it works. They are allowed to make their case (as labor representatives and environmental experts are allowed to make theirs), but it is the governments that decide what to do, through a complex procedure of horse trading among themselves.

Thus it is likely, even certain, that any final document will have some obnoxious provisions forcing New Zealand dairy products and American movies on markets that would like to restrict them and protecting Mexican cars (think I'd actually be in favor of the Mexican thing) and the like, and possible that some of them will be really obnoxious, though I still refuse to believe that it will allow Pharma to interfere with the drug pricing decisions of the health ministries of all these countries (which do so much better a job with drug pricing than the US does and are justly proud of it).

But it is unlikely, even impossible, that it will have any provisions that 10 or 11 of the countries hate. As I have been saying for some time, and as this letter from the American Farm Bureau Federation and friends pretty definitively demonstrates: far from providing evidence that the negotiators are slaves to the desires of the corporations, as my friends at Common Dreams suppose, it shows that the corporations haven't, in the last weeks of a five-year negotiation, gotten what they wanted.

Update 10/5/2015 (around 8:50 EST)

We'll soon know, as the completion of the agreement in Atlanta has just been announced. Looks like I'm ahead of the New York Times! (Sadly, no; they were 15 or 20 minutes ahead, hitting my mailbox at 8:28, I just didn't notice. See below.) Some highlights of what's known, from a Politico report bylined Doug Palmer:

Drug pricing:
U.S. pharmaceutical companies in particular wanted 12 years of monopoly protections for a new class of life-saving medicines called biologics, but U.S. negotiators faced stiff opposition from other countries and had to settle for far less.
Local content rules in car manufacturing:
The final tussle was over how much of each vehicle had to be made from parts manufactured within the 12-nation TPP region to qualify for reduced duty treatment under the pact. Japan wanted a much lower standard than the 62.5 percent requirement for autos and 60.0 percent for auto parts under NAFTA, but had to reopen negotiations after Canada and Mexico pushed back.
Environmental and labor standards:
“TPP will include the most robust enforceable environment commitments of any trade agreement, and will allow us to address pressing issues like wildlife trafficking, illegal logging and illegal fishing,” an administration official said. “TPP will put American workers first by including the strongest enforceable labor standards of any trade agreement in history, including in areas like child labor and forced labor and wages.”
Well, they would say that. Still it might actually be true. (The cynic says it's almost certainly true in the sense that those few trade agreements in history that have paid any attention to such things were lousy.) I continue to imagine without any actual evidence that the US insistence on protecting Pharma was a bargaining chip to gain concessions on these issues.

They argue that many farmers and businesses could benefit greatly from the agreement, especially in markets like Japan, Malaysia and Vietnam, where they now face significant trade barriers.... 
But it's not clear what they've done for US dairy farmers vs. New Zealand ones.

And finally on ISDS: at least the tobacco company lawsuits are ruled out:
Meanwhile, many agriculture-state lawmakers were irked by Froman’s decision to insert language in the agreement that would prevent companies from challenging anti-smoking regulations and other “tobacco control measures" under an investor-state dispute settlement forum that is a standard feature of free trade agreements and investment treaties.
So I really was proved fucking right on the specific subject of this post. Oh, and Republicans: that last is too much for Senator Thom Tillis of North Carolina Plantation, who will vote against the agreement. Need to know any more?

More, from the Times report by Jackie Calmes:

The labor chapter really does sound strong:
The worker standards commit all parties to the International Labor Organization’s principles for collective bargaining, a minimum wage and safe workplaces, and against child labor, forced labor and excessive hours.... The United States reached separate agreements with [Malaysia, Vietnam, and Brunei] on enforcing labor standards, which would allow American tariffs to be restored if a nation is found in violation after a dispute-settlement process.
Which sounds like a slowed process to allow the Southeast Asian members to comply with the standards (especially on forced labor for Malaysia and collective bargaining for Vietnam), which to me means a greater chance that they will ultimately comply. Clever to have this snap-back provision, though as with the Iran nuclear agreement I guess one may doubt whether the US will actually carry it out.

Real changes are being made to the ISDS regime, not just carve-out exceptions as for the tobacco industry, including a code of conduct for the arbitrators of disputes. I've quarreled a lot with the left-opposition for failing to get their facts straight on this, but I have to say at the same time that their fervent pressure has made a difference to the outcome, and we all need to thank them for that.

I'll add that I am not coming out to endorse the TPP yet. My man as ever is Rep, Sander Levin of Michigan, who believes that a good agreement is possible but retains the right to skepticism on this one in particular.

Update 10/7/2015

The single most useful thing I've read, by Jared Bernstein, cutting through the hype for and against, reserving judgment, but suggesting on the whole it won't do all the lovely things the administration will claim, but it won't destroy civilization either; and by implication that it's not going to be bad enough to reject (better to have inadequate rules of the road than no rules at all) and might do some good.

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