TPP: An International Deregulation Treaty, Not A Trade Treaty

By Dave Johnson — May 25, 2013

The upcoming Trans-Pacific Partnership (TPP) agreement is using a process that is rigged from the start. It is not being negotiated by governments for the benefit of their people, it is being negotiated by executives (or future executives/lobbyists currently in government) largely for the benefit of the giant corporations they serve. The process has these giant corporations "in the loop" but groups citizens, working people, consumers, the environment, human rights groups and especially democracy are not part of the process. That can only go one way: if you don't have a seat at the table you are on the table -- the meal.

Chile's TPP Negotiator Quits, Warns Citizens

Rodrigo Contreras, Chile's lead TPP negotiator recently up and quit to warn people of the dangers this agreement poses to everyone except the giant multinational corporations. In The New Chessboard, (English translation) Contreras warns that the TPP is solidifying multinational corporate control over the Internet, copyrights, patents (especially drug patents), and in particular warns that the giant financial interests are solidifying their current control over the regulatory process. He writes that this will block countries that are trying to "restore the space for applying financial safeguards. In these circumstances it does not makes sense to further liberalize capital flows, depriving us of legitimate tools to safeguard financial stability."

In particular, Contreras warns that smaller countries face a threat from this agreement's solidifying of the control of the giant multinationals, concluding,

It is critical to reject the imposition of a model designed according to realities of high-income countries, which are very different from the other participating countries.

Otherwise, this agreement will become a threat for our countries: it will restrict our development options in health and education, in biological and cultural diversity, and in the design of public policies and the transformation of our economies. It will also generate pressures from increasingly active social movements, who are not willing to grant a pass to governments that accept an outcome of the TPPnegotiations that limits possibilities to increase the prosperity and well-being of our countries.

Yves Smith at Naked Capitalism, in Chile’s Recent Lead Negotiator on Trans-Pacific Partnership Warns It Could Be a “Threat to Our Countries”, gives us a look at the context of what it means for a country's TPP negotiator to quit and sound the alarms. She writes that this is "a statement of principle that comes at considerable personal cost" and that "his call to Latin American negotiators has deep-sixed his chances of getting another senior government role or being retained by large companies as a lobbyist or advisor."

A job as a lobbyist or advisor to the multinationals is the golden goose that drives the negotiators. The last US negotiator, Ron Kirk, recently left that post to join the law firm Gibson Dunn where he will advise giant multinationals, probably for free. (Just kidding, he isn't doing it for free.) The Financial Times notes that "Other former US trade representatives, including Charlene Barshefsky and Mickey Cantor under President Bill Clinton, also joined law firms after their tenures in government." They probably also are not advising giant multinationals for free, either.

Smith at Naked Capitalism notes that, "Some of Asian participants in the negotiations (particularly Japan) are also believed to have serious reservations about the provisions of the TPP that would weaken national sovereignity by allowing corporations to challenge laws and regulations as violations of the TPP."

Americans are also reacting to the threat that the TPP poses to national sovereignty -- government's ability to control the wealth and power of the giant multinationals. Bloomberg News yesterday, in Wall Street Seeks Dodd-Frank Changes Through Trade Talks warns that, "U.S. bankers and insurers are trying to use trade deals, which can trump existing legislation, to weaken parts of the Dodd-Frank Act designed to prevent a repeat of the 2008 financial crisis."

The Bloomberg report gets into some specific problems that watchdog groups see. For example, “The trade talks could easily become a Trojan Horse,” said Marcus Stanley, the policy director for Americans for Financial Reform, a group that includes labor unions, civil rights organizations and consumer advocates.

Trade agreements, once signed, override national sovereignty and limit a country's ability to regulate giant corporations. The Bloomberg report noted that the financial industry is already trying to use existing trade agreements to roll back regulations required by the 3-year-old Dodd-Frank law,

The financial services industry has already invoked international trade rules in its bid to weaken proposed regulations, notably the Volcker rule that would ban proprietary trading. Named after former Federal Reserve chairman Paul Volcker, the rule is a signature part of Dodd-Frank.
The U.S. Chamber of Commerce sought a review of the rule by U.S. trade authorities, arguing it violated existing agreements.

So the financial industry is trying to use the upcoming TPP to overturn portions of Dodd-Frank and other rules in other countries they see as restricting their power.

Senator Elizabeth Warren spoke of this at a recent Senate hearing:

Fix The Process

The process that we use to negotiate our "trade" agreements needs to be changed to relect that this country is supposed to be run by We, the People. The current secrecy must give way to an open, transparent participative process that serves citizens, workers, the environment, consumers, human rights and other considerations of all the stakeholders.

The way the process is currently set up, the giant multinationals have a seat at the table, and they are salivating as they await the main course. We the People and our silly laws and regulations that are in the way of the profits of the 1% are being prepared to be served up. And a fine meal we will be.