Time for an Open Debate on the Trans-Pacific Partnership Agreement

On February 22, trade ministers from the 12 countries negotiating the Trans-Pacific Partnership (TPP) agreement will meet in Singapore. Reaching a final signed agreement is unlikely, given U.S. Congressional resistance to ‘fast tracking’ President Obama’s authority to sign off on behalf of the country. Indeed, there is a push-back from over 60 legislators representing seven of the 12 countries, calling for full public release of the final agreement before it is signed and allowing ample time for public and political scrutiny. Canada’s NDP trade critic and Green Party leader are amongst the signatories on the open letter. This echoes a similar call for greater transparency from 30 international civil society organizations last November.

The reason for their concern is that the TPP is not just a trade treaty. Like other ‘new generation’ trade and investment agreements that have swelled in the wake of stalled WTO talks, it places increasing limits on future government ‘trade-related’ policy and regulatory options that could, even if inadvertently, constrain the cross border flow of goods, services and capital.  This renders such treaties political and not simply economic agreements—which in turn calls for full political and public debate before they are finalized.

The bottom line: these ‘constitutional’ trade treaties need full political and public debate before becoming binding international law.

Treaty negotiations do not, of course, always work well under full media scrutiny. But the U.S. (to take just one example) has allowed hundreds of corporations to review and comment on draft negotiations, something denied to its elected politicians. In Canada, there is nothing requiring parliamentary approval of trade treaties. If Cabinet and the prime minister want to sign off, so be it. Details of last year’s ‘agreed in principle’ Canada-EU Comprehensive Economic and Trade Agreement (CETA), for example, are still not public, and not expected to be so for another six months or more.

Surely it is feasible to release publicly those sections of treaties already agreed upon. Even those treaty chapters still in negotiation could be released without harming the poker-playing (or horse-trading) gambits of different parties;  only those parts of the text identifying the differing countries’ positions need be redacted.

Fortunately the secret TPP agreement has been almost as leaky as a colander. Two of the most contentious chapters now in the public domain (at least in draft form) are those relating to investor-state dispute settlement (ISDS) and intellectual property rights (IPRs). ISDS empowers foreign investors to sue governments over regulatory changes that they consider an ‘expropriation’ of their investments, which can include trademarks, and anticipated profits.

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ISDS treaties can increase investment flows from high-income countries to low-income countries otherwise lacking in transparent judicial remedies. However, many policy analysts contend that they are largely unnecessary and tip the scales too much in favour of private capital over public democracy. UNCTAD (the United Nations Conference on Trade and Development) notes a disturbing rise in the number of corporate ISDS suits against governments, including challenges to public health (e.g. Australia’s and Uruguay’s tobacco control policies). The $500 million NAFTA ISDS suit against Canada by Eli Lilly over the courts’ revocation of two of its drug patents (because the drugs failed to live up to their claimed efficacy) is a recent example of how such provisions are being used to curtail regulatory decisions intended for the public good.

IPRs similarly have nothing to do with trade. Ever since the TRIPS agreement entered the WTO suite of treaties, IPRs—like ISDS—have been criticized for a protectionism that contradicts the rhetoric of trade treaties being about liberalization. Under TPP proposals, data exclusivity and patent extensions would delay the introduction of price-competitive generics by five or more years beyond the 20 years already agreed to under TRIPS. Public health drug costs would soar, without any guarantee that the increased profits of multinational drug companies would be used for any public good purpose. Another provision would allow patents for drugs showing no useful purpose, as long as they were ‘novel’. (There goes the case with Eli Lilly….) There are even draft provisions in the TPP to patent new medical or surgical procedures—something opposed by the World Medical Association.

Other TPP chapters on transparency, regulatory coherence and government procurement (not all of which have been leaked) similarly shift future public policy space away from legislators and towards private global economic actors. This has not gone unnoticed. Nobel economists such as Joseph Stiglitz and Paul Krugman—and even the strident free-trade economist Jagdish Bhagwati—caution that these new treaties have little to do with trade and much to do with protecting powerful economic interest groups.

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There may be ways to protect future public policy space for health, environment, labour and other public good concerns in such treaties. But that can happen only if details of the treaties are made public before being approved, providing public interest and legislative oversight an opportunity to ensure that these health and social protections are sufficiently broad and legally enforceable.

Finally, where the TPP is concerned, most of the negotiating countries already have trade treaties with each other, often with low tariff barriers. The economic gains of the TPP and other such treaties are often exaggerated, with independent analyses showing inequitable results amongst the trading nations. The one major analysis of economic benefits from a completed TPP shows a GDP welfare gain for Canada of just 0.2%. Some countries do marginally better, but Mexico, Peru, Malaysia and notably Vietnam are all poised to lose.

The bottom line: these ‘constitutional’ trade treaties need full political and public debate before becoming binding international law. Otherwise we risk trading off important public policy flexibilities in the future for only marginal economic gains in the present.

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