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The chilling reality of the TPP

The TPP was conceived in 2003 as the Trans-Pacific Strategic Partnership Agreement (TPSEP) as a path to trade liberalisation in the Asia-Pacific. The original participating countries were Chile, New Zealand and Singapore with Brunei joining in 2005. In 2008 the United States of America (USA), Australia, Peru and Vietnam joined, followed on by Malaysia, Mexico, Canada and Japan. China and Korea have expressed interest but the USA did not bring it up when President Barrack Obama last visited the Chinese President Xi-Jinping in November 2014. This was puzzling to most as the USA has made so much of the TPP and it’s nervousness about China’s growing might economically and militarily.

Free Trade Agreements (FTA) deal mostly with goods being imported at a certain price as long as certain environmental and labour standards are met. What’s different about the TPP is that the treaty has 29 chapters, dealing with the whole scope of tariff and agricultural quota removal and market access on sensitive products, but in particular agricultural goods. It also includes provisions over nontariff issues such as intellectual property rights, the environment, state-owned enterprises, and investment. Japan was the last to join in 2013, and agriculture as well as the auto industry has long been a sticking point in Japanese trade liberalisation and held up the TPP negotiations with the USA. However recent agricultural reforms by Japan’s Prime Minister Shinzo Abe has tipped the power of balance back into the governments favour and away from Japan’s most powerful farm lobby, the Japan Agriculture Cooperative (JA). In January this year Japan offered to import more rice from the USA while keeping existing tariffs in place, and the USA agreed to stop demanding that Japan ease its car safety standards. In early February this year, progress was made on issues such as state-owned enterprises, environmental protection, and investment. This not only paves the way for greater market liberalisation and deregulation in Japanese agriculture but enables Mr Obama’s plan to “fast track” push for Congress approval to conclude the TPP within the year.

What is of the most concern is the provisions over not only the aforementioned non-tariff issues of intellectual property rights, the environment, state-owned enterprises, and investment but the Investor State Dispute Settlements provisions (ISDS). ISDS allows multinational corporations to sue governments if they’re deemed not to be acting in their best “interests”. It can potentially place limits on governments being able to develop their domestic laws and policies in areas such as public health, patents on medicine, the environment, food labeling, Internet use and privacy and even local media content. Australia for example is currently entrenched in it’s first investor-state dispute since November 2011 with Philip Morris Asia, due to the introduction of the ‘Tobacco Plain Packaging Act 2011′ (TPPA). The laws were introduced by the former Prime Minister Julia Gillard’s government, as a health measure but Philip Morris Asia amongst the many breaches, believes that it infringes their intellectual property. Previous Australian Labor Party (ALP) and Liberal National Party (LNP) governments have in the past only included ISDS in trade agreements with developing countries that don’t have investments in Australia and they weren’t included in the US-Australia FTA. American corporations are the most frequent users of ISDS and the “safeguard” clauses countries employ to protect themselves can and have been re-interpreted and over-turned through the arbitration process. Philip Morris International Inc in the Australian case for example is challenging the tobacco plain packaging legislation under the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments (Hong Kong Agreement) by using its Asian arm to circumnavigate them.

The former Gillard government also decided to ban the inclusion of ISDS in future trade agreements, they didn’t think that it harmed investment as did the Productivity Commission. Even where corporations do lose they have dragged governments through lengthy and expensive legal processes with dispute settlement cases being heard by tribunals of three private-sector lawyers whose decisions are beyond appeal. The tribunals tend to be more concerned with assessing potential damage to corporate investments over the protection of government or public interest. There are more than 500 of these disputes being launched globally and more than $3bn being paid by out governments, meaning taxpayers, to corporations under existing US trade and investment agreements alone.

Not only is there strategic litigation employed by corporations but there is a concept known as “regulatory chilling”, which is the alleged case with Philip Morris Asia suing Australia for example, they’re able to put pressure on other countries considering plain packaging regulations too. According to Dr Kyla Tienhaara: “The Australian government has suggested that Philip Morris is currently engaged in trying to achieve global regulatory chill through its case by basically showing other countries that might want to introduce plain packaging legislation ‘Look what we’re doing to Australia.’ This is actually working because countries are saying, ‘We’re going to wait to find out what happens with that case before we go ahead with our regulations.”

Lone Pine Resources filed a $250m lawsuit against the Canadian government when Quebec placed a moratorium in June 2011, which was expanded into 2012, banning drilling and fracking processes for oil and gas underneath the St. Lawrence River, until a strategic environmental evaluation was completed. “Based on the principle of precaution, the Quebec government’s response to the concerns of its population is appropriate and legitimate,” said Martine Châtelain, president of Eau secours! (Quebec based Coalition for a responsible management of water). “No companies should be allowed to sue a State when it implements sovereign measures to protect water and the common goods for the sake of our ecosystems and the health of our peoples,” Ms Châtelain added.

Again back in Canada, they are popular with these disputes unfortunately, is the case of Eli Lilly and Company, which is an American global pharmaceutical company (and it’s fifth biggest). They filed a $500m law suit against Canada for violating its obligations to foreign investors under the North American FTA for allowing its domestic courts to invalidate patents for two of its drugs. Canadian courts found that there was a lack of evidence supporting the drug’s alleged benefits.

According to Forbes in 2013 the biggest profit margins produced be USA corporations were in the Pharmaceuticals, Banks, Car makers, Oil and Gas makers and Media industries. In 2013, US Pharmaceutical Pfizer, the world’s largest drug company, made 42% profit margin. As one industry veteran put it: “I wouldn’t be able to justify [those kinds of margins].” In the UK that year, there was widespread anger when the industry regulator predicted energy companies’ profit margins would grow from 4% to 8% for the year. Last year, five pharmaceutical companies made a profit margin of 20% or more, these were – Pfizer, Hoffmann-La Roche, AbbVie, GlaxoSmithKline (GSK) and Eli Lilly.

The problem isn’t just with the massive amounts of seeming profiteering but the fact that the drug companies spend far more on marketing drugs, in some cases twice as much, than on developing them. Johnson & Johnson (US) total revenue for 2013 was $71.3bn with a profit of 13.8%, it only spent 8.2% on research and development, yet 17.5% was spent on sales and marketing. Drug patents are usually awarded for 20 years, but 10-12 of those years are spent developing it at a cost of up to $2.5bn, leaving eight to ten years to make money before the formula can be taken up by generic drug companies. Once this happens, sales fall by 90%-plus. Joshua Owide, director of healthcare industry dynamics at research company GlobalData, explains, “Unlike other sectors, brand loyalty goes out the window when patents expire.” This is why pharmaceutical companies go to such extraordinary lengths to extend their patents, a process known as “evergreening”, employing “floors full of lawyers” for this express purpose, one industry insider has said. And with a drug raking in $3bn a quarter, even a one month extension can be worth a lot of money. Some drug companies, including the UK’s GSK, have been accused of more underhand tactics, such as paying generics to delay the release of their cheaper alternatives. This is a win for both industries, as it has been said that the loss of the big pharmaceuticals far outweighs the generic industries revenue.

What can all of this mean potentially for my native country Australia and more so in my current home state of New South Wales (NSW)? NSW regulations that prevent coal seam gas (CSG) recovery near residential areas could be subject to lawsuits if the TPP goes ahead with these murky investor-state dispute settlement provisions. If it affects their profit margin you can be assured that a lawsuit will eventuate as will tricks from corporate lawyers trained in this specific area. Australian Trade Minister Andrew Robb has assurances of a deal being finally struck within weeks. “Mid-February to mid-March: that’ll be, I think, the timeframe,” he said. “We might have to come back again to conclude some things, but that’s the intent. The final issues, as always, are the most difficult. But everyone seems to be in a mood to find some common ground so that we can get this major, major agreement off the ground.”

The current Australian government has an appetite for signing FTAS as seeming proof of their economic prowess. The TPP has been years in the making and fraught with difficult negotiations especially in regard to the ISDS provisions that could impact on us really hard, and we have barely even touched on them. The secrecy in an Australian political environment, let alone with a disillusioned public, couldn’t come at a worse enough time. I would think now is the time for the Opposition, Independents and the Senate to come together and put the public’s interests first and put it first every time, no matter the high level of Investment interest in our country. It is apparent that the current government wants to dismantle our Medicare and even introduce a medical tax. Can you imagine what could be in store for us if we allow multinational corporations or investors with trade ministers, not governments mind you, to ultimately decide our economies, laws and policies? I will leave you with the global spend on medicines projected to be worth up to $1.2 trillion for the year 2017.

This article was first published as ‘We can not allow the TPP with no transparency & clauses to sue us‘ on Mel’s bog, Political Omniscience.


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  1. John Fraser


    Looks like Abbott did a deal with Japan to build submarines and all they had to do was agree to sign the FTA/TPP.

    And so far it's only cost Australia $20+billion to make Abbott look good.

  2. paul walter

    Congratulations, AIM Network, for publishing this.

    As a bonus, readers gain a glimpse of why previous governments have been bad mouthed– because they resisted the most intrusive and colonising aspect of what is actually an oligarchic wealth and power-grab involving nothing less than the disenfranchisement of communities and their members.

    So little has been talked over, concerning this latest FTA.
    But, as some on “Insiders” this morning obliquely inferred, the loss of the automotive and shipbuilding industries could relate to provisions agreed to recently tacitly, involving Japan, perhaps fostered by the USA and involving the global rivalry with China ( we will be in effect partially underwriting this?).

    No wonder there has been a monumental clamp on information prior to the signing and look also at the likes of Robb, likely a servant for resources exporters at the expense of local communities, industries and skills-bases.

    A dubious, redolent of base motives, exercise the article shows us, a hoax in the act of being perpetrated.

    As for Philip Morris, Monsanto, fracking etc, it smacks of Opium Wars/foot in door stuff, inamicable to an actual democracy and some thing perhaps more a rape of it, in countries where it will apply.

  3. stephentardrew

    Look you lot I am trying to get some work done just stop posting the bloody truth and making me read my life away.

  4. stephentardrew

    Back to reality.

    This has got to be one of the most blatant thefts by the corporate sector as it raids individual nations economies by undermining rule of law.

    Secret agreements are the tools of dictators and fascist oligarchs hell bent on world hegemony brought to you by the kind benevolence of the US.

    It is nothing more than criminal corruption and yes it can, and must be, undone if signed.

    I use the word fascist with the most restraint but this is exactly what secret trade agreements are. They are the complete and total antithesis of democracy, justice and rule of law.

    The media is completely inept and complicit in disclosing the facts.

    This article should be front page news on every media outlet in the county.

    In your dreams sunshine.

    Yes we have been warned in muted voice and silent complicity.

  5. JohnB

    Do I have this right?
    When Robb signs the TPP, his signature constitutes an indication of intent to proceed with the agreed negotiated arrangements.
    These arrangements must then be codified in legislation that must then be presented, debated and passed by both houses of the Australian parliament.
    If the Senate rejects this legislation, even in part, then Robb’s signature on the ‘intent to proceed’ agreement is rendered null/void.
    Parliamentary amendments of Robb’s signed agreement would necessitate re-negotiation of the TPP to incorporate such changes.

    As all the TPP negotiations are in secret, we don’t know whether the ISDS provisions are separable from the TPP agreement Robb may have signed – but knowing too well how this sneaky LNP govt. operates it will be an all or nothing case presented in parliament to wedge opposing forces.

  6. Sad sack

    This must be unmitigated rubbish who would think that robb would sign such a document. He is every bit a match for the negotiators of any nation. The PM, a Rhodes scholar for christ’s sake, who has never be a skiter, so he is completely trustworthy and, as his beliefs have never been contradicted by evidence from the web, he has a natural pre-internet understanding of both, concepts like ISDS, and his job.

  7. Rosemary (@RosemaryJ36)

    World government by the oligarchs by stealth.

  8. LOVO

    “……and print” (aka spreading the word the old fashioned way 😉 )
    P.S. Print articles you like…put ’em in an old mag…next time you go to the DR’s leave the mag amounst the other older mags…. spread the word 🙂

  9. LOVO

    amongst 😳

  10. Michael Taylor

    There I was thinking you’d ‘discovered’ a new word. :mrgreen:

  11. paul walter

    People are confident of it not getting through the Senate, but don’t forget, the ALP joined with the coalition to suppress release of details, a little while ago…

    Michael Taylor, clear and apparent evidence that we are living under the new ideology of neologism.

  12. MelMac

    Ha I love Lovo’s idea 🙂 Brilliant!

  13. MelMac

    Hi Paul, yes this worries me. We need to know the ALPs stance.

  14. Steve Oz

    Jeez people, with these TPP deals the crime of treason against Australia comes to mind but in this country the only “treason ” that seems to matter is criticism of the U.S. Empire or its master Israel. Labor (without a you) is also party to this evil.

  15. MelMac

    Hi John B, it will be interesting but unfair to be blind folded trying to get to the truth. I think we would all feel a bit better if the ALP tell us their stance. And are all the Independents up to speed?

  16. MelMac

    Hi Paul, totally agree re Japan Nevermind the fact that their economy is shot at the moment…

  17. Gail

    On my understanding, all parties to TPP discussions (or negotiations as you please) have to sign Non Disclosure Agreements. Discussions about the TPP and associated treaties are not new. The TPP has been around for quite a while. I suspect that any member of the Labor Party parliament, with previous involvement in discussions is bound not to release any details. Much of it is on wikileaks and elsewhere. Enough is floating around to make most people very nervous about it.

    What does Australian get from any of these Trade Agreements. It seems to me that we got bugger-all from the one John Howard and the cronies signed with the USA. What do Australians get from these treaties. I think they are a major contributory factor to the high prices we pay for all goods imported to this country. Australia has been paying significantly higher prices for goods from cars to sewing machines for many years. Why? We don’t seem to get any benefits at all. They are trade agreements to benefit corporations only. They will kill our local industries as well as jobs and technical innovations. CSIRO damage anyone?

    I don’t know how, but we must demand answers on this one. It is time we made sure that the Senate is aware of the reservations that most Australians have about these treaties. Is the NDA that may have been signed binding to any action that Labor might wish to take in the Senate? We really should know this. Our elected representative must represent us!

  18. musicinhills

    Been saying all along, since the second world war, fascism has just been getting bigger and better all the time.
    All those silly conspiracy theories about one world order and the Bilderberg group and all that nonsense
    not nonsense now is it. As I have been saying for years we will be voting corporations in soon not governments. Any way it’s almost over bar the shouting.

  19. MelMac

    Hi Gail, I have suspected this too for some time. The only folk to benefit from these trade agreements are the Corps & importers & exporters. Look at the contaminated berries packed in China for distribution here. How did we allow this? Too high manufacturing costs OK but we are losing an important part of our economy, that traditionally represents the middle class. We have lost our car manufacturing to enable cheaper foreign imports, these are the only supposed “benefits” for us. And the thought of outsourcing our defence re the subs to Japan is not only ludicrous but shows the rest of the world that we don’t have the confidence to take care our own defence. I won’t get started on Americas JSF debacle either.

  20. Haildebus

    If the TPP was good for us, it would not be negotiated in secret. It is one more step in the takeover of the world by corporations who, do not have our best interest at heart.

    TPP: Corporate power grab.

    Please share this most excellent documentary on the corporate takeover of our governments.
    Four Horsemen – Feature Documentary – Official Version

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