The following article appeared slightly edited in the Press on 16 June 2010, p.A21.
By Bill Rosenberg, Policy Director/Economist at the New Zealand Council of Trade Unions Te Kauae Kaimahi
A second round of negotiations towards the Transpacific Partnership Trade Agreement (TPPTA) will open next week in San Francisco. New Zealand is one of eight parties along with the US, Australia, Singapore, Chile, Peru, Brunei and Vietnam, and others may join.
This is much more than a trade agreement. It will reach into medicine prices, our ability to regulate important services such as finance, telecommunications, and education, our right to control foreign investment, our competition rules, rights to copy music and other digital media, the international trade effects of combating climate change, how local and central government can use their buying power for economic development purposes, and much more.
The Obama administration has put significant emphasis on this agreement, and has stated it wants it to “set the standard for 21st-century trade agreements”. It wants it expanded to include China, Japan, South Korea, Taiwan and other major Pacific economies.
In New Zealand it is sold as opening the US market to our agricultural produce, despite well engraved writing on the wall that any additional access will be bitterly fought, and if it comes will be at a glacial pace. By the time additional access is a reality, producers from many other countries would be competing for the same market.
This emphasis on opening markets with inadequate consideration as to the domestic effects of such agreements in weakening our ability to shape our own society and economy is distinctly 19th rather than 21st century. The globalisation of the 19th century ended with the First World War. The globalisation since the 1980s produced lower growth rates and repeated financial crises.
Prominent Harvard economist Dani Rodrik says he has an “impossibility theorem” for the global economy: “democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full”.
Our trade and investment agreements have ignored this incompatibility in favour of increasingly intense global economic integration, resulting in the wilting of our national sovereignty – our ability to make rules that would assist our development. Our democracy has weakened as a result: we still elect governments, but they are increasingly powerless to change the rules.
So what might a truly 21st century agreement look like – one which learns the lessons of the past?
First, open up the process of negotiation. This agreement will be more important than much of the legislation that goes through Parliament, yet it is negotiated behind closed doors with no opportunity for public scrutiny of proposals until the deal is signed, when it is too late. Let the citizens of the eight nations see the negotiating texts as they develop, and open them to debate.
Learn the lessons of the global financial crisis. It grew from high risk financial practices, and was spread rapidly round the world due to the absence of international financial regulation. It’s time to build new agreements in which nations cooperate in managing international financial movements, tax international financial transactions and regulate financial practices which are a danger to the health and safety of our economies. Instead, the financial rules being proposed give banks and other financial corporations the right to sell risky products, increasing international borrowing and trade risky instruments overseas with only limited protection for our financial system and economy.
“21st century” agreements should respect people’s need for affordable health care, and to organise their health services the way they choose. Instead, the vital work Pharmac does to force down monopolist prices charged for medicines is under attack from big US pharmaceutical corporations who want to use the TPPTA agreement to allow them to charge whatever the market will bear.
Many New Zealanders have been concerned at the control of strategic assets and land by overseas interests. A forward-looking international agreement should enhance our ability to select the investment we think is best for our needs. Instead the US has made clear its corporations dislike even our feeble foreign investment rules, and want the right to sue the government for damages before secretive international panels.
Such disputes have led to the award of hundreds of millions of dollars against governments which took action to protect the environment or to reverse privatisations which went wrong. In a current case, tobacco multinational, Philip Morris, is suing the Uruguay government to prevent it taking stronger anti-smoking measures.
International agreements have for decades been a recognised way to improve the rights of people at work. This one should be no exception.
If the TPPTA is genuinely there to improve people’s wellbeing it will ensure that core international labour rights conventions are just as enforceable as trade access and bad labour practices are not used as silent trade subsidies. Instead previous agreements have sidelined labour rights, while workers lose from the endless restructuring forced by globalisation, many seeing their high paid skilled job being replaced by a low paid, insecure one.
Similarly, international agreements are essential to protect our environment: many environmental threats require global solutions. Climate change is one, and controls on emissions can be undermined by trade with countries which have lower standards. The TPPTA should allow us to ensure our environment and our contribution to avoiding climate change are not undermined by trade. But the TPPTA countries all have very different approaches – in climate change, some have as yet done nothing. Protecting the environment should be an enforceable part of any agreement.
For the first time, the peak union bodies of most of the countries involved are cooperating in order to act on their concerns at the likely direction of the TPPTA. They have issued a declaration outlining their concerns, which include the above and many more.
Will the TPPTA be truly a 21st century agreement – or just more of the same?
