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Trans-Pacific Partnership: Background and Resources

Introduction

The TPP, or Trans Pacific Partnership, is a trade pact currently being negotiated by the United States and 10 other countries across the Pacitic. Because the TPP is intended as a “docking agreement,” other Pacific Rim countries can join over time. It is similar to the North American Free Trade Agreement, or NAFTA, only the scale of the TPP could make its impacts much more severe.  Governments want to conclude the this trade pact by October 2013

Key elements include:

  • While this is called a “trade” treaty, only a few chapters actually deal with trade; most of the chapters deal with other issues (see below), which, taken together, could affect nearly every aspect of our lives.
  •  Also, this agreement is being negotiated in almost total secrecy: While members of the public and Congress do not have access to draft texts and proposals, more than 600 corporate representatives do have access to key texts.
  • Finally, once complete and ratified, other nations will be able to join it. For that reason, it may be the biggest — and last — “trade” agreement ever to be negotiated.

Click here for Additional Resources

Jim Mays, February 16, 2013, “TPP: Wrong Trade Deal for the US,” http://nyc.sierraclub.org/2013/02/tppwrong-trade-deal/

Sierra Club: Labor and Trade Program: Trans-Pacific Partnership Agreement http://www.sierraclub.org/trade/trans-pacific-partnership-agreement.aspx

Sierra Club, The Trans-Pacific Partnership Agreement: What it could mean for the Environment

Public Citizen,  February 21, 2013, “The 12 Questions about the TPP that President Obama and Prime Minister Abe Do Not Want to Hear this Week,”  http://citizen.typepad.com/eyesontrade/2013/02/the-12-questions-about-the-tpp-that-president-obama-and-prime-minister-abe-do-not-want-to-hear-this-.html

Lori Wallach, “NAFTA on Steroids,” The Nation, June 27, 2012. http://www.thenation.com/article/168627/nafta-steroids#

Environment

The Sierra Club is concerned about the TPP  not only because of its potential threats to the environment and environmental regulations.  Under the controversial “investment chapter,” the proposed TPP gives foreign corporations unprecedented power to circumvent domestic courts and sue governments in private trade panels.  These rules give foreign corporations more power than domestic ones, creating a strong incentive to offshore jobs. This could mean, for example, that new U.S. regulations on the coal or gas industry could be challenged by foreign corporations from TPP countries with investments in those industries.

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The United States Trade Representative (USTR) has made reassuring comments about US commitments to maintain international laws against trading in “products harvested or exported in violation of national laws; support for anti-trafficking obligations; and increased cooperation with NGO and other private sector organizations to “address illegal trade and wild plant trade.” The USTR statement and position is critical to conservation in the Pacific Rim.  But still we are deeply concerned that other parts of the agreement, particularly on investment, could dramatically undermine the positive goals set out in the environment chapter. The Sierra Club and other organizations have been out front in warning about the dangers of the new trade regime to environmental regulations, in particular. The so-called “investor-state” system, whereby companies can sue nations in non-judicial international tribunals (see “Investment” below), gives corporations tremendous power to effectively roll over local regulations.

Here’s an example. Because Germany decided to phase out nuclear power, the Swedish company Vattenfall is suing Germany in a non-judicial tribunal under the “Energy Party Treaty.’ According to the Sierra Club’s Compass blog, “Vattenfall claims that Germany’s decision to phase-out nuclear energy production violates its right as an investor in nuclear energy in Germany by diminishing its profits.” The TPP contains similar provisions (see the Investment section below). Indeed, virtually any environmental regulation could be up for grabs under such a regime.

Additionally, the TPP may increase fracking across the United States. Under current law the Department of Energy (DOE) controls exports of natural gas. The Department of Energy’s (DOE’s) mandate requires it to consider whether the export of natural gas is in the country’s interest. However, under the TPP, the DOE would lose its ability to control the amount of natural gas that is exported (see here). Such a move would increase the demand for LNG and encourage increased fracking.  The U.S. government could end up ceding its ability to manage our energy under the TPP.

Moreover, even if the government decided against further imports of tar sands oil, the US might be required to accept them or pay out heavily though the investor-state tribunal system.

With the ability of foreign firms to challenge environmental regulations and sue for compensation for ones they don’t like, you can probably see how vulnerable environmental regulations could become.

Click here for Additional Resources

Ilana Solomon, Huffington Post, 01/10/2013 Trade Rules Undermine Transition to Clean Energy, http://www.huffingtonpost.com/ilana-solomon/clean-energy-trade-rules_b_2442080.html

Ilana Solomon, Sierra Club Compass, 05/22/2012 “From More Fracking to Fewer Jobs: Secrets Of The Trans-Pacific Partnership Free Trade Agreement,” http://sierraclub.typepad.com/compass/2012/05/tpp-secrets.html

Sierra Club, nd, An Explosion of Fracking, One of the dirtiest secrets of the Trans-Pacific Partnership Free Trade Agreement, http://www.sierraclub.org/trade/downloads/TPP-LNG%20Factsheet%20FINAL.pdf

Sierra Club, nd, “The Trans-Pacific Partnership Agreement: What it could mean for the Environment,” http://www.sierraclub.org/trade/downloads/TPP-Factsheet.pdf

Public Citzen, nd, TPP’s Investment Rules Harm the Environment, Public Citizen’s Global Trade Watch, http://www.citizen.org/documents/fact-sheet-tpp-and-environment.pdf

Public Citizen, Eyes on Trade, May 20, 2011, “U.S. dolphin-safe tuna labeling rule deemed a WTO violation” http://citizen.typepad.com/eyesontrade/2011/05/us-dolphin-safe-tuna-labeling-rule-deemed-a-wto-violation.html

USTR Green Paper on Conservation and the Trans-Pacific Partnership, http://www.ustr.gov/about-us/press-office/fact-sheets/2011/ustr-green-paper-conservation-and-trans-pacific-partnership

Investment

Last year the chapter on investment of the prospective agreement was leaked and exposed the special privileges the agreement will provide for corporations in international dealings that are not provided to domestic corporations. In this regard, it is an extension of rights provided under North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) rules. Most importantly, if a corporation believes that its expected profits from an investment project will not be met, it can sue the government of the host country in a private, international tribunal staffed not by judges but by lawyers in private practice.

These are referred to as “investor state” cases. As in the Vattenfall case, discussed in the Environment section, countries that enact policies or regulations to protect their citizens can easily fall prey to foreign companies that invest in them.

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Here’s another example of how this works from existing agreements: The Renco Group, an American-owned corporation, after having been denied a third extension to do remedial cleanup that it had contractually agreed to do, sued Peru in a private trade court for $800 million. This is referred to as the “investor-state model.” To date, corporations such as Exxon Mobil and Dow Chemical have launched than 450 cases against 89 governments. Nearly $675 million has been paid to corporations under U.S. free trade agreements (FTA’s) and bilateral investment treaties (BIT’s), with about 70% of money going to oil, gas, and mining industries.

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See analysis of the leaked chapter by Lori Wallach of Public Citizen, http://www.citizen.org/documents/Leaked-TPP-Investment-Analysis.pdf

Public Citizen, “More Power to Corporations to Attack Nations,” http://www.citizen.org/Page.aspx?pid=5411&frcrld=1

Public Citizen, TPP: Corporate Power Tool of the 1%. http://www.citizen.org/tpp

Public Citizen, nd. “TPP’s Investment Rules Harm the Environment.”

Sierra Club, Joint webinar with the CWA. October 2012, http://www.cwa-union.org/video/entry/webinar_the_tpp_and_the_race_to_the_bottom#.USaYb2dgh8E

Lori Wallach of Public Citizen interviewed on Democracy Now http://www.democracynow.org/2012/6/14/breaking_08_pledge_leaked_trade_doc

Consumer Food and Health Protection

When we think about free trade agreements, we usually think about what is likely to affect most of us immediately, like price changes at the supermarket or at the doctor’s office.   We may also think a free trade agreement will mean loss of jobs and lower-priced, foreign goods.

However, previous agreements like the TPP, including NAFTA and the WTO, go much further. They actually threaten consumer rights and protections and public policy with regard to medical care. Among other things, the TPP could allow unsafe food imports and make life-saving drugs more expensive. A wide variety of protections are at stake.

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Here are two examples of issues that the TPP raises.

Consumer Choice  Currently, consumers have a certain amount of protection with regard to the products we buy. For example, as this is written, you can buy canned tuna with a “dolphin safe” label.  Dolphins are often caught and killed as by-catch in tuna fishing. The label assures the customer that the tuna they buy was caught in ways that protect dolphins from harm. However, in May 2012, a WTO “court” ruled that these labels gave US tuna an “unfair” advantage over Mexican tuna and required the US to remove the labels in 18 months (i.e., by October 2013).

Moreover, Public Citizen’s Lori Wallach has warned  that the TPP might be able “to ban ‘Buy America’ policies and may require the U.S. to import foods that doesn’t meet its own safety standards.”

Medicine Canada invalidated Eli Lilly’s patent on Straterra, a medication for attention deficit disorder, opening the way for generic rivals. Allowing companies to manufacture and sell generic versions of the drug would lower prices for Canadian purchasers. So, Lilly challenged the action under NAFTA’s “investor state” rules has given Lilly the opportunity to challenge the in a a non-judicial tribunal.

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Andrea Brower, Food, Farmers, and the TPP, 6/5/2012 http://www.resilience.org/stories/2012-06-05/food-farmers-and-tpp

Member of Congress Rosa DeLauro, representing 3rd District of Connecticut safety, 09/07/2011 “DeLauro: Food Safety Critical in Upcoming Trade Talks,” http://delauro.house.gov/index.php?option=com_content&view=article&id=406:-delauro-food-safety-critical-issue-in-upcoming-trade-talks&catid=7:2011-press-releases&Itemid=23

Member of Congress Rosa DeLauro, representing 3rd District of Connecticut safety, 11/ 29/2012, “Trans-Pacific Partnership Could Open U.S. To Contaminated Seafood,” http://delauro.house.gov/index.php?option=com_content&view=article&id=1119:bipartisan-group-presses-for-consumer-protections-in-trade-negotiations&catid=2:2012-press-releases&Itemid=21

Donna Marykwas, Examiner, 08/07/2012, Public Citizen warns that Trans Pacific Partnership set to Undermine Food Safety,  http://www.examiner.com/article/public-citizen-warns-that-trans-pacific-partnership-set-to-undermine-food-safety

Public Citizen, nd, TPP’s Investment Rules Harm Public Access to Essential Services, http://www.citizen.org/documents/fact-sheet-tpp-investment-services.pdf

Public Citizen, January 2013, “U.S. Pharmaceutical Corporation Uses NAFTA Foreign Investor Privileges Regime to Attack Canada’s Medicine Patent Policy, Demand $100 Million for Denial for a Patent,”  http://www.citizen.org/eli-lilly-investor-state-factsheet

Public Citizen memo, Todd Tucker, “Re:Proposed Trans-Pacific Partnership rules could undermine Medicare, Medicaid and Veterans’ Health, hurting seniors, military families and the poor,” June 14, 2012  http://www.citizen.org/documents/memo-tpp-drug-price-06-14-12.pdf

Sierra Club Press Release “World Trade Organization Rules Against Dolphin-Safe Standards” (http://action.sierraclub.org/site/MessageViewer?em_id=239390.0) and end country of origin labeling.

“US’s dolphin safe  tuna labels banned by court calling them ‘unfair’ to Mexico, Suzanne Goldenberg, theguardian, May 16, 2012, http://www.guardian.co.uk/world/2012/may/16/us-dolphin-safe-tuna-labels

“$100M Brawl: Lilly, Canada & An Invalidated Patent,” Ed Silverman, Pharmalot, December 13, 2012. http://www.pharmalot.com/2012/12/100m-brawl-lilly-canada-an-invalidated-patent/

What Can We Do?

Before President Obama can achieve his goal of finalizing and passing the TPP, he has indicated that he will work with Congress to pass Fast Track Authority (FTA). Fast Track eliminates Congress’ constitutional right to discuss and amend trade agreements in favor of Executive power that allows Congress only a yes-or-no vote…which would do much to ensure TPP’s passage.

Luckily, the Fast Track expired in 2007. Now it’s up to us to both educate and pressure Congress to vote against the Fast Track. Here’s what you can do:

  1. Help raise awareness of the secrecy and dangers of the TPP in Congress by writing your representative requesting a copy of the TPP draft text. You can do this by taking action at http://tpp2012.com/. Find your Congress Member and Senators at http://gjae.org/lookup.
  2. Even more important, we need to actually visit our representatives’ offices and urge them to vote against Fast Track. Emphasize that their job’s constitutionally endowed power to debate and amend trade agreements will be sidelined by Fast Track, and point out all the ways TPP could destroy the fabric of our lives.

For more talking points about “Threats Posed by TPP,” go to tpp2012.com/ and click on Learn More: TPP.

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