The Moral Case Against the TPP

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(Photo: StopFastTrack / Flickr)

This commentary is a joint publication of Foreign Policy In Focus and TheNation.com

Pope Francis waxed radical on a number of big issues during his recent speech to the U.S. Congress, where he condemned the arms trade, war profiteering, and even the war on terror itself.

But despite the Vatican’s previous critical statements about free trade agreements, the Pope chose not to confront Obama’s trade agenda in his own backyard.

I wish he had. On October 5, just weeks after Francis’ historic visit, the United States and 11 other countries announced that they’d reached an “agreement in principle” on the Trans-Pacific Partnership — a huge “free trade” pact that would set investor-friendly rules in countries making up 40 percent of the world’s GDP, many of them at the expense of crucial labor and environmental protections.

Would strong words from Pope Francis have prevented this rush to complete the pact? Probably not. But his moral authority would’ve given U.S. lawmakers something to think about as they move towards voting on the deal in early 2016.

Naming the Beast

When the pope visited Bolivia last July, he delivered an unmistakable invective against exploitative economic policies at the World Meeting of Popular Movements.

“Neocolonialism,” Francis said — a term he used 7 times in that speech — “takes on different faces,” including “some treaties named as ‘free trade’ and the imposition of ‘austerity’ measures that always tighten the belts of the workers and the poor.”

Other Vatican officials have spoken out directly against the TPP.

Archbishop Silvano M. Tomasi, the permanent observer of the Holy See in Geneva, has warned the World Trade Organization against “mega-regional trade agreements such as the Transatlantic Trade and Investment Partnership, or the Trans-Pacific Partnership.”

Tomasi called these pacts “asymmetric” and noted that “among the most damaging concessions developing countries make in regional and bilateral agreements are those enhancing the monopolies on life-saving medicines, which reduce access and affordability, and those that provide excessive legal rights to foreign investors, limiting the policy space for nations to promote sustainable and inclusive development.”

Until they release the TPP text, which (aside from what’s been leaked by WikiLeaks) has been kept secret from the public and even the parliaments of countries involved in the negotiations, we won’t know for certain what’s in it or how exactly the TPP will affect citizens. But there’s strong reason to assume that the deal will reflect everything the Vatican warned about.

Checking the Fine Print

Following the conclusion of negotiations, the U.S. Trade Representative — the office responsible for negotiating the U.S. position in the deal — quickly produced a “summary of the TPP” to try to convince Congress and the public of its virtues. And indeed, there are some nice-sounding words in the summary about development and sustainability.

But a key question is which parts of the deal will be legally binding for all parties and which will be merely voluntary. For example, the summary provides a description of the “Development Chapter,” which will be presented as an innovation in these types of agreements. It lists “three specific areas to be considered for collaborative work once TPP enters into force.”

And they’re hard to disagree with. They include:

“(1) broad-based economic growth, including sustainable development, poverty reduction, and promotion of small businesses; (2) women and economic growth, including helping women build capacity and skill, enhancing women’s access to markets, obtaining technology and financing, establishing women’s leadership networks, and identifying best practices in workplace flexibility; and (3) education, science and technology, research, and innovation.”

The fine print, however, makes clear that the committee established to promote these priorities focuses only on “voluntary cooperative work in these areas and new opportunities as they arise.” That’s hardly an impressive commitment.

Stacking the Deck

These voluntary developmental objectives contrast sharply with the enforceable protections transnational corporations would receive, including “the basic investment protections found in other investment-related agreements.”

Those standards are exactly what made past “free-trade” agreements so exploitative.

According to the U.S. summary, parties will essentially be required to treat transnational corporations the same as local companies, despite the asymmetries between the two. The deal bans “performance requirements” that could require the local sourcing of labor or technology, and restricts capital controls that could ensure investments promote development in the countries where they’re made. The agreement will also “prohibit the expropriation of corporate resources that are not for public purposes” — a provision which, under other agreements, has led corporations to characterize environmental protections and other regulations as “expropriation.”

In simpler words, as the pope said in Bolivia, rules like these ensure that “transnational companies are becoming stronger to the point that local economies are subordinated, especially weakening the local states, which seem ever more powerless to carry out development projects in the service of their populations.”

Rewriting the Rules

These corporate protections are enforced by an obscure process called the “investor-state dispute settlement system,” which has allowed major corporations to sue scores of countries in little-known World Bank tribunals for millions and even billions of dollars.

This system thwarts the ability of governments to regulate in the public interest — including on health, safety, and environmental protection, although the U.S. summary of the TPP claims the contrary — by allowing corporations to claim damages for public interest regulations that they claim impact their profits.

Take the El Salvador case that’s been in the World Bank court’s dock for six years. The small country was sued by the multinational Pacific Rim-Oceana Gold company for $300 million simply for protecting its primary watershed from poisonous gold mining. That’s just one of scores of cases stemming from the U.S.-led DR-CAFTA deal, which has chilled the regulatory environment

Canada and Mexico, meanwhile, have lost many regulatory cases under NAFTA’s investment rules.

The TPP must be stopped — not simply because it could put jobs on the line. It needs to be stopped because it rewrites all the rules in favor of big corporations, allowing them to circumvent regulations for the public good — even as its backers claim they’re doing the opposite.

The pope knows it. Obama must know it. Even Hillary Clinton, if you can believe it, says she knows it now. And if the texts are ever released, we’ll know it for sure, too. No wonder there’s a growing global backlash to this unjust system.

It’s a pity the pope didn’t try to talk some sense into U.S. policymakers on the issue of trade. But it’s not too late for him and others to make the moral case against the Trans-Pacific Partnership.

Manuel Perez-Rocha is an associate fellow at the Institute for Policy Studies.

  • robertwgordonesq

    But if these trade deals are so detrimental to the indigenous public . . .why are their leaders agreeing to them in the first place? You can’t blame the “Big Bad Corporations” if local leaders are the real sell outs.

    • Paul Renault

      Why not blame both?

      • robertwgordonesq

        Good point.

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