TPP rises from the ashes

Rumours of the death of the TPP are greatly exaggerated. After President Trump announced U.S. withdrawal from the Trans-Pacific Partnership, I congratulated him: “Thank you, Mr. Trump, for killing the TPP.”

 image: WMAL radio

I now realize that Trump’s withdrawal from the TPP was not an indicator of leadership, but a sign of retreat from the international community. It’s just another indication of the degree of U.S. marginalization. Trump’s withdrawal from the Paris Agreement is yet another indicator that we must carry on without him.

Where the original TPP had a number of flaws, the new TPP can be negotiated to Canada’s advantage. Canada was disadvantaged in the first round because we were latecomers: we had to accept what had already been negotiated.

Canada is a trading nation and as such, we depend on fair trade agreements. As politicians like to do, I’ll list my five conditions for acceptance of the new TPP -dubbed TPP11 after the number of countries left to pick up the pieces.

Investor-state dispute settlement provisions (ISDS) should not be part of TPP11. This allows companies to seek damages from governments when local regulations interfere with profit-making.

When disputes arise, as they are bound to do, they should be settled in a transparent manner by judges, similar to the International Court, not in private between arbitrators as is now done with NAFTA.

Environmental standards should not be part of TPP11. Environmental damage is seen by industry as a cost of doing business -a price which indigenous peoples and future generations will pay. Environmental standards need to be negotiated by separate accords like the Paris Agreement.

Intellectual property and should be excluded as well. Artists and small software companies need protection, but too often concern for intellectual property masks large corporate interests such as Disney.

Exclude health regulations as well. They are an excuse for Big Pharma to extend the patent life of drugs that could be made cheaper with generics.

TPP11 will be a meeting of middle powers now that the U.S. is out, and China and Europe were never in. Canada can then negotiate from a position of strength when it comes to superpowers. Trump favours individual bilateral deals because he imagines an advantage over smaller countries. But if those smaller countries can form a block where there is an alternative to the bully-tactics of Trump.

The TTP11 would give Canada access to markets not previously available, says Hugh Stephens of the Canadian Global Affairs Institute. It will jump-start bilateral talks that were going nowhere, like those between Japan and Canada. With Japan in the TTP11, negotiations can proceed. And trade agreements under the umbrella of TPP11 can take place with other countries where Canada has no bilateral agreements such as Australia, New Zealand, Malaysia and Vietnam and Malaysia.

And in countries where Canada does have bilateral agreements, such as Mexico, Chile and Peru, the TTP11 can tie up loose ends.

Whereas Canada was a follower in the original TTP, we can be a leader in fair trade under TTP11. With the U.S. retreating into a fog of befuddlement, Canada needs to step up on the world stage.

 

 

Thank you, Mr. Trump, for killing the TPP

It’s a rare thing when the views of president-elect Trump and Canadian activists align as in their opposition to the Trans-Pacific Partnership. Trump has vowed to kill the deal the day he is sworn in.

However, the source of loathing couldn’t be more different. Canada is a trading nation and we depend on the flow of goods for jobs. Trump wants to set up barriers to trade and regards such deals as “job-killing.”

Unlike the deal between Canada and Europe, the Comprehensive Economic and Trade Agreement (CETA), we were on the sidelines when the TPP was negotiated. The TPP had little to do with reducing trade barriers. Law professor Michael Geist of the University of Ottawa outlines the other provisions:

“Much of the TPP focused on economic regulation, such as intellectual property enforcement, health regulation and environmental standards. Trade agreements are a poor place to negotiate these issues, which have traditionally fallen within the purview of international organizations that develop consensus-based treaties with broad stakeholder participation (Globe and Mail, November 16, 2019).”

Trump has NAFTA within his sights, too. With the North American Free Trade Agreement threatened by the belligerent president-elect, it’s vital that Canada look elsewhere. Canada already reached a deal with South Korea in 2014 and has engaged in talks with Japan, India and China regarding similar agreements.

Ongoing irritants plague all of these trade deals because corporations insist on corrupting them with their own interests under the label of “free trade.” One of those irritants is the investor-state dispute settlement provisions (ISDS) which allow companies to seek damages from governments when local regulations interfere with profit making.

Canada was stung by an ISDS under NAFTA in which a Delaware-based company proposed expansion of a quarry in the Bay of Fundy. Nova Scotia rejected it on environmental grounds. The federal government rejected it. Then a secret NAFTA tribunal approved it and we are stuck with a bill of hundreds of millions in compensation.

Tribunals aren’t a necessary part of trade agreements when you consider we have a court system. It’s not like we’re dealing with developing countries whose court systems are unknown or viewed as dodgy. CETA is a slight improvement over NAFTA. Members of the tribunal will be appointed by countries instead of corporations giving it the aspect of an international court.

One way to bypass trade deals is for unions to negotiate international agreements that are not susceptible to tribunals. Canadian auto unions have recently bargained deals with the big 3 auto manufacturers worth $1.6 billion. Jim Stanford, former economist for the Canadian Auto Workers and Unifor, and now professor McMaster University is thrilled with the deal which acknowledges superior productivity in Canada:

“Most Canadian auto plants operate at or near full capacity. Combined with advanced technology and work organization, that gives the Canadian industry an important productivity advantage. Output per worker is 10 per cent to 15 per cent higher than it is in the United States (November 21, 2016).”

Trade deals have been muddied by the addition of non-trade provisions, although I doubt that’s what motivates Trump.