TPP: Good for profits - bad for people and planet

October 9, 2015
A protest against the Trans-Pacific Partnership in Atlanta, Georgia.

Negotiations on the Trans-Pacific Partnership (TPP) were finally completed in Atlanta on October 5. Final agreement on the treaty had been delayed for years as negotiating countries tried to protect their own industries while trying to gain market access in others.

The TPP was negotiated by countries on the Pacific Rim: the US, Australia, Singapore, New Zealand, Chile, Brunei, Canada, Malaysia, Mexico, Peru, Vietnam and Japan. These countries represent about 40% of global GDP.

Details of negotiations have been kept secret, as has the text. But leaked documents indicate that this agreement is not mainly about trade in goods. The US is driving an agenda on behalf of global corporations, which want changes to laws that allow them greater ability to make money. To do this, however, they also need to reduce peoples' rights and environmental protections.

That, of course, is not how the deal is being spun by the Australian government.

On October 6, trade minister Andrew Robb painted a rosy picture, saying: “The TPP will enhance our competitiveness; promote growth, job creation and higher living standards.”

In a long statement, Robb did not hint at any negative consequences of the TPP. Instead, he listed a host of benefits for Australian businesses, including new openings for investment, trade, e-commerce and services.

Robb did not explain how jobs would be created rather than lost, or how living standards would rise rather than fall.

Neoliberal orthodoxy

We are expected to assume that the business boom will “trickle down” to the rest of us — the neoliberal orthodoxy that is yet to be proven.

When is this “trickle” going to reach Mexican farmers or US and Canadian manufacturing workers under their now-infamous free trade deal?

NAFTA, the North American Free Trade Agreement, has been a disaster for small farmer and workers. Some corporations, however, have done very well under it.

If there is one thing neoliberals love, it is removing barriers to investment and trade, which increases their bottom lines.

Robb enthuses about it: “[The TPP] will slash barriers to Australian goods exports, services and investment and eliminate 98% of all tariffs across everything from beef, dairy, wine, sugar, rice, horticulture and seafood through to manufactured goods, resources and energy.”

The elimination of protections for Mexican agriculture meant that heavily-subsidised US agribusinesses were able to decimate their Mexican competitors, many of whom were poor, small farmers.

The resulting destitution of millions of Mexican peasants led directly to their mass exodus to the US. Mass unemployment in Mexico also drove down wages, leading to the shift of the manufacturing industry from the US to Mexico.

It is this reason why Democratic presidential hopeful Hillary Clinton has only recently come out against the TPP.

Free trade is massively unpopular in the US because the working class has had first-hand experience of its negative effects.

Self-described socialist presidential contender Bernie Sanders' unflinching opposition to TPP, and his resulting popularity, has no doubt contributed to Clinton's about face.


The TPP will also allow Australian businesses access into the service sectors of other countries. These include education, transport and professional and financial services. It will allow Australian goods and services exporters access to government procurement markets in the region.

This paves the way for the expansion of privatisation.

The Malaysian Socialist Party (PSM), which has been campaigning against the TPP, noted that under the new trade rules, there is likely to be a push to privatise education and thereby limit access to what should be a human right.

The PSM notes: “A ban on private educational institutions, or a restriction of their numbers, is not possible under the likely market access rules of the TPP services, as stated by the Special Rapporteur on Right to Education.

“'Privatisation adversely affects the right to education, both as an entitlement and as empowerment. …

“'Privatisation in education cripples the universality of the right to education as well as the fundamental principles of human rights law by aggravating marginalisation and exclusion in education and creating inequities in society.'”

One of the Australian government's main achievements was to prevent the US from extending patents on biologic medicines — a medication manufactured in, extracted from, or semi synthesized from biological sources — by up to 12 years.

Any extension of patents on pharmaceuticals prolongs the monopoly pricing of medicines, raising the cost of the health system by hundreds of millions of dollars a year.

The Australian government's statement said: “Concerns that the price of medicines would increase have proven to be absolutely unfounded.”

But the US government has a different opinion.

Patricia Ranald, coordinator of the Australian Fair Trade and Investment Network (AFTINET), said: “We note these assurances are weakened by the fact that the US is claiming that five years is a minimum standard and there is a 'voluntary' agreement using administrative means for an additional three years of monopoly on biologics, referred to as '5 years + 3 years'.”

Investor-state dispute settlement

The main concern in the TPP is the investor-state dispute settlement (ISDS), which allows corporations to sue governments for any perceived loss of profit due to governments introducing new laws or regulations.

Australia was opposed to the ISDS throughout the eight-year negotiations, but now appears to have agreed to its inclusion.

But while the rest of our health and environmental safeguards are open to the ravages of corporate lawyers, Robb said: “Australia will be able to ensure that tobacco control measures are never open to challenge, an issue on which we have been a leading voice”.

After detailing at length the supposed benefits the TPP offers to Australian businesses, the government statement offers two and a half lines under the heading “Worker and Environment Protections”.

“The TPP includes requirements for the highest labour and environmental standards including requiring TPP parties to combat wildlife trafficking and address illegal logging and illegal fishing, as well as reducing subsidies that cause the depletion of global fish stocks.”

But if previous leaks are anything to go by, the TPP is as vague and non-committal on protecting the environment as the supportive government statement.

The environment chapter, leaked in January last year by WikiLeaks, showed there were no binding provisions and no penalties for failure to comply — though it is difficult to penalise anyone when there's nothing to comply with in the first place.

WikiLeaks said: “With the exception of fisheries, trade in 'environmental' goods and the disputed inclusion of other multilateral agreements, the Chapter appears to function as a public relations exercise.”

ACTU president Ged Kearny believes the TPP will badly affect workers. “We don't know what the deal says about overseas workers and labour movement, which would impact jobs and potentially drive down wages and conditions, similar to The China-Australia Free Trade Agreement.

“What we do know is that the US is protecting its interests and the concern is that the impact of this will be negative for Australian workers and communities.”

But, for the moment, much of the criticism of the TPP remains hypothetical because the text of the agreement is still secret. The lack of access to details in the text — it will not be published until it goes to the US Senate in at least another month — allows the government to put a positive spin on the deal.

But we cannot stop the campaign against the TPP — the “Blind Agreement” as a recent Senate inquiry aptly named it — because there is ample evidence from other neoliberal trade agreements showing their class bias.

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