Trans Pacific Partnership (TPP)

The Trans Pacific Partnership (TPP) will affect everything from the price of cheese to the cost of medicine. Big business will fatten their bottom-line. Union members will lose their jobs. Small farmers will be squeezed out by unfair competition by agribusiness. No one will be left untouched by this free trade deal.

TPP Investment Cartoon

Can we afford to be left out?

The TPP covers 40% of the world’s GDP but only 13% of the world’s trade., Canada already has free trade agreements with four (United States, Mexico, Peru and Chile) of the twelve nations that signed on to the deal.. Our trade with the rest of the free trade area amounts to 3% of our exports and 5% of our imports. Tariffs are already low.  Eighty percent of our imports from the rest of the trade group are motor vehicles  and consumer electronics, while eighty percent of our exports are coal, beef, pork, and lumber. We have a five to eight billion trade deficit with these countries. Don’t expect that to change.

Shipping good jobs overseas

What the TPP means is that high wage nations such as Canada, the United States, and yes, Japan are going to double down on shipping good manufacturing jobs overseas.  The average Canadian manufacturing wage is $36.5 thousand compared with $2.9 thousand in Vietnam and $1.6 thousand in Mexico, so we can’t compete.  The false promise of gains in higher skilled service jobs here is fully offset by rules that allow companies to bring in their own personnel (e.g. Microsoft to Vancouver) or for branch plants to repatriate service jobs to their head offices.

Who wins?

The United States Trade Commissioner’s Office has identified the winners and losers.  Number one winner is of course the corporate bottom-line because the TPP lowers the cost of doing business. By 2025 the GDP of Vietnam will grow 23.7%, Malaysia 6%, and Singapore 2%.  In contrast Canada’s GDP is only expected to grow a paltry 0.2%.

Is it fair?

The HarperGovernment negotiated and initialled this trade deal in the midst of a national election.  Our elected officials (members of the opposition) have been kept in the dark over the last five years of talks, while corporate lobbyists have had a seat at the negotiating table.  The bureaucracy is not answering the public’s questions and well known concerns about the deal but it has briefed anyone who may benefit from the trade deal on its selling points.

Why is It’s still secret!

Almost everything we knows comes from leaks.  It is unlikely that the text, which will run to thousands of pages, will be released in the next sixty days. Even after the deal is made public we will not have access to the negotiating texts for another four years, so we really won’t know what they discussed or even what concessions Harper made, until long after the deal is approved. When it is approved, it will be on a take or leave it basis, no changes allowed

The Deal  is not really about trade.

Don’t be fooled. Trade deals aren’t really about trade. Only five of the 29 chapters of the TPP actually deal with trade issues like tariffs and quotas. Free markets override every other public policy concern (e.g. labour standards, consumer protection, health, safety, and the environment) in the TPP. Member States will now only be allowed to govern themselves to the extent they don’t impede trade.  Trade panels will now have the final say over national laws and regulations.

It creates a Kangaroo court.

The TPP creates more opportunities than NAFTA for corporations to challenge decisions of national governments (labour standards and environmental protection are now subject to this dispute resolution process).  The Investor-State dispute mechanism (ISDS) is used by corporations to bully policy makers.  Even if corporations lose they know that with this type of intimidation the chill effect is worth the cost.  (Under NAFTA Canada was sued 36 times and forced to settle five cases, compared to the USA which has only been sued 13 times and brags that it has never lost a case.) Domestic standards and policies can be legal and fair (treat national and foreign companies identically) and well designed to achieve results but still face corporate lawsuits.  Even after a case has been decided by our Supreme Court (e.g. Eli Lilly patent case) it still can be appealed to this trade tribunal. The purpose of this trade regime is to free foreign corporations from domestic laws and regulations, and to lower public expectations of government.

What about Free Trade in Services?

TPP introduces free trade in services, opening up new sectors of our economy to privatization and foreign investment.  State-owned enterprises, such as hospitals will now be forced to operate on a commercial basis, and in a non-discriminatory manner. They can no longer receive any subsidies or claim any advantage that would undercut private-for-profit firms.  Harper claims that Canadian Medicare is exempt but he is not telling you the whole story. First, free trade in services will impact government purchases of medical devices and pharmaceuticals and lead to the contracting out health care services.  Second it opens the door to private-for-profit hospitals, and user pay insured medical services.  It spells the end to single payer universal Medicare and will unavoidably result in a two tier healthcare system, one for the rich and another for the poor.

Intellectual Property

The TPP grants excessive protection to intellectual property (e.g. patents and copyright).  Canadian law currently provides copyright protection for the life of the author plus an additional 50 years, meeting the international standard.  We are now forced to adopt the USA’s “Mickey Mouse” standard extending the term to life plus 70 years, effectively keeping works out of the public domain for decades.  The TPP also gives Big Pharma more power to monopolize markets by delaying access to generic versions of next generation drugs (from 5 to 8 years falling short of the 12 years they wanted).  You are going to pay more for high-end consumer goods over time (e.g. books, consumer electronics, and medicines etc.).

Internet Use

When it comes to internet use, we don’t really know what they agreed to. According to US sources, they demanded and got TPP rules that could allow media conglomerates to monitor your on-line activities, remove on-line content – including entire websites, and terminate your access to the internet. The U.S. also insisted on rules to prohibit countries from requiring that personal information be stored on national databases.  Internet service providers can no longer be forced to locate in the markets they serve. There are good reasons why a country might require that tax, health care or financial data be stored locally. Treating all information as a kind of private commodity that companies could move when and where they like has huge implications for privacy

Auto Industry

Under NAFTA, because of the regional content provision over half a motor vehicle (62.5%) had to be built in North America. Under TPP, domestic content has been lowered to 40%-45%, allowing half the work to be done outside the TPP region (e.g. China, Thailand).  Under the terms of the TPP, the U.S. will get to phase out tariffs over 25 years; Canada will have to do the same in just 5. This puts Canadian manufacturers at a competitive disadvantage.  Canada’s 6.1% tariff on Japanese automotive imports will be phased out but does not come with reciprocal guarantees for Canadian automotive exports to Japan or other TPP countries.

Supply Management

Our new TPP partners will be given duty free access to Canada’s dairy and poultry market through quotas that will be phased in over five years.  Farmers stand to lose far more in income over the long run than Harpers paltry payouts suggest. Unlike the USA our market isn’t protected or subsidized. For example, Canada imports more chicken than the USA and five other TPP countries combined. Remember that the proposed quotas are a floor not a ceiling on what foreign agribusiness wants.  National supply management systems are designed to provide a fair return to farmers and a reasonably priced supply of fresh milk, eggs and poultry to food to consumers. Farmers and consumers in countries and sectors without supply-management systems are subject to wild swings in commodity prices and have little ability to negotiate reasonable returns or prices with giant global agri-businesses.

Environmental Protection

The TPP explicitly excludes how we regulate, develop, and extract our natural resources. However, all environmental policies will now be subject to a screen to ensure they do not hurt trade and investment. The focus of these provisions is to protect corporations from government regulation. Some have argued that under the TPP, companies will be able to successfully sue nations that enact laws to limit fossil fuel extraction or carbon emissions. They feel the deal will also lead to the rubber-stamping of pipeline proposals and export facilities.

The Next Steps

We know enough about Harpers secret deal to know that voters are faced with a stark choice. It’s yes or no but not maybe.  Do you really want big business to have that amount of control over your life and the future of your children?  Say no to Harpers secret deal and vote for the NDP to have a say in your future.