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February 20, 2013

Trans-Pacific Partnership: Wrong Trade Deal for the U.S.

Photo44The massive Forward on Climate rally in Washington, D.C. last weekend bears a significant relationship to the ongoing negotiations for a trade agreement spanning the Pacific Rim, but pointedly excluding China.

The Obama administration is in the closing stages of negotiating an agreement with 10 other countries, with others hoping to join, that dwarfs any previous U.S. trade agreement since we joined the World Trade Organization. It’s bigger than NAFTA (the North America Free Trade Agreement) and it now includes both Mexico and Canada. Its environmental, social and political significance will probably be greater than the World Trade Organization, as the expansion of the scope of that organization has stalled.

The Sierra Club has chosen to make energy a key element in its deep concern about the emerging Trans-Pacific Partnership (TPP) trade pact. Click here for more. Currently, the U.S. enjoys a surplus of natural gas, which has driven down producer prices. Export of that surplus is seen by the industry as the solution, as they are in a “use it or lose it” bind. Currently, export of natural gas is tightly controlled by the federal Department of Energy, but if the TPP agreement goes through, its likely provisions would prevent the U.S. from such restrictive enforcement rules, much to the joy of the industry. Suddenly, any restrictions on petroleum exports could vanish, and many Pacific Rim countries would be more than happy to buy what we couldn’t refuse to sell. The same situation would apply to other hydro-carbons, some of which, such as coal, we have in abundance.

Secrecy is the by-word with the TPP negotiations. Even Members of Congress that will be called upon to vote on the agreement have been given no better access than the general public. However, some 600 or so corporations that have signed non-disclosure agreements are privy to what’s going on and can have input on the final result. One critical section, on investor protection, was leaked, so we have every reason to believe that the flawed NAFTA model is being followed throughout.

The benefits to trans-national corporations are enormous. For one thing, it would be a way of bypassing all those pesky environmental and legal restrictions: The system under these agreements, of which NAFTA is the best known, allows corporations to sue nation-states for actions that they feel are contrary to their right to profit. The expression in trade terms is “tantamount to expropriation.” These cases are referred to one of the international dispute settlement organizations, and will be heard by, typically, three trade lawyers, the results of which are generally binding. History has been most favorable to corporations. And entering the fray are groups looking for big pay-outs from successful arbitration. Success means pay-outs for everyone but the usually poor nation at the brunt of the assault. Even when they win, a nation will be left with a large tab for legal expenses, money that isn’t going into its health and education system.

The U.S. has paid out over $3 billion to foreign investors under U.S. trade and investment pacts, while more than $14 billion in claims are pending under such deals, primarily targeting environmental, energy, and public health policies.

Australia has in recent years stood firm against agreements that allow arbitration. Unfortunately, their older agreements did allow for this, and they are now fighting “big tobacco” over regulations requiring generic packaging of cigarettes and including graphic descriptions of the health effects of the use of the product.

Other areas of special interest to corporations include restrictive rules on medicines and copyrights – the intellectual property regime. The object is to limit the use of generic medicine. Australia, for one, has a progressive health system, providing low-cost medicine to its people. And many of the other participants in these negotiations are ill-prepared to pay the high cost of brand medicines.

The Obama administration has promised to seek approval for this agreements as early as spring of this year. In order to pass, a special law known as “fast track” must be in place, allowing only an up-or-down vote in Congress. Congress seems ready to give him what he wants. So our first job is to defeat fast track. Don’t allow it to pass through Congress.


We’re not opposed to trade, but it needs to be Clean, Green and Fair. For more information go to the Club’s Labor & Trade program pageRight now, you should contact your Senators and ask them to oppose any move toward fast tracking consideration of this treaty. Find your senators’ contact information here.

--Jim Mays, Sierra Club Volunteer, Responsible Trade Program

[Cross-posted with permission from Sierra Club NYC Group


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