A Cautionary Tale: Once upon a TPP in Hawaii (or how the 1% co-opted our Aloha)
As of last week, Canada and Mexico have been invited to join the Trans-Pacific Partnership (TPP), and will be participating in the 13th round of negotiations in San Diego, CA, July 2-10th. Large protests are being planned by Occupy San Diego and national coalitions like the AFL-CIO, Sierra Club and other international organizations. In this expanded line-up, the current body of the TPP is comprised of the United States, Australia, New Zealand, Chile, Peru, Brunei, Vietnam, Malaysia, Mexico, Canada and Singapore, with Japan still waiting on the sidelines. If you have not heard of the TPP yet, it has been called the NAFTA (North American Free Trade Agreement) of the Pacific, or a NAFTA on steroids, and if concluded will bind the participating countries to what essentially represents an economy worth $20.5 trillion dollars, and representing 658 million people.
In the past, trade agreements used to be about the trade of goods and services across borders, but since 1994, with the signing of NAFTA and the WTO the following year, the meaning of trade has expanded to include substantial new provisions that far outweigh the goods, services and tariff aspects of trade. It is more accurate to describe trade agreements now as Trojan horses that blow smoke about job creation while selling goods cheaper and faster and sneaking in provisions that negatively impact labor, health and environmental regulations. The TPP is the enforceable global governance that goes to benefit the 1%.
Since the TPP negotiations started in 2009, it has been held in secret between trade ministers and corporate lobbyists. About 600 corporate lobbyists have been given special status to review negotiating documents to advise negotiators and the general public, and most senators and legislators have been barred from reviewing what U.S. negotiators are proposing in our name.
Recently, the TPP investor-state chapter was leaked, revealing—as was mostly expected—that investors would indeed be given more rights to sue governments in third-party, secret tribunals over a variety of compensation rights that include labor, health and environmental protections and regulations. This amounts to foreign corporations suing governments (hence taxpayers) in foreign courts over things that might include provisions over the cost of waste disposal or cleanup of industrial accidents, access to medicines and resources, standards of treatment, labor, health or environmental regulations that cut into the profits of shareholders. This also includes market access, where foreign imports have the right to compete in local markets at the expense of local businesses. In terms of Hawaii, for example, if the “buy local” campaign is seen as giving unfair market advantage to local goods on the shelf, foreign companies could demand the right for equal access, removing any state endorsed special treatments.
Cargill, the largest agricultural commodities trading company in the world with land holdings in Hawaii, welcomed Canada and Mexico’s entry into the trade negotiations and wrote, “The TPP negotiations present an opportunity for greater economic growth through trade and investment liberalization among Pacific economies. The negotiations create the potential to simplify trade in the region, to unravel the complexities of each country’s standards and regulations, while setting in place a higher standard of trade and investment provisions and protocols.” Cargill represents the standard transnational demand for weakening trade unions, removing environmental and health barriers and removing tariffs and warehousing regulations for faster production and market delivery. This is known as the “global supply chain,” and large transnational corporations like Wal-Mart have developed the transfer of goods to science.
Through the TPP, transnational corporations are lobbying governments for the removal of as many barriers to trade as possible, and this threatens to challenge many of the labor and environmental securities we have come to take for granted in exchange for investment returns. Recent large investments like the sale of Lana’i, transferring title from David Murdoch to Larry Ellison for example, might really simply be an exchange of real estate. However, the sudden and timely announcement, coupled with the push for an underwater cable supplying renewable wind energy to the other islands electrical grid, also sets in motion the preparation for developing new investment infrastructure.
Other transnational corporations in Hawaii, like Syngenta and Monsanto are also corporate stakeholders in the TPP. Although Monsanto is officially a biotech, the relationship between Monsanto and Cargill have a combined economic weight of over $125 billion dollars (for perspective, Hawaii’s 2010 GDP was around $68 billion).
Local farms already have difficulty defending their resources from large transnational industries and corporations. Backed by these new investor-state provisions, the U.S. will be obligated under this agreement to provide all the necessary infrastructure and security to satisfy investors. In Hawaii, unresolved disputes arising from non-compliance with any of these mandated provisions could jeopardize our public or “ceded” land trusts, for example. The problem with these trade laws is that they are binding with real punishments that ultimately impact taxpayers. For small economies, being threatened with sanctions for failure of compliance hurts people and communities most. For small governments, options for resolving these disputes are limited, and I should add that these investment agreements might not distinguish investment agreements signed between a federal government and a tribal government, placing indigenous resources even further at risk.
As an example of just how egregious these provisions are within the leaked investor-state chapter, resources could be expropriated as compensation for grievances, which is to say that if Monsanto feels that the state is not providing adequate protection or security from local protestors, then Monsanto could file a complaint with ICSID (the International Centre for Settlement or Investment Disputes), forcing the state to open up more lands for lease as compensation. This may be a cautionary tale, but it is not without merit and no less surprising, considering that there are dozens of other cases that have been brought through the same dispute mechanism through NAFTA of CAFTA. These investor state provisions have caused taxpayers to lose hundreds of millions of dollars. Transnational corporations have sued states that have demanded the clean up of toxic chemicals because of its added cost to investors, and in an often cited case, an American corporation successfully sued Canada because a grumpy bureaucrat gave an investor a hard time, citing the “minimum standard of treatment” article.
Piecing it all together, if you’re wondering why the state has been on a deregulatory bullet train since Abercrombie signed the Public Land Optimization Plan last year, consider that the basket of deregulations is providing for the infrastructure of these investor-state provisions that could become realized very quickly if the Trans-Pacific Partnership is concluded.
It’s important also to note that these free-trade agreements are treaties or executive agreements. Once signed, the public is bound by the terms and provisions contained within these agreements. Admittedly, there is much that we do not know about the TPP. Last year, the secrecy provision was leaked, stating that the public will be barred from reviewing the agreement for four years after the TPP was either concluded or dismissed.
If you’re residing near San Diego, it will be good to be aware of the events that are being organized by Occupy San Diego and labor groups. Although this article focuses on the TPP and how it could impact Hawaii, I’d like to remind readers, that although this is only a cautionary tale, we might need to consider how to puka through this agreement should it conclude. The TPP is in its 13th round of negotiations, and some think that it could conclude later this year, others think next year, and some think never. With public support, we can at least give benefit to the latter and say that the TPP can be stopped, because the point of this cautionary tale is one that we know so well: reversing international executive agreements are not easy.
For more information on the investor-state chapter, Lori Wallach gave an interview on Democracy Now shortly after the investor-state agreement leak.