Information has been leaked about the Trans Pacific Partnership
(TPP), which is being negotiated in secret by US Trade Representative
Ron Kirk. Six hundred corporate “advisors” are in on the know, but not
Congress or the media. Ron Wyden, chairman of the Senate trade
subcommittee that has jurisdiction over the TPP, has not been permitted
to see the text or to know the content.
The TPP has been called a “one-percenter” power tool. The agreement
essentially abolishes the accountability of foreign corporations to
governments of countries with which they trade. Indeed, the agreement
makes governments accountable to corporations for costs imposed by
regulations, including health, safety and environmental regulations. The
agreement gives corporations the right to make governments pay them for
the cost of complying with the regulations of government. One wonders
how long environmental, labor, and financial regulation can survive when
the costs of compliance are imposed on the taxpayers of countries and
not on the economic activity that results in spillover effects such as
pollution.
Many will interpret the TPP as another big step toward the
establishment of global government in the New World Order. However,
what the TPP actually does is to remove corporations or the spillover
effects of their activities from the reach of government. As the TPP
does not transfer to corporations the power to govern countries, it is
difficult to see how it leads to global government. The real result is
global privilege of the corporate class as a class immune to government
regulation.
One of the provisions allows corporations to avoid the courts and
laws of countries by creating a private tribunal that corporations can
use to sue governments for the costs of complying with regulation.
Essentially, the laws of countries that apply to corporations are
supplanted by decisions of a private tribunal of corporate lawyers.
The TPP is open to all countries. Currently, it is being negotiated
between the US, Australia, Brunei, New Zealand, Singapore, Vietnam,
Chile, and Peru. Australia, according to reports, has refused to submit
to the private tribunal system.
What are we to make of the TPP? It is perhaps too early to have all
the answers. However, I can offer some ways of thinking about it.
I doubt that the TPP is a New World Order takeover. If anything, the
TPP reduces the scope of global government by exempting corporations
from government control. Also, global government, unless it is
government by the American Empire, is inconsistent with the
neoconservatives insistence on US hegemony over the world. Powerful US
ideological, private, and government interest groups have no intention
of losing the power that they have acquired by being rolled into some
New World Order unless the New World Order is a euphemism for American
Empire.
In the criticisms of the TPP, much emphasis is placed on the costs
that corporations of foreign members of the agreement can impose on the
US. However, US corporations gain the same privileges over those
countries, as the agreement gives every country’s corporations immunity
to the other countries’ laws.
It could be the case that US corporations believe that their
penetration of the other countries will greatly exceed the activities in
the US of Brunei, New Zealand, Peru, et al. However, once Japan,
Canada, China and others join TPP, the prospect of American firms
getting more out of the agreement than foreign firms disappears, unless
from the US perspective the definition of foreign firm includes US
corporations that offshore the production of the goods and services that
they market in the US. If this is the case, then US offshoring firms
would be exempt not only from the laws and courts of foreign countries,
but also exempt from the laws and courts of the US.
This point is possibly moot as the agreement requires all governments
that are parties to the TPP to harmonize their laws so that the new
corporate privileges are equally reflected in every country. To avoid
discriminatory law against a country’s own corporations that do not
engage in foreign trade, harmonization could mean that domestic
corporations would be granted the same privileges as foreign investors.
If not, domestic firms might acquire the privileges by setting up a
foreign subsidiary consisting of an office.
As the TPP is clearly an agreement being pushed by US corporations,
the implication is that US corporations see it as being to their
relative advantage. However, it is unclear what this advantage is.
Alternatively, TPP is a strategy for securing exemption from regulation under the guise of being a trade agreement.
Another explanation, judging from the unusual collection of the
initial parties to the agreement, is that the agreement is part of
Washington’s strategy of encircling China with military bases, as the US
has done to Russia. One would have thought that an agreement of such
path-breaking nature would have begun with Japan, S. Korea, and
Philippines. However, these countries are already part of China’s
encirclement. Brunei, Singapore, New Zealand, and especially Vietnam
would be valuable additions. Are the special privileges that Washington
is offering these countries part of the bribe to become de facto
outposts of American Empire?
Yet another explanation is that Ron Kirk is caught up in the
deregulatory mindset that began with the repeal of Glass-Steagall and
financial deregulation. If financial markets know best and are
self-regulating, requiring no government interference, then so also are
other markets and businesses.
Free market economists view regulations as “takings.” The argument is
that regulations take corporate property–profits, for example, by
making corporations comply with health, safety, and environmental
regulation–just as government takes private property when it builds or
widens a road. Therefore, corporations should be compensated for
takings that result from regulation. As the argument goes, if government
wants corporations to protect the environment, the government should
pay the corporations for the cost of doing so. This argument gets rid of
“external costs” or “social costs”–costs that corporations impose on
others and future generations by the pollution and exhaustion of natural
resources, for example. The argument turns social costs into
compensation for takings.
The TPP is likely serving many agendas. As we learn more, the
motives behind the TPP will become clearer. From my perspective as an
economist and former member of government, the problem with Ron Kirk’s
TPP is that the agreement is constructed to serve private, not public
interests. Kirk is a public official charged with serving and
protecting the public interest. Yet, he has conspired in secret with
private interests to produce a document that exempts private
corporations from public accountability.
There is a paradox here. While financial corporations and now all
corporations are being made independent of government, US citizens have
lost the protection of law and are now subject to being detained
indefinitely or murdered without due process of law. Corporations gain
an unimaginable freedom while citizens lose all freedom and the rights
that define their freedom. Similarly, foreign countries, which as
members of TPP can be exempt from US law, are subject to “pre-emptive”
US violation of their air space and borders by drones and troops sent in
to assassinate some suspected terrorist, but which also kill citizens
of those countries who are merely going about their normal business.
Perhaps one way to understand TPP is that the US government is now
extending its own right to be lawless to corporations. Just as the US
government today is only answerable to itself, the TPP makes
corporations answerable only to themselves.
Public Citizen’s analysis of TPP can be found here: http://www.citizen.org/documents/Leaked-TPP-Investment-Analysis.pdf and the leaked document here: http://www.citizenstrade.org/ctc/wp-content/uploads/2012/06/tppinvestment.pdf
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