Trans Pacific Trade

A note from Catherine Austin Fitts: As the Obama Administration moves forward aggressively with the TPP, I felt it was important for Solari Report subscribers to have an introduction and overview of the basic facts and issues involved. After much searching, I could not find such a presentation, so I asked attorney Carolyn Betts to prepare one for the Solari Report. As always, Carolyn has done an excellent job of giving us an overview of a highly complex legal agreement – one that could have a profound impact on our work and lives. The fundamental issue at hand is whether the nations involved in TPP are going to be sovereign nations or whether we are going to introduce global government by using trade agreements to override federal, state and local laws – often without the involvement, agreement and concurrence of the authorizing legislators – and do so in a format that gives large corporations extraordinary rights, making them superior in legal powers to people and governments.

By Carolyn Betts, Esq.

What is the Trans Pacific Partnership Agreement?

The Trans Pacific Partnership Agreement is a proposed regional international trade agreement that has been under negotiation since 2005 among Pacific Rim nations, currently numbering the following twelve:

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, Vietnam

According to US Trade Representative Michael Froman:

“President Obama’s trade agenda is dedicated to expanding economic opportunity for American workers, farmers, ranchers, and businesses. That’s why we are negotiating the Trans-Pacific Partnership, a 21st century trade agreement that will boost U.S. economic growth, support American jobs, and grow Made-in-America exports to some of the most dynamic and fastest growing countries in the world.

“As the cornerstone of the Obama Administration’s economic policy in the Asia Pacific, the Trans-Pacific Partnership reflects the United States’ economic priorities and values. The TPP not only seeks to provide new and meaningful market access for American goods and services exports, but also set high-standard rules for trade, and address vital 21st-century issues within the global economy.”

An article in the Los Angeles Times says of the TPP:

“…as attempts at global trade deals have faltered (such as the World Trade Organization’s Doha round), the Trans-Pacific Partnership is billed as an “open-architecture” document written to ease adoption by additional Asian nations, and to provide a potential template to other initiatives underway, like the Transatlantic Trade and Investment Partnership.”

The devil is in the details, as they say. The most recent round of negotiations was held in Ottawa in July 2014. According to Wikipedia, there have been nineteen previous negotiating rounds.

What are International or Regional Free Trade Agreements?

Free trade agreements in the distant past primarily focused on the lowering of tariffs among agreement signatory nations on a “most favored nation” basis under which signatories grant each other quid pro quo status with regard to lower tariffs than are available for non-signatories. Over the years, there has been a proliferation of free trade agreements that may or may not share various additional characteristics (non-tariff barriers, or “NTBs”) that are more or less favorable to various stakeholders. Among the non-tariff barriers typically dealt with in free trade agreements of recent vintage are:

• The establishment of investor-state dispute settlement (ISDS) processes whereby multinational corporations may bring complaints before specified international arbitration tribunals that are governed by their own rules, which may or may not require efforts to resolve the disputes in the domestic courts of the allegedly offending member state (called the “host state”). One such tribunal is the International Centre for Settlement of Investment Disputes, a member of the World Bank Group.
• Efforts to harmonize the regulatory systems of different countries as a means of promoting international trade. Such “harmonization,” however, tends to result in a race to the bottom rather than a strengthening of regulations in countries that have fewer protections in the areas of labor, the environment, capital controls, etc.
• Protections for worker rights. The “May 10, 2007 Understanding” is a trade policy template for future trade agreements in this regard. It requires signatory countries to enforce their own labor laws. There is no “enforcement parity” for workers’ rights and commercial obligations, i.e., the mechanisms for enforcing labor rights provisions are different from and inferior to those available to enforce commercial provisions and protections. Reportedly, the 2007 Peru Trade Agreement does include such parity.
• Government procurement provisions.
• Product standards, including sanitary and phytosanitary standards (i.e., food safety and animal and plant health measures).
• Customs regulations.
• Rules for administering antidumping and countervailing duty procedures.

Additional (and secret) international trade agreements currently in negotiations by the US trade delegation are the Transatlantic Trade and Investment Partnership (“TTIP”) between the US and European Union and the Trade in Services Agreement (“TISA”), which deals with financial and health care services. Notably, the BRIC countries of Brazil, Russia, India and China, are not negotiating partners in any of these trade agreements, although it has been estimated that trade covered by the TPP would account for 40% of global GDP and by the TPP and TTIP together would account for 60% of global GDP.

What Do We Know About TPP and What Is the Controversy over TPP?

According to the Peace and Justice News, although publicized as a free trade agreement, only five of the twenty-nine chapters have to do with trade issues. The other 24 chapters are provisions that would protect corporate interests: allowing corporations to avoid domestic laws, accessing land without government oversight, extending patents on brand name medicines, banning “Buy America” and “Buy Local” preferences that invest in US economy, and restricting internet freedom. A non-exclusive list of TPP chapters provided by the US Trade Representative includes: competition, co-operation and capacity building, cross-border services, customs, e-commerce, environment, financial services, government procurement, intellectual property, investment, labor, legal issues, market access for goods, rules of origin, sanitary and phytosanitary standards, technical barriers to trade, telecommunications, temporary entry, textiles and apparel, and trade remedies.

From the Wikileaks Salt Lake round positions report, the following appears to be a list of fourteen of the chapters (or at least subjects covered) in the Transpacific Partnership Agreement, together with issues in each chapter upon which various negotiating partners have held different positions [note: brackets indicate the author’s clarifications]:

Market Access

– Distinctive products discuss issue in access
– National Treatment (non-conforming measures annex)
– Restrictions to imports and exports (non-conforming measures annex)
– State-owned commercial importing enterprises
– Eliminate export taxes
– Incorporate ITA agreement
– Price bands
– Elimination of subsidies for agriculture exports
– State-owned exporting agricultural enterprises
– Export credits and others
– Annex about cheese
– Annex about biotechnology

Rules of Origin

– Cumulation
– Treatment of materials recovered on remanufactured products
– Do not consider origins of fishing products obtained in third party territories
– De minimis: tolerance range 10%
– Intermediate materials
– Transit and transshipment: products stay under customs control in transit
– Certification by importer
– Certificate without backing documents (importer knowledge)

Customs

– De minimis of US$200

SPS

– Application of dispute settlement
– Science and risk analysis — premarket approval
– Technical consultations

TBT [Technical Barriers to Trade]

– Incorporation of WTO TBT agreement
– Sub-national coverage
– Organics annex
– Cosmetic labelling annex

Government Procurement

– Sub-national coverage
– Marketing access for SMEs [small and medium enterprises < 250 employees < 500€ turnover(?)]

Competition (State-Owned Enterprises)

– Sub-national coverage

Investment

– Central reserve bank
– DL600 annex
– Performance requirements: royalties payments
– Land expropriation annex
– List NCMs at sub-national level [NCMs = international 8-digit “harmonized system” of numerical coding for commodities]

Services

– Open skies agreement
– Necessity test
– Payments and transfers

E-Commerce

– Digital products (nondiscrimination)
– Application of dispute settlement to the chapter
– Privacy obligations: information exchange
– Local server requirement: necessity test

Environment

– Definitions environmental law: “provisions thereof”
– Definitions environmental law: incorporating reference to MEAs [multilateral environmental agreements]
– Sub-national coverage
– MEAs cooperative settlement and not subject to dispute settlement
– Dispute settlement for the treaty applicable to the whole chapter
– Biodiversity: including mention of derivatives
– Biodiversity: elimination of paragraphs 3, 4, 5
– Climate change: shorten the article
– Climate change: paragraph 6 about inefficient subsidies to fossil fuels
– Climate change: reference to APEC [Asia-Pacific Economic Cooperation] in paragraph 6
– Fishery subsidies: prohibit subsidies targeted at fisheries of overexploited resources
– Control of illegal fishing not reported and not regulated
– Conservation: paragraph 5 “a foreign law”
– Environmental goods and services: commitments beyond market access and services

Labour Issues

– Dispute settlement
– Sub-national coverage
– Forced labour

Legal

– Medicines annex
– Tobacco exception: group considering proposals from Malaysia and US
– Cultural exception
– Tax exception: NAFTA focus
– Extension of obligations: stronger formulation
– Extension of obligations: weaker formulation
– US proposal for entry into force

Intellectual Property

– Patents: patentability criteria
– Patents: supplementary protection
– Patents: extend protection to new uses (plants, animals, surgical procedures)
– Pharmaceuticals: linkage
– Pharmaceuticals: data protection
– Copyright: TPM [technological protection measures?]
– Copyright: terms of protection (US proposal)
– Copyright: parallel importation
– Copyright: ISPs (CL [Chile] proposal)
– Observation: new elements of penal system: establishment of criminal offenses for unintentional infringements of copyright, related rights and trademarks (QQ.H.7.3)
– Observation: new elements of criminal code: obligations to establish criminal penalties and fines for recording of public works (camcording) (QQ.H.7.5)
– Inclusion of agreements that parties should ratify and implement
– National treatment: maintain TRIPS [Trade-Related Aspects of Intellectual Property Rights]

Although drafts of three chapters on intellectual property rights, the environment and investment) have been leaked by Wikileaks and various members of “consultative” appointees from Congress, business, labor and non-governmental organizations have viewed portions, or at least summaries, of other chapters, it is generally reported that specific provisions have not been circulated to most members of Congress, the media and representatives of labor and other stakeholder interest groups, purportedly for “national security” reasons.[i] Thus, suspicions abound that if “corporate interests” that clearly know details of the so-far negotiated agreement support it, there must be reasons that other interest groups should oppose it, particularly if they are not given time and an opportunity to review the negotiated language for themselves.

Intellectual Property Rights Chapter [Chapter 12]

Originally, Wikileaks published on its website the May 16, 2013 draft of the Intellectual Property Rights chapter of the Trans Pacific Partnership Agreement, the first leaked TPP document. The leaked document, as is the case for later leaked chapters, indicates where various negotiating partners take different positions on various provisions. The press release accompanying the first released leaked document states:

The chapter published by WikiLeaks is perhaps the most controversial chapter of the TPP due to its wide-ranging effects on medicines, publishers, internet services, civil liberties and biological patents.

On October 16, 2014, Wikileaks published a later draft (second publication). In the accompanying press release, the changes are described:

“…some controversial and damaging areas have had little change; issues surrounding digital rights have moved little. However, there are significant industry-favouring additions within the areas of pharmaceuticals and patents. These additions are likely to affect access to important medicines such as cancer drugs and will also weaken the requirements needed to patent genes in plants, which will impact small farmers and boost the dominance of large agricultural corporations like Monsanto.”

Nevertheless, some areas that were highlighted after WikiLeaks’ last IP Chapter release have seen alterations that reflect the controversy; surgical method patents have been removed from the text. Doctors’ groups said this was vitally important for allowing doctors to engage in medical procedures without fear of a lawsuit for providing the best care for their patients. Opposition is increasing to remove the provision proposed by the US and Japan that would require granting of patents for new drugs that are slightly altered from a previous patented one (evergreening), a technique by the pharmaceutical industry to prolong market monopoly.

The Electronic Frontier Foundation provides a summary of the objectionable signatory countries’ obligations that are not part of current law:

(1) Place Greater Liability on Internet Intermediaries – The TPP would require other countries to adopt requirements consistent with the US Digital Millenium Copyright Act “Internet intermediaries copyright safe harbor regime.” The US would then be unable to rewrite the DMCA to correct parts that privacy advocates and much of Silicon Valley object to. EFF also points out that this provision would require Chile to rewrite its copyright law adopted in 2010 that has a judicial notice-takedown regime” that is more effective than the DMCA at protecting privacy rights and Internet users’ rights of expression.

(2) Escalate Protections for Digital Locks – The TPP IP chapter would require signatory nations to enact laws banning the circumvention of digital locks that prevent access to certain sites accused of IP rights violations (e.g., in the US, competitors have used the DMCA digital lock provision to attempt to block access to sites that would refill toner cartridges and unlock cell phones). This provision would require Australia and New Zealand to rewrite particularly effective copyright laws in this respect.

(3) Create New Threats for Journalists and Whistleblowers – Vague language on misuse of trade secrets that covers use of computers to access allegedly confidential information could be used against journalists and result in tough criminal penalties.

(4) Expand Copyright Terms — This would extend the copyright coverage period well beyond that established in the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) from life of the author + 50 years to life + 70 – 120 years after creation or publication, depending upon whether the copyright is owned by an individual or corporation.

(5) Enact a “Three-Step Test” Language That Puts Restrictions on Fair Use – The “fair use doctrine” permits limited quotation by researchers, scholars and others of copyrighted text without obtaining permission from the creator or paying of royalties. EFF takes the position that the fair use doctrine is put at risk by the language in the proposed IP chapter.

(6) Adopt Criminal Sanctions – The IP chapter would require signatories to seek criminal sanctions for copyright infringement even when there is no commercial purpose. EFF interprets this requirement to mean that “[u]sers could be jailed or hit with debilitating fines over file sharing, and may have their property or domains seized even without a formal complaint from the copyright holder.”

Environmental Chapter

On January 15, 2014, Wikileaks published the leaked environmental chapter and in a statement accompanying the draft, levels charges that multinational corporate interests have controlled the negotiating process and concludes that “. . . the Environment Chapter does not include enforcement mechanisms serving the defence of the environment; it is vague and weak, and adheres to the lowest common denominator of environmental interests.” To illustrate the point, the Wikileaks “favorite words” count of the environmental chapter draft is “appropriate” (43), “enhance” (12), “consider” (12), “encourage” (11), “address” (10), “endeavour” (9) and “seek” (9).

In her article accompanying the leaked Environmental chapter provisions, “TPP – Sacrificing the Environment for Corporate Interests,” WikiLeaks Spokesperson Kristinn Hrafnsson describes the leaked material and provides editorial comment:

The Consolidated Text of the Environment Chapter of the TPP Agreement was drafted by Canadian officials after bilateral consultations with other TPP Parties. It is dated November 24, 2013, the last day of the TPP Chief Negotiators’ summit in Salt Lake City, Utah. It outlines what the Chairs of the TPP Environment Working Group evaluate as a compromise of the Parties’ different positions across issues. In a separate four-page document the Chairs of the Environment Working Group outline the main obstacles to agreement between the negotiating countries.

It is noteworthy in the assessment by the Chairs that the US government is isolated in its interest in placing enforcing mechanisms into the treaty to protect the environment. Without access to the negotiating table, it is hard to assess if the US representatives fought for this principle with the same vigour as they did for policing and enforcement on behalf of intellectual property interests, as can be seen in the leaked IP Chapter.

Ms. Hrafnsson says of the previously-released intellectual property rights chapter that it requires signatories to change their laws and enforce the intellectual property rights of major corporate interests. By contrast, she notes, the environmental chapter is vague and weak, adheres to the “lowest common denominator of environmental interests” and includes no enforcement mechanism. Her article concludes that:

The Environment Chapter clearly shows the intention to first and foremost protect trade, not the environment. The principle is spelled out in this draft that local environmental laws are not to obstruct trade or investment between the countries. Furthermore, there is great emphasis on the self-regulatory principle when it comes to environmental protection, and emphasis on “…flexible, voluntary mechanisms, such as voluntary auditing and reporting, market-based incentives, voluntary sharing of information and expertise and public-private partnership”. But even such measures should be designed in a manner that “…avoids the creation of unnecessary barriers to trade”.

The Sierra Club, World Wildlife Fund and National Resources Defense Council joint analysis concludes that the current provisions of the IP chapter could lead to increased stress on natural resources and species of fish, wildlife and trees. `

The analysis says that the provision on multilateral environmental agreements (“MEAs”)represents a step back from a 2007 free trade agreement in which the parties agreed to incorporate a specific list of MEAs in future trade agreements and to “adopt, maintain, and implement” the laws, regulations and other measures to implement the MEAs. “Critically, the May 2007 Agreement also stipulated that obligations to uphold commitments made under MEAs must be binding and subject to dispute settlement.” The analysis believes the language requiring countries to affirm their commitments to the MEAs is insufficient. The TPP does not provide parity for enforcement of environmental laws with enforcement of commercial provisions. Rather, the “enforcement” procedure is that (1) a complaining party can request a consultation with the other party, then set up a committee to review the dispute, then refer the matter to the relevant ministers of consulting parties. If no resolution is reached, the complaining party may request the matter be heard before an arbitration tribunal and, if the arbitration tribunal finds in the complainant’s favor, “the [p]arties ‘shall endeavor’ to agree on a ‘mutually satisfactory action plan.’” There is no recourse should there be no implementation or inadequate implementation of the action plan. Apparently, the US delegation’s position is that an environmental dispute should be the subject of mandatory arbitration just as are commercial matters, but there is no way to know whether agreement by other negotiating parties to this provision has been achieved.

The joint analysis also takes issue with the fisheries provisions, which it says do not adequately address overfishing and shark finning, even though, in the latter case, the US is required by law that it seek bans from other countries. It says the fisheries subsidy provisions are weak and represent a scaling-back from agreements already reached through World Trade Organization negotiations. Requirements to address overfishing and overcapacity are on a best efforts basis.

The provisions on conservation and trade need to be strengthened in light of the fact that TPP negotiating partners include major timber producers and traders in a wide variety of marine and wildlife products (e.g., food, luxury goods, pets and trophies) that have led to dramatic declines in biodiversity. According to the Report from the Chairs, the report says, only the US supports making the agreement parties’ commitments under the critically important Convention on International Trade in Endangered Species of Wild Flora and Fauna (“CITES”) legally enforceable under the TPP commercial dispute settlement mechanism. The report notes that the requirements of TPP fall short of requiring signing parties to take action to enforce conservation laws that prohibit illegal trading in flora, fauna, wood and wood products and, according to the Report from the Chairs, most signatories oppose any provision that would make such enforcement mandatory.

Investment Chapter [Chapter 2]

On March 25 2015, Wikileaks published the January 20, 2015 draft of the investment chapter of the Trans Pacific Partnership agreement. In an accompanying press release, Julian Assange, editor, states:

“The Investment Chapter highlights the intent of the TPP negotiating parties, led by the United States, to increase the power of global corporations by creating a supra-national court, or tribunal, where foreign firms can “sue” states and obtain taxpayer compensation for “expected future profits”. These investor-state dispute settlement (ISDS) tribunals are designed to overrule the national court systems. ISDS tribunals introduce a mechanism by which multinational corporations can force governments to pay compensation if the tribunal states that a country’s laws or policies affect the company’s claimed future profits.”

The “supra-national courts” already exist and are in use in many international trade disputes, so it appears that these provisions are not totally new. Chapter 11 of NAFTA includes such an enforcement mechanism. A key question in any trade agreement providing for arbitral settlement of trade disputes is whether there is a requirement that the parties first take the disagreement to domestic courts and exhaust their remedies in those courts before resorting to international tribunals (called the “local remedies rule”). NAFTA does not have a local remedies requirement. Some troubling precedent has been created in international arbitration decisions, where the number of cases has increased over the last few years. A 2013 United Nations Conference on Tariffs and Trades (“UNCTAD”) report on so-called investor-state dispute settlements (“ISDS”) found:

Investors have challenged a broad range of government measures, including those related to revocations of licences (e.g., in mining, telecommunications, tourism), alleged breaches of investment contracts, alleged irregularities in public tenders, changes to domestic regulatory frameworks (gas, nuclear energy, marketing of gold, currency regulations), withdrawal of previously granted subsidies (solar energy), direct expropriations of investments, tax measures and others . . . .

According to this report,

“…in 70% of the public decisions addressing the merits of the dispute, investors’ claims were accepted, at least in part. Nine Public decisions rendered in 2012 awarded damages to the claimant, including the highest award in the history of ISDS (US $1.77 billion) in Occidental v. Ecuador, a case arising out of a unilateral termination by the State of an oil contract.”

General Objections to TPP

The specific focus of opponents of TPP centers on the following substantive points (as opposed to the expedited adoption procedures under fast-track described below and the fact that contents generally have been kept secret from the public):

(1) Perceived un-enforceability of provisions that would place limits on currency manipulations. This is a hot-button issue because negotiators reportedly hope that China may become a future signatory to TPP and China routinely devalues its currency as a means of increasing auto and other exports, much to the detriment of US companies.

(2) Lack of parity in enforcement of provisions that protect labor and the environment and those that favor commercial interests. Reportedly, the TPP contains NAFTA-like provisions that have proven to be unenforceable instead of more effective language that was included in the more recent (2007) Peru Free Trade Agreement, which makes these provisions enforceable in the same manner as the commercial provisions.

(3) Threats to Internet freedom through back-door SOPA/PIPA-like provisions that Congress has so far failed to pass in the US. SOPA is the Stop Online Privacy Act and PIPA is the Protect IP Act. These bills, strongly and loudly opposed by Silicon Valley, would require US Internet service providers, online payment facilities and advertising networks and search engines to deny access to foreign websites that allow illegal Internet downloads of copyrighted material and support the sale of counterfeit goods. Opponents levy charges of censorship and say site operators would be forced to police their sites for offending copyrighted material, a role they do not wish to play and that spells potentially huge liability for what is essentially uncontrollable.

(4) Support for off-shoring of US jobs through NAFTA-like provisions that would guarantee a minimum standard of treatment in the offshore venue and compensation for regulatory costs.

(5) The ability of multinational corporations to force governments into international arbitration tribunals and recover lost “expected future profits” resulting from government policies that frustrate profit-making. The particular area of concern by opponents in this respect is weaker environmental and health safeguards and less regulation of food and products in negotiating partner countries than in the US as well as the potential for use by foreign financial firms to avoid Dodd-Frank controls. Past history shows that certain negotiating partners (e.g., Vietnam, Malaysia and Brunei) permit what in the US would be unfair labor practices in the “race to the bottom” for cheap labor and the absence of meaningful restraints on such practices, which unfairly disadvantage US laborers.

(6) Roll-back of Wall Street reforms. According to Public Citizen,

“[t]he TPP would forbid countries from banning particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG. It would prohibit policies to prevent banks from becoming “too big to fail,” and threaten the use of “firewalls” to prevent banks that keep our savings accounts from taking hedge-fund-style bets.”

What is Fast Track?

On May 12, 2015, the US Congress failed to pass the Bipartisan Congressional Trade Priorities and Accountability Act of 2015[ii] (“TPA-15”) introduced on April 16, 2015, which would have reauthorized “trade promotion authority,” that expired in 2007, known generically until 2002 and still popularly known as “fast-track” authority.[iii] The correct generic term for this authority since 2002, when “fast track” was determined to carry undesirable connotations, is the more politically palatable “trade promotion” authority. TPA-15 would reauthorize trade promotion authority for four years, with an opportunity for a three-year additional extension.

Trade promotion/fast-track authority is temporary authority that allows the President (and the US trade negotiators, which consists of the US Trade Representative and various appointees) to negotiate the terms of international trade agreements provided that certain pre-designated negotiating objectives, consultation requirements and requirements for Presidential notice to Congress are satisfied. The expedited legislative procedures were set forth in the Trade Act of 1974 (P.L.93-618, codified at 19 U.S.C. §2901ff) and have not changed since that time, although Congress requires periodic reauthorization and has from time to time changed details of the negotiating objectives and consultation and Presidential notification requirements.

Final authorization of negotiated international trade agreements is reserved to Congress (in the form of the approval of “implementing legislation”), but in all events, when trade promotion authority is in effect, under the most recent amendments, the statutory expedited legislative procedures consist of the following:

(1) At least 90 days before signing an international trade agreement, the President notifies Congress of his or her intention to enter into the proposed trade agreement.
(2) Within 60 days of signing the agreement, the President provides Congress with a list of US laws that must be changed in order to bring the US into compliance with the agreement.
(3) After entering into the agreement, on a day in which both houses of Congress are in session, the President transmits a copy of the final legal text of the trade agreement, a draft implementing bill, a statement of administrative action proposed to implement the agreement, and supporting statements on how the agreement meets various congressional priorities and objectives, changes existing agreements, and serves the purpose of U.S. commercial interests, and on how the implementing bill meets the statute’s requirements for being an implementing bill.
(4) The House Ways and Means Committee and the Senate Finance Committee must introduce identical bills on the day received.
(5) The committees have only 45 in-session days to report the implementing bill out (or it is automatically discharged and sent to the floor), without the ability to mark it up.
(6) Within 15 days, any member of either chamber may introduce a non-debatable motion to consider it, without amendment. Floor debate is limited to 20 hours (10 hours by members for and 10 hours by members against the bill) and, therefore, filibuster is impossible.
(7) If floor action is not completed within 15 days, any member may bring it to a vote. The bill may be passed by a simple majority in each house and, since the bills are identical, no conference committee is necessary.
(8) If passed, the bill is transmitted to the President for signature.
(9) The trade agreement goes into force in the US when the President implements it by Presidential proclamation.

Outside the statutory TPA process outlined above, certain procedures have been adopted informally as part of the Congressional authorization process in order to garner the required support for trade agreements. One such procedure is the conduct of non-binding mock-ups of preliminary drafts of a proposed trade agreement within applicable Congressional committees as a means of signaling specific Congressional concerns about the proposed agreement before negotiations are final. Sometimes, there have been informal agreements between the executive branch and Congressional members representing special interests (e.g., in the past in connection with CAFTA, sugar and textile manufacturers and labor interests) following the mock-ups. These informal agreements depend upon good will of the executive branch, however, and do not affect the trade agreement itself. Also, sometimes Congressional members insist on side agreements or letters following trade agreement signing as to specific trade agreement provisions (typically, those dealing with labor and the environment) that have the effect of clarifying the agreement but not of changing its text. The side agreements and letters generally are addressed to the lead negotiator (in the case of the US, the US Trade Representative) and are attached to the trade agreement.

Since most trade agreements involve spending authority, legislation implementing an international trade agreement must originate in the House of Representatives and the Senate must act on the House bill. The up or down vote by Congress is assured within 90 days of introduction.

Short History of Trade Promotion Authority

Trade promotion authority has been in existence in substantially similar forms intermittently since 1974 during the Tokyo Round of multilateral trade negotiations. Before that, most international trade agreements were limited to the reduction of tariffs, and Congress authorized the President by Presidential proclamation to enter into anti-tariff trade agreements within Congressionally-established parameters without the need for further Congressional approval. The parties to such agreement were granted what was called “most favored nation” status, meaning that …

With the advent of negotiation for the reduction of non-tariff based international barriers to trade, which required changes to US law, the previous simplified process was not available. As a result, among other things, US negotiators partners were unable to provide assurances to negotiating partners as to the authority of the US President to negotiate trade agreements that would be approved by the US Congress in the same form as negotiated with other parties, with required law changes, and within a reasonable period of time. The fast-track procedure was enacted into law in 1974 in the form of the Trade Act of 1974 in order to balance the interests of Congress in assuring that its objectives would be satisfied in any international trade negotiations and of the executive branch in assuring that the terms it negotiated in good faith would be enacted in the negotiated form by Congress in subsequent implementing legislation and to resolve the Constitutional sharing of international trade negotiating powers between the executive and legislative branches.[iv] At least this is the rationale promoted by the Office of the US Trade Representative and supporters of fast-track authority.

An additional aspect of trade promotion authority carried forward from earlier times is the accreditation of several members of Congress as advisors to the US trade delegation of negotiators.

Support for and Opposition to TPP and Fast-Track

Generally and traditionally, Democratic members of Congress, perhaps because of their labor support, tend to oppose international treaties like NAFTA and Republican members tend to support them, making the current state of affairs one that is counter-intuitive: President Obama is having difficulty gaining support of his own party for legislation that has come to be seen as a hallmark of his Administration.

The 550 signatories to a sign-on letter sent to Congress opposing the adoption of TPA-15 provide support for anecdotal evidence of the make-up of opposition to TPP and, by extension, the reauthorization of fast-track trade promotion authority that would facilitate approval of TPP by Congress. Included in the list are, for example, churches, ministries of churches and interfaith councils (Quaker, Presbyterian, Unitarian, Catholic, Episcopalian), a huge number of unions and union locals, student groups, sub-groups of medical professionals (nurses, doctors), fair trade groups, farmers’ groups, environmental groups, Move-on and Occupy groups, anti-GMO and other food groups and peace and justice groups.

The generally uncritical, glowing description of the potential results of US entry into TPP reflects the support by major multinational corporations and big business interests in general. A sign-on letter sponsored by the US Chamber of Commerce and the National Association of Manufacturers urges Congress to adopt fast-track. Reuters reports that that sign-on letter has 300 signatories, comprised of “state and local associations involved in almost all areas of the economy.” According to the letter, as reported by Reuters, such associations include chambers of commerce, manufacturing organizations, and farm bureaus representing millions of companies, workers, farmers, and ranchers from every sector of the economy and every state in the union.

Terms of Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015)

According to Public Citizen in a May 12, 2012 press release following the initial failure of the Senate to pass TPA-2015, “. . . under the Hatch-Wyden-Ryan Fast Track bill, the pact would remain secret from the public until 30 days after its text is locked. That the text would be made public 60 days before the formal signing ceremony is irrelevant, because it would be too late to fight for needed changes.”

The TPA-15 “principal trade negotiating objectives” that are similar to those included in previous reported by the Congressional Research Service, include trade in goods, trade in services, foreign investment, intellectual property, transparency, regulatory practices, dispute settlement and enforcement, trade in agriculture, labor, environment, border taxes, trade remedy laws, and textile negotiations.

The key features of TPA-2015 in addition to those incorporated in implementing legislation adopted in the past in connection with previous trade deals are the following:

(1) Updated negotiating objectives on trade in goods, services, and agriculture-especially in the area of sanitary and phytosanitary standards, intellectual property rights, regulatory practices, and digital trade in goods and services.
(2) New provisions on currency manipulation, localization, state-owned enterprises, and human rights.
(3) Negotiating objectives that adopt the May 10, 2007 Understanding provisions on labor and the environment.
(4) The creation of Congressional Advisory Groups (CAG) in both chambers whose members are accredited as official advisors to the trade negotiation delegations.

The failure of Congress to initially approve “TPA-2015” on May 12, 2015 was termed by President Obama’s press secretary as a mere “procedural snafu” that would not ultimately prevent the Administration from obtaining implementing authority for the Trans Pacific Partnership Agreement. By the following day, reports from the Hill indicated that the Administration had obtained the required Democratic support for TPA-2015 in the Senate through an agreement by the majority to a separate bill to protect U.S. firms from currency manipulation and unfair trade practices.

[i] According to a 2013 Huffington Post article, “Alan Grayson On Trans-Pacific Partnership: Obama Secrecy Hides ‘Assault On Democratic Government’”, “[t]he Obama administration has barred any Congressional staffers from reviewing the full negotiation text and prohibited members of Congress from discussing the specific terms of the text with trade experts and reporters. Staffers on some committees are granted access to portions of the text under their committee’s jurisdiction.”. More recently, according to an April 25, 2015 Fox News report, Senator Elizabeth Warren (D-MA) called upon the President to declassify TPP. See, http://www.foxnews.com/politics/2015/04/26/elizabeth-warren-calls-on-obama-to-declassify-trade-deal-details/.

[ii] S. 995/H.R. 1890.

[iii] Fast-track authority provisions are contained in existing federal law (19 U.S. Code § 2191 – Bills implementing trade agreements on nontariff barriers and resolutions approving commercial agreements with Communist).

[iv] Article I Section 8 of the US Constitution, gives Congress the power to “regulate commerce with foreign nations . . . . ” and to “ . . . lay and collect taxes, duties, imposts, and excises. . . .” Under Article II, the President has exclusive authority to negotiate treaties and international agreements and exercises broad authority over the conduct of the nation’s foreign affairs, to wit:

[The President] shall have power, by and with the advice and consent of the Senate, to make treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments.

It is claimed widely that over 600 corporate advisors have had access to drafts of TPP. A list, originally published by Sojourners, has been published on the Flush the TPP website.

RELEVANT LINKS:

Internet Articles

Joseph Stiglitz editorial about TPP in the context of globalization:
http://opinionator.blogs.nytimes.com/2014/03/15/on-the-wrong-side-of-globalization/?_php=true&_type=blogs&_r=1

Salt Lake City Round, with some useful summaries of negotiating partner positions on various provisions:
http://big.assets.huffingtonpost.com/1294_001.pdf

Content of internal memos from a negotiating partner delegation revealing disagreements among negotiating nations and details of “corporate empowerment” provisions:
http://www.huffingtonpost.com/2013/12/08/tpp-trade-agreement_n_4409211.html

San Francisco council passes resolution opposing Fast Track:
https://www.eff.org/deeplinks/2015/04/san-francisco-passes-resolution-oppose-fast-track-tpp

TPP as a 2016 election issue:
http://www.usnews.com/news/articles/2015/04/28/trans-pacific-partnership-becomes-a-2016-election-issue

Congressional wranglings around fast-track:
http://www.zerohedge.com/news/2015-05-12/senate-democrats-defeat-obama-why-president-rushing-fast-track-trans-pacific-partner

On make-up of members of US trade advisory system (heavily weighted in favor of trade groups and multinational corporations):
http://www.washingtonpost.com/wp-srv/special/business/trade-advisory-committees/

Ten biggest lies about TPP – refuting Administration’s statements in support of TPP:
http://www.salon.com/2015/0/12/the_10_biggest_lies_youve_been_told_about_the_trans_pacific_partnership/

On history of inability of labor groups to obtain redress for violations of worker protections:
http://www.ticotimes.net/2015/05/10/op-ed-lets-see-a-trans-pacific-partnership-that-respects-workers-rights

On secrecy:
http://www.politico.com/story/2015/05/secrecy-eroding-support-for-trade-pact-critics-say-117581.html#ixzz3ZAKixRFj

China’s reaction to TPP:
http://articles.economictimes.indiatimes.com/2015-04-29/news/61653246_1_tpp-trans-pacific-partnership-weiwen

Technical versus functional definition of free trade:
http://www.truth-out.org/news/item/13082-the-trans-pacific-partnership-what-free-trade-actually-means

New York Times weighs in, including map showing US 2014 imports and exports with various TPP and other countries.

Concerns of Michael Wessel, “cleared advisor” and former member of Congressional trade policy staff, who has read TPP, on the trade agreement in current [5/15] form.


Relevant Wikipedia Entries

Fast Track (Trade):
http://en.wikipedia.org/wiki/Fast_track_%28trade%29

Multilevel Environmental Agreements: http://en.wikipedia.org/wiki/Multilateral_environmental_agreement

International Centre for Settlement of Investment Disputes:
http://en.wikipedia.org/wiki/International_Centre_for_Settlement_of_Investment_Disputes

Investor-State Dispute Settlement:
http://en.wikipedia.org/wiki/Investor-state_dispute_settlement

Trans Pacific Partnership:
http://en.wikipedia.org/wiki/Trans-Pacific_Partnership


Original Website Materials on International Courts, Positions of Stakeholders, Congressional Sites, etc.

AFL-CIO website, “Trans Pacific Partnership Free Trade Agreement”:
http://www.aflcio.org/Issues/Trade/Trans-Pacific-Partnership-Free-Trade-Agreement-TPP

Citizens Trade Campaign website: sign-on letter [4/27/15] “Over 550 Groups Urge
Opposition to Fast Track”:
http://www.citizenstrade.org/ctc/wp-content/uploads/2014/01/FastTrackOppositionLtr_012714_Congress.pdf

Congressional Research Service website, Ian F. Fergusson, Specialist in International Trade and Finance, “Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy” [4/27/15]:
http://www.fas.org/sgp/crs/misc/RL33743.pdf

Electronic Frontier Foundation website, position on leaked Intellectual Property Rights chapter:
https://www.eff.org/issues/tpp

Fastcoexist website, article re: technology companies’ sign-on letter opposing TPP, including copy of sign-on letter: http://www.fastcoexist.com/3046505/more-than-250-tech-companies-release-letter-to-congress-opposing-trans-pacific-partnership

Peace & Justice News website, Alissa Boochever, “The Trans Pacific Partnership – An Assault on Workers,” July, August, September 2014:
http://www.pjcvt.org/dbpjc/wp-content/uploads/2014/07/July-AugSept2014.pdf

Reuters article [4/20/15] re: TPP supporter sign-on letter:
http://www.reuters.com/article/2015/04/20/us-usa-trade-fasttrack-idUSKBN0NB2MZ20150420

Senator Bernie Sanders web site, “Unfair Trade Deal Would Exploit Foreign Workers and Cost American Jobs, Sanders Says” [4/23/15]:
http://www.sanders.senate.gov/newsroom/press-releases/unfair-trade-deal-would-exploit_foreign-workers-and-cost-american-jobs-sanders-says

Sierra Club web site on TPP, including joint findings of Sierra Club, World Wildlife Fund and Natural Resources Defense Council:

Trans Pacific Partnership Leaders’ Statement:
https://www.whitehouse.gov/the-press-office/2014/11/10/trans-pacific-partnership-leaders-statement

United Nations Conference on Trade and Development website — Recent Developments in Investor-State Dispute Settlement (ISDS) — Updated for the Multilateral Dialogue on Investment, 28-29 May 2013:
http://unctad.org/en/PublicationsLibrary/webdiaepcb2013d3_en.pdf

US Trade Representative website “Trans Pacific Partnership (TPP) – Unlocking Opportunity for Americans through trade with the Asia Pacific”:
https://ustr.gov/tpp

US Trade Representative website, “Statement by U.S. Trade Representative Michael Froman on the Bipartisan Congressional Trade Priorities and Accountability Act”:
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/april/statement-us-trade-representative

World Trade Organization website, “Sanitary and Phytosanitary Measures”:
https://www.wto.org/english/tratop_e/sps_e/sps_e.htm


Wikileaks Documents

Secret Trans-Pacific Partnership Agreement (TPP) – IP Chapter — Advanced Intellectual Property Chapter for All 12 Nations with Negotiating Positions [11/13/13 release]:
https://wikileaks.org/tpp/

Salt Lake extracts:
https://wikileaks.org/IMG/pdf/tpp-salt-lake-extracts-.pdf

Draft text of IP chapter following Salt Lake meeting in 11/19-24/13 (posted 12/9/13) [Note there was a trade ministers’ meeting in Singapore the week of this posting]:
https://wikileaks.org/Second-release-of-secret-Trans.html

Positions of various members after Salt Lake meeting: https://wikileaks.org/IMG/pdf/tpp-salt-lake-positions.pdf and internet post [dated 12/18/13] by Gabriel J. Michael (attendee of “stakeholder presentations” meeting in DC) re: analysis of positions of TPP negotiating counties on contentious issues based on Wikileaked document:
https://topromotetheprogress.wordpress.com/2013/12/18/which-tpp-proposals-are-most-contentious/

Kristinn Hrafnsson, “TPP – Sacrificing the Environment for Corporate Interests,” [1/15/14]:
https://wikileaks.org/tpp-sacrificing-the-environment.html

“Secret Trans-Pacific Partnership Agreement (TPP) – Environment Chairs Report” [1/15/14]:
https://wikileaks.org/tpp-enviro-chairsreport/

Environmental chapter (11/24/13 date, Salt Lake) second draft [posted 1/15/14]:
https://wikileaks.org/tpp-enviro/

Press release re: release of TISA (Trade in Services Agreement) Financial Services Annex (6/19/14) from 4/14 negotiation round:
https://wikileaks.org/tisa-financial/press.html

Updated Secret Trans-Pacific Partnership Agreement (TPP) – IP Chapter (second publication) dated 5/16/14, Ho Chi Minh IP Group [10/16/14 release] (Intellectual Property Chapter for All 12 Nations with Negotiating Positions (May 16 2014) consolidated bracketed negotiating text):
https://wikileaks.org/tpp-ip2/

10/16/14 press release re: IP chapter (second publication):
https://wikileaks.org/tpp-ip2/pressrelease/

US and Japan Lead Attack on Affordable Cancer Treatments) [10/16/14]:
https://wikileaks.org/tpp-ip2/attack-on-affordable-cancer-treatments.html

Secret Trans-Pacific Partnership Agreement (TPP) – Investment Chapter dated January 20, 2015 [3/25/15 release]:
https://wikileaks.org/tpp-investment/WikiLeaks-TPP-Investment-Chapter/page-1.html

1/15 press release re: investment chapter [dated 1/20/15]:
https://wikileaks.org/tpp-investment/press.html

Share