The Trans-Pacific Partnership

The Trans-Pacific Partnership (TPP) is a massive new international trade pact being pushed by the U.S. government at the behest of transnational corporations. The TPP is already being negotiated between the United States, Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and most recently, Japan — which together cover approximately 40% of the global economy.  But it is also specifically intended as a “docking agreement” that other Pacific Rim countries would join over time, with the Philippines, Thailand, Colombia and others already expressing interest.  It is poised to become the largest Free Trade Agreement in the world.

The Trans-Pacific Partnership Would Empower Corporations to Attack U.S. Policies in Foreign Tribunals and Demand Taxpayer Compensation for Our Environmental, Health and Other Laws

The Trans-Pacific Partnership would include and even expand the controversial system of extreme corporate privileges called the "investor-state" regime. Under this system, the TPP would elevate individual foreign corporations to equal status with the sovereign governments signing the deal - allowing them to privately enforce this public treaty. The rules empower foreign corporations to skirt domestic laws and courts and directly challenge governments' health, environmental and other public interest policies before extrajudicial tribunals authorized to order unlimited amounts of compensation with taxpayer dollars.

The World Bank and UN tribunals that decide such cases are comprised of three corporate lawyers, unaccountable to any electorate, who rotate between suing governments for corporations and acting as the "judges." Tribunals are not bound by precedent and there is no appeal mechanism.

When an investor-state tribunal rules in favor of the foreign investor, the government must hand the corporation an amount of taxpayer money decided by the tribunal. Tribunals have already ordered governments to pay over $3.5 billion in investor-state cases under existing U.S. agreements. This includes payments over toxic bans, land-use policies, forestry rules and more. More than $14.7 billion remain in pending claims under U.S. agreements alone. Even when governments win, they often must pay for the tribunal's costs and legal fees, which average $8 million per case. The TPP would expand the scope of policies that could be attacked.

The proposed TPP foreign investor privileges would provide foreign firms greater "rights" than those afforded to domestic firms. This includes a "right" to not have expectations frustrated by a change in government policy. Claiming such radical privileges, foreign corporations have launched investor-state cases against a broad array of environmental, energy, consumer health, toxics, water, mining and other non-trade domestic policies that they allege undermine their "expected future profits."

                   TPP: Back-room Deal for the 1%

​  ​The Trans-Pacific Partnership Would Promote Off-Shoring of American Jobs

Nearly five million American manufacturing jobs – one out of every four – have been lost since implementation of the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO). Since NAFTA, over 60,000 American manufacturing facilities have closed. The TPP would replicate and expand on the NAFTA model.

A leaked text revealed that TPP is slated to include the extreme foreign investor privileges that help corporations offshore more U.S. jobs to low-wage countries. These NAFTA-style terms provide special benefits to firms that relocate abroad and eliminate many of the usual risks that make firms think twice about moving to low-wage countries.

Under the NAFTA model, U.S. manufacturing imports have soared while growth of U.S. manufacturing exports has slowed.

TPP includes Vietnam, a new favorite for corporations’ job offshoring, because
wages there are even lower than China.

Already, the growth of the U.S. trade deficit with China, since China entered the WTO in 2001, has had a devastating effect on U.S. workers and the U.S. economy. Between 2001 and 2011, 2.7 million U.S. jobs were lost or displaced.

Devastation of U.S. manufacturing drives down wages, erodes the tax base and heightens inequality. Despite major gains in American worker productivity, real median wages hover at 1979 levels. Government data shows that two out of every five displaced manufacturing workers who were rehired in 2012 experienced wage reductions of more than 20 percent. With the loss of manufacturing, tax revenue that could have funded social services or local infrastructure projects has declined, while displaced workers have turned to ever-shrinking welfare programs. This has resulted in the virtual collapse of some local governments in areas hardest hit.

               Trans-Pacific Partnership: Corporate Global Domination        
       The Trans-Pacific Partnership Would Ban "Buy American" and "Buy Local" Procurement Preferences

The TPP's procurement chapter would require that all firms operating in any signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold. The United States would agree to waive "Buy American" and "Buy Local" procurement policies for all such foreign firms, eliminating an important policy tool to use U.S. tax dollars for U.S. job creation.

Some corporate TPP proponents argue that these rules would be good for the United States because they would ban domestic preferences in all signatory countries, allowing U.S. firms to bid on procurement contracts in other countries on equal footing with domestic firms. It is a ridiculous notion that new access for some U.S. companies to bid on contracts in TPP countries is a good trade-off for waiving "Buy American" preferences on U.S. procurement: Taking even the most favorable cut on other countries' markets, the total U.S. procurement market is more than five times the size of the combined procurement market of the current TPP negotiating parties: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Even with Japan in the TPP, the U.S. procurement market is over twice as large as the new TPP procurement market would be. Plus, Japan and the United States are already party to the WTO's Government Procurement Agreement - which covers most procurement that the TPP would likely cover. Accordingly, there will be few, if any, new procurement opportunities in Japan for the United States.

                           No Back Room Deals for the 1%

            Labor rights: Will the Trans-Pacific Partnership FTA include labor standards based on International Labor Organization conventions, and if included, how will they be enforced?
            Investment Provisions: Will the Trans-Pacific Partnership FTA include so-called “investor-state” provisions that allow individual corporations to challenge environmental, consumer and other public interest policies as barriers to trade?
            Public Procurement: Will the Trans-Pacific Partnership FTA respect nations’ and communities’ right to set purchasing preferences that keep taxpayer dollars re-circulating in local economies?
            Access to Medicines: Will the Trans-Pacific Partnership FTA allow governments to produce and/or obtain affordable, generic medications for sick people?
            Agriculture: Will the Trans-Pacific Partnership FTA allow countries to ensure that farmers and farm workers are fairly compensated, while also preventing the agricultural dumping that has forced so many family farmers off their land?