Trans-Pacific Partnership: Laissez-faire or Faustian Bargain?

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The Trans-Pacific Partnership (TPP). Merely reading the name makes eyes glaze over and drool leak out of the corner of the mouth. I’m willing to bet that if the average American were to list off a series controversial political issues, ‘trade agreements’ wouldn’t even come to mind. This is because the idea of a bunch of old politicians, lawyers, and businesspeople getting together and hammering out the finer points of trade policy makes for one of the least exciting scenes humanly possible.

However, boring or not, the TPP will have an extraordinarily broad impact on the citizens of every country involved, including the United States.

The first hint of this is how the negotiations over the TPP have been conducted in near-total secrecy. Though negotiations have been held repeatedly since 2008, we still wouldn’t know any specific details about the text were it not for the leaking of draft copies. In fact, the draft text is technically a classified document under U.S. law, and will remain so for four years after it has been ratified and enacted.
Besides the negotiators, only a select group of about 550 advisers have had open access to the text, 85 percent of whom represent various branches of industry and trade organizations. From what has been gleaned from the leaked text, it’s clear that the disproportionate corporate presence among the board of advisers has had a strong influence on the provisions of the document.

For example, the TPP would enable a legal procedure called Investor-State Dispute Settlements (ISDS), which would allow multinational corporations to directly sue countries that take actions deemed detrimental to their property and “expected future profits.” The only judicial bodies hearing these cases would be ad-hoc tribunals which would make rulings on the basis of TPP rule violations, ignoring the laws within the member state being sued.

Pharmaceutical companies in particular stand to benefit from the TPP. When drug patents expire, companies other than the patent holder can begin to manufacture and sell chemically identical generics, typically at a significantly lower price point. Because of their affordability, generics account for upwards of 80 percent of all drugs sold in the U.S. Provisions included in the TPP strengthen patent laws, making more drugs patentable and increasing patent durations. Medical costs in the U.S. are already some of the highest in the world, and changes like these will only cause those costs to go up.

Of course, it’s not just the United States that will be involved in the TPP. Other partner states include: Japan, Canada, Australia, New Zealand, Vietnam, Malaysia, Brunei, Singapore, Mexico, Peru, and Chile. Together these 12 countries make up 40 percent of the world’s gross domestic product and 30 percent of all trade, making the TPP the mother of all trade agreements.

As of April 16, Republicans and Democrats in Congress seemed ready to compromise on approving presidential ‘fast-track’ authority, a bill which would short-circuit the role of Congress as the branch of government in charge of trade. Should fast-track pass, the TPP will be put up for a single Congressional vote, which will disallow filibusters and amendments.

In a press statement, President Barack Obama stated: “My top priority in any trade negotiation is expanding opportunity for hardworking Americans. It’s no secret that past trade deals haven’t always lived up to their promise, and that’s why I will only sign my name to an agreement that helps ordinary Americans get ahead. At the same time, at a moment when 95 percent of our potential customers live outside our borders, we must make sure that we, and not countries like China, are writing the rules for the global economy.”

That last sentence says a great deal about what appears to be the main driving force behind the TPP. At a point in history when the United States is feeling real pressure from an increasingly multi-polar global economy, creating secure trade zones in which American business continues to play a leading role is a strong strategic move, albeit more than a little Machiavellian.

One thing is certain: President Obama has made the TPP the keystone of his administration’s economic policy. Only time will tell what effect that decision will have on his legacy.