Tobacco Carve-Out From ISDS Starts To Spread: Another Nail In The Coffin Of Corporate Sovereignty

from the crack-in-the-dam dept

One of the last pieces of horse-trading that went on in order to conclude the TPP deal involved corporate sovereignty, aka investor-state dispute settlement (ISDS), and tobacco. As we reported a year ago, a "carve-out" for tobacco was agreed, which was designed to assuage fears that tobacco companies would use TPP's ISDS mechanism to challenge health measures like plain packs -- something that Philip Morris attempted against both Australia and Uruguay. Now, it looks like the idea is spreading, as Simon Lester points out on the International Economic Law and Policy Blog:

Whether or not the TPP ever gets ratified, the idea for a tobacco carveout seems to have taken hold. Via Tania Voon on twitter, I see that Australia and Singapore have agreed to amend their FTA to include a tobacco carveout.

The wording itself, inserted into the section on corporate sovereignty, is pretty simple (pdf):

Section B: Investor-State Dispute Settlement

ARTICLE 22

Tobacco Control Measures

No claim may be brought under this Section in respect of a tobacco control measure of a Party

It's worth noting that this is not just another carve-out, but a retrospective one, which creates an interesting precedent that might be followed elsewhere. After all, once the principle that tobacco companies should not be allowed to use ISDS to interfere with health programs is established, there's no reason not to apply it more widely, to both future and existing trade and investment deals.

More generally, the appearance of this carve-out for tobacco raises a question Mike asked a year ago: if corporate sovereignty is such a bad idea for this industry, why not for others that can cause harm -- like the extractive industries, for example? And once people start asking these kinds of questions, it's not long before they realize that putting companies above national laws, and letting them sue governments in supranational tribunals, makes no sense at all for any sector. Calls to drop the entire ISDS system have been growing for a while; the latest move by Australia and Singapore is likely to make them louder.

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Filed Under: carve-outs, corporate sovereignty, isds, tobacco, trade deals

Australia's Arrogant, Irresponsible Trade Minister Rejects Calls For Cost-Benefit Analysis Of TPP

from the would-anyone-run-a-business-like-this? dept

Mike has just written about the way the US public is being short-changed over the promised "debate" that would follow the completion of the TPP negotiations. That broken promise is just part of the general dishonesty surrounding the whole deal. For example, the public was told that it was not possible for it to make its views known during the negotiations, because they had to be secret -- even though many other trade deals aren't -- but that once everything was agreed there would be ample time for a truly democratic debate. Of course, at that point nothing could be changed, so the debate was little more than a token gesture, but now it seems the US public won't even get that.

It will be cold comfort to learn that US citizens are not the only ones being denied the opportunity to engage in a serious discussion with politicians about the merits or otherwise of TPP. Here's what's happening in Australia, as reported by the Guardian:

The trade minister, Andrew Robb, has rejected calls for an independent cost-benefit analysis of the Trans-Pacific Partnership after the World Bank estimated it could lift Australia’s economic output by just 0.7% by 2030.

Robb, who signed the regional trade pact with counterparts from 11 other nations in New Zealand on Thursday, dismissed opponents of the deal as "the usual suspects" who would not be persuaded by a new inquiry.

To dismiss those who want to weigh up the evidence for and against TPP as "the usual suspects" is insulting not just to them, but also to the Australian public, who are effectively being told that if they dare to question the value of TPP, they are just "the usual suspects." This is pretty rich, too:

There’s nothing that they’ve said that convinces me that they’re genuine about this ... I think the community accepts that we've got 25 years of uninterrupted economic growth in Australia, we've got millions of jobs which have come off the back of Australia opening up and participating in these sorts of major agreements around the world with all of our trading partners.

So Robb is saying that those who want a mature debate about TPP must convince him, rather than the other way around. And claiming that Australia's growth is due to trade agreements -- without providing any evidence -- expects people to be naive enough to fall for the old 'correlation implies causation' trick. In any case, it's the details of the deal that are being questioned, many of which are quite antithetical to genuine free trade -- enhanced monopoly protections for copyright and biologics being two examples.

Robb's problem is that the traditional instruments of government persuasion -- econometric models that purport to demonstrate the benefits of signing up to trade agreements -- reveal that TPP is likely to bring Australia vanishingly small economic benefits. As we wrote recently, the World Bank predicts that the annual boost to Australia's GDP thanks to TPP will be around 0.07%. The country's trade minister tries to side-step that awkward fact as follows:

Robb told Sky News there was "a war by modelling" occurring. He pointed to a US Department of Agriculture study that showed Australia's agriculture sector would be the "biggest winner by a country mile".

In other words, don't look at that World Bank study, look at this US Department of Agriculture (USDA) study instead. Techdirt discussed that analysis over a year ago, noting one rather pertinent fact that Robb somehow forgot to mention: the USDA predicted that the total boost to the Australian economy from TPP would be precisely zero, zip, zilch, nada. If Australia's agricultural sector is a big winner from TPP, there must also be some big losers to balance things out.

Those facts probably explains in part why Robb refuses to ask the Australian government's own Productivity Commission for an analysis of TPP, even though its job is precisely to provide "independent research and advice to Government on economic, social and environmental issues affecting the welfare of Australians." The other reason why he won't want them giving an expert opinion is probably because of this comment in the Commission's Trade and Assistance Review 2013-14:

Preferential trade agreements add to the complexity and cost of international trade through substantially different sets of rules of origin, varying coverage of services and potentially costly intellectual property protections and investor-state dispute settlement provisions.

The emerging and growing potential for trade preferences to impose net costs on the community presents a compelling case for the final text of an agreement to be rigorously analysed before signing. Analysis undertaken for the Japan-Australia agreement reveals a wide and concerning gap compared to the Commission's view of rigorous assessment.

Robb's reluctance may be understandable, but it is also unforgivable. The benefits for Australia from TPP are routinely exaggerated, but no account is ever taken of the costs of signing up to the trade agreement -- a situation that is plainly absurd. Any manager that suggested closing an important business deal without carefully weighing up both the benefits and the costs would be rightly dismissed for gross negligence and incompetence. And yet Robb expects 23 million Australians to agree to TPP on precisely that basis, simply because he says it's a good deal. That's not just appallingly arrogant, but also profoundly irresponsible.

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Filed Under: andrew robb, australia, cost benefit, economics, tpp, trade deals

Tobacco Industry's Interest In Trade Negotiations? Totally Redacted

from the public-interest? dept

The folks at Corporate Europe Observatory (CEO) sent a freedom of information request to the EU Commission, asking for details of meetings that trade officials held with the tobacco industry. This matters, because the tobacco industry is one of the major abusers of trade agreements, repeatedly making use of the "corporate sovereignty" ISDS provisions to effectively sue any country passing anti-smoking health laws -- as was covered a few months back by John Oliver: So, as new trade agreements are being negotiated -- especially since the powers that be tell us these agreements are designed to protect the health and well being of the public -- it seems that Big Tobacco's efforts in these negotiations is pretty relevant. After numerous delays and confusing responses, CEO finally received a response. And it's [redacted]. Well, not entirely, but basically anything useful is blacked out. Such as this lovely document, which is oh so revealing: Democracy in action!

Filed Under: corporate sovereignty, isds, redacted, tafta, tobacco, trade deals, transparency, ttip
Companies: ceo, philip morris

Wikileaks Latest Info-Dump Shows, Again, That The NSA Indeed Engages In Economic Espionage Against Allies

from the with-friends-like-these dept

With all the revelations that have come out about the NSA and our foreign and domestic spy programs, it can, at times, become difficult to parse out exactly what we're supposed to be getting pissed off about and what is the exact kind of spy-work we ought to expect the alphabet agencies to conduct. Some of the groups that are involved in getting these revelations out there don't make it much easier, of course. Take as an example the latest Wikileaks info-dump, which chiefly concerns the NSA's spy program against our ally Japan. From the press release accompanying the documents:

Today, Friday 31 July 2015, 9am CEST, WikiLeaks publishes "Target Tokyo", 35 Top Secret NSA targets in Japan including the Japanese cabinet and Japanese companies such as Mitsubishi, together with intercepts relating to US-Japan relations, trade negotiations and sensitive climate change strategy. The list indicates that NSA spying on Japanese conglomerates, government officials, ministries and senior advisers extends back at least as far as the first administration of Prime Minister Shinzo Abe, which lasted from September 2006 until September 2007. The telephone interception target list includes the switchboard for the Japanese Cabinet Office; the executive secretary to the Chief Cabinet Secretary Yoshihide Suga; a line described as "Government VIP Line"; numerous officials within the Japanese Central Bank, including Governor Haruhiko Kuroda; the home phone number of at least one Central Bank official; numerous numbers within the Japanese Finance Ministry; the Japanese Minister for Economy, Trade and Industry Yoichi Miyazawa; the Natural Gas Division of Mitsubishi; and the Petroleum Division of Mitsui.

Now, what Wikileaks is doing is mashing together the NSA spying on the Japanese government, our ally, with Japanese industry. That's silly, in my estimation. In fact, much of the hand-wringing that goes on about our spy networks spying on allies seems naive in the extreme, as if to suggest that our closest allies aren't conducting similar spy programs on our government. You can insist, if you like, that America should not be spying on her allies, but then I get to insist that you grow up, because that's exactly the kind of work you want the NSA doing.

But on the economic side, things get a little murkier. The NSA has insisted for years that the agency does not engage in economic espionage, actions which would put it out of the norm for how we treat our allies. It's also been clear for some time that the NSA is full of crap in this regard. This latest Wikileaks dump fleshes out just how much economic espionage we do against our allies, even very close allies like Japan.

The documents demonstrate intimate knowledge of internal Japanese deliberations on such issues as: agricultural imports and trade disputes; negotiating positions in the Doha Round of the World Trade Organization; Japanese technical development plans, climate change policy, nuclear and energy policy and carbon emissions schemes; correspondence with international bodies such as the International Energy Agency (IEA); strategy planning and draft talking points memoranda concerning the management of diplomatic relations with the United States and the European Union; and the content of a confidential Prime Ministerial briefing that took place at Shinzo Abe's official residence.

It's just more egg on the face of government and security officials who have claimed to have kept their hands clean of economic espionage. There's sure to be more of interest in the documents as they get parsed out, but if nothing else we can be reminded that the NSA is a spy agency and that its officials have been caught lying over and over again.

Filed Under: economic espionage, espionage, japan, nsa, surveillance, trade deals

Senators Up In Arms Over State Department Plan To Deliberately Ignore Malaysian Mass Graves Just To Get TPP Deal

from the maybe-fast-track-wasn't-such-a-good-idea,-huh? dept

Earlier this week, we wrote about a troubling move by the US State Department to "upgrade" Malaysia from a "tier 3" country to a "tier 2" country regarding human trafficking. This move came despite a near total lack of evidence of any improvement by Malaysia. In fact, just two months ago 139 mass graves were discovered for migrant workers who had been trafficked and/or held for ransom. And the US ambassador to Malaysia had publicly criticized the country for failing to tackle its massive human trafficking problem.

So why would the State Department magically upgrade Malaysia? Well, because of a tiny provision in the fast track "Trade Promotion Authority" deal that Congress recently passed. It noted that fast track authority would not apply to trade deals involving countries that were categorized as "tier 3" by the State Department. In other words, this should have given the US tremendous leverage to push Malaysia to really tackle the problem. Instead, because it appears that the administration is so focused on getting the TPP officially finished and ratified, it got the State Department to just magically upgrade Malaysia, and effectively spit on the graves of those murdered migrant workers.

It appears that this may have been a move too far for some Senators, as 19 of them are demanding some answers from Secretary of State John Kerry about this decision to "upgrade" Malaysia.

In the letter, senators said that upgrading Malaysia would weaken the U.S. government's international credibility on human rights issues.

"Fighting human trafficking is one of the great moral challenges of our time," the senators wrote. "It is therefore with grave concern that we now hear Malaysia may be upgraded in this year’s Trafficking in Persons (TIP) report based on developments that occurred after the end of the review period. A premature upgrade of Malaysia would undermine the integrity of the TIP report process and compromise our international efforts to fight human trafficking."

You think? But, really, to this administration is the integrity of a program on things like human trafficking really that important when compared to getting the TPP agreement and its bundle of gifts to corporations moving forward again? In the grand political calculus, migrant workers in Malaysia get screwed over again. But, no worries, at least Phillip Morris can sue countries that try to warn people about the dangers of smoking. Either way, it's just poor helpless people getting totally screwed over, while giant corporations get richer. No big deal, I guess.

Filed Under: fast track, human trafficking, malaysia, tip, tpp, trade deals

Certification: How The US Demands Even More Concessions After Trade Agreements Have Been Signed And Ratified

from the enough-is-never-enough dept

The battle raging over the fast track bill is essentially one about control: who gets the final say over so-called trade agreements like TPP and TAFTA/TTIP. If the US President is not given trade promotion authority, it is possible that Congress will demand changes to the negotiated text; with fast track, it will be a simple up or down vote. That's also the situation in other countries participating in the negotiations: once the text is agreed upon, they can essentially accept it or reject it. However, a group of senior politicians in five of the TPP nations point out that after those votes, the US can still demand further concessions from its partners thanks to a process known as certification:

Senior parliamentarians from five countries negotiating the Trans-Pacific Partnership (TPP) agreement have signed an open letter urging their political leaders to protect their nations’ sovereignty from the United States' process of certification.

Here's how that works:

The US withholds the final steps that are necessary to bring a trade and investment treaty into force until the other party has changed its relevant domestic laws and regulations to meet US expectations of its obligations under the agreement. In the past, US 'expectations' have gone beyond what is in the actual text, and even included matters that were rejected in negotiations.

US officials can define another country's obligations; become directly involved in drafting that country's relevant law and regulations; demand to review and approve proposed laws before they are presented to the other country's legislature; and delay certification until the US is satisfied the new laws meet its requirements.

In other words, even though other nations might think that after their agreement and ratification of the text, everything is fixed, the US reserves the right to come back and demand changes to domestic laws and regulations so as to ensure that the implementation is as it wishes. That's no mere theoretical option: it has been used against both Peru and Australia recently. In the latter case, the US was unhappy with the legislation enacting the Australia-US free trade agreement (AUSFTA), and demanded that Australia bring in a supplementary law that actually went beyond the terms of AUSFTA. Even then, the US reserved its right to take legal action if it felt that Australia had still not gone far enough.

The publication of the open letter (pdf) to the political leaders of the TPP nations is a timely reminder that however much sovereignty they might be willing to give up during the negotiations for the sake of supposed gains, the US may want even more concessions -- without, of course, granting other countries the same prerogative.

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Filed Under: certification, promises, regulations, tafta, tpp, trade deals, ttip, us

EU Politicians Say: Don't Undermine Data Protection Rules With TAFTA/TTIP -- And Stop The Mass Surveillance

from the you-have-been-warned dept

The mosaic of interlocking political, economic and civil society groups at multiple levels -- local, national, regional and continental -- makes decision-making within the European Union extremely complex. That means the European Parliament's decision whether or not to ratify TAFTA/TTIP at the end of the negotiations is subject to a vast array of contrasting forces and opinions, which can lead to the outcome of that final vote shifting dramatically in a very short space of time, as the ACTA saga demonstrated so clearly.

The European Parliament's committees play a key role in determining policy, and one of the most important -- for civil liberties -- has just formally adopted an "opinion" on TAFTA/TTIP that will feed into the final position of European politicians. It re-iterates many of the points the committee made last year, and places great emphasis on protecting the personal data of Europeans:

The European Commission should incorporate in the Transatlantic Trade and Investment Partnership (TTIP), as a key priority, an unambiguous horizontal self-standing provision that "fully exempts the existing and future EU legal framework on the protection of personal data from the agreement", says the Civil Liberties Committee in its TTIP opinion adopted on Tuesday.

That "horizontal provision" basically means across the entire agreement, and not just in certain chapters. To achieve that, the Civil Liberties MEPs call on the Commission:

to incorporate, as a key priority, "a comprehensive and unambiguous horizontal self-standing provision based on Article XIV of the GATS [general exceptions] that fully exempts the existing and future EU legal framework on the protection of personal data from the agreement, without any condition that it must be consistent with other parts of the TTIP".

Article XIV of the General Agreement on Trade in Services (GATS) says:

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member of measures:

...

(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:

...

(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;

The Committee points out that this threat to data protection is present not only in TTIP, but also in TISA, as Techdirt has discussed before:

Ongoing negotiations on international trade agreements, such as TTIP and the Trade in Services Agreement (TiSA), also touch upon international data flows, while excluding privacy and data protection entirely, which will be discussed in parallel track within the framework of the US-EU Safe Harbor and the data protection "umbrella agreement".

Safe Harbor, as we've noted, is major point of contention between the US and EU. Another, of course, is the mass surveillance revealed by Edward Snowden, and the Civil Liberties Committee is not shy about mentioning that, too:

The negotiators should keep in mind that that the consent of the European Parliament to the final TTIP agreement "could be endangered as long as the blanket mass surveillance activities are not completely abandoned and an adequate solution is found for the data privacy rights of EU citizens, including administrative and judicial redress", MEPs say

This is only one committee, albeit a key one. But at the very least it gives an indication of some of the serious issues that will be raised if and when it comes to a vote on ratifying TAFTA/TTIP -- and of the difficulty of gaining enough support among MEPs to do so.

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Filed Under: data protection, eu, europe, privacy, tafta, trade deals, ttip