February 09, 2014

The Trans-Pacific Partnership Deal

Prabhat Patnaik

THE Obama administration has been negotiating what is claimed to be a free trade agreement with eleven other Pacific nations for some time now. These nations are: Australia, Japan, Brunei, Malaysia, Vietnam, Chile, New Zealand, Peru, Singapore, Canada and Mexico. The exact terms of the agreement are not publicly known; whatever is known is from “leaks”, including one that has come through Wikileaks. But what these “leaks” reveal is that the agreement is less about free trade, or even about trade per se, and more about protecting and improving the positions of corporations in their dealings with foreign governments, and correspondingly about restricting the rights of sovereign governments to enact laws or effect measures to curtail, control or regulate the activities of such corporations. This agreement, termed the Trans Pacific Partnership agreement (or TPP), has been called the “biggest corporate power grab to date”; Noam Chomsky calls it an agreement about “investor rights”. One area that the agreement crucially concerns itself with is Intellectual Property Rights. What it envisages would further attenuate the limited scope that governments still have under the existing TRIPS arrangement for controlling corporate profiteering at the expense of the people, for instance profiteering via higher drug prices. Likewise, the control over financial speculation that governments have tried to exercise recently, through legislation enacted in the wake of the World Financial Crisis with a view to preventing the recurrence of such crises (such as the Dodd-Frank Act in the United States), will be nullified by the TPP agreement. Dean Baker, a noted American macroeconomist, has this to say about the TPP: “It will make effective health, safety, and environmental regulation more difficult. It may also shield the financial sector from efforts to rein in the sort of abuses that led to the financial crisis. And, it will make drugs more expensive. The TPP is about redistributing income upward; it has no place on a serious inequality agenda.” The motive for some of the poor Asian countries to enter into these negotiations is perhaps to gain access to the United States market for goods produced on their soil, at wages much lower than in the United States (not necessarily by their own domestic producers but typically by foreign multinational corporations attracted by such low wages). Whether this would actually improve the lives of their people is doubtful, since the very condition for drawing multinational corporations to produce on their soil is that their working people should continue to earn low wages. But attracting such investment for producing for exports to the US and other such markets, they have come to believe, is what constitutes the basis for a successful growth strategy for them. For the United States however there is absolutely no reason for believing that such an agreement would be in the interests of its working people. Indeed competition with low wage Asian economies is likely to reduce wages in the US itself. Not surprisingly, many in the US argue that the TPP is directly against the goal of reducing domestic income inequality about which Obama has been showing much concern of late. What is undeniable however is that the TPP will increase the power of corporate capital immensely, while reducing, even further, the control exercised by sovereign States over such capital. It would in other words carry the neo-liberal agenda very substantially forward. CLASS NATURE EXPOSED The fact that the US administration is pushing an agreement which can only harm the American working people but which strengthens the position of its corporations in their foreign dealings, makes the class nature of the US State absolutely clear. This class nature is usually hidden behind a lot of rhetoric about defending the interests of the people at large. But the TPP is one instance where the class nature stands exposed with extreme clarity. Indeed what is remarkable about the TPP is that it would, if anything, entail a decline of the US as a spatial or geographical economy, while furthering the interests of its corporate capital by increasing its global power and reach at the expense of foreign sovereign States. Just one illustration will show in this context the increase in corporate global power being negotiated under the TPP. According to the leaked documents, the TPP will enable corporations directly to challenge laws and regulations of governments before an international tribunal, as distinct from the present situation where they have to operate through another sovereign government. At present it is only a sovereign government that has the authority to challenge laws enacted by another sovereign government; but the TPP will change that. For instance, at present if an American corporation feels aggrieved over some regulation of the Indian government and thinks that it violates some current standing agreement, then it will have to persuade the US administration to move an international court against this regulation of the Indian government. Such persuasion for a particular case is not easy in the first place; besides, the US administration may be loath to move against the Indian government on such a specific issue owing to broader foreign policy considerations. But once the TPP takes effect, the corporations themselves can directly go to an international court challenging the policies or laws of sovereign governments of the TPP countries. This amounts therefore to an attenuation of the sovereignty of the signatory States. It is significant that while the agreement being negotiated has been kept a secret from the public, corporations have been closely involved in the negotiation process. And it is also significant that the Obama administration is planning to introduce measures to “fast track” American legislative approval for the agreement once the negotiations have been completed. Normally, when the US enters into some international agreement, that agreement has got to be approved by the US legislatures before it can become law (a practice which unfortunately is not followed in our country). When the agreement is being discussed by the American legislatures, they can strike down even individual clauses of it, and not just the agreement as a whole. What “fast-tracking” means is that the legislatures renounce their right to strike down individual clauses and simply vote “yes” or “no” for the agreement as a whole. Clearly, under such conditions, the legislatures typically vote “yes”. So, “fast-tracking” is a means of ensuring that legislative approval in the US is reduced to a mere “rubber-stamping” exercise. Corporate capital is attempting through the TPP not only to reduce the sovereignty of signatory third world States, but even that of the legislative process within the United States itself. Interestingly, the strongest opposition to “fast-tracking” in the US comes from Obama’s own Democratic Party, which, since Franklin Roosevelt’s days, has relied heavily on working class support. INTENSE LOBBYING TO ACCEPT “FAST TRACKING” But the American corporate capital is working overtime to push the agreement through. Corporate capital is not only present at the negotiating table; it is lobbying legislators to accept “fast-tracking”; it is using the media to generate public opinion in favour of the agreement, even by spreading statistical falsehoods about the beneficial effects of past agreements like the NAFTA (details regarding such falsehoods are given in the article by Dean Baker in the Truthout of January 27); and it is working on many bourgeois economists to come out openly in support of such falsehoods and push the case for this agreement before the American public. There is in fact a sense of déjà vu about all this. Some years ago, a group of large American corporations had got together and hatched a plan to roll back the Intellectual Property Rights legislations that had been enacted in a number of third world countries in the wake of decolonisation (including the Indian Patents Act of 1970), which had undermined their monopoly position. Such rolling back appeared to be an extraordinarily difficult task at that time, but they persisted. They first got the US administration to fall in line with their plan, and to introduce Intellectual Property Rights as an issue into the WTO agenda. They then participated directly at the international negotiations over the issue, along with a whole army of lawyers, economists and other professionals who were hired to browbeat hapless third world governments (each of whom was represented at such negotiations by at most a joint secretary-level officer with a minuscule intellectual support base). And having rammed an agreement through at the negotiations, they took advantage of the fact that in most third world countries legislative approval was not necessary for the ratification of international treaties (which made the TRIPS agreement a fait accompli), to ensure that suitable legislation was introduced in these countries to make their IPR-regimes “TRIPS-compatible”. (All this was revealed by a former Monsanto executive who was repelled by the entire exercise). An exactly similar process is being tried out now with the TPP, though of course on a smaller scale to start with. The aim is to further consolidate the monopoly position of these corporations; to remove further whatever residual hurdles remain in their way for dominating the world economy, by eliminating the scope for State regulation of their activities under popular pressure. True, the TPP has not yet been finalised. And even if it is finalised along the lines that the “leaks” reveal, it will still be applicable only to a limited number of countries. But what is instructive about the TPP is the ambition and the plan of corporate capital. It is an outline of the contours of the emerging phase of imperialism. What is being attempted through the TPP will tend to get generalised to other countries as well. And through such agreements, globalised capital, with the backing of the most powerful imperialist State, and subject not even to legislative scrutiny within that State, will dominate the world economy, riding roughshod over third world States. If this comes to pass, then the rolling back of decolonisation would have taken a giant leap forward.