Home > The Economy > “Trans-Pacific Partnership” is Washington speak for corruption and theft

“Trans-Pacific Partnership” is Washington speak for corruption and theft

from Dean Baker

“Free trade” is a sacred mantra in Washington. If anything is labeled as being “free trade” then everyone in the Washington establishment is required to bow down and support it. Otherwise they are excommunicated from the list of respectable people and exiled to the land of protectionist Neanderthals.

This is essential background to understanding what is going on with the Trans-Pacific Partnership Agreement (TPP), a pact that the United States is negotiating with Australia, Canada, Japan and eight other countries in the Pacific region. The agreement is packaged as a “free trade” agreement. This label will force all of the respectable types in Washington to support it. 

In reality, the deal has almost nothing to do with trade; actual trade barriers between these countries are already very low. The TPP is an effort to use the holy grail of free trade to impose conditions and override domestic laws in a way that would be almost impossible if the proposed measures had to go through the normal legislative process. The expectation is that by lining up powerful corporate interests, the governments will be able to ram this new “free trade” pact through legislatures on a take-it-or-leave-it basis.

As with all these multi-lateral agreements the intention is to spread its reach through time. That means that anything the original parties to the TPP accept is likely to later be imposed on other countries in the region, and quite likely the rest of the world.

At this point it’s not really possible to discuss the merits of the TPP since the governments are keeping the proposed text a secret from the public. Only the negotiators themselves and a select group of corporate partners have access to the actual document. The top executives at General Electric, Goldman Sachs, and Pfizer probably all have drafts of the relevant sections of the TPP. However the members of the relevant congressional committees have not yet been told what is being negotiated.

There have been a few items that have been leaked that give us some insight as to the direction of this pact. One major focus is will be stronger protection for intellectual property. In the case of recorded music and movies, we might see provisions similar to those that were in the Stop On-Line Privacy Act (SOPA). This would make Internet intermediaries like Google, Facebook, and indeed anyone with a website, into a copyright cop.

Since these measures were hugely unpopular, the SOPA could probably never pass as a standalone piece of legislation. However tied into a larger pact and blessed with “free trade” holy water, the entertainment industry may be able to get what it wants.

The pharmaceutical industry is also likely to be a big gainer from this pact. It has decided that the stronger patent rules that it inserted in the 1995 WTO agreement don’t go far enough. It wants stronger and longer patent protection and also increased use of “data exclusivity.” This is a government-granted monopoly, often as long as 14 years, that prohibits generic competitors from entering a market based on another company’s test results that show a drug to be safe and effective.

Note that stronger copyright and patent protection, along with data exclusivity, is the opposite of free trade. They involve increased government intervention in the market. They restrict competition and lead to higher prices for consumers.

In fact the costs associated with copyright and patent protection dwarf the costs associated with the tariffs or quotas that usually concern free traders. While the latter rarely raise the price of a product by more than 20-30 percent, patent protection for prescription drugs can allow drugs to sell for hundreds or even thousands of dollars per prescription when they would sell for $5-$10 as a generic in a free market. Patent protection increases what patients pay for drugs in the United States by close to $270 billion a year (1.8 percent of GDP). In addition to making drugs unaffordable to people who need them, the economic costs implied by this market distortion are enormous.

There are many other provisions in this pact which are likely to be similarly controversial. The rules it creates would over-ride domestic laws on the environment, workplace safety, and investment. Of course it’s not really possible to talk about the details because there are no publicly available drafts.

In principle the TPP is exactly the sort of issue that should be featured prominently in the fall elections. The voters should have a chance to decide if they want to vote for candidates who support raising the price of drugs for people in the United States and the rest of the world, or making us all into unpaid copyright cops. But there is no text and no discussion in the campaigns and that is exactly how the corporations who stand to gain want it.

There is one way to spoil their fun. Just Foreign Policy is offering a reward, now up to $21,100, to WikiLeaks if it publishes a draft copy of the pact. People could add to the reward fund, or if in a position to do so, make a copy of the draft agreement available to the world.

We know that our political leaders will say that they are worried about the TPP text getting in the hands of terrorists. But we know the truth. They are afraid of a public debate. If the free market works, we will get to see the draft of the agreement.

See article on original website

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Categories: The Economy
  1. Garrett Connelly
    September 4, 2012 at 2:46 pm | #1

    TPP is being rammed through on the sly so that US environmental and labor law can have monetary penalties applied to them and thus be overruled in secret foreign courts. TPP being pushed by the current US administration as vigorously as NDAA, which legalizes disappearing anyone for secret national security purposes … Google NDAA

  2. Deniz Kellecioglu
    September 13, 2012 at 10:36 am | #2

    Thank you for this important post. TPP seem to be an outrageous process to further undermine halting democracies around the world. A new round of browsing today reveals nothing new, really. The executive office of the President (http://www.ustr.gov/tpp) continues to provide superficial information. The only concrete information is that the current round of negotiations ends in two days (15 September). It says nothing about ambitions to reach an agreement. However, according to the online activist network Avaaz, the intention is indeed to reach an agreement of a “global corporate power grab of breath-taking scope”. Furthermore, international mainstream media do not report on the issue, really. More information, anyone?

    • Garrett Connelly
      September 13, 2012 at 11:13 am | #3

      Deniz, Representative democracy as practiced in the US is a hoax. The Obama/Romney performance is a good-cop/bad-cop charade. Modern democracy is forming up in the streets world-wide; it will be a continuous and leaderless information-age tool that includes the economy or all mammals will be extinct, soon.

      • Deniz Kellecioglu
        September 13, 2012 at 11:35 am | #4

        Thanks Garrett. I fully agree. I failed to formulate my scepticism of “democratic” countries around the world, whether the USA or any other country, including “success cases” like Sweden. But projects like TPP further dismantles hard-won progresses, why it is important to challenge them …as much as possible.

        In addition, I am sure you will agree with me that the current state of democracy on the streets (and IT platforms) around the world is not unproblematic, and either way this empowerment process must be combined with efforts to disempower the one’s who still possess the real executive powers.

      • Alice
        September 15, 2012 at 10:19 am | #5

        Of course representative democracy is a hoax in the US. Its also a massive hoax in Australia. See how busy the Australian authorities are now trying desperately not to charge anyone in our central bank for bribery and corruption.
        Yes, one rule of law for the poor and middle and another toothless tiger law for corrupt upper echelons.
        Same in the US – governments have been corrupted to the core by the presence of private monies everywhere.
        Ugly because what has been sacrificed is honour, ethics, leadership, a moral compass, the desire to help the majority etc perhaps signs of economic breakdown.

        All we face is corruption to the highest levels of government.
        Maybe not quite as bad as Columbia, where everyone works for the man, but bad for the majority anyway.

        So dishearteneing that we have, somewhere along the way, lost truly good (as in good hearted) leadership..

        Sad.

  3. Garrett Connelly
    September 13, 2012 at 11:46 am | #6

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