“Free Trade” Treaties are for Big Corporations, not for us.

The consequence of agreements such as the TPP and EU/US treaties, being presented as facilitators of free trade is now becoming clear – as exposed recently by Wikileaks.  Are we already in the post democratic era?  The idea that global corporations could sue future democratically elected governments seems bizarre – yet that is a possibility. These treaties would mean the end of democracy. Former Labour MP, Bryan Gould  writes on the Trans Pacific Partnership. The TPP is a blue-print for the EU/US treaty, which endangers our NHS, and more. Both must be opposed.

“Free Trade” for Big Corporations, Not For Us.

By Bryan Gould

Reproduced by kind permission

The leaked document from the negotiations over the Trans Pacific Partnership, reported in the Herald last week, shows that the fears expressed in many quarters as to the outcome of those negotiations are more than justified. 

We are constantly assured that the great advantages of extending free trade, particularly with the Americans, will more than offset any minor changes we might have to make as the price of such an agreement.  The record of the negotiations shows, however, that – exactly as was to be expected – the Americans see the supposed advantages of free trade entirely in terms of advancing the interests of major American corporations.

The inevitable result?   Since cooperative arrangements for handling both exports and imports are regarded by “free trade” zealots as an infringement of the “free” market, what is peddled as a simple free trade deal could require major concessions in the way we organise our exports – through Fonterra or Zespri – and in the freedom we have to negotiate, by using our collective purchasing power through agencies like Pharmac, the best possible prices for imports like pharmaceuticals.

The leaked document, focusing as it does on intellectual property issues like patents and copyright, pays little attention, however, to one of the main threats from the TPPA – the requirement that overseas corporations should be able to sue a future New Zealand government in a specially constituted tribunal if their trading opportunities were to be reduced by future legislation.

Foreign businesses would, as a consequence, have much greater legal rights than any New Zealand enterprise would enjoy, and those legal rights could not be altered, even by a future government elected with a mandate to do so.

These fears are in no sense fanciful.  Other countries which have agreed to such obligations in the past are now regretting having done so.  South Africa, for example, which accepted such arrangements in trade deals with the Americans in earlier years is now insisting that the deal should be re-negotiated in the light of their damaging experience of what they mean in practice.

Ecuador and Venezuela have already refused to extend trade agreements with the US containing such provisions and India has rejected an investment agreement with the US only if the dispute-resolution mechanism is changed.

Countries like these understand that granting permanent rights of this kind to American corporations would mean, for example, giving up the ability to protect the environment from the activities of mining and petroleum companies, or (as the Australian government has discovered) being sued as a result of trying to restrain tobacco companies from selling a product that is known to cause death and disease.

Our government would have to accept many other restrictions, as the Argentine government discovered when it imposed a freeze on energy and water prices, in an attempt to help hard-pressed consumers, and had to pay over a billion dollars in compensation to international utility companies.

Even the judges who sit on these specially constituted tribunals are amazed at the power they exercise; as one has commented, these provisions mean that “three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”

Concerns like these have now extended to Europe and to the UK in particular.  The Americans are negotiating a Transatlantic Trade and Investment Partnership with European countries which will contain the same investor-state dispute settlement provisions as are intended for the TPPA.  It seems likely that those countries will provide stiffer resistance to these provisions than our own government will offer in the TPPA negotiations.

What justifies such pessimism about our government, you may ask?   The first warning sign is that the negotiations are being conducted in secret and that, by the time the deal is done and announced, it will be too late.  The government’s willingness to defy public opinion over asset sales is convincing evidence of the scant regard it pays to what our citizens want when it is a question of pleasing business interests.

Even more worryingly, the government has demonstrated in the deal it has made with Sky City over an Auckland convention centre that it suffers no twinge of conscience over signing up to a legally binding arrangement that is intended to prevent future governments from altering the deal.  The granting of the licence for an increased number of pokies is meant to run for 35 years, whatever a new government – or the voters – might think.

The risk is clear – the TPPA, while presented as a free-trade arrangement, is really a very different beast.  Free trade, in principle, is undoubtedly to be welcomed, but in the normal sense is meant to remove restrictions in order to benefit the consumer and ordinary citizen through lower prices and increased opportunities.

The TPPA is intended to do the reverse – to ensure that the dominant market positions of powerful overseas corporations are immune from challenge, so that prices stay high and the interests of the ordinary citizen, and the principles of democracy, are sidelined.  You have been warned!

Bryan Gould


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From Think Left:

3 thoughts on ““Free Trade” Treaties are for Big Corporations, not for us.

  1. Does this mean then that Miliband’s bold statements about freezing energy prices are entirely without foundation? I’m also puzzled how any government, particularly any unelected one as we currently have, can sign any future government up to what is effectively the complete surrender of its authority. What happens when some future government says no to this? Would we be sensible to do away with government as we currently have it so we can get out of such a deal? It might be useful in that case, and if the pound’s been ruined we could create a new fiat currency openly declared to be backed with the wealth of the nation and rebuild using that. I’m liking this more and more actually 🙂


  2. Pingback: Petition – STOP TAFTA ! Why the Free Trade Agreement Must Not Go Ahead | Think Left

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