Little to gain and much to lose for Australia in the Trans-Pacific Partnership (TPP)
Trade Ministers from 12 countries around the Pacific Rim met once again in Singapore on May 19-20. Their aim was a breakthrough in negotiations towards the Trans-Pacific Partnership (TPP), a free trade agreement involving Australia, Japan, the US and nine other countries around the Pacific Rim. They failed, yet again, to reach an agreement.
This recent failure follows a fruitless visit by Obama to Asia in April, which had to focus on regional security issues instead of trade, as Japan and the US - the two biggest economies involved in the negotiations – failed to come to an agreement on market access issues. The current US-Japan stand-off demonstrates that the most powerful players are dominating the talks. As negotiations drag on into their fifth year, it is clear that many governments are unable to agree that the TPP is in their national interest. In the US, domestic opposition has led commentators to say there will be no Congressional consideration of the TPP before the end of 2014.
In Australia, opposition to the agreement is increasing as the community has become more aware of the more harmful proposals in the TPP, such as those which would increase the cost of medicines, impact negatively on public health, reduce the ability of government to regulate in the public interest, allow foreign investors to sue governments over health and environment laws, and threaten internet freedom.
In May, 46 unions, church groups, public health and other community organisations representing millions of Australians endorsed a letter to Trade Minister Andrew Robb which calls on the Minister to reject harmful proposals in the TPP which they say pose unacceptable risks and costs, and should not be traded away in secret negotiations.
A major concern is the possible inclusion of Investor-State Dispute Settlement (ISDS) clauses in the TPP and other trade agreements, which allow foreign investors to sue governments if they can claim that a law or policy has ‘harmed’ their investment. The current Coalition government has already agreed to this proposal in the Korea-Australia Free Trade Agreement which was announced at the end of last year, and has indicated that it is willing to agree to include it in the TPP in exchange for market access. However, largely due to community opposition this clause was not included in the recently announced Japan-Australia free trade agreement.
In March, Greens Senator Peter Whish-Wilson tabled a bill in the Senate which would ban ISDS from all trade agreements, and received more than 130 submissions which demonstrate the extent of community opposition in Australia. There is also a Senate inquiry into the Korea FTA for which submissions are still open.
Opposition to ISDS is not only growing in Australia. As the number of ISDS cases lodged increases each year, more and more countries are expressing opposition towards ISDS provisions, including Germany, France, Indonesia, India, South Africa, and 10 countries in Latin America. Despite this, the US is still pushing for ISDS to be included in the TPP.
As negotiations drag on, it becomes more and more apparent that there is little to gain and much to lose for Australia in the TPP.