Trade agreement benefits unproven and ISDS dangerous, says Productivity Commission
24th June 2015:Peter Martin reports in the Sydney Morning Herald that The Productivity Commission has launched a scathing attack on Australia's latest series of free trade agreements, saying they grant legal rights to foreign investors not available to Australians, expose the government to potentially large unfunded liabilities and add extra costs on businesses attempting to comply with them.
Leaks about the text of the Trans Pacific Partnership suggested it will "include obligations on pharmaceutical price determination arrangements in Australia and other TPP members of an uncertain character and intent... The history of intellectual property arrangements being addressed in preferential trade deals is not good."
Also, investor-state dispute settlement clauses included in the Korean and Chinese agreements and planned for the Trans Pacific Partnership "depart from national treatment principles by affording substantive appeal rights to foreigners not available to domestic firms," the Commission warned, saying this could create the risk of "regulatory chill" where Australian governments will be cautious about enacting new laws for fear they are challenged in foreign tribunals.
The safeguards and carve-outs for environmental and health legislation included were of "uncertain effect, lack transparency and have inadequate parliamentary scrutiny", exposing the government to "potentially large unfunded contingent liabilities dependent on decisions by international arbitration tribunals", the Commission found.
The cost to Australia of defending an action brought against it by Philip Morris Asia under an investor-state dispute settlement clause over its plain tobacco packaging legislation were "unknown, unfunded and likely to be substantial."