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Wikileaks Releases Documents On TPP

Trans Pacific Partnership Agreement is worse than we thought.

by Daniel Johnson

Wikileaks Releases Documents On TPP
Wikileaks Releases Documents On TPP

A lot of people would like to know more about the highly secretive and, from what we can tell, very expansive Trans Pacific Partnership agreement, being forcibly fast tracked by various governments with no public input or debate. But the details are being kept under wraps, and, it appears, for good reason. 

 As the world's largest economic trade agreement, the TPP will encompass more than 40 per cent of the world's GDP, with details effecting many aspects of life and governance, yet the negotations between the 12 countries involved have been entirely in secret. Even people within those governments haven't had access to the full text of the agreement, while the public gets no details at all. Large companies have been given access to many parts of the text, and are actively involved in writing parts of it.  

On July 29, 2015, WikiLeaks released a secret letter from the Trans-Pacific Partnership Agreement (TPP or TPPA) Ministerial Meeting in December 2013. 

The document, entitled 'State Owned Enterprises: Issues For Ministerial Guidance' centers on publicly owned utitilities and crown corporations. This includes our public water facillities, hospitals, as well as public broadcasters like PBS and CBC. 

The ideological bent of the treaties authors clearly shows that they see publicly owned property as 'unfair competition' with private, for profit multinationals. 

According to the letter, 4 issues that local ministers have to address are: 

How to address government support for SOEs that cause adverse effects to trading partners;

• The exceptions or other forms of flexibility that may be required if government support disciplines are applied broadly (i.e., to goods and services, trade and investment);

• The definition of SOE and application of SOE disciplines to all levels of government; and

• Dispute settlement.

 

Wikileaks release of the letter was accompanies by an analysis by Professor Jane Kelsey, Faculty of Law, University of Auckland, New Zealand. According to Kelsey,

"The SOE text has been totally US-driven. For several years, negotiators reportedly sat around the table asking the US to explain the issues. It was only when Australia offered an alternative approach that the standoff was broken. Clearly, some governments were still reluctant at the time of this paper in late 2013, as it states “a majority of TPP countries” support the additional “disciplines” – meaning handcuffs – on governments."

He goes on to explain the far reaching implications of TPP, and how the wording of the agreement is seemingly hostile to the very idea of public property, commons, or even a social contract:

SOEs and monopolies have to act on the basis of commercial considerations. “Commercial considerations” is a vague term that could have far-reaching consequences. The converse – non-commercial considerations – seems to reframe the public good role of public entities as a negative trait that governments must abandon.

That is intrinsically problematic. SOEs are almost always stateowned because they have functions other than those that are merely commercial, such as guaranteed access to important services, or because social, cultural, development and commercial functions are inextricably intertwined.

1 Many SOEs at central, regional and local government levels provide basic services that have a public dimension, even when they have been converted into a corporate form. What does this mean for them? The scope of “commercial considerations” raises further questions. Governments may opt for cost recovery, rather than a profit, where a public or infrastructure service is involved. Or an SOE engaged in public broadcasting, railways, or research may have hybrid roles, some being commercial and some not. Would the entire enterprise have to act on the basis of “commercial considerations”?

Even where SOEs are profit-oriented, a government may elect not to extract full commercial profits, and choose to reinvest in the enterprise to strengthen the asset base or the quality of the services in ways that private investors would rarely do. The pricing of goods or services may reflect considerations other than a market price based on supply and demand. This obligation would seem to prevent SOEs from behaving in that way.

Presumably the obligation applies to governments as well as SOEs, and would prevent a government from requiring or facilitating SOEs to act on non-commercial considerations. Depending on the definitions, this could severely fetter governments seeking to pursue mixed objectives through SOEs that are subjected to the chapter. Are there any effective protections for public good aspects of SOE activities, and how are they defined?

Terms such as “legitimate public policy objectives” or pursuant to a “government mandate” can be full of fishhooks"

 

Kelsey's analysis ends with a list of important questions. They are questions that we all need to be asking, especially during the coming election. 

Key questions arising from this paper:

What protections are there for public services and public good functions of SOEs, how are they defined, and do they apply to all the rules?

Can governments define which of their SOEs are subject to these rules, or do the other parties all have to agree?

Are all countries treated the same, or will these handcuffs have a much greater effect on countries that have a lot of SOEs?

What does this mean for countries whose economy, jobs and local businesses rely on their SOEs, especially a developing country like Vietnam?

Will the rules only apply to SOEs at central government level, and if so, does that impose disproportionate restrictions on countries that have centralised governments as opposed to those with sub-federal systems of government?

What happens if a state enterprise has a hybrid of commercial and social or public good functions, or the market model has failed and the government wants to restore that function and subsidise the SOE to provide it?

How can universal service obligations, such as postal services or telecoms, be protected if SOEs receive special payments to provide them?

Would payments for a universal service obligation be an anticompetitive subsidy if the SOE also carried out other activities that compete with the private sector?

Can a new SOE be established to meet a social or market failure if it needs initial capitalisation or other support? If an SOE is in trouble can a government provide an injection of funds or must it let the SOE fail?

Is the SOE section of the TPPA a backdoor to privatisation by stripping away the social and subsidised aspects of SOEs, so there is no reason why they cannot just as easily be run by the private sector?

 If investments from TPPA countries have to be given the same treatment as SOEs can they use investor–state dispute settlement to challenge what foreign investors consider to be discrimination, or claim they are unfairly treated because their expectations have not been met?

How are monopolies over natural resources or infrastructure affected?

Do the rules that apply to monopolies affect existing as well as future monopolies?

What protections are there against abuse or harassment of governments or individual SOEs under the proposed monitoring and review process?

Could one government tie up the resources of another country’s SOEs by constant demands for information as part of monitoring and review processes, and put those SOEs at a competitive disadvantage because private competitors do not have to disclose that information?

If this is a completely new set of rules, does every government really know how they will work, and are they confident about how a dispute body would rule on a dispute?

Because the ‘transparency’ provisions in other chapters, including the Transparency and Regulatory Coherence chapters, also apply to SOEs could competitors from another country use those provisions to keep demanding information, explanations and reviews on regulatory decisions that involve SOEs?

The Council Of Canadians and other groups already active against the TPP have issued statements about the documents.

COC trade campaigner Sujata Dey says  “The very mission of the CBC – telling the bilingual and multicultural story of Canada – will be reduced to simple profit making. Likewise, Canada Post will no longer function as a nation builder, but as a private company. The essence and mandate of our crown corporations are being traded away in favour of private corporate profit.”


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