Revived for the second time, the Trans-Pacific Partnership (TPP) trade deal is set to be signed in Chile during March. This shonky secretive deal is designed to undermine legal protections for workers and the environment and let big business sue governments for passing laws that affect their profit making.
Negotiations for the TPP have been ongoing since 2008. It is roundly condemned by, and has faced protests from environmental activists, trade unionists and socialists globally. The original agreement would have covered a population of 800 million people throughout 12 countries which account for 40% of the world economy. But Donald Trump withdrew US support upon his election late in 2016 as part of his false populist pitch to support industrial workers in the US. The TPP looked dead.
But Malcolm Turnbull and Japanese Prime Minister Shinzo Abe have worked hard since to revive this so-called ‘free trade’ agreement, despite threatened Canadian withdrawal last year. It is now known officially as the “Comprehensive and Progressive agreement for Trans-Pacific Partnership” or CPTPP. It includes the remaining 11 countries Australia, New Zealand, Japan, Canada, Brunei, Vietnam, Chile, Singapore, Peru, Malaysia and Mexico.
‘Free trade’ is a capitalist propaganda term, like ‘free market’. It’s supposed to sound nice, but it’s really just ‘freedom’ for capitalists to trample all over laws and rules which were won by the struggles of ordinary people. Free trade deals often result in local industries being destroyed and the working class communities built around them left destitute. The effort that big business politicians put into drawing up these deals is never put into planning a future for these communities.
“Investor-State Dispute Settlement” (ISDS) clauses are common in trade deals and are included in the CPTPP. These clauses are legal weapons companies use to sue governments for making laws that might affect their profits. Laws on workplace rights, on Medicare funding or to protect the Great Barrier Reef and phase out fossil fuels could all be targeted and scrapped under the CPTPP. Not only that, billions of dollars of compensation to the companies can be ordered as well.
Trade minister Steve Ciobo claims these arguments are simply scare mongering. History shows otherwise. Swedish energy company Vattenfall sued the German government successfully under ISDS trade deal clauses in two cases. Vattenfall reportedly sought over €5 billion compensation for government policies to restrict coal fired power stations and phase out nuclear power.
Tobacco conglomerate Phillip Morris recently sued the Australian government for tobacco plain packaging laws introduced in 2012. They used an ISDS clause from a 1993 Hong-Kong Australia investment agreement. Numerous other examples exist. Clearly these clauses are a real threat.
Government ministers also argue that this deal will ‘create jobs’. But their argument is just another version of the thoroughly discredited ‘trickle down economics’ idea. The same false idea they use to support their proposed $65 billion big business tax cuts.
Really this deal is about rivalry between big imperialist powers and their supporters. The CPTPP started as part of the US plan to contain China’s rise during President Obama’s term. US allies, especially Australia and Japan, kept the deal alive after Trump’s withdrawal as a counter-weight to China’s growing dominance. By prioritising trade between the 11 countries in the block, they hope to increase inter-dependence and decrease reliance on China. They hope that the US will be coaxed back into the deal in the near future, perhaps under a new president.
Australian capitalists are being squeezed between China and the US: their economic engine and their main military and political ally. Increasing reliance on China means that the Australian ruling class is becoming more vulnerable to Chinese economic pressure. China’s government can use this power to force concessions and silence criticism on issues like the status of Hong Kong or Taiwan, control of the South China Sea, or anti-democratic crack downs. For Australia’s ruling class the CPTPP is an attempt to prolong their balancing act on the US-China tightrope as the wind picks up.
For working class people in Australia and throughout the region, none of the imperialist powers or their trade deals, rivalry and cut-throat conflict offer anything good. Neither do ‘protectionist’ trade policies, which focus on protecting the profits of ‘local’ capitalists at the expense of local workers. The alternative is international cooperation based on a democratic socialist economic plan that puts people and the environment before profit.
By Kirk Leonard