Trump NAFTA Trudeau

The investor-state dispute settlement (ISDS) provisions of the zombie Trans-Pacific Partnership (TPP) have been dealt a blow, but continue to live on after some shenanigans at a meeting of what is now called the “TPP 11” in Da Nang, Vietnam, late last week.

The meeting of leaders of the US-less TPP group was supposed to sign off on what has now been rebadged — in an acknowledgement of how badly damaged the TPP brand was — as the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP), but Canada’s Justin Trudeau didn’t show up. Exactly what happened still isn’t clear, but Trudeau has since made it clear Canada isn’t happy with the deal, which was negotiated by his neoconservative predecessor Stephen Harper. It seems likely Trudeau’s ploy was a successful effort to extract some further concessions for Canada, as well as providing some cover for his own, much more important negotiations currently underway with the toddler in the White House over the North American Free Trade Agreement (NAFTA).

The CPTPP, to be fair, has some revisions that make it an improvement on the secretly negotiated TPP (secret except for major corporations — they were given privileged access to the text). Some 20 clauses from the original document have been “suspended” (there’s a good guide here from the perspective of New Zealand, where the media have paid for more attention to all this than our own). In particular, the draconian copyright and intellectual property requirements imposed by the United States have mostly been suspended, and will have to be renegotiated if a post-Trump United States wants to re-enter the treaty.

But ISDS, under which multinational corporations can sue governments for enacting public policy measures that might affect their profits, remains in the CPTPP. New Zealand’s Jacinda Ardern, who promised to go hard on ISDS during the recent NZ election campaign, secured some curbs: ISDS won’t apply to investor screening laws that enable governments to prevent foreign investment in certain areas, and if a company enters into a contract with a government, it will be prevented from using ISDS and instead must use domestic courts for any litigation, removing the capacity of multinationals to engage in contract litigation with governments not before an actual judge, but before a pro-business “international arbitrator” without any legal framework.

The Kiwis also revealed that Malcolm Turnbull had agreed to a “side letter” that would in effect prohibit ISDS between Australia and New Zealand — suggesting Ardern made her views on ISDS loud and clear to Turnbull at their recent meeting in Sydney. But it prompts the question of why Turnbull is so eager for ISDS with other signatories when he’s happy to give it up in relation to decisions made in Wellington.

Ardern would clearly have preferred to remove ISDS altogether from the agreement, and she’s right to do so: ISDS, however limited, hands more power to multinational corporations at the expense of governments. It’s an echo of the fading era of neoliberalism, when governments reflexively bowed to corporate will, and those that didn’t were punished.

Turnbull has tried to sneak through a revival of the TPP and commit Australia to a shabby deal that even the Americans walked away from (don’t forget, Trump was at one with Clinton and Sanders on rejecting the agreement). He’s rebadged it, he’s agreed to suspend some of the worst aspects of it. But he won’t dare ask an independent body like the Productivity Commission to examine it ahead of signing Australia up to it, because he knows what it will conclude.

Turnbull and the overpaid, business-class-dwelling shiny bums of DFAT have undermined Australia’s interests with the TPP. Thankfully, there are other leaders who are doing more to stand up for the interests of Australia than they are.