Trans-Pacific Partnership | First in a series: The ‘investor-state’
Credit: stoptpp.org |
Moderator’s Note: This is the first in a series of analytical reports that focus on a development in international treaty negotiations. This is the Trans-Pacific Partnership[i] or TPP, which is on Fast-Track path for approval as the framework for trade and investment among a group of Pacific Rim countries. The Trans-Pacific Partnership comprises a region accounting for approximately 40 percent of global GDP.
According to the Wikileaks press release of 13 November,the current TPP negotiation member states are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. Notably absent: China. One of the things I noticed in reading through the so-called patents and intellectual property chapter is that the February 2011 document reflects a great deal more disagreement among the partners than has been discussed. It will be interesting to see ow and if these differences, some of which are discussed below, have been resolved once we get a look at the full text of the treaty.
Neoliberal enclosure redux
‘INVESTOR-STATE’ RULES TO RE-MAP ‘PACIFIC RIM’
Devon G. Peña | Seattle | November 17, 2013
Strike another one for the Republic of Property and against democracy. Julian Assange confirmed this past Wednesday that the source of the leaked document explained that the rules allow “only three individuals in each [negotiating] nation to have access to the full text of the [TPP] agreement”. The secretive behind-the-scenes negotiating has been molded by 600 ’trade advisers’ who are the corporate lobbyists guarding the interests of US transnational corporations like Chevron, Halliburton, Monsanto and Walmart. These advisers are “granted privileged access to crucial sections of the treaty text.”
The TPP treaty documents released by Wikileaks last week consist of a redacted record from February 2011 reflecting what the disagreements were at that time as expressed in the redaction notes on negotiated positions for principal elements in the TPP chapter on intellectual property covering copyright, trademarks, and patents.
I wish to get at something that may not seem too obvious at this point and it involves the need for us to engage in a critical explanation and interrogation of the central concept underlying treaties like these, the investor-state arbitration complex. I looked for evidence of this investor-state complex as reflected in the texts and counter-texts leaked in the chapter on trade-related intellectual property. The TRIP chapter is based on a key principle that was embodied in the North American Free Trade Agreement or NAFTA (1994). International trade law expert Marc R. Poirier (2003) explains how the principle of autonomy of corporate governance involves the “formation of new legal regimes that negotiate between national sovereignty and the transnational practices of corporate economic actors.” (851). There is a name for this neoliberal model – the investor-state.
The investor-state and the ‘Club of 600’
The “transnational practices of corporate economic actors” described by Poirier can also be seen to operate as the self-referential sources and objects of a totalizing scripture. In this case, scripture and verse is defined by a cadre of well-organized capitalists who seek rules for finance capital to dominate the operation of the Trans-Pacific investor-state of economic exception.
The neoliberal trickery in these sorts of treaties is simple: Adopt rules and conditions that will prevent public sector agencies and other regulatory or supervisory actors – including the general public and civil society associations and NGOs – from having knowledge of or access to information related to specific cases of dispute resolution. This will hold true even if this involves claims against domestic environmental, labor, or civil rights law. This is the investor-state of economic exception.
The way NAFTA and the post-NAFTA frameworks evolved initially placed very few limits on foreign investors rights to invoke secret dispute resolution mechanisms. Through the exercise of this administrative authority, transnational corporations can abridge and undermine the nature, scope, and functioning of national statutes covering everything from contract and liability law to regulatory standards for social sector goals such as environ mental and worker protections. The TPP regime grants private corporate actors exclusionary capacity to resolve claims against states and other actors through private tribunals that conjure their own applicable investor-state rules by articulating the sacred [sic] domain of property law.
Susan D. Franck (2005) makes a useful critical observation about the investor-state model being propelled forward by the advent of bilateral and multilateral investment treaties like NAFTA. According to Franck, these treaties “give foreign investors substantive rights - such as freedom from expropriation - as well as the right to sue host governments for violations of the substantive rights enumerated in the investment treaties.” In NAFTA, the right to sue the host government was handed over in the form of language prohibiting “non-tariff barriers to free trade” including dispute resolution tribunals to resolve claims against environmental and labor laws.
In The Terror
of the Machine I explained longstanding opposition to NAFTA as being based
on the concern that the inclusion of claims arising from the treaty’s explicit
ban on “non-tariff barriers to free trade” would be implemented through claims
for exemption from and/or compensation for damages arising from the enforcement
of national or domestic environmental, labor, and civil rights laws (1997: ).
This has indeed come to pass and constitutes a “race to the bottom” through the
dismantling of social and environmental sector of the state. I suppose this is
a basic neoliberal principle: When shifting to the neoliberal investor-state
model you destroy as much of the social sector as possible along the way. This
is “austerity” by another name – and it only applies to the 99% and involves a
transition to what I think we should more accurately call the post-liberal minimalist state.
Franck’s analysis, which was published in the Fordham Law Review, reveals that between
2000-05 the number of arbitrations “arising under investment treaties
…skyrocketed” – this period covers the immediate ten-year aftermath of NAFTA
implementation.
The proliferation of…bilateral and multi-lateral investment treaties has led to an unprecedented increase in the number of arbitration tribunals convened to resolve investor-state disputes…These private tribunals consider legal issues that impact the international economy, public policy and international relations, but they do so in a vacuum [sic] largely because of gaps in the academic literature and confidentiality obligations that prevent public decision-making. Substantive obligations in investment treaties are remarkably similar; notwithstanding these similarities, in the absence of valuable guidance from scholars or appellate bodies, arbitral tribunals have come to inconsistent [sic] decisions on the meaning of fundamental international law rights. (p. 1521) [Emphasis and brackets are added.]
By establishing private tribunals to settle investor-state conflicts in secrecy, the TPP follows principles established earlier under NAFTA. TPP is pre-designed in accordance with the innate DNA of neoliberal or free market fundamentalist value framing. For example, the objections posed by Mexico and other countries on plant varieties in February 2011 all involved issues that the U.S demanded must be deleted from the TRIP chapter and instead delegated to the as yet undisclosed environmental and labor protection chapters. Australia is backing the U.S. on this important issue.
The “Club of 600” does not appear comfortable with the authority of regulatory agency – especially anything that would expose them and their ‘proprietary’ claims to the eyes of the public or the organizations of civil society. This is the principal trump card – an investor-state of economic exception – and that is why we must foment in Congress a will to reject the ‘Fast Track’ authority and then the entire TPP treaty.
Why is there a lack of transparency? No one familiar with NAFTA is surprised since the authority and secrecy granted to the tribunals of the investor-state are by now a familiar method. It is easy, as Lori Wallach and others argue, to pose this as simply the largest anti-democracy trade agreement conceived to date. But it is that and much more. The investor-state organizational form is how the club of 600 wants this particular set of geopolitical international trade relationships organized. The necessity of the opaqueness is the point.
This is not a new idea and David Rockefeller’s Trilateral Commission declared this in the Crisis of Democracy report that too much democracy was pretty much bad for capitalism. This is the same reason the Zapatistas wisely declared in 1994 that the state was the investor\CEO club of the capitalist class. They called on ‘basement’ Mexico – all the social majorities comprised of dispossessed and devalued peoples – to mobilize alongside the rest of the civil society to deny the state undeserved legitimacy and engage the great refusal to obey the iron fist of the market.
Credit: Wikileaks |
Neoliberal enclosures redux?
Starting on p. 28 of the TRIP chapter is “Section E: Patents / Undisclosed test or Other Data / Traditional Knowledge.” There are several concerns related to this section, starting with the definition of what is a “patentable subject matter.” As of February 2011 there was a clear divide between the US/Australia proposal and an alternative position supported by Chile, Malaysia, Philippines, Singapore, Vietnam, Brunei, New Zealand, Cambodia, and Mexico.
The US/AU tandem insists that patenting be made “available for any invention, whether a product or a process, in all fields of technology, provided that the invention is new, involves an inventive step, and is capable of industrial application.” The other countries are opposed and want a proviso establishing that “patents shall be available for any new uses or methods of using a known product” and that:
Each Party may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal, or plant life or health or to avoid serious prejudice to nature or the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.
Another point of contention centers on various approaches to the kinds of subjects that a country may “exclude from patentability” and a group comprised of New Zealand, Cambodia, Singapore, Chile, and Malaysia propose a third alternative that would exclude:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and
(b) plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than nonbiological and microbiological processes. However, Parties shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof.
It seems evident this group seeks to make various medical technologies available as quickly as possible and to thwart abusive monopolies that emerge with longer-term patents. It seems they also want to prohibit foreign patents on plants and animals other than organisms and also a system to protect indigenous plant varieties, albeit under a patent or sui generis regime. The US/AU insist that this is unacceptable and that issues related to environmental protection and health must remain confined within the as yet unseen environmental chapter.
Credit: Global Research |
They need us; we do not need them
It is pointless to suggest an idea we can critique – and the fact is that the investor-state is a nice fat target – but we also might want to think about political strategies and the fact is that right about now is when we need an immediate response by the Occupy Wall Street forces and its infinite local network] iterations. The Trans-Pacific Partnership represents exactly the type of Wall Street thinking that imposes the contract and commodity view of life – all life, since selfish individual economic behavior is the only social rationality. This is of course a deception; a dangerous illusion. [This section to be brought forward in the next in the series.]
Sources
Franck, Susan D. 2005. The legitimacy crisis in investment treaty arbitration: privatizing public international law through inconsistent decisions. Fordham Law Review 73:1521.
Peña, Devon G. The terror of the machine: Technology, work, gender, and ecology on the U.S.-Mexico border. Austin: CMAS Books/Univ. of Texas Press.
Poirier, Marc R. 2003. NAFTA Chapter 11 expropriation debate through the eyes of a property theorist. Environmental Law 33: 851.
Note
[i] The official homepage of the Office of the United States Trade Representative can be found at: http://www.ustr.gov/tpp.
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