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Beyond trade

by Wolf Dagmar


“Internet-service providers would turn into spies”: smart-phone and tablet users preparing to take pictures of Pope Francis in Manila in January.

“Internet-service providers would turn into spies”: smart-phone and tablet users preparing to take pictures of Pope Francis in Manila in January.

Manila looks undecided about joining the Trans-Pacific Partnership (TPP), a trade deal promoted by US President Barack Obama. Proponents see huge economic benefits, but critics see serious downsides.

Last year, President Benigno Aquino said his government was “studying” the options concerning TPP. In March, Gregory Domingo, his trade secretary, announced the Philippines would not participate under the current administration since there was not  enough time to assess the matter. In May, however, he said that TPP was “live” and “ongoing”.  

The TPP’s roots go back to 2006, when Brunei, Chile, Singapore and New Zealand signed the Trans Pacific Strategic Economic Partnership agreement. In 2008, the US started talks with the group to discuss liberalisation of financial services. Later, Australia, Peru, Vietnam, Malaysia, Canada, Mexico and Japan joined the talks too.

There are two possible reasons why the Philippines is indecisive. One is that the government feels it can get a better deal from the Regional Comprehensive Economic Partnership (RCEP), the alternative China proposes to TPP. The other is that the Aquino administration, now in its final year, does not want to spend its remaining political capital on something as controversial as the TPP. Proponents say the pact would bring huge benefits. A Philippine trade official claims that participation would be worth $ 10 billion in exports. But critics find the TPP appalling for many reasons. The two main ones are that it is being negotiated in secrecy and that the information that has leaked out nonetheless indicates that the  TPP will go beyond typical trade issues such as tariffs and quotas. Its 29 chapters will commit members to a wide range of issues – most of which would mostly benefit large corporations.

Defenders of the agreement say secrecy is necessary to avoid revealing negotiating strategies. Opponents do not buy this. As political analyst Walden Bello has said of both the TPP and its European equivalent, the Transatlantic Trade and Investment Partnership (TTIP), “if they were negotiated openly they wouldn’t stand a chance of being approved by people.” He said both “are really about asserting corporate control over every aspect of our lives, through intellectual property rights and investor-state arrangements”.

Among the most notorious of the TPP’s provisions that have leaked out are those on intellectual property and something called Investor-State Dispute Settlement (ISDS). TPP signatories will be compelled to follow the United States’ stringent definition of copyright and digital-rights management (DRM). Patent protections could keep the prices of medicines and books high in the TPP countries. Internet-service providers of the signatory countries will likely end up monitoring their users to prevent copyright violations, turning into de facto spies and censors. Moreover, governments would be obliged to criminalise disclosure of “trade secrets”, which could mean prison for investigative journalists and whistleblowers.

The ISDS provisions will allow corporations to sue TPP governments in special tribunals if they feel that policies threaten their profits or rights to be treated “fairly”. Drug companies might sue to keep medicine prices high, or tobacco firms could take a government to court over health warnings on cigarette packs.

ISDS would mean that new legislation would not only be checked by a nation’s supreme court, but that foreign investors would have another kind of court they could turn to. This additional tribunal would not protect the constitutional order, but be entitled to rule on any legislative change a foreign investor might find disturbing. It is unlikely that the US Supreme Court, for example, would accept such jurisdictional ambiguity. Corporate lawyers, however, would certainly try to make the most of competing legal systems, hoping at least to achieve lucrative out-of-court settlements.

As for the Philippines, the decision to join the TPP may not depend on the agreements’ merits and downsides. It may be based, in the end, on geopolitical considerations. In view of China’s assertive stance on claiming the huge South China sea as its territorial waters, the main motive may be to get on the good side of the USA. Given that the US Congress is unconvinced by President Obama’s trade plans, however, Manila ultimately may not have to decide at all.

Alan Robles is a free-lance journalist based in Manila.
[email protected]

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