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Forum Post: Corporate-Backed Trans-Pacific Partnership Shrouded in Secrecy

Posted 1 year ago on March 19, 2013, 4:29 p.m. EST by LeoYo (5878)
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Corporate-Backed Trans-Pacific Partnership Shrouded in Secrecy

Tuesday, 19 March 2013 09:15 By Sam Knight, Truthout | News Analysis

http://truth-out.org/news/item/15142-corporate-backed-trans-pacific-partnership-shrouded-in-secrecy

Statements made at the February panel discussion, however, indicate that TPP discussions are centered around hogtying legislators and regulators. Weisel said that the USTR wants "a very deep agreement" in terms of "an ambitious outcome on services and investment, because we are still competitive in the service sectors as well as in government procurement."

"There have been lots of studies on this and all of them would demonstrate that the deeper the liberalization, the greater the benefits," she said. While that could be construed to encompass only tariffs, the scope of the vision Weisel laid out seemed to praise giving corporations a much wider berth than federal law currently allows. "It's the non-tariff barriers and regulatory issues that companies face that we really need to do significant work on, and have been looking at carefully as key elements in TPP," she added.

The concept of non-tariff barriers, as described by Citigroup's Johnston, "has a lot to do with regulatory control by host government."

"It has a lot to do with conditions - once you're invested, you then find it very difficult to take advantage of the capital you put into the country," he stated, adding that the TPP can be useful for "not totally removing, of course, but reducing the behind-the-border barriers."

Publicly owned enterprises, for example, are being targeted by negotiators. One such entity in the United States that has been the subject of considerable interest in recent years is the Bank of North Dakota (BND) - the only fully publicly owned financial institution in the country. The BND, which is only allowed to lend wholesale, was a stabilizing force that helped keep the already energy-rich state insulated from the shock of the financial crisis (Alaska, for example, didn't fare as well). It has also brought a small fortune to the state's treasury - $340 million in net tax gain between 1997 and 2009. Legislators in at least 13 different states have proposed studying or emulating the North Dakota model - state-owned development of central-bank style institutions guaranteed by tax revenue. But if the TPP is passed, that option might not be available. Weisel said that State Owned Enterprises (SOE) are routinely "competing directly with private enterprises, and often in a way that is considered unfair."

"Some of the advantages that can be conferred on State Owned Enterprises are things like preferential financing," Weisel said. "Those are things that wouldn't be provided to private companies - preferential provision of goods and services provided by a government."

She said that "State Owned Enterprises - which in some cases can comprise a significant percentage of an economy - can be used to undermine what we're otherwise trying to gain from this free trade agreement."

A spokesperson for the BND declined to comment on whether or not this outlook was perceived by the bank to be an institutional threat. But, depending on the report's language, foreign bankers could claim that the BND stops them from lending to commercial banks throughout the state.

Citigroup's Johnston, in response to another question from the audience, said that corporations weren't exactly enamored of competition with publicly owned enterprises - and that they are prodding TPP delegates into doing something about it.

"The companies that are running up against the problem and the challenges of the state-owned enterprises, they obviously feel strongly enough about it that the problem is being addressed within the negotiations," he said.

"How it's going to ultimately flesh out in my mind is one of the big question marks in the TPP negotiations," he opined, "because you've got such a diverse array of economies at the table."

Weisel added that she didn't think SOEs should be barred by the treaty, commenting that they "are created for a lot of purposes." "We have SOEs to address market failure, or to cover certain public services that wouldn't otherwise be covered by the private sector," she pointed out.

But in a day and age in which public institutions are commonly used as a dumping ground for private failures, when every commodity under the sun - from water utilities to public education, from security to space exploration - is targeted by free-marketeers, there can be no guarantee, until the draft is finally released, that the TPP will protect entities like the BND, especially when considering, as critics have contended, that the deal's boosters are pushing an agreement that more firmly entrenches capital flow as a form of trade.

"When you hear the word 'trade' in today's business world, it doesn't just mean goods moving across borders," Johnston said. "It doesn't even mean just services moving across borders. It also means investment. And that's something where the TPP is really gonna make a big difference."

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