Law Speak - Is the Trans Pacific Partnership Agreement truly for trade?

THE US Senate has finally approved "fast track" procedures for US President Obama to conclude the trade agreement known as the Trans Pacific Partnership Agreement (TPPA). This means that the agreement being negotiated between the US and 11 Pacific Rim countries, including Malaysia, can be presented for a "yes or no" approval process to the US Senate for its adoption. This will prevent a long process of debate which could filibuster and even thwart the adoption of the treaty.
The negotiations, now nearing conclusion, started in 2010 based essentially on the US template agreement.
The first problem: the negotiations are shrouded in secrecy. The text being negotiated is not fully disclosed to the people of the countries involved: citizens, legislators, farmers, and such like.
Since Wikileaks started disclosing some chapters, the text is being made available on a limited (need-to-know) basis to some chosen people and groups. And they must sign a non-disclosure agreement. The secrecy applies up to five years after the treaty comes into force.
Now why should Malaysia be party to an agreement that is being negotiated at such a high level of secrecy – reminiscent of secret society proceedings of days gone by? What is there to hide from our own people – who after all will be the ones affected by the agreement? Does this not breach the fundamental ethos of a functioning democracy; and our oft-repeated declaration of being open and transparent in decision-making?
The minister of international trade and industry says: No problem, the treaty will be presented to Parliament. But this will be after all its terms have been negotiated to conclusion. Is this not too late then? And judging by the way the government passed far-reaching laws recently by "stopping the clock" and using its "whipped" majority – can there be any meaningful input?
From reports and rumours, the TPPA will be a charter for multinationals and big business. It has the potential for huge adverse impacts – upon the country's sovereignty and even the basic structure of the Federal Constitution.
Decisions of the country's highest judiciary can be bypassed as happened in Australia and Ecuador (when sued by tobacco companies: see "A toxic clause to note" – Law Speak, April 28).
Policy changes to protect the environment and health can be thwarted – a company (only a foreign one) can complain that the government is precluded from changing our law to prohibit its factory from producing dangerous radioactive substances. Huge pay-outs running into billions can then be dished out to such multinationals which are given the right to sue governments – under the Investor State Dispute Settlement (ISDS) provision, as has already happened elsewhere where there is a similar provision in a trade agreement; and by "judges" comprising mainly trade lawyers who also routinely act for these mainly Northern multinational corporations.
Even our foreign policy space can be shrunk. A provision in the negotiating text prevents countries from imposing trade sanctions against Israel – although, ironically, the US has initiated the most number of sanctions against other countries ever in the world!
Incredulous as this provision may sound, it advances the United States-Israel Trade and Commercial Enhancement Act which requires US trade agreements to "discourage politically motivated actions to boycott, divest from, or sanction Israel and to seek the elimination of politically motivated non-tariff barriers on Israeli commerce." This is to checkmate the growing movement to boycott, divest from, and sanction (BDS) Israel for human rights abuses against Palestinians.
Medicines may cost infinitely higher as Big Pharma's lobby seems to have entrenched longer and tougher intellectual property (IP) rights for their drugs. Generic drugs will be phased out. Consider the impact: a new hepatitis drug will cost US$84,000 (RM319,603) for a 12-week course; as contrasted with a generic for a fraction of the price.
The international Doctors Without Borders says that: "The US government is pushing policies in the TPPA that represents the most far-reaching attempt to date to impose aggressive IP standards in a trade agreement with developing countries – policies that further tip the balance towards strong IP regimes favouring commercial interests and away from public health.
For pharmaceuticals and other health commodities, stronger IP regimes mean extended patent monopolies and delayed generic competition, and that translates into higher prices for people who need medicines. In developing countries, where people rarely have health insurance and must pay for medicines out of pocket, high prices keep lifesaving medicines out of reach and are often a matter of life and death."
According to the Medical Journal of Australia, the most recently leaked draft of the international trade deal includes provisions proposed by the US that would further protect the monopoly pharmaceutical companies hold over drugs, and delay cheaper versions from entering the market. Contrivances such as "evergreening" the patent – keeping it alive on expiry in another slightly altered form – for example, can delay the availability of generics by two decades.
Even Hilary Clinton, in her book Hard Choices, criticises the ISDS mechanism, arguing that it empowers investors to "sue foreign governments to weaken their environmental and public health rules."
It is also reliably learnt that the Malaysian Cabinet has approved abolishing our Malaysian law – the Plant Variety Protection Act – that allows small farmers to claim rights over their farm-bred crops. This is on the insistence of the US negotiators. We are required instead to join the UPOV 1991 agreement which favours commercial breeders and adversely impacts small farmers in developing countries.
This would favour developed countries' corporate plant breeders and institutional researchers, at the expense of biodiversity and the rights and interests of small farmers and local researchers of developing countries such as Malaysia, says the open letter by the eminent Consumers Association of Penang.
Indeed, less than 20% of the provisions relate to trade – the rest are economic and political issues. Obama's law mentor, Harvard professor Laurence Tribe together with other very senior US law experts agree that this is not a trade agreement. "It's about intellectual property and dispute settlement; the big beneficiaries are likely to be pharma companies and firms that want to sue governments."
It is rather curious, too, why the US has excluded China when it is the largest Pacific Rim trading country! Julian Assange on July 1, leaked that according to the US National Security Agency interceptions of French treasurer Jean-Francois Boittin: "Washington is negotiating with every nation that borders China ... so as to 'confront Beijing'."
What then?
What needs to be done to restore the balance in these trade negotiations?
First, is to open the text for all sectors of society to be consulted openly, extensively and on a fully informed basis. There can be no bypassing the free prior informed consent of our people in this endeavour. The US commerce secretary's argument that secrecy ensures effective negotiations simply does not make sense. Numerous treaties (including the WTO) have never been negotiated in such shrouded secrecy. This is antithetical to the ethos of a functioning democracy.
Second, the basic structure of the Federal Constitution must not be altered. There should be no ISDS provision to supplant the role of the judiciary as the final arbiter in all disputes. That is how the Constitution is structured. There should be no preferential treatment for foreign corporations to sue developing country governments.
Third, the policy space to introduce laws in the interest of the general public, including the environment and health, and to favour disadvantaged groups must not be restricted.
ISDS risks undermining democratic norms because laws and regulations enacted by democratically-elected officials are put at risk in a process insulated from democratic input, as the group of legal experts assert.
In particular IP laws should not be allowed, directly or otherwise, to delay or prevent the entry of generic medicines; access to medicines by the rakyat at affordable prices must be guaranteed.
It may be argued that our negotiators are in fact protecting our interests in these and many other ways. Maybe so.
But when such critical matters affecting the long-term interest of our people are secretly negotiated, confidence in the process and the outcome is shattered.
As the old saying goes: The proof of the pudding lies in the eating. Empty assurances count for little.
Gurdial is professor at the Law Faculty, University of Malaya. Comments: letters@thesundaily.com