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TPP Trade Deal Proposal Would See CBC, Canada Post Exist Solely For Profit

TPP Trade Deal Proposal Would Force CBC To Exist Solely For Profit

A leaked document from the Trans-Pacific Partnership (TPP) trade talks indicates the CBC, Canada Post and other Crown corporations could be required to operate solely for profit under the deal’s terms.

It’s unknown whether the principles outlined in the document will be a part of the final agreement, but the paper — a briefing for ministers ahead of a December, 2013, TPP meeting — also raises questions about the extent to which Canada will be able to continue using taxpayers’ money to fund Crown corporations, such as the $1-billion annual subsidy to the CBC.

The latest round of TPP talks, between Canada and 11 other countries, opened in Hawaii this week, and news reports indicate some negotiators are optimistic a final deal will be reached in this round.

The Harper government is reportedly eager to have a deal in hand before an expected election call this weekend, in order to burnish its credentials on the economy.

The briefing, which was obtained and released by Wikileaks, states that a “majority of TPP countries” have agreed that state-owned enterprises (SOEs) will have to “act on the basis of commercial considerations.”

The document — which makes clear that final decisions on these issues hadn’t been made at that time — also indicates that state-owned companies may be subject to all the rules of the TPP.

If that were to be the case, governments would not be able to fund Crown corporations with taxpayers’ money if that funding has “adverse effects” on another TPP country, says Jane Kelsey, a professor of law at the University of Auckland, in an analysis of the document she prepared for Wikileaks.

“It looks like SOEs are not allowed to get government support or noncommercial assistance. … That kind of support is often essential for SOEs that provide public functions that are not profitable or are even loss-making.”

Kelsey says the U.S. is pushing to have state-owned businesses covered under the TPP’s investor-state dispute mechanism. This would mean that foreign entities could sue the government of Canada for subsidizing a Crown corporation if that foreign entity can prove it’s at a competitive disadvantage because of those subsidies.

She describes the proposal as “intrinsically problematic.”

State-owned corporations “are almost always state-owned because they have functions other than those that are merely commercial, such as guaranteed access to important services” or social and cultural functions, Kelsey wrote.

She also suggested that the rationale for the existence of state-owned enterprises would be undermined by the TPP rules.

"Once SOEs and private firms are 'competitively neutral,' the advocates of privatization will say there is no justification for retaining state ownership because the private sector can bring efficiency gains, choice and competition to the provision of the public service."

However, the document also states that negotiating countries will have to decide about “exceptions or other forms of flexibility” for the rules for state-owned companies. This opens the door for Canadian negotiators to protect the status of Crown corporations, if they choose to pursue that course.

All the same, many activists have come out with harsh criticism of what they expect will be part of the 12-country free trade deal.

“The TPP will hinder our state-owned enterprises from acting in the public interest,” said Sujata Dey, trade campaigner with the Council of Canadians, which has a long history of opposing trade agreements.

“The very mission of the CBC – telling the bilingual and multicultural story of Canada – will be reduced to simple profit making. Likewise, Canada Post will no longer function as a nation builder, but as a private company. The essence and mandate of our Crown corporations are being traded away in favour of private corporate profit.”

Talks on the TPP have been ongoing since 2008, under what critics call an unprecedented veil of secrecy. Canada joined the talks in 2012.

The other negotiating countries are Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. China is not a part of the talks.

It’s being billed as the largest free trade area in the world. The negotiating countries together comprise nearly 800 million people and a combined GDP of $27.5 trillion, or 40 per cent of the world economy.

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