Historic Trade Deal Confirms Critics' Worst Fears

But Obama calls it the "highest standard trade agreement in history."
SAUL LOEB via Getty Images

The United States government released the final text of the Trans-Pacific Partnership on Thursday, and a wide array of advocacy groups did not like what they saw.

Organizations promoting climate change action and global health have long argued that the 12-nation trade deal would undermine participating countries’ freedom to set and preserve their own economic and social policies. The groups based their conclusions on drafts of select chapters of the 12-nation trade deal, which were leaked over the course of the past year. Now that the final text has emerged with few changes, their criticism has only grown stronger.

Here’s what advocacy groups are saying about the following key policy areas:

National Sovereignty

A fear that the Trans-Pacific Partnership will give corporations undue influence over public policy in the U.S. and other countries remains at the heart of objections to the trade deal.

Critics are especially concerned about a legal process TPP establishes for enforcing new regulations called “investor-state dispute settlement,” or ISDS. ISDS allows foreign companies to challenge a participating country’s laws before an international tribunal of judges if they think that law excessively limits their investors’ profits. The tribunals have the power to levy fines on the government should they rule in favor of the companies, which could in turn prompt countries to change their laws and deter them from passing similar measures in the future.

Concerns about returns are only one kind of grievance foreign companies can use ISDS to address. They can also use the system to challenge an array of less contentious practices, like expropriation of property and breach of contract. And ISDS is a feature of many trade agreements.

But as Sen. Elizabeth Warren (D-Mass.) noted in a Washington Post column in February explaining her opposition to ISDS, companies have dramatically increased the number of claims they bring against sovereign governments in recent years, taking aim at a minimum wage increase in Egypt and a move away from nuclear energy in Germany.

Climate Change and the Environment

Environmental groups did not find anything in the text of the final deal that would preclude fossil fuel companies from using ISDS to challenge a government’s ability to ban or limit energy extraction as a way of addressing climate change and other ecological risks.

“The agreement would give fossil fuel companies the extraordinary ability to sue local governments that try and keep fossil fuels in the ground,” Jason Kowalski, policy director for climate group 350.org, said in a statement.

Expressing similar concerns, the Sierra Club estimated in an initial assessment of the final accord that in addition to U.S. companies that can already sue governments through previous trade deals, TPP will make 9,000 more U.S. firms eligible to challenge a country’s environmental laws through ISDS, including mining titan BHP Billiton.

The Sierra Club also noted that TPP’s text did not so much as mention the phrase “climate change” in its section on the environment.

“The agreement would give fossil fuel companies the extraordinary ability to sue local governments that try and keep fossil fuels in the ground.”

- Jason Kowalski, 350.org


Investor-state dispute settlement is creating anxiety for anti-tobacco advocates as well.

Corporate Accountability International argues that TPP still gives Big Tobacco too much leeway, despite a provision allowing countries to refuse the “benefits” of ISDS to tobacco companies.

Since the deal preserves ISDS as a default for governments’ interactions with tobacco companies -- requiring countries to opt out of, rather than opt in to, the arbitration system -- it will be easier for powerful tobacco giants to pressure governments into agreeing to ISDS.

“Allowing parties to ‘elect to deny the benefits’ of investor-state dispute settlement leaves the door open to the sort of bullying, bribing, and intimidation the tobacco industry does best,” Cloe Franko, a senior organizer for Corporate Accountability International’s Challenge Big Tobacco campaign, said in an e-mail message.

Phillip Morris has used ISDS in other trade agreements to sue Australia and Uruguay over regulations requiring “plain packaging” on packs of cigarettes. John Oliver’s scathing segment on HBO about Big Tobacco’s litigation of sovereign governments went viral in February, drawing international attention to the industry's aggressive tactics.

“It is not only MSF [Doctors Without Borders] -- many experts have been very concerned, but unfortunately we have lost.”

- Judit Rius, Médecins Sans Frontières


Doctors Without Borders, the international nonprofit health care provider, argues that the final text of the Trans-Pacific Partnership retains provisions that will drive up the prices of prescription drugs and other medications.

“It is not only MSF [Doctors Without Borders] -- many experts have been very concerned, but unfortunately we have lost,” said Judit Rius, the U.S. manager and legal policy adviser for the group's Access Campaign.

As examples, Rius identified two provisions that she said would “export” elements of U.S. laws protecting drug companies from competition. The accord requires countries to provide additional patents for “new uses” of, or “new methods of using,” a pharmaceutical product, thereby allowing drug makers to avoid competition from generic drugs even after the original patent expires.

It also creates a waiting period of five to eight years before biosimilars -- generic versions of treatments made out of living organisms (like some vaccines) -- can come to market in TPP countries. MSF worries about how this will affect the affordability of vaccines, which often use living organisms, as well as other essential medicines.

John Sifton, the Asia advocacy director for Human Rights Watch, told The New York Times that those pharmaceutical provisions will “literally kill people” by rendering medicines unaffordable.

U.S. Trade Representative Michael Froman was the U.S.' top negotiator of the Trans-Pacific Partnership trade deal.
U.S. Trade Representative Michael Froman was the U.S.' top negotiator of the Trans-Pacific Partnership trade deal.
MANDEL NGAN/Getty Images

A Win For Workers?

The Obama administration has repeatedly denied that TPP will jeopardize environmental and health standards -- or otherwise endanger the wellbeing of residents of countries signing the law.

"It’s the highest standard trade agreement in history," President Barack Obama wrote in a blog post on Thursday. He argued TPP will include “the strongest labor standards” and “environmental commitments in history.”

But neither Obama, nor U.S. Trade Representative Michael Froman -- who issued a separate statement -- explicitly addressed claims that ISDS will jeopardize environmental laws and tobacco regulations, or that the treaty will drive up drug prices.

(The Office of the U.S. Trade Representative referred HuffPost back to Obama and Froman’s remarks when asked for a point-by-point response to activists’ arguments.)

Instead, the Obama administration touted, as a specific example of the deal’s stellar labor provisions, a separate agreement with Vietnam under TPP that would create a right to unionize and go on strike in the country for the first time. The U.S. could withhold trade privileges if the accord is not implemented after five years.

“Without reservation, I think this is the best opportunity we’ve had in years to encourage deep institutional reform in Vietnam that will advance human rights, and it will only happen if TPP is approved,” Tom Malinowski, the assistant secretary of state for democracy, human rights and labor, told The New York Times.

Human Rights Watch’s Sifton was skeptical. He told the Times that the side deal “is not enforceable in practice,” since it does not allow workers to file grievances against companies in international court.

Still, the objections of advocacy groups may be the least of the president’s worries.

TPP will face hurdles when it comes to a vote in Congress in the spring. Congress granted the president so-called fast track authority on trade deals in June, with the help of Republicans, ensuring the treaty will receive an up-or-down vote without amendments.

Many congressional Republicans, however, now say they have doubts about the final deal.

Also on HuffPost:

Obama Visits 50 Countries

Popular in the Community


What's Hot