Wheaton College economics professor, John Miller writing in Dollars & Sense, a self described journal of "real world economics" puts the issue quite bluntly; "TPP is less about trade than about corporate-dominated globalization." Writers such as Prof. Miller, writing for the more than forty year old heterodox journal of economic theory and topical issues, have always condemned free trade agreements (FTAs) as less about trade than about a global corporate business model which is based mostly on concentrating manufacturing in low wage areas (labor arbitrage) while financing the consumption of the output by recycling trade partner surpluses through global capital markets in rich countries to suppress interest rates. This business model has not only restructured the global "division of labor" (or created a new economic geography of specialization) but has also placed economic decision making in the sphere of "global governance" well beyond the reach of the democratically elected representatives in various countries. The TPP is only the very latest example of these efforts.
Although the TPP has the potential to greatly expand trade, the treaty's greatest impact will not be the removal of trade barriers which has already been largely accomplished in the recent past through many other agreements. The twelve countries that are now part of the TPP already have average tariff rates below the low world average of 6.8%. In addition, as Miller points out, about three quarters of the US trade in goods in 2014 with the TPP countries were with six of the twelve countries that already have other FTAs with the United States. US trade with these countries is already robust with annual trade flows amounting to several hundreds of billions; a new treaty is not needed to remove "barriers" to trade.
The problem is with non-job loss related issues. In other words, it has to do with the rules of corporate globalization taking more and more decision making prerogatives out of the hands of elected representatives and putting them into the hands of unelected bureaucrats who are entirely beholden only to global corporations. In essence, its about a loss of democracy, not jobs! This threat is from a uniquely global era institution called the Investor-State Dispute Settlement which allows global corporations to bypass national court systems (and challenge laws passed by elected representatives before unelected tribunals). Public Citizen has described the ISDS as being,
"Among the most dangerous but least known parts of today's "trade" agreements are extraordinary new rights and privileges granted to foreign corporations and investors that formally prioritize corporate rights over the right of governments to regulate and the sovereign right of nations to govern their own affairs."
Foreign corporations are thus able to challenge a decision, policy or action by any given country that is party to a particular FTA that the corporation feels unjustly reduced its earnings. Thus, national sovereignty is sacrificed on the alter of corporate profits and the global governance institutions established to protect those profits. These extra-judicial tribunals are often comprised of the same attorneys that work for the very corporations that are bringing the complaints proving that conflict of interest issues cannot be brought up in a way that would obstruct a corporation seeking damages for a claim under consideration by the tribunal. According to a June 2015 Public Citizen report;
[Global] firms have access under the deals to an “investor-state” enforcement system, which allows them to skirt national court systems and privately enforce their extraordinary new investor privileges by directly challenging national governments before extrajudicial tribunals...If a corporation wins its investor-state case, the taxpayers of the “losing” country must foot the bill. More than $440 million in compensation has already been paid out to corporations in a series of investor-state cases under NAFTA-style deals. This includes attacks on natural resource policies, environmental protections, health and safety measures and more. In fact, of the more than $34 billion in the 18 pending claims under NAFTA-style deals, nearly all relate to environmental, energy, financial, public health, land use and transportation policies – not traditional trade issues. (emphasis mine)
In a February 2015 Washington Post opinion piece written by Liz Warren, the ISDS process was described as something that would allow transnational corporations to, "undermine U.S. sovereignty."
This is because rulings by tribunals established by the World Bank or UN would allow extra-judicial rulings against governments that could not be appealed in any national court system. But an arbitration panel could require sovereign governments to pay billions in damages to transnational corporations making the compensation claims. Warren's brilliant article explains the rationale, origins and functions of the ISDS system and why it is so insidious in the global context. She deserves to be quoted at length;
If the tilt toward giant corporations wasn’t clear enough, consider who would get to use this special court: only international investors, which are, by and large, big corporations. So if a Vietnamese company with U.S. operations wanted to challenge an increase in the U.S. minimum wage, it could use ISDS. But if an American labor union believed Vietnam was allowing Vietnamese companies to pay slave wages in violation of trade commitments, the union would have to make its case in the Vietnamese courts. Why create these rigged, pseudo-courts at all? What’s so wrong with the U.S. judicial system? Nothing, actually. But after World War II, some investors worried about plunking down their money in developing countries, where the legal systems were not as dependable. They were concerned that a corporation might build a plant one day only to watch a dictator confiscate it the next. To encourage foreign investment in countries with weak legal systems, the United States and other nations began to include ISDS in trade agreements. Those justifications don’t make sense anymore, if they ever did. Countries in the TPP are hardly emerging economies with weak legal systems. Australia and Japan have well-developed, well-respected legal systems, and multinational corporations navigate those systems every day, but ISDS would preempt their courts too.
Warren goes on to explain that political risk insurance is a far better answer to the security problems entailed foreign domestic investment and it should be born entirely by those taking the risk, not the taxpayers of a sovereign country. Furthermore, the increase in ISDS claims signify not an increase in risk of property loss, which has probably declined with the far more business friendly environment than in decades past (when was the last time a government nationalized the property of a foreign corporation as went on constantly between 1940 and 1980), but because of the greater, unprecedented guarantees demanded by transnational firms to protect their profits from the impact of laws passed by sovereign governments simply to maintain the very labor, environmental, public health and land use standards which were taken for granted by all prior to the global era. Warren points out that, "From 1959 to 2002, there were fewer than 100 ISDS claims worldwide. But in 2012 alone, there were 58 cases." These cases involved challenges to minimum wages laws, public health laws, environmental protection laws and even laws providing insufficient government financial guarantees for to big to fail banks! Clearly, this extra-judicial system is not just about protecting foreign property rights but about guaranteeing corporate profits by removing vital protections to the general public afforded by laws passed by the peoples' elected representatives.
Specifically, one of the most important features of TPP is patent protection for big pharmaceutical companies. This is one of the most contentious parts of the treaty because of the way it restricts drug availability for patients and its effect on consumer prices. According to a recent NYT report;
About 5,600 medicines are in development in the 12 T.P.P. countries, according to the Senate Finance Committee. Of those, 3,372 are in the United States, including more than 900 biologics, which are grown from live cells. The industry contributes nearly $800 billion to the United States economy each year. United States law protects data collected during the development of biologic medicines for 12 years, allowing drug makers to recoup their research and development investments before generic companies can come in with far cheaper versions. Negotiators for the United States say they are obligated to defend American law, even though President Obama has been pushing to shorten the data exclusivity protection to seven years...The Pacific accord is structured so that other countries can join in the future, and the belief on both sides of the pharmaceutical fight is that once 12 nations ratify rules, they will become international standards.
The data collected during the R&D period of biologic pharmaceuticals is protected for twelve years but the patent itself is protected by US law for twenty! The data collection protection period in other countries is usually under eight years but, like the US, the patent protection period itself is often much longer. Public Citizen has reported that drugs under patent are protected by generics being brought to market which can cut drug costs by 30% to 80% for consumers. The WTO embraced the twenty year standard for the patenting of pharmaceutical biologics that are "inventions that are new and non-obvious" in the language of the WTO protocol. But the PC report explains the changes effected by the terms of the TPP;
...the TPP will enable pharmaceutical companies to: 1) extend their patents beyond 20 years, 2) re-patent medicines that are already known and thus, are not necessarily inventions, and 3) block the registration of generic products. The longer a product is under patent protection, the longer patients have to wait for low-cost versions of the patented drugs. Such delays lead to preventable suffering and death.
The problem with global pharmaceutical monopolies on intellectual property through highly restrictive patent regimes is less competition through the introduction of generics, higher drug prices and thus higher overall medical costs for individuals, insurers, governments and employers, and finally, lost access to vital medication for millions of people resulting in unnecessary deaths. The TPP seems impervious to this issue in its zeal to protect an industry which has reported in recent past years up to 19% annual profit rates.
The TPP is not about ending restrictive trade policies and creating new jobs. In fact, it is more liable to cost jobs for the workers in many of the countries involved. It is about extending the power of global corporations through new global channels in ways that would never be allowed by the legal and parliamentary systems of sovereign countries. This is reason enough to oppose the TPP resolutely as we should oppose all global era FTAs.