A free trade agreement with the US would not be free, US advocate Lori Wallach explains

A free trade agreement with the United States through the Trans Pacific Partnership (TPP) would not be ‘free trade’, a US consumer advocate and New Zealand law professor say.

Lori Wallach, from Public Citizen’s Global Trade Watch, along with Jane Kelsey from Auckland University, spoke to interest.co.nz earlier this month. Kelsey has just released a book titled No Ordinary Deal - Unmasking the Trans-Pacific Partnership Free Trade Agreement.

"The United States, regardless of who’s President, only does one version of trade agreement, and it’s based on our NAFTA – North American Free Trade Agreement – and unfortunately now we have 15 years of track record," Wallach said in a double shot interview..

K Street

"The way our trade negotiations explicitly occur is, we have special, official corporate trade advisors," Wallach said. "It’s a system of 17 committees - the corporations are explicitly given security clearance and access to the texts and the negotiatiors. They have literally written the rules," she said.

"Trade associations, foreign corporations, foreign banks, all of the international oil and gas firms, and then they threw in 12 labour unions. No environmental, consumer, health, development, no small business representation.

"It’s the old theory of he who pays the piper calls the tune. So they wrote these agreements.

"On agriculture, the person who wrote the text from the US as a negotiator literally had come from one of our major agribusiness companies, revolving ‘doored’ into the trade office, out of the trade office and then sat on the committee with 30 of his former private sector buddies and wrote the agreement."

Consumer groups, as well as small farm producers, were nowhere to be seen, Wallach said.

Would trade have happened anyway?

Kelsey said in her book, Bryan Gould’s take on the Closer Economic Relations agreement with Australia was that New Zealand had ended up as a branch economy of Australia. “If we expand a CER style agreement to the US, then we end up in fact becoming a branch economy of the US," Kelsey said.

“If we look at the China agreement, if you look at the figures and the timing of the agreement, actually isn’t the access into China more to do with, one, [China] sourcing milk powder products from here after the San Lu disaster, and two, demand within China?”

"There [are] some very shonky kinds of logic that [are] brought out to rationalise these agreements," she said.

Access without review

"The US and New Zealand [already] have very low tariffs," Wallach said. "It’s not about tariffs in this agreement. One of the areas we [the US] has tariff spikes is the dairy. Perhaps the only real interest for New Zealand potentially would be more access for dairy into the US, and it just ain’t gonna  happen," she said.

“[US companies] want the right to have access to land here, without review to be able to buy it. The investment rules [in the NAFTA-style agreements] set up what’s called ‘pre-market access national treatment’.

"[They are about] an absolute right to invest, control and own land, any kind of asset movable of non[-movable], acquire companies, establish companies, and a whole set of rights to what are considered as investable objects such as ‘licenses’ and ‘permits’, debentures, loans.

"It’s an absolute guarantee of foreign firms having better access in your country.”

'Not your courts'

“And here’s the final piece of it – they don’t have to go to your courts if they don’t like how they’re being treated," Wallach said.

"These US agreements have what’s called ‘investor-to-state private enforcement’. This is why, even though the US and New Zealand have lots of property rights and lots of rights for foreign investors, until you get into a US agreement it’s still your courts and your law.

"The US agreements, and this is what the US is currently demanding for TPP, set up a private right of enforcement for the foreign investor to go to World Bank and UN arbitral tribunals, called UNCTRAL and ICSID, and to actually litigate against your government, suing for taxpayer compensation for violations of their new granted rights as foreign investors under the agreement.

"So not your law, not your courts, your tax dollars get extracted in foreign tribunals, privately enforcing ‘trade agreement law’.

"That set of rights is the real enchilada that the US firms are after."