Modern Trade Agreements and the Mega-corporate End Game

NZ is on the verge of joining the CPTPPA - the awkwardly rebranded "Comprehensive and Progressive TPP Agreement", comprising 11 Pacific nations now that the US has pulled out of the original TPPA.

The CPTPPA is the latest persistent incarnation of the Trans-Pacific Partnership Agreement (TPPA), originally designed to include the US, using access to the world's biggest economy as a carrot to entice the other 11 nations.

The TPPA is one of a new class of trade agreements. It's not a Free Trade Agreement, as it is not primarily concerned with removing barriers to trade between nations. Instead, it is what its authors have termed a "Modern Trade Agreement". It is concerned with rewriting the rules of trade. The original TPPA is 6000 pages of legalese. The TPPA's Atlantic counterpart, the snappily named Transatlantic Trade and Investment Partnership or TTIP (usually referred to as "T-Tip" in the media) has a similar bulk as it's largely the same, but tuned for the European context.

Negotiations of the TTIP agreement were effectively halted by the European Commission due to the US' political landscape in 2016. Many social, environmental, workers rights, and other community groups in the EU protested the terms of TTIP as being far too imbalanced in favour of multinational corporate rights over those of the EU's own power and the rights of its constituent states to regulate the activities of these corporations with regard to property ownership, employment practices, competition, and environmental impact.

Despite similar, though more fragmented, protests in the Pacific region, negotiations on the TPPA continued throughout, even following the departure of the US from the agreement on the eve of Trump's election, despite the fact that nearly all of the perceived advantages - and each negotiating country admitted that these benefits were already disappointingly marginal - depended on access to the US market. 

Why does NZ business support the TPPA/CPTPPA?

There are many possible answers to this. The TPPA has been broadly but very inaccurately sold as a "Free Trade Agreement" in participating countries. The mainstream media has been entirely uncritical of this label, uniformly referring to the TPPA as an "FTA" and often conflating those opposed to the TPPA with those (are there any!?) who fundamentally oppose Free Trade. As a result of this pervasive mis-impression combined with the very pro-business National party who led the NZ government during the past 9 years of negotiations, NZ business interests, who, unable to see the text of the agreement (and, most likely, unqualified to interpret the text, even if it was available) have broadly supported NZ's participation in the agreement. This is despite all available analysis showing the agreement would have negligible commercial benefits for most NZ businesses.

I think NZ businesses are overly unsceptical of the NZ government's assurances. Naïvely so. They've become complacent as a result of generations of benign government. We all saw a horrible and prophetic example of the speed with which a stable government administration can go feral with the change in US government last year. Sadly, I suspect many in the NZ business community welcomed that change. As a result, they have not learned to be wary of government change.

So... Where are the corporations who wrote TPPA?

The benefits of the TPPA and the rebranded CPTPPA (which no longer includes the US, but leaves room for it to "rejoin" the agreement should there be a "more favourable" political climate in US politics in years to come) are marginal at best - and in almost every case will only benefit the largest domestic corporations in the participating nations rather than any of the people directly. Benefits to the voters of these countries is predicated on the validity of Trickle Down economics (which has been widely discredited as a valid theory of wealth distribution). So why are the 11 governments persisting with the negotiations?

Also, with the tumultuous time the original 12 (now 11) nations had in negotiating the TPPA and its rebranded offspring, CPTPPA, where is the input from the multinational corporations whose 600ish lobbyists and lawyers wrote the original secret document on which the negotiators have made only minor changes?

They went to substantial trouble and expense (in corporate lawyer retainer fees) to get the original TPPA document written... yet they've been curiously low profile throughout, staying well away from the political discourse.

Corporate Proxies

Every time the TPPA reappears (like a movie zombie) in the mainstream media here in NZ, we inevitably get some politicians crowing about negotiating successes (which are always exceedingly minor and their positive impact highly debatable), opposition politicians arguing that other changes are needed, and Prof Jane Kelsey offering uniformly astute and usually damning analysis of the state of the agreement, its pervasive and anti-democratic secrecy, and its substance. And, invariably "for balance" we get enthusiastic TPPA booster Stephen Jacobi or, if he's not available, Catherine Beard from BusinessNZ adding their commentary.

Whereas, to my knowledge, Prof Kelsey's work on the TPPA is largely volunteer and possibly supported by her academic role, but is ultimately a volunteer public service. Her only direct personal gain for being involved appears to be academic plaudits - otherwise, she seems to be responding to her conscience and sense of civic duty. In other words, I don't see her having a real vested interest.

On the other hand, both Stephen Jacobi and Catherine Beard are paid by corporate interests. I'm not entirely sure of Stephen's current employment arrangement, but historically, Stephen was paid by the "USNZ Council" of which he is or was executive director, a corporate non-profit lobby group based in the US. They both have a vested interest because they're almost certainly literally being paid to talk the way they do.

I suspect that US corporate interests have delegated this activity to people whose connection to them is subtle enough that the corporations aren't seen by the public to be engineering any spin or influencing the public opinion directly.

I also think there's another reason the US Corporations have kept quiet: they actually don't care whatsoever about final terms of the agreement. That's as relevant to the inevitable outcome as rearranging the deck chairs on the Titanic as far as affecting the end game.

The End Game

So the real question: given the pervasive lack of benefits identified by participating nations who have modeled the predicted benefit of being part of the (CP)TPPA, why have politicians in ruling coalitions doggedly persisted with completing the agreement despite the departure of the US and almost intractable problems with the positions of nations like Japan and Canada? What's in it for their constituents?

I honestly have no idea.

I suspect in some cases it's politicians wanting to build a legacy, or one-upmanship over predecessors (like (Labour) Minister Parker over (National) Minister McClay), or maybe (if we're being charitable) they do think that Trickle Down Economics is a thing (it's not). In the worst case, they're supporting it out of self interest: either implied or explicit support/employment/benefits from corporate interests during or following their political careers. In other words, corruption.

They're willing stooges, regardless - but what do the corporate authors of the agreements want? I think that's both simple and grim:

They want to see the end of nation states, democratic or otherwise. By creating these agreements and then letting the nations scrap amongst themselves, looking increasingly dithering and ineffectual (and swallowing lots of compromises to fundamental principles like accountability, transparency, democratic process, sovereignty, national interest, citizens/human rights, environmental reform, economic reform, governance, etc.) these negotiations have brought - in the eyes of many - the governments of the participating nations into disrepute. They're seen as cumbersome, ineffectual, and unprincipled. Precisely what the corporate interests want.

In the end, the Googles, Amazons, Facebooks, Microsofts, and Apples of the world (among others) want to see the hindrances of nation states, with their separate jurisdictions and policy frameworks, rendered moot. The corporate interests want to carve the world up among themselves - treating us as we do dairy herds today: a resource to be milked for maximum return to the shareholder (who aren't us), regardless of the effect it has on us all or the world we unhappily inhabit.

At the current rate - given the lack of public discourse on this, the lack of incredulity in the media, the lack of declared interests by commentators, and the willingness of our politicians to abandon their democratic principles - it seems that not only is a collapse of nation states in favour of corporate rule inevitable, most people will actually welcome it, because they are trusting to a fault, and they haven't studied history.

Lest we forget - in the words of Mussolini's speech writer, "Fascism should more appropriately be called Corporatism, as it a the merger of state and corporate power". Boom. 

Update 2018-04-09 - here's what the Guardian newspaper has to say about it... although they don't specifically cite trade agreements like the TPPA.