More Dirty Little TPPA Secrets
Foreign Control Watchdog, Aotearoa/New Zealand
More Dirty Little TPPA Secrets
US Fast Track & Certification
By Jane Kelsey
April 2015
Imagine Trade Minister Tim Groser gets to the meeting of ministers to do the final horse-trading for the Trans-Pacific Partnership Agreement (now slated to happen in late May 2015), plays his final hand and signs away our future for a carton of milk powder. He will know that’s not really the end game: a final deal is not a final deal until the US Congress says so. The US has two more aces in its hand.
Fast Track
The first is reasonably well known. Fast Track (rebranded as Trade Promotion Authority to make it sound more anodyne) would require the US Congress to accept the deal with a yes or no vote on the implementing legislation and not pick it apart. A time limit on the debate would also mean critics can’t filibuster. A majority of members of Congress could insist on changes to the TPPA, even with Fast Track. Without Fast Track any deal the TPPA ministers reach can be rewritten by Congress saying “yes, we like that bit”, “no, we don’t agree with those US concessions” (if there are any), and “go back and demand the other countries give more on this, that and that”. If our Government has already played its final hand it will still have to do more.
That situation is looking increasingly likely. A Fast Track Bill (Bipartisan Trade Priorities Act of 2014, also known as the Camp-Baucus Bill) was proposed in January 2014 but didn’t get anywhere. A new one has been expected but still hasn’t materialised, at the time of writing. That’s because it needs bipartisan support from leading members of Congress and the Democrat side wants Congress to retain a stronger role in reaching the final deal. Even if the Congressional leadership can agree on the wording, Obama doesn’t have the votes to get the Bill passed, especially in the House of Representatives. The vast majority of Democrats are opposed to Fast Track, and most of them oppose the TPPA itself. The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the peak union body that puts big money into Democrat campaigns, has pledged to put all its support behind critics of the deal.
Ironically, Obama would have to rely on the Republicans to get Fast Track (or get Congress to accept a final deal without it). They are playing hardball as well. The Tea Party already refers to Obama as the “imperial President” and isn’t about to give him more executive powers. Republicans from the farm and auto belts aren’t prepared to give away their influence on the outcome either. The White House has launched a pretty desperate propaganda campaign to sell the TPPA and Fast Track. In a rational world, their offensive should be too little too late - certainly if ministers are to reach a deal in May. The date is crucial because Obama needs a deal no later than June if it is to have any chance of getting completed during his term in office. Past that date, he’s unlikely to continue squandering scarce political capital on trying to get the deal concluded. By now you should be asking: what government in its right mind would sign up to a TPPA with no Fast Track? Sadly, not all governments, or trade ministers, are guaranteed to be in their right minds when it comes to these deals …
Certification
But that’s only part of the story. Even if the US Congress has passed the implementing legislation (under Fast Track or otherwise) that deal is still not final. Treaties come into force between states after their leaders have exchanged letters saying they have done what is necessary to comply with their obligations. Under the process known as “certification”, the US refuses to exchange those letters until the other government has changed its laws, regulations and administrative processes to fit the US interpretation of its obligations. So the US effectively decides what the other country’s obligations are. Certification can extend for years after the other country believes it has fulfilled its constitutional requirements for ratification. Indeed, certification could be withheld indefinitely.
The legal requirement on the President to certify compliance before the exchange of letters has existed since the 1980s. But there has been a lot more focus in recent years. Media reports show that US corporate interests drive US government demands during the certification process. These interests have included the US rice and pork industries, National Council of Textile Organizations, Chevron, the alcohol industry, the International Intellectual Property Alliance, Pharmaceutical Research and Manufacturers of America, and the National Cattleman’s Beef Association, National Pork Producers Council and poultry exporters.
The process involves an outrageous interference in sovereign governments. US officials send the other country a list of the changes the US requires to its laws and regulations. They then monitor compliance, and keep the pressure on until they are satisfied. Sometimes they even become involved in drafting the other party’s laws to ensure they will meet US requirements. This intrusion is problematic enough when the US bases its argument on vague or ambiguous provisions and terms - which is a common method of reaching a final agreement. On many occasions, the US has required other countries to comply with what the US says was agreed, even if that is not written in the text and there is no independent evidence to support its interpretation. The US has even tried to obtain concessions through certification that were not in the agreement and where it did not even claim a verbal commitment. For example, it insisted that Guatemala should give three years data exclusivity on medicines that was not an obligation in the Central America Free Trade Agreement (CAFTA) text, and Guatemala had resisted.
Peru
The best documented and most outrageous example of certification involves Peru. Media coverage reports that the Deputy US Trade Representative (deputy minister of trade) travelled to Peru in 2008 “to help the administration finalise 35 new laws” that the US required. In addition, two teams of US government lawyers assisted Peru on drafting environmental and business laws. The 35 laws reportedly included laws on data protection for pharmaceuticals, investor arbitration, changes to indigenous land ownership and the education system.
Documents released under the US Freedom of Information Act show detailed communications between US Trade Representative’s staff, staff of the US Embassy in Lima, other US government officials and Peruvian government officials. These occurred during 2008 and 2009 when Peru was making changes to its domestic laws and regulations to satisfy US expectations of what was required from Peru by the US Free Trade Agreement (FTA).
Most of the communications concern a particularly controversial legislative decree – LD 1090, Peru’s Forestry and Wildlife Law. One US official complained that: “Peru made additional changes to LD 1090 that the US never agreed to or saw and then published it as a done deal in July. We told Peru that the changes they made were unacceptable as they undermined the letter and spirit of the Forest Sector Annex. They agreed to make changes and we agreed to those specific changes in November. We gave them the go ahead to move LD 1090 through their Congress weeks ago. I do not understand why this has been delayed and why we weren’t notified of the delay. They need to move the modifications to LD 1090 through their Congress ASAP but we also need to make sure additional changes are not made to LD 1090. I am not sure the Peruvians can assure us that their Congress will not make additional changes”.
Fallout from the certification process was treated as a domestic political issue that Peru’s government was left to manage. Leading Opposition parties and civil society groups had called for a nationwide work stoppage to protest the special authority for the President to make laws and bypass Congress. Indigenous peoples took a constitutional challenge to land laws that would reduce their controls over mining and deforestation. Unions objected that changes to the small and medium enterprise law removed workers’ entitlements.
Peru’s government issued numerous legislative decrees regarding oil, gas and logging in the Amazon basin as part of its implementation, including LD 1090. On 5 June 2009 Peruvian security forces attacked several thousand indigenous Awajun and Wambis protestors, including many women and children; more than 30 people were killed in what became known as the Bagua massacre. They were blocking the highway to support demands for revoking the decrees that implemented the laws. Cables published by Wikileaks show warnings from the US four days before the massacre that Peru’s government was being too lenient and giving into indigenous pressures would have “implications” for the FTA.
Australia
The US does not just target poor countries that you might consider have minimal bargaining power. The US made it clear to the Australian government during the passage of legislation to implement the Australia US Free Trade Agreement that the law did not go far enough. That Act was passed in August 2004. Three months later the Australian Trade Minister asked the US to exchange the letters that would allow the agreement to come into force on 1 January 2005. That request included a promise to pass additional copyright laws. The US reluctantly agreed, but reserved the right to sue Australia for failing to comply with the treaty.
The new law was introduced to the Australian Parliament at the end of November 2004. A week later it was sent to the Senate Select Committee, which was required to report the next day. People were given three hours’ notice to prepare a submission. The report said: “Given the short timeframe for reporting, the Committee has not had the opportunity to properly consider the issues raised in the inquiry”. The Australian Parliamentary Library’s Bills Digest was almost apoplectic:
“This Bill, like the US Free Trade Agreement Implementation Act (USFTAI Act), makes significant changes to Australia’s copyright regime without rigorous public consultation with stakeholders or experts. As a result of both pieces of legislation, Australia can expect uncertainty in copyright law, at least until courts develop interpretations that make sense of the American law which have been grafted on to the Australian system. As Australia lacks much of America’s legal context such as a constitutional Bill of Rights, the doctrine of ‘air use’, or the narrower test of originality in copyright law, these American elements could produce quite different results in Australia to those in the United States.
“Finally, Parliament might note with concern the process that has preceded this Bill. Through the Vaile–Zoellick* correspondence, the Government has effectively created new obligations for Australia. Some of the flexibility in implementation offered under the Agreement has been reduced through Minister Vaile’s detailed assurances to the United States on specific implementation models. The lack of Parliamentary involvement or scrutiny of the negotiations leading to the Vaile–Zoellick correspondence stands in sharp contrast to the involvement in the decision to ratify the Agreement”. *Mark Vaile was Australia’s Minister of Trade; Robert Zoellick was US Trade Representative. Ed.
The TPPA
The US will attempt to apply certification to the TPPA. The Fast Track bill drafted in 2014 contained new and additional requirements for the US Trade Representative to consult with Congress about whether certification requirements have been met. A new Fast Track bill may go even further. The non-US parties to the TPPA negotiations are well aware of the dangers of certification, but it is exceedingly hard to neutralise. It is a unilateral exercise of power by the US. Any attempt to include provisions in the text would require consensus, so the US could veto them. To ask the obvious question again – why would any government in its right mind enter into a deal with the US knowing its dirty little secret?
For more details see http://tppnocertification.org/
