In attempting to address criticism leveled by lawmakers, the US Trade Representative has acknowledged past problems with a type of controversial dispute settlement mechanism included in the Trans-Pacific Partnership.
USTR Ambassador Michael Froman told Sen. Tammy Baldwin (D-Wisc.) in a letter sent in December that investor protections written into the TPP “are designed to prevent the kind of abuses of the investor-State [sic] dispute settlement that have happened under agreements negotiated by other countries.”
Froman described those deals as “more expansive” with “few (or none) of the extensive safeguards being proposed in TPP.”
But while Froman recognized issues with past trade deals and told Sen. Baldwin that she could access “texts referred to in your letter”–an inquiry demanding more openness about TPP negotiations–he only mentioned the USTR’s “policy of providing Members of Congress access to US negotiating proposals and other classified materials relating to our negotiations.” In her letter, Baldwin, along with Sens. Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.), had asked for “all US proposals and bracketed negotiating texts” concerning investor-state settlement disputes, market access and capital controls.
An aide to Baldwin said her office is assuming that the Obama administration “will comply with previous statements that Members of Congress can view the text.” In the past, however, the USTR has mentioned that legislators are only allowed to see American proposals
“Bracketed text” is a term that refers to a draft agreement that includes terms offered by each party, with delegations related to proposals denoted by abbreviations in brackets.
As The Sentinel reported on Jan. 5, Sen. Bernie Sanders (I-Vt.) also demanded access to “the full composite bracketed text” of the secretly-negotiated TPP and said he would introduce a bill that would make public “content of any trade agreement being negotiated” to any member of Congress who requested it, if the USTR did not produce the information he asked for.
The USTR did not respond to an email containing questions about whether Sen. Baldwin will have a chance to review bracketed negotiating texts and which investor-state “abuses” Ambassador Froman referenced.
Froman did, however, in his letter to Baldwin, attempt to directly address questions posed by the three Senators, and said that the TPP would not hinder financial reform or regulations.
“Nothing in our existing trade agreements prevented the United States from responding to the 2008 financial crisis or from putting in place the important prudential measures contained in the Dodd-Frank Act,” Froman wrote. “And nothing we are negotiating in our trade agreements will reverse or impede those reforms going forward.” On the issue of capital controls, he said that US negotiators are “working to establish predictable rules for trade and investment that provide the flexibility governments need to mitigate the risks that can accompany capital flow surges.”
Froman also claimed American negotiators are “seeking to ensure that there is a level playing field for American services suppliers, which employ nearly 80 percent of the US workforce, so that they are not deprived of the opportunity to compete,” and argued that market access provisions would similarly not hinder future regulatory initiatives.
Whether flexibility will outweigh predictability in language dealing with capital controls and the extent to which financial services will be affected by the deal, Sen. Baldwin might soon know more. Her office said it is requesting a meeting to discuss matters that came up in the correspondence with Froman, and other issues she has brought up earlier with the administration. Sen. Baldwin has said she is concerned about: the lack of corrective mechanisms in trade deals for states that engage in currency manipulation; intellectual property protection for US companies; the preservation of“Buy American” government procurement provisions, and, in bilateral deals with Beijing, China’s “non-market status.” One of Baldwin’s staffers told The Sentinel that the Senator hasn’t been able to review whatever texts will be made available by the USTR because of scheduling conflicts.
In a report on the letter initially sent by Sens. Baldwin, Warren and Markey (D-Mass.), The Sentinel noted that the senators expressed concerns that the investor-state resolution process, by definition, does not afford “labor unions, environmental groups, or any other non-investor” the opportunity to litigate issues related to trade deals. The Senators also pointed out that the process has permitted corporations to win large sums of money from governments, and that often ruling pertain to a “minimum standard of treatment”–a matter that does not relate directly to “non-discrimination” agreements that underpin free trade agreements.
There have been concerns that non-trade issues could feature heavily in the TPP, with the term “non-tariff barriers” used frequently by proponents of the deal. When previously discussing the TPP, Public Citizen trade expert Lori Wallach said American negotiators “label the fundamental environmental, health, safety standards on which our families rely as ‘non-tariff trade barriers.’”
Either way, big businesses have increasingly been using multilateral trade deals to litigate issues. According to the UN, in 2012, there were 58 cases brought by corporations against governments in investor-state tribunals–the highest number ever recorded. The majority of these lawsuits were filed against “developing or transitioning” economies, with three-quarters of them initiated by investors from developed countries.
President Obama and Congressional Republican leaders have said that they hope to pass more trade deals like the Trans-Pacific Partnership during the 114th Congress. As The Sentinel has reported, the US is also negotiating the Transatlantic Trade and Investment Partnership–a deal being negotiated under terms that could violate European Union rules on transparency–and the Trade In Services Agreement–a deal, as revealed by a leak, that could make regulatory enforcement, consumer privacy protections, and Net Neutrality regulations more difficult to mantain.
The TPP is currently being hashed out by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam, and it would affect about 40 percent of the global economy.
[aesop_document type=”pdf” src=”https://districtsentinel.com/wp-content/uploads/2015/01/TBaldwin-TPP-Reply-12-19-14.pdf” caption=”Letter from USTR Froman to Sen. Baldwin. 12/19/14″]
