Meera Nair

Posts Tagged ‘Trans-Pacific Partnership’

it IS a big deal

In Posts on March 2, 2014 at 3:47 pm

On 27 February 2014, The NY Times published “No Big Deal”, by Paul Krugman on the Trans-Pacific Partnership (TPP) agreement and the apparent stalling of negotiations. He writes, “I am in general a free-trader, but I’ll be undismayed and even a bit relieved if the T.P.P. just fades away.” On that point, many people would likely share his relief. However, Krugman’s article is dangerous; he cloaks the TPP with an aura of blandness, arguing that the benign nature of the agreement is why it will not be missed. According to Krugman, the agreement does very little to enhance trade, instead:

… these days “trade agreements” are mainly about other things. What they’re really about, in particular, is property rights – things like the ability to enforce patents on drugs and copyrights on movies.  And so it is with T.P.P.

Krugman’s assessment of the TPP is framed by comparison to trade agreements of days gone by, when eliminating tariffs was a principle feature of negotiation. His remarks may be accurate in that regard, but by confining his assessment so narrowly, he avoids in-depth examination of the agreement as a whole. The TPP is not about trade. That word suggests a mutually beneficial exchange between two or more parties. The TPP is about domination and ensuring that countries do not oppose any actions taken by foreign corporations regardless of how those actions might affect health, environment, or even trade, within a host country.

Achieving such dominance includes imposing stringent measures upon intellectual property (more so than what is currently required by international agreement) and requiring that disputes arising are not adjudicated in either a court of law, or a seat of some impartiality like the WTO, but in private tribunals. (I have touched on the perils of investor-state dispute mechanisms, see here; Renée Loth writing for the Boston Globe on 22 December 2013 also covers this issue.)

Mr. Krugman could dismiss such remarks on the grounds that the actual agreement is yet to be seen. But that factor in itself ought to be a major reason for concern. Negotiations have been conducted in secret, with the public having to rely on a leaked document to discover what is being discussed. Granted, it is not possible, nor desirable, for any administration to govern by referendum. However, even U.S. elected representatives have not been privy to details. That combined with the desire of the Obama administration to fast-track the agreement, should have alerted Krugman: the TPP is a big deal.

But perhaps most startling of all is that Krugman’s article of the 27th is the second such article he has written. The first was published by The NY Times on 12 December 2013, titled “TPP”. Comparing the two articles, the tone is essentially the same; that judging by the former hallmarks of free trade, the TPP would not make much difference:

…  my starting point for things like this is that most conventional barriers to trade — tariffs, import quotas, and so on — are already quite low, so that it’s hard to get big effects out of lowering them still further.

That earlier article provoked some commentary. Dean Baker wrote a courteous dissent for the Center for Economic and Policy Research:

…it is a misunderstanding to see the TPP as being about trade. This is a deal that focuses on changes in regulatory structures to lock in pro-corporate rules. Using a “trade” agreement provides a mechanism to lock in rules that it would be difficult, if not impossible, to get through the normal political process.

Mike Masnick of TechDirt went into greater detail than Baker on the measures included in the TPP. And Masnick puts his fingers immediately on the value of an op/ed such as Krugman’s:

On [Krugman’s] basic reasoning, he’s correct. There’s little trade benefit to be gained here. In fact, some countries have already realized this. But that’s why the TPP is so nefarious. It’s being pitched as a sort of “free trade deal,” and Krugman analyzes it solely on that basis. That’s exactly what the USTR would like people to think, and it’s part of the reason why they’ve refused to be even the slightest bit transparent about what’s actually in the agreement.

Both responses are worth reading in their entirety; they are as germane today as they were three months ago.

Which leads me to question why Krugman continues to limit his exploration of the subject? He acknowledges that the TPP would, “increase the ability of certain corporations to assert control over intellectual property.” But he makes no effort to explore the ramifications of the increase. For such an accomplished economist, who writes under the tagline of “The Conscience of a Liberal,” this neglect is unconscionable.

Further Reading: InfoJustice.org (of the Washington College of Law, American University) has compiled a list of analyses (some for the agreement, others against), see hereChristopher Ingram, writing for The Washington Post (28 February 2014) describes the current composition of trade-advisory committees as selected by the Obama administration: “Of the 566 committee members, 306 come from private industry and an additional 174 hail from trade associations. All told they represent 85% of the voices on the trade committees.”

Update – 18 March 2014 – And more reading: On the Wrong Side of Globalization by Joseph Stiglitz.

TPP and ISDS – more acronyms

In Posts on December 8, 2013 at 3:45 pm

“Countries that want to preserve flexibility on copyright term pretty much have no strategy in the TPP. Canada is about to fold.”

This tweet came early Friday morning from James Love, Director of Knowledge Ecology International. Love is in Singapore watching the latest drama of the TransPacific Partnership (TPP) negotiations. However, given that Canada officially has no negotiating power, its efforts to opposing copyright maximalism may not matter anyway. (Thomas Walkom, of The Toronto Star reported in 2012 that Canada’s admittance to the group did not include the right of negotiation.)

As many readers know, the TPP is a trade agreement in the making, negotiated in secrecy (except for privileged members of the business class). In November, Wikileaks published details of the negotiations with respect to intellectual property rights; they did not look promising. At that time, Michael Geist offered a series of posts detailing the shortcomings of the agreement. In his first post, Geist wrote:

The good news is that Canada is pushing back against many U.S. demands by promoting provisions that are consistent with current Canadian law. Canada is often joined by New Zealand, Malaysia, Mexico, Chile, Vietnam, Peru, and Brunei Darussalam. Japan and Singapore are part of this same group on many issues. Interestingly, Canada has also promoted Canadian-specific solutions on many issues. The bad news is that the U.S. – often joined by Australia – is demanding that Canada rollback its recent copyright reform legislation with a long list of draconian proposals. …

And in his regular column with The Toronto Star, Geist added:

The U.S. finds itself relatively isolated on many issues, with only Australia offering consistent support for its positions. For example, Canada and most other TPP countries support a general objectives provision that references the need for balance, promotion of the public domain, protection of public health, and measures to ensure that intellectual property rights themselves do not become barriers to trade. The U.S. and Japan oppose these objectives.

If the U.S. is successful in pressuring other countries to meet its demands, Canada would be required to radically overhaul its current law, reversing course on many of the rules the government recently enacted as part of its long-awaited copyright reform package or negotiated in the trade agreement with the European Union.

Returning to Love’s assessment of the current talks, the prospects of Canada (or any country) maintaining a sovereign system of copyright looks bleak. Copyright term extension is high on the list of demands; earlier today Love tweeted: “One USTR official I talked to said, yes, 70+ life copyright terms [are] wrong. But Europe made us do it, and now, we need everyone to follow.” Even more disturbing was the news that Mexico is arguing for “at least” life plus 100.

Yet copyright may be the least of our problems.

By far the most insidious part of the TPP is the determination by the Office of the United States Trade Representative (USTR) to further entrench the Investor State Dispute Settlement (ISDS) process. This mode of dispute resolution allows corporations to sue governments, not through courts of law, but in private tribunals. Earlier this year, law professor Brook Baker published a comprehensive examination of the risks ISDS poses to access to medicines:

Suddenly intellectual property rights, already hugely protected, are given another mantle of protection, namely protections as investments.  In addition, investors are given rights to bring claims for private arbitration directly against governments whenever their expectations of IP-based profits are frustrated by government decisions and policies.   Decisions of these private arbitral tribunals consisting of three international trade lawyers are not subject to judicial review, but are reducible into court judgments that can be levied against government property.

The principle behind compensation for thwarted expectation may have seemed rational at its outset (investor-state dispute mechanisms were first introduced in NAFTA in 1994) — to ensure corporations have recourse against unstable governments whose court systems may lack objectivity and rigour. But the mechanism has allowed egregious actions by corporations directly against governments, sidestepping robust courts of law. That health, environmental, or financial regulations seem to hinder corporate profit, is considered sufficient cause to bring action. That these regulations serve the citizens of that elected government is irrelevant.

In a TPP information session in Singapore, Melinda St. Louis of Public Citizen gave a presentation describing actions brought under ISDS; video available here.  Some of the highlights:

  • Even municipal actions can provoke claims of frustrated expectation.
  • The private attorneys who participate in the proceedings rotate between serving as arbitrators and serving as judges.
  • Tribunal rulings are not bound by precedent.
  • There is no means for appeal.
  • Governments cannot counter-sue investors.
  • The proceedings are very expensive for governments; it is in the interests of the tribunal arbitrators to drag out proceedings as even if the government wins, “almost always they are ordered to pay half the tribunal costs.”
  • Tribunals have the discretion to award unlimited damages.
  • Each year, the number of disputes increases.
  • An example from St. Louis’ list (there were many): Occidental Petroleum (OP) breached their contract with the Ecuadorian government; the tribunal recognized the breach of contract but still awarded OP $2.4 billion to be paid by the government.
  • Canada features in the list a few times; including the matter of Eli Lilly.  As I have written before, the U.S.-based pharmaceutical company has taken issue with Canadian courts’ invalidation of patents for two drugs and is seeking $500 million. St. Louis emphasizes how significant this case is: “[Eli Lilly is] actually challenging Canada’s entire patenting system.”

As a result of numerous actions against governments, many countries are starting to question whether ISDS should be part of trade agreements. Intriguingly, all 50 state legislatures in the United States passed a resolution opposing ISDS in trade agreements. Which makes it all the more perplexing that Canada appears to have already agreed to such terms in the purported Canada-EU free trade agreement. Announced in October by the Harper government as an agreement in principle, the text has not yet been publicly disclosed.  But in the summary document provided by our government, discussion of ISDS is artfully worded:

The process that investors follow to seek compensation is called “investor-to-state dispute settlement” (ISDS) and involves an independent arbitral panel hearing facts and making a decision on the merits of an investor’s claim. ISDS rules have been a standard feature of Canada’s comprehensive free trade agreements since the North American Free Trade Agreement and give assurance to investors that their investments will be protected from discriminatory or arbitrary government actions (p.21).  …

When individuals have disagreements, they have various ways to resolve them. They can try to negotiate  among themselves or, if that doesn’t work, they can seek the help of an impartial third party such as a mediator, an arbitrator or a court. Trade disputes between countries work much the same way. Trade agreements include various dispute resolution mechanisms so that governments can resolve their disagreements. For instance, when consultations fail to resolve a problem, trade agreements provide governments with the option of using impartial third parties to help resolve the dispute. In some cases, these third parties act like courts in the sense that they hear evidence from both sides and ultimately render binding decisions (p.38).

While our government assures us that the agreement, “includes provisions to guard against frivolous claims in order to ensure that the process will not be abused,” the disparate bargaining positions vis-à-vis the Europeans do not bode well for Canadians; see this assessment of the imbalanced negotiation by Gus Van Harten (an Associate Professor at Osgoode Law and well-versed in international trade).

Our best hope seems to be that saner Canadian heads will prevail before the final language is set. And that other countries can remove the deleterious conditions of ISDS from the TPP.

A short lived celebration

In Posts on January 8, 2012 at 7:48 pm

With the celebration of the New Year, came new vigour into the Canadian public domain. But by Friday Michael Geist was alerting us that our public domain may stagnate soon. Under the auspices of the Trans-Pacific Partnership (a proposed international trading agreement) the term of copyright in Canada would increase from life plus fifty years, to life plus seventy years.

As Geist reminds us, our international obligation stops at life plus fifty years. Other countries have increased their copyright term, without any illustration of public benefit.  Whereas, evidence to the contrary is not hard to find. 1998 was not only the year of the United States’ Digital Millennium Copyright Act (DMCA) with its protection of digital locks, but also the year of their Copyright Term Extension Act (CTEA) which set American copyright term to life plus seventy years.

Before, during, and after the extension of American copyright term, dialogue was vigorous. A memorable comment came from Peter Jaszi; in his testimony to a Senate Judiciary Committee in 1995, he expressed concern that copyright in the United States would become perpetual via “the installment plan.” This lay in contravention to their Constitutional quid-pro-quo bargain: the monopoly of copyright is permitted only for a limited time in order to assure the public of unfettered access to creative works. These concerns were further argued through a constitutional challenge to CTEA, Eldred v. Ashcroft (2003). (Regrettably, the case did not succeed; see my entry here.)

Canadians may wish to read the detailed analysis of seventeen note-worthy economists, prepared for the Eldred case. From their summary:

The longer term for new works provides some increase in anticipated compensation for an author. Because the additional compensation occurs many decades in the future, its present value is small, very likely an improvement of less than 1% compared to the pre-CTEA term.

With respect to the economists’ analysis, dissenting Justice Breyer of the United States Supreme Court offered these choice words:

What potential Shakespeare, Wharton, or Hemingway would be moved by such [a gain]? What monetarily motivated Melville would not realize that he could do better for his grandchildren by putting a few dollars into an interest-bearing bank account?

The economists also observed that the extension of term for existing works does not provoke a further incentive to create — the investment required had already been made. Against these negligible, or non-existent, benefits of term extension, the economists examined the costs of the extension by way of access to existing works and creation of derivative works:

A lengthened copyright term under the CTEA keeps additional materials out of new creators’ hands. Would-be new creators face increased transaction costs: the necessity to engage in costly locating (especially for very old works, the very ones that would be in the public domain but for the CTEA) and bargaining with multiple parties. These higher costs give new creators less incentive to produce. As a result, the CTEA imposes two kinds of burden on society, fewer new works produced and higher  transaction costs in the creation of some works.

Canadians might also be interested in the 2009 copyright consultation submission of Project Gutenberg Canada, written by its founder Mark Akrigg. He explains how our cultural heritage is affected by copyright’s lengthy term:

The commercial value of copyrights is exhausted far more quickly than most people realize. The vast majority of books go out of print shortly after their original appearance, and are never reprinted. Very long copyright periods are dangerous to Canada’s cultural heritage, because many original works are in essence gone forever by the time they enter the Public Domain. They are forgotten, because they have been unavailable so long.

Akrigg asked our Government to refrain from copyright term extension and protect the public domain. In his final recommendation, he made three suggestions:

(a) The Copyright Act be renamed the Copyright and Public Domain Act. The purpose of this to emphasize that private copyright and public copyright (the right to use the Public Domain freely) are both vitally important.

(b) Explicit recognition of the Public Domain. The preamble to the copyright update bill should include specific recognition of the role of the legislation in ensuring “the orderly passage of works to the Public Domain to form part of Canada’s cultural heritage”, and a statement that “full, unimpeded access to the Canadian Public Domain is a critically important cultural right which is vital to preserving Canada’s cultural heritage.”

(c) The creation of a Public Domain Commissioner. The Public Domain is not protected by organizations of any kind, and its critical importance is often overlooked in policy discussions and decisions. For the public good, a high-profile advocate is needed to ensure that the Public Domain is protected and promoted. The history of copyright in Canada must not be a depressing tale of increasingly oppressive legislation removing accepted rights from the Canadian people. It would be extremely helpful to have a Public Domain Commissioner with a specific mandate to act as the advocate of the Public Domain, to facilitate the access of Canadians to their cultural heritage, and to report to Parliament on the status and health of Canada’s Public Domain.

Our Supreme Court has not been shy to emphasize the preeminence of the public domain. In 2002, Justice Binne, writing for the majority in Théberge v. Galerie d’Art du Petit Champlain inc., stated: “Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long-term interests of society as a whole (para.32).” Two years later, in CCH Canadian Ltd. v. Law Society of Upper Canada, Chief Justice McLachlin spoke of the importance that there be “room for the public domain to flourish as others are able to produce new works by building on the ideas and information contained in the works of others (para. 23).”

Our life plus fifty copyright term gives Canadian creators an advantageous position with disfavour to none. In fact, far from extending copyright’s term, a worthy ambition would be the international reduction of the term of copyright. With instant obsolescence an increasing characteristic of the present day world, lengthy protection holds even less meaning.

On 31 December 2011, in Canada Gazette, the Government of Canada filed notice of a public consultation regarding the TPP agreement: “It is essential that the Government of Canada be fully aware of the interests and potential sensitivities of Canadians with respect to this initiative.” Canadians may submit comments before February 14, 2012; see Canada Gazette for details.

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