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The 12 Questions About the TPP That President Obama and Prime Minister Abe Do Not Want to Hear This Week

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- 1918 days ago -
A hot item on the agenda is the possibility of Japan joining the Trans-Pacific Partnership (TPP), a U.S. NAFTA-style "free trade" agreement currently under negotiation between 11 Pacific Rim nations.

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JL A (281)
Saturday February 23, 2013, 9:59 am
The 12 Questions about the TPP that President Obama and Prime Minister Abe Do Not Want to Hear this Week

Today Japanese Prime Minister Shinzo Abe arrives in Washington for a Friday meeting with President Obama. A hot item on the agenda is the possibility of Japan joining the Trans-Pacific Partnership (TPP), a U.S. NAFTA-style “free trade” agreement currently under negotiation between 11 Pacific Rim nations. Japan is not now involved in TPP negotiations and Prime Minister Abe’s party, the Liberal Democratic Party (LDP), explicitly campaigned against joining the TPP in the December elections that restored Abe and his party to power.

Recent indications that Abe may contradict those campaign pledges have ignited a torrent of criticism within Japan and prompted the Japanese press to flood the Abe administration with tough questions regarding his TPP intentions. Meanwhile, key Obama constituencies, such as the auto industry and unions, have vocally opposed Japan’s inclusion, while U.S. congressional leaders from both parties have expressed opposition to the entire deal alongside consumer, labor, environmental, public health, Internet freedom and other public interest groups.

Here are 12 questions on the TPP that President Obama and Prime Minister Abe do not want to hear during Abe’s visit this week:

For both Prime Minister Abe and President Obama:

The TPP replicates provisions from prior NAFTA-style agreements that empower foreign investors to skirt domestic laws and courts and privately enforce the terms of a public treaty by directly challenging governments’ public interest policies before foreign tribunals to demand unlimited sums of taxpayer compensation. The premise for including such extreme extra-judicial enforcement procedures in past agreements has been that the domestic legal systems of developing country trade partners have not been sufficiently trustworthy. President Obama, do you see Japan’s domestic legal system as not sufficiently trustworthy, or do you plan to exempt U.S. firms operating in Japan from these investor privileges? Prime Minister Abe, I would ask the same question with regard to the U.S. domestic legal system and Japanese firms operating in the United States.

The TPP would bar both of your governments from favoring domestic companies with fiscal stimulus, or from requiring that taxpayer dollars be directed toward domestic firms in government procurement. China, meanwhile, remains free to pursue such pro-growth, domestically-focused strategies. If both Japan and the United States intend to compete with China, why would either country benefit from such limiting provisions in the TPP?

For President Obama:

In your recent State of the Union, you stated a priority of “making America a magnet for new jobs and manufacturing.” Given that wages in Vietnam are approximately one-third of those in China, how do you see the TPP – a NAFTA-style deal with Vietnam – contributing to your manufacturing growth goals for America?

Japan’s powerful rice lobby has successfully pushed Prime Minister Abe’s party to conditionally reject the TPP unless Japan is granted an exemption from tariff cuts on sensitive products like rice. Vietnam, as one of the world’s largest rice exporters and a TPP negotiating party, is unlikely to accept such an exemption unless the United States grants Vietnam greater access to its own sensitive economic sectors, such as the manufacturing sector that you pledged to expand in your State of the Union speech. How do you expect to simultaneously satisfy Japan and Vietnam and grow American manufacturing?

The U.S. auto industry and unions, key supporters of your administration, have rejected Japan’s inclusion in the TPP, citing Japan’s resistance to lowering import barriers on U.S. autos. Have you been able to extract from Japan a commitment to lower these barriers as a precondition to joining the TPP?

For Prime Minister Abe:

Your party has stated that it is not interested in joining the TPP unless you are guaranteed that there is no precondition that tariffs must be cut on all products without exception. Given that no such assurance has been given, what do you have to discuss with President Obama regarding the TPP?

Given the LDP campaign pledge to protect the national healthcare system, have you been able to extract from the United States a commitment to exempt Japan from the provisions in the proposed TPP text that would extend medicine patents and challenge national drug formularies?

Japan’s legal associations have opposed the TPP’s proposed inclusion of investment provisions that would allow foreign corporations to skirt Japan’s laws and courts and directly challenge Japanese domestic policies in foreign tribunals, demanding taxpayer compensation for public interest laws that they claim to be violations of TPP-granted investor privileges. Have you been able to extract a commitment from the United States to exempt Japan from these provisions?

Japanese consumer safety groups have opposed proposed TPP rules that would require Japan to accept meat, poultry and other food from the United States and other TPP countries that are deemed to have roughly “equivalent” food inspection systems, even if Japan’s specific food safety requirements were not met. Have you been able to extract a commitment from the United States to exempt Japan from these rules?

Japan’s economy relies heavily on the use of existing technologies to spur innovation and growth. Given that the TPP’s proposed text would significantly expand intellectual property protections so as to inhibit open-source usage of existing technologies, have you been able to extract from the United States a commitment to exempt Japan from these rules?

Japan’s farm ministry calculates that the TPP would cause a ¥7.9 trillion downfall in Japan’s gross domestic product and the loss of 3.4 million jobs. How do you see the TPP fitting into the economic growth goal that is one of the three pillars of your reform platform?

Have you been able to extract from the United States commitments to exclude rice, beef, pork, dairy, sugar or other sensitive agricultural sectors from the TPP’s tariff-cutting requirement, given the intense anti-TPP pressure exerted by the farmers in these sectors who helped return the LDP to power in December? Have you been able to extract such a commitment for construction, postal services, insurance or other sensitive service sectors that have also opposed the TPP?

Posted by Ben Beachy

Stephen Brian (23)
Saturday February 23, 2013, 11:46 am
There are some good answers to some of these questions:

For the first set, in the end, a foreign tribunal cannot force a government to sign over taxpayer money. If they really find the demands ridiculous, they can refuse to abide by a ruling, and if the other government agrees that the ruling does not follow the intent of the treaty, then there will be no consequences for the breach. Otherwise, the treaty can be renegotiated. This is pretty much how all treaties work, and the provisions in this one seem to be intended to make complaints easier to handle. For the same reason, the loss of control over domestic policy is only relative to companies from TPP partners. There is a loss of control, but in such a way that it encourages mutual private-sector investment, turning the members into more of an economic bloc and reducing destructive competition between them.

For the second set, the nature of American manufacturing has changed dramatically in recent decades, and especially during the recession when production dropped and factories were retooled. Labour-costs are dropping as a fraction of those of manufacturing as more jobs get automated. People talk about how manufacturing is in trouble in the U.S., but only when they look at the job-numbers, not output. American manufacturing is still, in a lot of cases, cheaper. In those cases where it is not, the problems are mostly internal regulatory issues which slow retooling (by smothering any attempt to change products with redundant inspections, licenses, red tape) and interfere with industry in general (public commentary/complaint sessions in cases of fctory-renovation, requiring affordable housing to be constructed along with any industrial infrastructure in New Jersey, etc.), not foreign wages. If the U.S. deals with those, its manufacturing sector will grow dramatically, and if not, then it won't.

For the third set, generic drugs are cheaper, but extending patents encourages research, which leads to better healthcare. It's a tradeoff, and it's just a question of which is more important now. Same for other IP law, where Japanese innovation may become rarer, but more valuable. The same principle applies, in the other direction, to inspections: Duplicating inspections makes for more expensive food. Demanding local inspections may or may not help, but it would increase the cost of goods on which the poor spend proportionally more of their income already. It's a question of which way the government feels would be more beneficial to the country. Again for food, the U.S. may be able to export more easily to Japan so there could be losses in the domestic market, but the reverse is also true so there would be gains in the international one, and the rest of the TPP is a larger market than Japan, with more room into which to expand.

On the other hand, the numbers may not work out on some of there. I haven't really checked.

JL A (281)
Saturday February 23, 2013, 8:17 pm
Stephen, it sounds like you haven't read any of the leaked drafts of TPP which are written to ensure corporations are exempt from local laws and will always win their cases, like I understand are underway in various nations related to labor and environmental laws at least, while the older agreements it had less certainty.

Giana Peranio-paz (398)
Sunday February 24, 2013, 12:37 am
Noted. thanks JL

JL A (281)
Sunday February 24, 2013, 1:03 am
You are welcome Giana

Past Member (0)
Sunday February 24, 2013, 6:37 am

Anna M (18)
Sunday February 24, 2013, 8:05 am

Sending a Green Star is a simple way to say "Thank you"

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. (0)
Sunday February 24, 2013, 1:17 pm
Many of you who are familiar with my comments will know that I am a firm believer in following the money. Find out who stands to gain and who stands to lose. Why Harper or Obama would think this is a win win situation is totally beyond me. Foreign nations like those already involved in the TPP are the only ones who benefit. All prior treaties signed by the participating members allows no recourse to newer partners such as Canada, the US or Japan. Stephen needs to read the fine print a little more carefully. This is why Canadian voters took Harper to task over CNOOC. They can literally ties individual citizens or any organization that threatens their profit margin and balance sheet in the courts for an ungodly period of time. Guess who would foot the bill? Foreign workers would also be employed first at any new company or endeavor and there is no guarantee that the company wouldn't be moved outside of its originating country. Also, the foreign owners would get cheap resources too and any environmental damage would have to be cleaned up by the host country at their expense. The offending endeavor or business would not pay theoretically. If we are not careful we could wind up like Mexico where there are few if any environmental controls or China that has polluted its environment in every conceivable way to the point of death. That's just my opinion of course.

JL A (281)
Sunday February 24, 2013, 6:27 pm
Thanks for the marvelous explanation of how CNOOC proved to be to highlight TPP issues and concerns Michael!
You cannot currently send a star to Michael because you have done so within the last week.

Stephen Brian (23)
Monday February 25, 2013, 12:54 am
Thanks for the URLs. :)

I hope these issues get hammered out before anyone signs the TPP.

JL A (281)
Monday February 25, 2013, 7:43 am
You are welcome Stephen. The concerns are that the issues of concern are intended by the corporate influence with secrecy being the mode of drafting to prevent resolution in ways that would satisfy concerns.
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