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An example of how this can play out: Australia enacts a law on cigarette labeling, requiring warnings on the package. Tobacco companies sues A

An example of how this can play out: Australia enacts a law on cigarette labeling, requiring warnings on the package. Tobacco companies sues Australia under a Hong Kong - Australia trade agreement, to get them to revert the labeling law. (this isn't hypothetical, it's already happening) http://en.wikipedia.org/wiki/Plain_cigarette_packaging#Tobacco_industry_response http://en.wikipedia.org/wiki/Plain_cigarette_packaging#Tobac... I'm definitely a big champion of capitalism, but these investor-state dispute settlements seems really wrongheaded. Also, I cannot understand why these negotiations are secret? All in favor of trade-deals as long as they remove/reduce tariffs and tolls, but they should be conducted in the open.

pdkl95 12y ago
We already have very little tariffs and tolls. This is being negotiated in secret because the TPP isn't about "free trade" in the traditional sense; this is an attempt to allow the free movement of capital. A nice explanation of the realpolitik of the TPP, in comic form: http://economixcomix.com/home/tpp/ http://economixcomix.com/home/tpp/
- xnull2guest 12y ago
  Could you explain why the free movement of capital implies or requires secrecy - and how this is different than other trade agreements freeing up the movement of capital that haven't been as secret?
  - deleted 12y ago
    [deleted]
mike_hearn 12y ago
Nitpick: you have stated that tobacco companies are suing Australia using a HK-AUS trade agreement to get them to "revert the labelling law". That's simply not true: they are suing for compensation, not trying to force a change in the law (they'd have to try and get the law struck down as violating some other constitutional law to do that). > I'm definitely a big champion of capitalism, but these investor-state dispute settlements seems really wrongheaded Why? Can you at least see the underlying motivation for them? As it happens I don't like tobacco companies at all. I'm very sympathetic to what Australia is doing and think other countries should adopt the same idea. Nonetheless, I'm OK with the idea of Australia paying compensation to Phillip Morris and other cigarette companies in this case, even though these companies are quite loathsome. The reason is the higher principle might still be worth it. The rationale for ISDS is simple: politicians answer to citizens, citizens want jobs and a growing economy. Period. They want that more than anything else. In hard times "the economy" is always at the top of voters concerns. Politicians know this and will do almost anything to juice the economy e.g. quantitative easing. One of the ways to boost the economy is to increase trade, it's classical economics and it seems to work. Hence there's always some free trade agreements being worked on somewhere. Free trade is a great idea. However in the developed world most of the easy, low hanging fruit has already been picked. Tariffs are mostly gone. The remaining bottlenecks to trade are often things like differing technical standards or different regulations, which are hard to fix. One bottleneck is that business values a stable and predictable business environment nearly as much as citizens value jobs, however "stable and predictable" is obviously in tension with the desire politicians have to change things around at a moments notice in order to try and win votes. In particular, businesses fear sudden and arbitrary banning of their business model or sudden seizure of their assets. This holds back trade: company executives say to themselves things like, "our factory is in the USA and lots of our customers are in the EU so we have high shipping costs. We could set up a factory in the EU but that will take five years and be a very expensive and complex project. If we do it and after seven years the laws change such that it's no longer economic for us to do that, we're screwed. And we don't trust the politicians over there not to screw with us, so maybe we'll just stay as we are". Result: Europeans have fewer jobs so are less happy, they pay more for the imports so are less happy, the company doesn't expand so it's also less happy. With ISDS maybe the decision looks like this instead: "we should set up a factory in the EU, because even if the laws there change and suddenly our factory can't operate or doesn't make sense any more, we'll be compensated and can use the compensation money to smoothly transition our business somewhere else ..... so let's do it". So by agreeing to compensate companies for changes in the political environment, the hope is that there will be more trade, more investment, more jobs and thus more happy wage-earning citizens. Of course, politically this is a hard sell because people like to think that if their elected politicians start whacking a foreign company doing business in their country it's because the dirty foreigners are immoral and nasty and generally deserve it .... and not, say, because their votes are easily bought by a bit of crafty populism. But then again, they really want the jobs too. So we'll have to see how this works out.
- littletimmy 12y ago
  If this is that fine and dandy, why is it being done in secret?
  - nebolo 12y ago
    Free trade agreements are always negotiated in secret in order to enable the two sides to come to a comprehensive agreement. Transparent negotiations fail.
    - littletimmy 12y ago
      That is circular reasoning. That sentence says agreement is secret so that there can be agreement. What nonsense.
      - nebolo 12y ago
        No, the sentence says negotiations are secret so there can be agreement.
  - mike_hearn 12y ago
    I guess there's some back story there. Perhaps in previous rounds they had problems with unfinished, known to be flawed drafts triggering big political upsets back home that ended negotiations early. Whereas if the process had been allowed to play out the final agreement presented for ratification would have actually been acceptable. I don't know though, that's just a guess. That said, I try and assume the best in people. I really doubt there's some moustachioued cigar smoking trade negotiator explicitly demanding secrecy because otherwise the plebs might realise how much they're getting screwed. Seems more likely it's done for their own convenience. People always like to shield themselves from criticism by invoking secrecy, it's an easy "fix".
  - snowwrestler 12y ago
    It's not being done in secret; everyone knows that the negotiations are happening. For example the U.S. government has a mini-website all about the TPP: https://ustr.gov/tpp https://ustr.gov/tpp The negotiations are being conducted solely by national representatives because the TPP is an agreement between nations. When the national representatives think they have a deal, they will present the proposed deal to their governments for ratification. In the case of the U.S. that will mean a Congressional vote. Similarly: Corporate deals are negotiated in private by company staff, and then presented to shareholders for ratification. Domestic legislation is negotiated in private by Congressional staff, and then presented for consideration by the appropriate Congressional committee. Etc. National negotiators do seek input from their citizens who might be affected by the TPP. From the USTR site: "On Wednesday, March 6, negotiators from the 11 Trans-Pacific Partnership Countries paused talks to meet with more than 300 global stakeholders at an engagement event hosted by the Government of Singapore. Representatives from academia, labor unions, the private sector, and non-governmental organizations from around the world spoke with and heard from negotiating teams about priorities for and progress on the pending trade agreement. The negotiators also had the opportunity to listen to 60 lecture-style stakeholder presentations." https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/direct-stakholder-engagement https://ustr.gov/trade-agreements/free-trade-agreements/tran... edit: speling
pjc50 12y ago
The high degree of secrecy is in response to the previous decades of protest and outrage at e.g. G20 meetings. You can't protest what you can't see.
- A_COMPUTER 12y ago
  I am waiting for when they start incorporating anti-leak technologies in their drafts, like including unique steganographics, and then using evidence of "bad faith" to punish leaker countries. I understand in practical terms why it's good to keep draft legislation under wraps while it's being negotiated, but it's pretty clear with TPP that the secrecy is being done to large extent to mitigate the fact that so many in the public would be completely opposed to parts of it.
- CountSessine 12y ago
  Yes - exactly. And in spite of claims that our elected representatives will ultimately decide whether or not to ratify the agreement, when the agreement is presented it's take-it-or-leave-it - any opportunity to have shaped the agreement will be long gone. Of course, this is to be expected in diplomacy and trade agreements, right? We give a little, they give a little, and no one gets everything they want. The only problem is that we're not negotiating against China or Japan or Australia - our chief adversaries in these negotiations are Phillip Morris, Monsanto, and other non-nation states that have insinuated themselves into diplomatic discourse and have gamed the system for their advantage. Our own national negotiators are working against us and our interests. It's not a matter of compromise - its a matter of being completely raked over by multinationals under threat of lost jobs and an even further deteriorated standard of living.

pdkl95 12y ago

We already have very little tariffs and tolls. This is being negotiated in secret because the TPP isn't about "free trade" in the traditional sense; this is an attempt to allow the free movement of capital. A nice explanation of the realpolitik of the TPP, in comic form: http://economixcomix.com/home/tpp/ http://economixcomix.com/home/tpp/

xnull2guest 12y ago
Could you explain why the free movement of capital implies or requires secrecy - and how this is different than other trade agreements freeing up the movement of capital that haven't been as secret?
- deleted 12y ago
  [deleted]

mike_hearn 12y ago

Nitpick: you have stated that tobacco companies are suing Australia using a HK-AUS trade agreement to get them to "revert the labelling law". That's simply not true: they are suing for compensation, not trying to force a change in the law (they'd have to try and get the law struck down as violating some other constitutional law to do that). > I'm definitely a big champion of capitalism, but these investor-state dispute settlements seems really wrongheaded Why? Can you at least see the underlying motivation for them? As it happens I don't like tobacco companies at all. I'm very sympathetic to what Australia is doing and think other countries should adopt the same idea. Nonetheless, I'm OK with the idea of Australia paying compensation to Phillip Morris and other cigarette companies in this case, even though these companies are quite loathsome. The reason is the higher principle might still be worth it. The rationale for ISDS is simple: politicians answer to citizens, citizens want jobs and a growing economy. Period. They want that more than anything else. In hard times "the economy" is always at the top of voters concerns. Politicians know this and will do almost anything to juice the economy e.g. quantitative easing. One of the ways to boost the economy is to increase trade, it's classical economics and it seems to work. Hence there's always some free trade agreements being worked on somewhere. Free trade is a great idea. However in the developed world most of the easy, low hanging fruit has already been picked. Tariffs are mostly gone. The remaining bottlenecks to trade are often things like differing technical standards or different regulations, which are hard to fix. One bottleneck is that business values a stable and predictable business environment nearly as much as citizens value jobs, however "stable and predictable" is obviously in tension with the desire politicians have to change things around at a moments notice in order to try and win votes. In particular, businesses fear sudden and arbitrary banning of their business model or sudden seizure of their assets. This holds back trade: company executives say to themselves things like, "our factory is in the USA and lots of our customers are in the EU so we have high shipping costs. We could set up a factory in the EU but that will take five years and be a very expensive and complex project. If we do it and after seven years the laws change such that it's no longer economic for us to do that, we're screwed. And we don't trust the politicians over there not to screw with us, so maybe we'll just stay as we are". Result: Europeans have fewer jobs so are less happy, they pay more for the imports so are less happy, the company doesn't expand so it's also less happy. With ISDS maybe the decision looks like this instead: "we should set up a factory in the EU, because even if the laws there change and suddenly our factory can't operate or doesn't make sense any more, we'll be compensated and can use the compensation money to smoothly transition our business somewhere else ..... so let's do it". So by agreeing to compensate companies for changes in the political environment, the hope is that there will be more trade, more investment, more jobs and thus more happy wage-earning citizens. Of course, politically this is a hard sell because people like to think that if their elected politicians start whacking a foreign company doing business in their country it's because the dirty foreigners are immoral and nasty and generally deserve it .... and not, say, because their votes are easily bought by a bit of crafty populism. But then again, they really want the jobs too. So we'll have to see how this works out.

littletimmy 12y ago
If this is that fine and dandy, why is it being done in secret?
- nebolo 12y ago
  Free trade agreements are always negotiated in secret in order to enable the two sides to come to a comprehensive agreement. Transparent negotiations fail.
  - littletimmy 12y ago
    That is circular reasoning. That sentence says agreement is secret so that there can be agreement. What nonsense.
    - nebolo 12y ago
      No, the sentence says negotiations are secret so there can be agreement.
- mike_hearn 12y ago
  I guess there's some back story there. Perhaps in previous rounds they had problems with unfinished, known to be flawed drafts triggering big political upsets back home that ended negotiations early. Whereas if the process had been allowed to play out the final agreement presented for ratification would have actually been acceptable. I don't know though, that's just a guess. That said, I try and assume the best in people. I really doubt there's some moustachioued cigar smoking trade negotiator explicitly demanding secrecy because otherwise the plebs might realise how much they're getting screwed. Seems more likely it's done for their own convenience. People always like to shield themselves from criticism by invoking secrecy, it's an easy "fix".
- snowwrestler 12y ago
  It's not being done in secret; everyone knows that the negotiations are happening. For example the U.S. government has a mini-website all about the TPP: https://ustr.gov/tpp https://ustr.gov/tpp The negotiations are being conducted solely by national representatives because the TPP is an agreement between nations. When the national representatives think they have a deal, they will present the proposed deal to their governments for ratification. In the case of the U.S. that will mean a Congressional vote. Similarly: Corporate deals are negotiated in private by company staff, and then presented to shareholders for ratification. Domestic legislation is negotiated in private by Congressional staff, and then presented for consideration by the appropriate Congressional committee. Etc. National negotiators do seek input from their citizens who might be affected by the TPP. From the USTR site: "On Wednesday, March 6, negotiators from the 11 Trans-Pacific Partnership Countries paused talks to meet with more than 300 global stakeholders at an engagement event hosted by the Government of Singapore. Representatives from academia, labor unions, the private sector, and non-governmental organizations from around the world spoke with and heard from negotiating teams about priorities for and progress on the pending trade agreement. The negotiators also had the opportunity to listen to 60 lecture-style stakeholder presentations." https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/direct-stakholder-engagement https://ustr.gov/trade-agreements/free-trade-agreements/tran... edit: speling

pjc50 12y ago

The high degree of secrecy is in response to the previous decades of protest and outrage at e.g. G20 meetings. You can't protest what you can't see.

A_COMPUTER 12y ago
I am waiting for when they start incorporating anti-leak technologies in their drafts, like including unique steganographics, and then using evidence of "bad faith" to punish leaker countries. I understand in practical terms why it's good to keep draft legislation under wraps while it's being negotiated, but it's pretty clear with TPP that the secrecy is being done to large extent to mitigate the fact that so many in the public would be completely opposed to parts of it.
CountSessine 12y ago
Yes - exactly. And in spite of claims that our elected representatives will ultimately decide whether or not to ratify the agreement, when the agreement is presented it's take-it-or-leave-it - any opportunity to have shaped the agreement will be long gone. Of course, this is to be expected in diplomacy and trade agreements, right? We give a little, they give a little, and no one gets everything they want. The only problem is that we're not negotiating against China or Japan or Australia - our chief adversaries in these negotiations are Phillip Morris, Monsanto, and other non-nation states that have insinuated themselves into diplomatic discourse and have gamed the system for their advantage. Our own national negotiators are working against us and our interests. It's not a matter of compromise - its a matter of being completely raked over by multinationals under threat of lost jobs and an even further deteriorated standard of living.