Jane Kelsey: Leak shows trade deal may prove tricky

President Barack Obama is struggling to get support to fast-track negotiating authority for the Trans-Pacific Partnership Agreement. Photo / AP

Opinion

Ministers and officials have different ideas on what was agreed at Trans-Pacific Partnership talks in Singapore.

Trade ministers from the 12 countries negotiating the Trans-Pacific Partnership Agreement (TPPA) injected real momentum into the negotiations when they met in Singapore in late December. It seemed they might actually pull off a deal in the next few months. Trade Minister Tim Groser announced they would meet again in January and the officials would work tirelessly over summer to prepare.

But the plan to meet around the margins of next week's World Economic Forum in Davos, Switzerland, proved too difficult. The latest rumour is ministers will reconvene in Singapore in late February, with officials holding negotiations shortly before then.

What was and was not agreed in Singapore is also now disputed. Feedback from several countries suggests that ministers and officials genuinely have different perceptions.

Australia's Trade Minister is saying the agreement text is close to being sealed and intellectual property is no longer a problem. But his Japanese counterpart told NHK Television that if the negotiation was not concluded at the next meeting it would be postponed indefinitely.

WikiLeaks has provided another small piece of the puzzle, posting its third leak on the TPPA in three months. This time it was the draft environment chapter and a chairs' report describing the 12 countries' positions on that draft. They were outcomes of the Salt Lake City round in November.

The fact that someone or some country has leaked another chapter confirms all is not well inside the negotiations.

The draft environment chapter confirms expectations that the TPPA's "gold standard" is for the corporations, not to protect people and the planet. Environment chapters are used as fig leaves to deflect criticisms of other chapters that confer legal rights on foreign corporations that can seriously harm the environment. In the investment chapter, these rights are enforceable through the notorious investor-state dispute settlement processes. Most investor-state disputes involve government measures to regulate natural resources or protect the environment or public health.

The leak also provides insights into the negotiating process and how ministers are trying to break the deadlock in key chapters. Asking one country, in this case the Canadian chair of the environment working group, to prepare a new text "on their own responsibility" is a controversial strategy used at the World Trade Organisation to isolate countries that are holding outlier positions.

Dissenting parties can be treated as obstructive if they insist on holding the line - unless they are sufficiently powerful to get their own way. In this case, the US is the outlier on most of the disputed provisions. That fact makes the chapter a captive of US domestic politics.

Back in May 2007 President George W. Bush did a deal with the Democrat-controlled Congress. One requirement was that environment chapters in all US FTAs must be enforceable by sanctions. The US demanded that be included in all free trade pacts after May 2007. But Peru was the only TPPA party affected. Now, all 11 parties have rejected US demands that the environment chapter is subject to the agreements dispute settlement process and penalties.

President Barack Obama has a dilemma. On January 9, a bill was tabled in Congress seeking fast-track negotiating authority for the TPPA and other agreements which would require Democrats and Republicans to accept or reject a final text as a whole, within a specified time. Obama is struggling for support. This environment chapter will strengthen opposition from some Democrats and force Obama to rely on hostile Republicans. Even with fast-track, a TPPA with an unenforceable environment chapter would be hard to pass. US Trade Representative Michael Froman made it clear, in response to the leak, that "we will insist on a robust, fully enforceable environment chapter in the TPP or we will not come to agreement".

The bet is on a trade-off that accepts enforcement of an incredibly weak chapter, making the concession largely meaningless.

However, the leaked chapter will show that the other 11 countries have caved to US demands. To find out what happens we may have to wait for the next instalment from WikiLeaks.

Jane Kelsey is a law professor at the University of Auckland.