Many question how local government can possibly be affected by an international trade agreement like the Trans-Pacific Partnership Agreement. They need to realise that the TPPA is deliberately designed to be far more than a mere trade treaty and includes numerous provisions that could ultimately affect almost every aspect of our daily lives. Indeed, one of the greatest criticisms of the TPPA is for the ways in which it can severely curtail and even subvert the powers and activities of democratically elected governments at both national and local levels.
Some of us have been grappling over the last two decades to deal with previous attempts to foist similar rules on us. Although the MAI (Multilateral Agreement on Investment) was actually withdrawn in 1998 in the face of strong opposition from civil society groups here and around the world, it was soon replaced by the GATS (General Agreement on Trade in Services), and in the last few years by the TPPA.
One common thread through all of these so-called Free Trade agreements is the attempt to embed Investor-State rules which tend to replace the authority of national legislation and judiciary with that of Disputes Panels that hold secret hearings. And this tendency indirectly extends to the functions of local Councils.
Apologists for the TPPA airily dismiss such criticism as alarmist theorising. But it is not – we can see exactly how these Investor-State rules have worked in practice to the detriment of local communities by learning from the all too real experience of NAFTA. The North American Free Trade agreement, which has covered Canada, Mexico and the USA since 1994, provides the model on which TPPA is based.
One classic case is known as Metalclad Industries versus Mexico. Following complaints about health effects from residents of Guadalcazar City, local officials forced Metalclad to cease operations at its landfill because it contained 20,000 tons of improperly dumped hazardous waste close by the town water supply. In 1997, the company sued the Mexican Government – only governments can be sued – for damages under Chapter 11 of NAFTA for $90 million. At a closed hearing held in Canada, an arbitration panel awarded them $16.7 million. Even though this amount was later reduced it is outrageous that local government can be monstered like this for carrying out one of their most important roles – ensuring that citizens have safe drinking water.
There are numerous other cases where multinationals, mainly American, have sued for damages under NAFTA because local rules or regulations were claimed to affect the profitability of their operations. Although comparatively few have been ultimately successful, fear of being sued has had a “chilling effect” on authorities attempting to regulate or control the activities of multinationals. For this reason NAFTA is widely feared and loathed in Mexico and Canada, but also in some communities within the USA – opposition to it has actually become an election issue.
Although quite a few in New Zealand local government circles just do not understand how they and their organizations are threatened by TPPA, there are many others that do. Councils from throughout the country have now passed resolutions seeking an opportunity for an informed public debate about the draft TPPA. For example on 6th December 2012, albeit by a two-vote margin, Auckland Council voted to “encourage the government to conclude negotiations on the Trans-Pacific Partnership and Free Trade Agreements in a way that provides net positive benefits for Auckland and New Zealand, that is provided the Partnership and Agreements achieve the following objectives [I have emphasized the last]:
(i) Continues to allow the Auckland Council and other councils, if they so choose, to adopt procurement policies that provide for a degree of local preference; to choose whether particular services or facilities are provided in house, by council-controlled organizations (CC0s) or by contracting out; or to require health and safety, environmental protection, employment rights and conditions, community participation, animal protection or human rights standards than national or international minimum standards;
(ii) Maintains good diplomatic and trade relations and partnerships for Auckland and New Zealand with other major trading partners not included in the agreement, including with China;
(iii) Provides substantially increased access for our agricultural exports, particularly those from the Auckland region, into the US Market;
(iv) Does not undermine PHARMAC, raise the cost of medical treatments and medicines or threaten public health measures, such as tobacco control;
(v) Does not give overseas investors or suppliers any greater rights than domestic investors and suppliers, such as through introducing Investor-State Dispute Settlement, or reduce our ability to control overseas investment or finance;
(vi) Does not expand intellectual property rights and enforcement in excess of current law;
(vii) Does not weaken our public services, require privitisation, hinder reversal of privitisations, or increase the commercialisation of government or of Auckland Council or other local government organizations;
(viii) Does not reduce our flexibility to support local economic and industry development and encourage good employment and environmental practices and initiatives like Council Cadetships, COMET, and the Mayors’ Taskforce for Jobs which enable marginalized young people to develop their skills and transition into meaningful employment;
(ix) Contains enforceable labour clauses requiring adherence to core International Labour Organisation conventions and preventing reduction of labour rights for trade or investment advantage;
(x) Contains enforceable environmental clauses preventing reduction of environmental standards for trade or investment advantage;
(xi) Has general exceptions to protect human rights, the environment, the Treaty of Waitangi, and New Zealand’s economic and financial stability;
(xii) Has been negotiated with real public consultation including regular public releases of drafts of the text of the agreement, and ratification being conditional on a full social, environmental and economic impact assessment including public submissions.
Graeme Easte
member of the Albert-Eden Local Board
formerly an Auckland City Councillor
