The Trans-Pacific Partnership or TPP is one of the most expansive free trade agreements in history, encompassing 12 countries and 40 percent of the world’s economy, and it is currently awaiting Congress’ approval. The agreement largely succeeds in its prospective goal of empowering big business, but fails to effectively uphold purported goals of better working conditions and improved environmental protections for involved countries.
The free trade agreement fundamentally aspires to eliminate barriers to trade, particularly impediments such as strict domestic regulatory laws or tariffs and duties imposed on imports and exports. The agreement does intend to serve other goals than maximizing economic success, which has served to placate concern at the effects of unrestrained capitalism. One of these goals is a comprehensive environmental protection plan, aimed at mitigating the impact of climate change and carbon emissions.
One of the most egregious concessions allowed to corporations under the agreement is the ability to sue member countries for impeding a corporation’s profit. For example, government actions that might prompt a lawsuit include environmental protection laws and Wall Street regulations.
In other words, corporations can challenge laws designed to protect average citizens and the common good. Under the new system, unelected lawyers could grant verdicts that would compel our government to hand over taxpayer dollars to corporations without any chance of appeal. These proceedings would take place in private tribunal arbitration with no transparency or accountability. Given their newfound power, foreign and domestic corporations, including domestic corporations with outsourced labor , can make countries pay for trying to look out for their constituents’ welfare.
Another problematic aspect of the agreement comes from within corporate America, and who wins and loses from the deal. Some of the biggest beneficiaries are tech companies. Silicon Valley serves to profit greatly from the agreement’s stipulations, which would prohibit member nations from demanding a company’s source code as terms of allowing them to do business in their country.
While this is certainly a positive effect, the companies that lose the most from the agreement unfortunately will be manufacturers in more developed countries, whose jobs will flock overseas without tariffs in place. There is good to be found for certain industries; the tech giants will thrive, but it is not the tech sector that provides the most jobs, it is manufacturers.
Protectionist policies are what allow labor-intensive industries in countries that afford their workers a higher standard of living to be economically viable. The TPP endangers this, much as NAFTA and CAFTA, other free trade agreements in effect since the ‘90s, both of which have hurt American workers.
The TPP’s focus on climate change is one of the key issues that proponents of the agreement will tout as universally beneficial. It is true that the agreement will set stringent rules on illegal timber harvesting and illegal wildlife trade among other environmentally destructive actions, but the problem arises with enforcement.
It is naive to believe that the U.S. would sanction or somehow punish trading partners and allies such as Japan or Vietnam over environmental issues. The U.S. does not have a strong record when it comes to holding other nations accountable to environmental agreements. The agreement will also allow for nations to reduce carbon emissions at self-determined rates, allowing countries to set their own standards.
While this stipulation is rational, it has potential for trouble, as poorer countries are likely to delay or neglect their mission of carbon reduction more than richer countries, who can accomplish the task much more easily. With no means of enforcement, the environmental clauses of the TPP will be largely innefectual.
The TPP is an instance of economic interests overpowering humanitarian ones. The TPP is especially insidious in presenting a façade of environmental and workers’ progress while, in reality, it amounts to simply a corporate victory.
Scott Johnson ’18 (johnso16@stolaf.edu) is from Gladstone, Mo. He majors in economics.
