TPP Basics: After Signing (Workshop by Sanya Reid Smith)

What happens after signing the TPPA? In this article, the ratification and certification processes are covered, with a focus on how the US can demand more concessions during these processes. It is recommended to first read the Introduction for the context, and also the earlier part of the process on the TPP negotiation, before the signing of the TPP.

This series is brought to you by TPPDebate.org based on a recent NGO briefing on the Trans-Pacific Partnership (TPP) in Malaysia by Ms Sanya Reid Smith, an expert on Trade and Investment Rules. She has been monitoring the Trans-Pacific Partnership Agreement (TPPA) since 2011, and is also the resource expert for Bantah TPPA Malaysia. The entire talk is uploaded on YouTube in a seven part series and can be accessed here; this article is drawn mainly from Part 4 of the talk. The index of the series is attached at the end of the article.

Video starts at 3:39

The ratification process allows US to ask for more

The ratification process is where Malaysia has to change its laws to comply with the TPP. How many laws is that? I don’t know. Patent, copyright, trademark, tariffs, labour… a lot lah. And, in this process, the US wants more.

So, Malaysia has given up this much [she makes a gesture] in the signed TPP text. It’s already quite a lot. For the TPP to come into force, to start operating, it must pass the US congress. The US parliament, under their constitution. To pass the US, they currently have what they call a “fast track law”. It’s supposed to be the US parliament voting yes or no to the whole thing, the whole 6000 pages, without any changes. But, if the majority of the US congress wants a change, they will say “I will vote no, unless you reopen the text and give me more”.

The Korean case

And this is what happened to Korea, in the US free trade agreement. The text was signed, four years later it goes into the US congress, the US congress said “we will vote no”. Unless you reopen it and allow more American cars into Korea, and Koreans must buy mad cow beef from America.

It was a big controversy. 300,000 people demonstrating on the streets of Korea every night, the whole cabinet had to offer to resign, the Prime Minister flew to America and said, “please don’t force me -” he took out a photo of the demonstration – “this is what I have to go back to!” Because the US of course has mad cow beef, nobody wants to buy it. But they force it down their throats in the free trade agreement, making you accept diseased meat.

So even with Fast Track, the congress can reopen the text, and demand changes.

Certification process: another opening for more demands

OK. So you gave up this much [gestures the level] in the signed text, to be signed in February this year. You give up more to get through the US congress [gestures the increase of the level]. Then there is another stage called Certification, that is required by US law. If they don’t do this, it doesn’t get fast tracked and it doesn’t pass the parliament, because without Fast Track every senator can change the text. There would be a hundred senators with different demands, it would never pass.

What does certification mean? (And this is allowed by the TPP.) The US has done this since the Chile-US free trade agreement, because Chile was very smart. When they implemented the US free trade agreement they played a lot of tricks. They didn’t quite implement it. They were supposed to give this five-year monopoly on medicines, but they said “oh, that’s for marketing approval. In Chile we don’t do that. We do ‘sanitary approval’, it’s very different.” So they didn’t give them the five-year monopoly. Actually it was the same thing. They were cheating lah. But they were very clever to protect their national interest in the way they were implementing.

The US got so angry, they said “never again. We will never fall for this trick again.” So, ever since the Chile-US FTA, they have been “certifying” the other country, and that means that, to allow it to come into force, the free trade agreement, the US must give a letter. And it’s supposed to be that “I, the US have done my implementing laws.” But the US abuses it and says, “I will only give my letter when I’m satisfied with your implementation” in Malaysia. And it becomes like blackmail.

The US can ask for things not in the text

The US has a long list of demands of what they want, and you must give him everything. If you don’t, it won’t come into force, and your exports cannot go to the US with those nice zero tariffs. So the countries give lah. So what they give, what the US asks, is things that are not in the text. Things that the US asked for but were rejected. Like an additional three-year monopoly on medicines, they said to Guatemala, you give me. Even though it’s not in the signed text, and Guatemala is so poor that they cannot afford medicines.

US corporations can push their own demands as well

And who can ask for this? It’s not just the US congress, and the US trade ministry. One US company, Chevron. They didn’t like the oil law in the Dominican Republic about transporting oil in trucks. They wanted it canceled, repealed. That oil law was legal. It was ok under the free trade agreement. It had nothing to do with the free trade agreement. But Chevron didn’t like the law, so they said to the US government, “I want that law repealed. Make it a condition of certification.” US government said, “yes sir Chevron”, they turned to the Dominican Republic and said, “you repeal that law, or the FTA doesn’t come into force and your clothes don’t go to the US with zero tariffs.”

It was a very politically sensitive law, but Dominican Republic had to repeal it. After that its USFTA came into force. So, who can make these demands? The US government, the US congress, US companies.

US can write our laws: the Malaysian Parliament can end up as a rubber stamp

And it’s not just extra stuff, like change the colour of your flag, or whatever the USA doesn’t like. But also interpreting.

Remember we talked about “comparable market outcome”? What does this mean? How many years of monopoly do we have to give on medicines? Malaysia will say five years. The US will say eight years because they want their medicine companies to make money. So, what they do for some countries, is they write your implementing law. This happened to Peru. The whole environmental law was written by the US government. The US government gave it to the Peruvian parliament, and said, “pass this with no changes. Not even one letter. Otherwise it won’t come into force.” So the Malaysian parliament would be a rubber stamp lah, for the US government.

Note 1: The Peruvian case is elaborated in another article about sovereignty (link will be inserted later), together with a case from Australia.

Note 2: The Peruvian, Guatemalan and Dominican Republic etc cases can be accessed here. The Australian Parliament’s certification experience is here.

In sum: the final text is not final

So you give up this much in the signed text, in what we read today, of the 6000+ pages. Malaysia has to give up this much more to get through the US congress, and then how much more it has to give up through Certification, we don’t know. The last time when there was a US free trade agreement with more than one other country, they had different demands for every country. It came into force at different times depending on how quickly they rolled over and said “yes sir America we give you everything you want. Now you have another ten demands, we’ll give you that too. Another twenty? OK.”

Until the USA have squeezed everything they wanted that they could not get in the negotiations.

Video starts 1:19

There is still room for campaigning after signing, before ratification

It’s great to do all the campaigning before it’s discussed in parliament on the 26th and before it signed on the 4th of February 2016. But that’s not the end of it. There are still about two years when they will be deciding whether to ratify. So yes, it’s good to have your campaigns before the parliament voting and the signing, but it’s not the end of the world if it’s not stopped then. There’s still a chance after that. It’s getting late, but there’s still a chance.


Index of the Series

This series contains 20 articles on the TPP, and can be read in any order:

Transcriptions are kept chiefly ad verbatim, with some minor edits for readability. The text has also been checked by Ms Smith for accuracy.

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