New free-trade agreements like the Trans Pacific Partnership, are not only an assault to our sovereignty, but also a black boot to peoples and our biodiversity.
If we measured the revenues or assets of corporations alongside the GDP of nations, more than 50% of the 100 biggest economies on Earth would be corporations, and the TPP negotiators are meeting secretly and being advised by 600 of these largest corporations. I’m pretty sure that we would mostly want to know what the specific details of those negotiations are, and by we—I mean the 99%– those who are most likely to be impacted by those negotiations.
US-led Free Trade Agreements like the TPP represent corporate stakeholders, shareholders, investors—but what about the proper rightsholders?
Peoples, public citizens, workers, animals, plants, the entire biodiversity of our forests, deserts and oceans have a right to consent to decisions impacting our world. Greed driven policies are being determined without the free, prior and informed consent of the proper rightsholders. Exponentially more than the 99.9999% of the planet’s rightsholders should have that right. We know enough about the biodiversity of this planet to know that extinction does not equal consent.
If we are not given free, prior and informed consent over decisions impacting our lives and commons how do we move forward with decisions that allow us to steward our communities and environments?
This question should not only be addressed to TPP negotiators, as this is a fundamental question that should be posed to the trade regime in its entirely, but I would argue that the TPP is the most aggressive, because of its size and because of its investment process.
There are alternative or competing trade co-operations like the China-led RCEP, the Regional Comprehensive Economic Partnership, which was launched last year at ASEAN. China, practices more attractive investment procedures called soft-loans. These soft-loans are state-owned infrastructure loans that are generally more attractive to developing economies than loans provided by the World Bank and the Asia Development Bank. Soft loans do not require the same structured repayment that investment banks require or have the trade-liberalizing conditions demanded by development banks.
Additionally, I think it’s important to note that none of the BRICS economies—Brazil, Russia, India, China, South Africa—are included in the TPP, and when we talk about TPP, we may want to consider that there are competing fundamental policies reminiscent of, or perhaps inherited from the Cold War, policies that bind not only nations, but economies to trade cooperations.
Very quickly, I want to blurt out that ALBA (the Alianza Bolivariana para los Pueblos de Nuestra América, or the Bolivarian Alliance of the Americas), may be a better alternative for Pacific Islands and peoples because as a trade alliance, the focus is on strengthening a regional peoples economy rather than privatizing resources for shareholders.
PICTA, as Maureen has discussed is a Pacific Island Countries Trade Agreement binding Pacific Small Island States to outdated neoliberal policies.
And then there are other regional or bilateral investor-state agreements, which if the U.S. is involved, follows the same neoliberal investor-state protocols.
Wal-Mart VP Angela Hofmann expressing her participation in the TPP before the Committee on Ways and Means, writes “we have realized that gaps and complications in the supply chain unnecessarily hinder our ability to deliver the right product at the right price to our customers around the world.” Her testimony, that agreements are being drawn for the benefit of the global supply chain, or for Walmartization, are parroted by other corporate and fund managers. In the Forbes Global 500, WalMart stands head and shoulders above everyone else.
But going back to the TPP, beyond this lack of free, prior and informed consent, the TPP and all other US-led investor-state agreements are all codified in binding international law.
These Investor-State agreements are essentially treaties that are housed in the highest courts—and what I mean by highest, I mean international courts or tribunals that if unresolved can impose harsh punishments as a means to settle disputes, these being financial penalties, or expropriation of resources, or economic sanctions.
And although this entire acronym soup of trade co-operations may be daunting to some, what we are in essence talking about are investor-state agreements and a new paradigm of legal rights to investors or corporate shareholders that are motivated by the sheer financial and economic strength of these cooperating economies.
So for example, earlier this month Samoa was the first Pacific Small Island State to sign PICTA—the Pacific Island Countries Trade Agreement, Trade in Service Protocol.
One of the chapters is the financial services annex and it reveals that Samoa has just inherited the kind of unregulated over-the-counter, derivative, risk investment services that led to the crippling of many lower and middle-income communities here in the U.S.
Since the crash, however, the U.S. has initiated regulatory rules via the Dodd-Frank Wall St. Reform and Consumer Protection Act, but for Small Pacific Island countries whose GDP might be around 500 million dollars annually—there’s no Dodd-Frank, there’s only this investment service that Samoa is now legally bound to. But perhaps I speak too soon, as House republicans are now trying to use trade deals like the TPP and its evil twin, the Transatlantic Trade and Investment Partnership, as a vehicle to trump Dodd Frank regulations.
In the event of disputes, Samoa, as well as other Pacific Island Countries who are considering ratifying this agreement, may hardly even be able to pay the legal fees to settle disputes without bankrupting their economy.
Who benefits most from these agreements are investors and corporations representing agriculture, fisheries, bio-tech, mining, banking or insurance sectors, etc. and the Pacific Plan is opening the flood gate for large banks and hedge funds to sell these mortgage-related or futures-related investment schemes that are designed to fail so that hedge funds can collect the insurance on that failure.
Because the Pacific region is one of the most isolated and resource rich regions, creating terms of trade that maximize the investment and trade regime will eventually leave a lot of Pacific peoples bankrupt, and when you account for the TPP, which Australia and New Zealand also belong to, island communities will be left stranded without a paddle just as a storm cloud of impending doom hovers over the horizon.
I think for many of the Pacific Small Island States, they view PICTA as a kind of stand alone integration scheme, like a mini-EU, but the reality is that with the TPP looming in the distance, PICTA, by default will be consumed in what is currently a 12-nation, 26-trillion dollar trade cooperation.
Now, sometimes I feel like I have to apologize because when we describe the impact of free-trade agreements, or investment agreements we talk about it as a warning, or as a cautionary tale, as if we were those three witches in Macbeth, the ones who are always in this storm cloud representing chaos, conflict and darkness. As these ever-watchful witch figures, we are acting as witnesses, as agents that prophesy and send out warnings of impending doom. Yet, this is where we are today. We are talking about impending doom. We are talking about our lives continually having to adjust from one crisis to the next, fighting over our customary lands and resources, having traditional communities and family structures torn apart by greed while up ahead we see that the impact of global warming and man-made climate change is the end-game to life on the planet as we know it, and it’s difficult to convey this, because the sun rises and the birds sing, but when you step back and view this through a history-filter, we are living in a very strange and dark time.
And what gets me, is that Wall St—the investment regime—continues to prioritize extractive and depleting industries and resource privatization and has developed a whole new financial mechanism that profits off catastrophe—new investment products called CAT BONDs that transfers the risks from insurance companies to investors, which technically are part of the reinsurance market.
Catastrophe Bonds are another derivatives product, another product derived from some tradable good or service, and it works like this: if there is no disaster by the end of whatever term, investors get a return on their investment. In the event of a disaster, however, insurance companies pay the claim holders while investors lose their upfront investment.
Seems straight forward enough. The caveat, however, is that only large investor corporations like Monsanto, Walmart, or those 600 corporate advisors the the TPP can afford to purchase these. Many of these 600 heavy-weight corporations are investing in the Pacific, as are mining and energy or other extractive industries that rely upon the leasing or privatization of resources.
To illustrate, there are research and development costs, there’s the building of security and infrastructure, all of which attracts investors.
Sometimes these infrastructure costs are paid for through development loans given to governments by international development banks like ADB or the World Bank.
More often now, we see that investments are being driven by public-private enterprises through the selling, leasing or the privatization of public resources.
In terms of security, there may be some partnerships with private militaries, but mostly we’re talking about militaries that have a parking space and commute to and from Pearl Harbor.
And so one of the ways that this new paradigm shift in investment is impacting financial services is that hedge funds, for example, are looking for development opportunities to privatize more resources, because the loss of these resources, is a loss of “anticipated future profits” and whatever these “anticipated future profits” are, can easily be accounted for through the investment of these Catastrophe Bonds. And large hedge fund managers have capitalized heavily on these Cat Bonds when disasters occur.
So in this new profit-driving reinsurance scheme, catastrophes and severe weather have become financial assets to investors because they can drive this narrative of fear to sell these trade investments and services to Pacific Island Countries, which are very susceptible to severe weather and climate change, to the point where islands are literally sinking.
But what I think is really important to address, here, now is the Pacific Plan. By way of history, the Pacific Plan is a Pacific Island economic integration proposal that was initiated by the Pacific Island Forum in 2005.
Fundamentally, the Pacific Plan asserts trade liberalization across the region, and it was drafted and led by the Big Brother economies of Australia and New Zealand.
A year before the announcement of a Pacific Pivot, Asst. Secretary of State Kurt Campbell met with the American Samoa Representative Eni Faleovamaega and the House Committee on Foreign Affairs on New U.S. Policy in the Pacific.
This new U.S. Policy identified working with the Pacific Island Forum and the Pacific Plan, as well as a whole slew of sub-regional institutions, NGOs and Civil Society Organizations to create greater opportunities and regional investment between Pacific Island Countries and the U.S.
Now here we are barely three-years later and the Pacific Plan is now going through a review process. As part of the review process, the Pacific Planners are traveling from island to island meeting with representatives in trying to determine how best to implement this neo-liberal economic package by assessing the needs of each island group.
For some governments the needs may be climate change, for others it may be infrastructure, for others like in Palau, they discussed growing the private sector to play a key role in tourism and development—which they identified as a golf course and five-star hotels.
These programs may seem sound if we were still partying as if it were 1999 and the strength of our economies were accounted for in ways that did not have to take into account resource depletion and environmental degradation, but the truth of the matter is the new economic matrix will have to account for the degradation and depletion of resources.
These 600 largest corporations that are advising TPP negotiators are going to ensure that U.S. owned assets abroad, either through direct investment or foreign securities will be accounted for by the corporations and be added to their portfolios, and government economic bureaus will also account for this in their national accounting systems.
So, as a recommendation to any Pacific Plan revision process, there should be a moratorium on these investor state agreements, until we can better understand what’s contained in these TPP negotiations. (2x)
As it stands now, the national accounting of resources and the protection of Pacific Island regional biodiversity should be seen as a strength to our national economies and not a commodity. Trade cooperations like the TPP and PICTA seek privatization models and as Small Pacific Island States, I wonder if Alliances like the Melanesian Spearhead Group should be turning our attention to cooperations like ALBA, the Bolivarian Alliance of the Americas.
For Pacific Islands, economic and political integration has for the most part already been co-opted by the larger economic powers.
Ecological integration, however, has not, and it is open for us to assert a non-centralized peoples-led regional monitoring authority that could very well create some kind of regulatory wedge within these investor-state agreements.
When one looks at the basic framework of these investor-state agreements between corporate investors and governments, clearly, people and biodiversity is missing.
In terms of ecological integration, we just need to look at the Fukushima-Daiichi melt down and the collapse of the Deep Sea Horizon to see that the impact of these accidents hurt, foreclose upon peoples, ecologies and communities in vast regions, and these agreements need to be regulated by the proper rightsholders, and not by shareholders or stockholders.
What I hope to communicate here is this view on free trade agreements—a view from the Pacific shore of a smoldering nuclear reactor, a cracked pipeline– all paving a bleak road across the Pacific.
I do think however that there are ways to turn this bleak bus around and I’d encourage you to begin looking at the UN Statistical Division, because in 2012 the UN System of National Accounts adopted the SEEA, the System of Environmental and Economic Accounting Framework to revise and replace GDP as the standard by which we measure our national economy.
In terms of international trade, the value of ones economy is what determines the value of trade, and since 1953 when GDP was adopted as the system of accounting for international trade, the matrix of good and services have been unfairly stacked towards the industrial northern economies rather than the resource economies of the Global South.
So there is currently a window of opportunity for indigenous communities, household advocates and deep ecologists to engage in this framework while it is still yet a framework.
And to give some context, the SEEA is UN’s version of the 2001 GPI, the Genuine Progress Indicator of Sustainable Well-Being Accounting that advanced the possibility of creating a deficit to unsustainable polices that include resource extraction, depletive industries and ecological degradation.
In the 2003 version of the SEEA, resource depletion and environmental accounting was accounted for, but in the 2012 adopted framework, it was left out because it was “too experimental.”
I do not believe that people want to trade in our resources for Walmart.