Chile’s Recent Lead Negotiator on Trans-Pacific Partnership Warns It Could Be a “Threat to Our Countries”

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An important article in the Latin American press peculiarly has not gotten the attention it deserves. Or perhaps not so peculiarly, given the Obama administration’s intention to keep the Trans-Pacific Partnership negotiations as far out of the public eye as possible.

An overview of the TPP from a post earlier this month:

….the Administration is taking the unusual step of trying to negotiate two major trade deals in the same timeframe. Apparently Obama wants to make sure his corporate masters get as many goodies as possible before he leaves office. The Trans-Pacific Partnership and the US-European Union “Free Trade” Agreement are both inaccurately depicted as being helpful to ordinary Americans by virtue of liberalizing trade. Instead, the have perilous little to do with trade. They are both intended to make the world more lucrative for major corporations by weakening regulations and by strengthening intellectual property laws. The TPP has an additional wrinkle of being an “everybody but China” deal, intended to strengthen ties among nations who will then be presumed allies of America in its efforts to contain China. As we indicated via a link to an Asia Times article over the weekend, that’s proving to be a bit fraught as Japan is flexing its muscles militarily and thus less inclined to follow US directives tamely.

A not flattering bit of sunlight on the TPP negotiations comes from an unexpected source. Rodrigo Contreras, the lead negotiator on the TPP from Chile, resigned suddenly two months ago. It’s widely believed that he left his post voluntarily. He’s held in high esteem not just in Chile but among his fellow trade negotiators. His departure left people on the trade beat scratching their heads.

It now appears probable that the reason for his resignation was that he saw where the TPP was likely to go and didn’t want his name attached to it. Contreras wrote an article in Spanish that ran last week Peru’s magazine Caretas that described the promise, and more important, the dangers of the TPP. He argued that many of its major thrusts, if they are not checked and modified, are detrimental to less advanced economies. He also argues that the Latin American countries have enough votes that if they act together, they can influence the direction of the negotiations.

I’m including the Spanish original plus a translation courtesy Global Trade Watch at the end of this post. Here’s the key section:

It is critical to reject the imposition of a model designed according to realities of high-income countries, which are very different from the other participating countries.

Otherwise, this agreement will become a threat for our countries: it will restrict our development options in health and education, in biological and cultural diversity, and in the design of public policies and the transformation of our economies. It will also generate pressures from increasingly active social movements, who are not willing to grant a pass to governments that accept an outcome of the TPP negotiations that limits possibilities to increase the prosperity and well-being of our countries.

For a former insider like Contreras, this is a statement of principle that comes at considerable personal cost. Remember, he has spent over two decades as a diplomat, most recently in a very senior role. Even though his comments might seem understated to some readers, his call to Latin American negotiators has deep-sixed his chances of getting another senior government role or being retained by large companies as a lobbyist or advisor.

This article also might not be as quixotic as it sounds. Given Contreras’ reputation, his piece is certain to come to the attention of his former peers. Some of Asian participants in the negotiations (particularly Japan) are also believed to have serious reservations about the provisions of the TPP that would weaken national sovereignity by allowing corporations to challenge laws and regulations as violations of the TPP. And as readers like “from Mexico” have emphasized, Latin American countries have had more up-front-and-personal experience with neoliberalism than any other group, and most regard its tenets with considerable skepticism. Policymakers thus have no excuse if they sign up for a TPP that contains many of the bad policies that Contreras described as possible outcomes.

I strongly urge you to read Contreras’ article in full.

The New Chessboard – English Translation of Rodrigo Contreras Article

Caretas Actualidad Candente Investigación y Humor

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  1. nonclassical

    …thank you-thank you, Yves, for keeping this issue in forefront of your public’s

    in mainstream media perception TPP is considered a “trade agreement”, when in fact it is a corporate-legal document, nearly all sections granting legal auspices to corporate tribunal, over national-state law…

    that bushbama could proceed with such provides all information necessary to view his “legacy”;

      1. David Lentini

        Market state? These guys are implementing the physiocrats’ utopian vision of a stateless society in which all human activity is resolved in the marketplace.

        1. Expat

          I wouldn’t call it stateless because it will take an enormous police state to enforce it. More like facism.

          1. danb

            The power of corporatism/market state/neoliberalism is highly unlikely to survive in a post-peak oil (light,sweet and cheap crude) world. Its energy costs of control and coercion will become enormous, probably unbearable.

          2. colinjames

            all this talk about markets and stateless corporations is making me hungry. For an Apple.

        2. Susan the other

          But wait…patents and copyrights are granted by national patent offices… so why can’t the trade tribunals say no to that too? Every country has its thinkers and tinkerers who probably came up with the idea first… Why does national patent law avoid trade tribiunals?

          1. steelhead23

            Susan, It is my understanding that the U.S. typically seeks to have its patents and copyrights recognized by its trade treaty partners. Few recognize the breadth of intellectual property rights. They have been used to prevent Indian farmers from saving seed – a practice that has been going on for eons. Forcing trade partners to recognize such rights is a violation of sovereignty and very likely part of the reason Sr. Contreras said “no mas.” I would be very interested in Yves take on the U.S. foreign policy vis a vis trade and finance. For example, I believe that a portion of Argentina’s inflation problem is caused by U.S. court actions. I only vaguely understand the issue, but the stench of corporatism is overwhelming.

          2. hunkerdown

            First-to-invent went away with the America Invents Act. Patents go to the first-to-file in the US now, just like most of the rest of the world. Can’t let too many little people have a crack at rentiership, now can we?

  2. Norman

    Just when I thought it couldn’t get any worse, the “O” is pushing this thing. I hope-there’s that word again-that the Latin Americans/Japanese reject this. The Latin countries already have the knowledge/experience of what it’s like to live under “Big Brother U.S.A.” and the protection there of; the financial manipulations of the 2nd 1/2 of the 20th century.

  3. Doug Terpstra

    The TPP is a threat to all signing countries; it certainly does not favor “more advanced economies” any more than the “less advanced” as Contreras implies. That’s especially true for the US, which makes Obama’s betrayal of America, on this issue among many, rise to treason. It is a deceptive assault by the global elite on democracy, the moral equivalent of war on national sovereignty, and a hostile takeover of all vital national interests and resources—labor, health, safety, welfare, environment, energy, trade, taxation and monetary policy. It’s a list that leaves literally nothing, zero, zilch, nada of any material socioeconomic importance for member governments to govern. It is a suicide pact.

    This is not a foil-hat conspiracy theory; it is the coup de grace on democracy by global fascism that’s been sought doggedly for decades, even before Thatcherism and Reaganitis. It’s why the TPP treachery must be conducted in twilight, with conspicuously little media exposure. So far, they’re clearly keeping a tight rein on MSM journalists, and except for some token petty huffiness about AP-surveillance crimes, the veal-pen stenographers are almost fully compliant, still sucking the milk nipple. The final disaster of disaster capitalism will not be televised.

    For a president who promised transparency and sunshine in government:

    “This is the verdict: Light has come into the world, but people loved darkness instead of light because their deeds were evil.” (John 3:19)

    Incredibly, in spite of everything, years of deception, betrayal and crime, Obama’s public job approval still polls above 50%. The manufacture and extortion of consent is higfhlyu successful. So for now there’s no immediate impetus for holding him accountable, nor for the wholesale replacement of a manifestly corrupt system, barring another serious financial crisis.

    1. Yves Smith Post author

      I think (as regards Latin America) what Contreras really meant was it favors American multinationals more than any group. Some of the Japanese MNCs and Korean chaebol members might also benefit. If you look at the article, he’s kept it short and at a pretty high level of abstraction.

    2. Chauncey Gardiner

      Thank you for your observations, Doug. I agree. And thank you for the post, Yves. It is informative.

      Contreras stated: … “This requires a strong negotiating position in the face of claims and pressures of the richest countries in the TPP and their companies.”

      Based upon his statement, it seems that he views some form of TPP agreement as fait accompli. Why is this so? Is such an agreement secretly a “Done Deal” such that the American people will have little or no foreknowledge or be given a meaningful opportunity to provide input concerning the terms of this agreement? On what legal basis is this being done?

      My question is not to diminish the courage of this Chilean diplomat, but to question the current status of these secretive negotiations, which also seem to be fast-tracked.

      As Doug said, I am particularly concerned that large transnational corporations, large banks, and their managers are effectively being granted a license to operate above federal law across a very broad sphere of activities, subject only to the decisions of tribunals comprised of self-selected corporate representatives, with little in the way of legal restrictions or federal regulation over their activities ranging from financial derivatives speculations, to environmental laws, patent laws (including GMOs), minimum wage and occupational safety laws, tax law, and many other areas that include those Doug mentioned.

      I am particularly concerned that we will be required to pay their claims of damages from any subsequent efforts at the state or federal level to require they conform to law, to break them up, or to regulate them, regardless of the merit of such claims, and for their financial failures – as we have and are presently doing through QE-ZIRP, TARP and many other hidden subsidies and guarantees.

  4. Casteelk

    Its refreshing to see someone like Contreras actually have a soul and step out of the elevator straight to hell.

    1. Newsboy

      Thanks Ray, for the leaked documents leak.
      Now gotta’ get back to my fervent prayers and stuff.

  5. greg

    Latin American governments are getting their asses sued by transnational corporations. They’re beginning not to like it.


    and the references therein.
    Acording to Milton Friedman:“…there is one and only one social responsibility of business–to use it(s) resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

    Simply, (transnational) corporations have no social responsibilities to any society. The caveat, ‘stays within the rules of the game, engages in open and free competition without deception of fraud,’ is nonsense, a fob for fools. It is cast aside by corporations at the first opportunity to manipulate competition and the system, and deceive. Corporations must, in fact, do these things, in order to compete with other corporations, which are intent on doing the same thing.

    And it is a duty of government, and the people, to oppose this manipulation, and to regulate, and to prevent this from happening.

    Transnational corporations *cannot* be citizens of any nation. They cannot be expected to act in good faith, if by acting in bad faith, if by manipulation of law and system, they can secure greater profits. Corporations are predators, and the citizens and governments of all nations are their prey. Governments of all nations must beware, if they are to secure be blessings of liberty and prosperity for their citizens.

    And when transnational corporations make the ‘rules of the game,’ when their lawyers sit in judgment, all bets are off: Anything goes. But you may be sure it will cost you.

  6. ChrisPacific

    One take from New Zealand:

    Parallel importing is a big deal in New Zealand. Imports have always been expensive here as it’s a small market and easily captured. The rise of the Internet has brought this practice into sharp focus and seen the growth of alternative import channels as a way to work around the problem. Shutting those down and protecting monopoly/cartel pricing schemes would be a hot button issue for much of the country – if it was publicized.

    I’m not sure whether nonclassical’s summary (first comment) is correct, but certainly everything that’s been leaked so far suggests that it is.


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