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Why The TPP Is Not A Done Deal, And Why It May Never Get Done

Why The TPP Is Not A Done Deal, And Why It May Never Get Done

Prime ministers and presidents around the world congratulated themselves Monday after coming to an agreement on the Trans-Pacific Partnership, a "transformational" deal that, if ratified, would create the world’s largest free trade area, encompassing 40 per cent of the global economy, including Canada's.

Conservative leader Stephen Harper, in the midst of a re-election campaign, certainly wants to sell this as him bringing home a done deal, as something concrete accomplished.

But in reality, what’s been accomplished is the easy part, and what Harper has brought home is completely unprecedented and unpredictable. The TPP is one of a new generation of free trade agreements that are more ambitious — both in scope and geography — than anything that has come before. And in the past few years these agreements have proven to be a political headache, bogged down in regional and special-interest politics. They are beginning to look unwieldy.

Take, for example, the Canada-EU free trade deal, known as CETA, or the Comprehensive Economic and Trade Agreement (gotta love that technocratic jargon).

It’s been two years since the Harper government announced an agreement in principle with the EU, and a year since the formal signing of an agreement. Today, we are no closer to ratification. Despite the Harper government’s protests to the contrary, it’s clear that the deal has stalled.

The real sticking point of the Canada-EU deal, at least in Europe, has proven to be the creation of a tribunal — outside of national courts — where corporations can sue governments if they feel have been treated unfairly under trade law.

This “investor-state dispute settlement mechanism,” or ISDS, is under attack in Europe by critics — including some inside the German government — who say it will allow corporations to rewrite national laws.

The Europeans are mostly concerned about the inclusion of ISDS in the much larger EU-US trade deal, known as the TTIP, currently under negotiation. The Canada deal is seen as a test run for the U.S. deal, and the real fear is the spectre of U.S. corporations running roughshod over European laws. Some EU member states are threatening to kill the Canadian deal if the ISDS mechanism isn’t removed. In the wake of the ISDS dispute, TTIP talks appear to have stalled.

Leaked chapters of the TPP indicate that a similar ISDS clause has been included in the deal, and it’s bound to prove controversial as well. These tribunals are actually nothing new; there is such a provision in NAFTA, the North American trade deal that the TPP would, in effect, replace. But it's only in recent years that it's become a political hot-button issue.

But with the Canada-EU deal, there is even confusion as to what has to happen for the deal to be ratified. Some officials and politicians have suggested that only the European Parliament has to ratify it on the European side, but this seems like wishful thinking at best and misinformation at worst.

According to the European Commission, deals like CETA and TTIP “can only be signed if they are agreed both by the governments of the EU's 28 member countries and by a majority in the European Parliament.”

So 30 parliaments have to all agree to this trade deal — 28 EU member countries, the European Parliament and Canada's House of Commons. And according to an analysis by a group trying to stop the TTIP, half of EU member states have a mechanism that would allow the vote to go to a referendum. We are looking at the possibility of 14 referenda that all have to say yes in order to ratify this deal.

Good luck, CETA supporters. You’re going to need it.

By comparison, getting the 12 countries negotiating the TPP to agree to a deal seems easy. But it won’t be. One need only look at the political climate in the U.S. to see the possible pitfalls.

American opposition to the TPP is broadly spread and bipartisan. The Republican base is suspicious of the deal because Obama negotiated it. The liberal wing of the Democratic Party opposes it for the same reasons it has opposed other trade deals — it’s a threat to U.S. jobs and hands too much power to corporations, they say.

An unofficial alliance of people like Democrat Bernie Sanders — who's actively campaigning against the TPP — and Republican Donald Trump — who called the deal a "disaster" — could make any congressional ratification of the TPP very difficult.

And that’s just one of 12 countries that need to pass the deal.

At a press conference in Atlanta Monday, trade ministers from the TPP countries called the deal a "once-in-a-lifetime" opportunity. But will countries grab the opportunity? Between the myriad local special-interest concerns, ideological fears about the power of corporations, and political jockeying in numerous countries, the debate over whether this opportunity is worth grabbing has just begun.

While this deal could usher in a new era of economic history, it could just as easily come to nothing.

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