Among the coverage TTP/TTIP has received several points keep arising; among them secrecy, lobbying, corporate lawsuits, economic benefit, and motivation.


Secrecy in Trade Negotiations:

Two Level Game Theory is pretty much the authoritative theory on success in international negotiation. As you can see from a quick google scholar search, the theory has been cited in academic works over six thousand times, so it's not some crack-pot minor theory no one has ever heard of.

What Two Level Game Theory essentially stipulates is that there are two levels of playing field in international negotiation; the domestic, and the international. In the domestic playing field, groups are formed to apply pressure on the government to adopt favorable policies (these groups may be anything, from companies and NGOs, to public or party opinion - the important thing is not to just consider them to be organized, clearly delineated groups), whilst politicians seek to get the power to push the agreement through by building consensus amongst the groups. The international playing field, however, is where the national governments want to alleviate their domestic constituents concerns, whilst at the same time ensuring that the development of the policies of other parties in the negotiation does not adversely affect their constituencies and power bases.

One of the clearest ways to represent this is through ‘win-sets’. A win-set is the full spectrum of acceptable outcomes to the party in question. Thus, in a two level game, the possible win-set for the international negotiation is in large part dependent on the range of acceptable outcomes in the level 2 negotiation; that is, the larger each of the negotiating parties level 2 win-set is, the more likely they'll overlap with the other parties in a place where both sides are satisfied with an agreement. Perhaps the best way to visualize it is through a Venn diagram, except imagine that there are 12 actors and they all have to overlap in one spot.

Now, the reason the negotiations are conducted in secret is to keep each of these Venn diagram bubble countries as large as possible. Each time one of their possible negotiating outcomes is constrained, they get smaller, and thus less likely to overlap with all of the 11 other actors potentially leading to deadlock or abandonment of the agreement. This can be especially troubling if the negotiations were done in public, with every individual, every company, every lobbyist, knowing at each stage what is being discussed and what has been provisionally agreed to.

Thus, for negotiations to be successful win-sets need to be maximized, which means minimizing the influence of vested interests during the negotiation process. Imagine the following scenario.

The party governing a country gets a lot of its funding from a certain demographic, say dairy farmers. Dairy farmers have access to the text, and see there's something they don't like there. Maybe dairy tariffs will be lowered. Maybe their export subsidies will be cancelled. Maybe they'll lose Protected Designation of Origin status. Whatever, they don't like it. So the Dairy Union Lobby launches a massive advertising campaign trying to scare the shit out of Joe Public about the new treaty, whilst simultaneously threatening the ruling party about how they're going to fund the opposition if this goes through.
So, ruling party of course says that that clause can no longer be part of the treaty. Except imagine this multiplied amongst every industry sector of every country negotiating. It'd be an absolute clusterfuck, twelve countries all drawing red-lines over certain issues would lead to a treaty with absolutely zero teeth, and everyone would wonder what the fuss was about because it would really amount to nothing.

And I'd also like to preempt the response we often hear of "but the corporations are already heavily involved". Those aren't corporations that are hammering out the deals. What actually happens it that a number of different industry specialists are part of consultative groups (for example one on agriculture, one on chemicals, one on pharmaceuticals), as are consumer rights groups, environmental groups, and others. There's nothing clandestine or shady about it, but if you're coming up with a deal that's going to change tens of billions of dollars in trade, then you definitely want to get a sense of how it would affect various stakeholders, and those stakeholders give input on those elements of a treaty. Joe Citizen generally doesn't have the knowledge, nor the expertise, nor the specialization, to be able to have a meaningful input into how a given provision would affect environmental standards, or consumer standards, or the steel industry, or the chemical industry. But just as representatives of key sectors are given some access, so too are consumer rights groups, environmental groups, and the like. Groups like the Consumers Union, and for the environment, the Center for International Environmental Law (and CIEL is world renowned organization) are part of the group as well, are they to be viewed the same way? It makes sense to have representatives of those most affected taking part.


ISDS (Investor State Dispute Settlement):

ISDS is nowhere near as bad as commonly reported. Most instances of ISDS are pretty reasonable, and even the Phillip Morris one has some backing (tobacco company suing Australia over plain packaging of cigarettes). Phillip Morris aren't suing because of 'lost profits' or any of the other reductive reasons that you read about in the media. Rather, they're suing on the basis that that the government expropriated without compensation their intellectual property - their trademark, brand name, brand associated goodwill, etc. I, and most other people in the field, are extremely skeptical they'll win but they do have a case to make. Regardless I don't think they even intend to win - rather, whilst Australia is bogged down in negotiations, other countries will refrain from implementing plain packaging themselves (Ireland, for example, appears to be waiting on the verdict before implementing their version of the law). They probably did some cost analysis which determined they'd lose less money on lawyers than they would if other countries implemented plain packaging sooner.

Regardless, in most cases that ISDS is undertaken it's not nearly as egregiously against the public interest as the Philip Morris case. Pretty much all successful ISDS cases are when the government takes political decisions which disproportionately disfavor foreign companies. For example, an early use of ISDS was when Canada banned a fuel additive that was only used by one company (foreign) called Ethyl Corp on the basis of health reasons. Ethyl Corp sued, saying the additive was actually banned for political reasons rather than on any scientific grounds, and the Canadian government chose to settle - paying them some $20 million dollars and withdrawing the law they were implementing.

On the face of it, it seems like Ethyl Corp was the bad guy and the Canadian government was pursuing legitimate policy in the public interest, and this is certainly how it was played out in the media. In actual fact, Ethyl Corp presented the Canadian governments own documents (http://www.economia-snci.gob.mx/sic_php/pages/importa/sol_contro/consultoria/Casos_canada/Ethyl/971002_Statement_of_Claim.pdf) (p.4 onwards), coming from the Health and Environmental departments, dating to about a year prior that unequivocally stated that there was absolutely zero danger from using the additive in fuel. In fact, the party that tried to get the law through had had strong historical links with the domestic companies competing with Ethyl Corp.

In all the papers, it was portrayed as 'Company sues government over environmental protections/health protections', and that's how all ISDS cases get presented in mainstream newspapers. 'Company screwing with our laws' sells way more papers than 'company disputes unfair government policies', I guess. I don't know about you, but I don't think it's fair that foreign investors should be unfairly discriminated against in this way. ISDS prevents political parties from favoring their contributors over foreigners by enacting biased laws such as these. Why should Joe Public lose out because one of the parties is trying to cozy up to their largest donors, and why is it fair that international investors get screwed just because they're foreigners? In actual fact, ISDS is a great way of keeping governments accountable by limiting the political favors they can hand out whilst in office.
Regardless, modern negotiators have recognized some of the flaws demonstrated by the Phillip Morris case, which is why the EU negotiations for the TTIP (a bilateral deal between the EU and the US roughly analogous to the TPP) have added to their negotiating mandate the following text cornering ISDS (http://data.consilium.europa.eu/doc/document/ST-11103-2013-DCL-1/en/pdf) (p. 8).

“…and should be without prejudice to the right of the EU and the Member States to adopt and enforce, in accordance with their respective competences, measures necessary to pursue legitimate public policy objectives such as social, environmental, security, stability of the financial system, public health and safety in a non-discriminatory manner”


So ISDS cases are rarely as simply or one sided as portrayed in the media - I could probably list five examples off the top of my head that are completely reasonable if you read the statement of claim documents rather than media articles which egregiously misreport what's actually going on.

Companies can sue and win only when; the government expropriates their assets without fair compensation or; the government acts in a discriminatory fashion to foreign companies (favoring domestic companies over foreign) or; when the government acts 'in bad faith' against a foreign company (laws that disproportionately and with prejudice target foreign companies). Regardless, that only allows them to sue for financial compensation, and not necessarily successfully given companies only win a third of ISDS disputes. It doesn't give them any power over legislation. So as the Ethyl case shows, it's not *just* for trade deals with countries that don't have functioning legal systems. It's also for when governments abuse their regulatory powers.

And if the Ethyl case isn't enough for you, there's also the Hamburg-Vattenfall case. Vattenfall signs contract with the city of Hamburg to build a new coal power plant, the Green party (which was ruling Hamburg at the time in a coalition government) kept arbitrarily creating and raising regulatory standards with the aim of stopping the power plant. There was no empirical/evidence-based backing for most of the regulations that they implemented, it was simply directly targeting the power plant. Vattenfall actually changed their plans multiple times to accommodate these changes, before realizing it was an unfair playing field and deciding to take Germany through ISDS. And Germany lost the dispute, because again, this is an instance of unfair and discriminatory regulation. You can read about the stuff they went through here (http://www.italaw.com/sites/default/files/case-documents/ita0889.pdf) (starts at p.7 of the PDF document). Perhaps most telling is the multiple instances where leaders of the Green Party said they would take every avenue possible to stop the coal power plant (such as exhibit C12), clearly violating the Energy Charter Treaty and abusing their regulatory power for political ends.

The deeper you go into individual ISDS cases such as reading actual source documents, instead of just shitty sensationalist news articles, the more you realize there are absolutely two sides to the story. But please, at least for your sake, realize that there's a second side to this and that often (and Monbiot is in particular a cretin for doing this) you are being directly manipulated and outright lied to by people trying to win you to their cause via reductive and very populist phrasing.


Sincerely,

livefree

Articles:

http://www.economist.com/news/europe/21636061-trade-deal-america-would-be-good-everybody-yet-it-still-may-not-happen-ships-pass
http://www.economist.com/news/leaders/21571890-good-idea-state-union-address-business-should-rush-support-come-ttip
http://www.economist.com/news/united-states/21576704-historic-trade-pact-between-america-and-europe-needs-saving-transatlantic
http://www.economist.com/news/asia/21647330-why-whiff-panic-has-entered-americas-pacific-trade-negotiations-whats-big-deal
http://www.economist.com/news/21648778-congressional-compromise-boosts-odds-passage-key-global-trade-deals-step-closer
http://www.economist.com/news/finance-and-economics/21623756-governments-are-souring-treaties-protect-foreign-investors-arbitration