TPPA update: leaked investment chapter, Mexico and Canada join the party

In an intriguing follow-up to last year’s leaking of the draft TPPA intellectual property chapter, last week the negotiating text of the controversial TPPA investment chapter was leaked to the public by Public Citizen’s Global Trade Watch. The leaked provisions require states party to the agreement to provide a wide range of privileges to overseas investors. These include;

  • Limiting regulation of foreign firms
  • Allowing for overseas investors to directly sue governments for compensation when domestic financial, health, environmental, or other laws undermine their new TPPA privileges (investor-state provisions)
  • Enabling overseas investors to by-pass domestic courts in favour of international tribunals to pursue actions for compensation

The leaked text reveals that Australia has opted out of the investor-state provisions allowing investors to sue the government for compensation. A footnote to the provision provides,

Section B does not apply to Australia or an investor of Australia. Notwithstanding any provision of this Agreement, Australia does not consent to the submission of a claim to arbitration under this Section.

The position is more than understandable given that Australia is in the midst of a battle fought along exactly these lines – the plain packaging for cigarettes case was launched by Phillip Morris et al under the same type of provision in a free trade agreement with Hong Kong. The Howard government also explicitly argued against the adoption of such provisions during negotiations for the 2004 Australia–United States FTA. Thus far, however, it seems Australia is the only country opposed to this provision, and their decision to opt out appears to be one which is unpopular with other negotiating states. New Zealand Prime Minister John Key has stated that New Zealand will join other negotiating countries in urging Australia to accede to the provision.

The overarching concern over the provisions in the leaked investment chapter is that multi-national corporations are being given extensive privileges which are not being balanced by standards of accountability. The ability of states parties to impose accountability measures by regulating overseas investor activities is rather being restricted. It is also worth noting that the definition of ‘investment’ includes intellectual property, again widening the powers of multi-national content owners.

Despite these concerns, this week the TPPA welcomes two new members, Mexico and Canada. Canada’s entry into the agreement is particularly interesting as they have only just passed a raft of amendments to their intellectual property regime, many of which may have to be revised following entry into the TPPA. So far, there have been no new updates on the TPPA IP chapter; however, it is encouraging to see awareness of the agreement continuing to rise in the wake of these new developments. Watch this space!