Five ways to ensure trade treaties work for everyone
Trade agreements should recognise economic growth as a means to common good objectives, including health and environment, say academics Louise Signal, George Thomson and Louise Delany.
‘Trade and investment treaties are great for everyone.’’ You could think this from the uncritical media coverage of the treaty negotiations now under way between New Zealand and the European Union.
‘‘Lucrative’’, ‘‘benefits could be huge’’, ‘‘winwin’’ – nothing about the real disadvantages that such treaties may have for health, the environment, and social justice.
New Zealand and EU businesses are driving the treaty, and profits are a priority.
Trade and investment treaties give enforceable rights to corporations, without requiring enforceable obligations from them.
Such treaties tend to discourage new government policies that would achieve health and environmental objectives. They reinforce existing inequalities because of their strong emphasis on protecting the interests of investors. The ‘‘common good’’ objectives, such as the quality of the air around us, tend to lose to business interests.
Only some elements of these current treaties are in fact about ‘‘freeing trade’’ – such treaties are now very wide in scope and ‘‘reach to the very heart of domestic governmental authority’’.
For example, the New Zealand government would face difficulties if it decided on health grounds to require pictorial health warnings on alcohol containers, or some limitations on the marketing of certain food products.
The Government has recognised some of the concerns around trade and investment treaties, with its new ‘‘Trade for All Agenda’’.
But there is no indication that common good objectives would be prioritised, or even given equal weight, over business interests, under this approach. Business interests are still the focus of the relevant Cabinet paper, with the risks to other interests to be ‘‘minimised’’.
Because of the problems with the way treaties are written, we propose five principles for new treaties:
❚ Economic growth should be recognised as a means to common good objectives, including Currently, such objectives in trade treaties do not have mechanisms to ensure any effective action to achieve the objectives. Trade and investment treaties must also include enforceable corporate responsibilities for contributing to health, environmental, human rights and other common good objectives. Currently, the only clear responsibilities of multinationals are profits to their own shareholders.
❚ New treaties need to remove the ability of investors to sue states through secret arbitration (ISDS). Provisions for ISDS remain the default position in our treaties – as seen in the upcoming Regional Comprehensive Economic Partnership with Asian countries. Government should instead use our own courts for disputes arising under trade and investment agreements. If transnational dispute resolution systems are needed, they must use decision makers that represent wider objectives. Currently, international treaty dispute processes are dominated by trade lawyers and economists, with assumptions that prioritise business.
❚ The process for making treaties must be transparent. The public needs to know what its government is signing up to, with open policy statements, independent assessment of treaty impacts, and independent avenues of citizen involvement. Currently, businesses have privileged access to negotiations, with citizens the last to hear about crucial provisions. We ask for active co-design of new treaties with civil society, not simply ‘‘consultation’’. Ideas along these lines have been developed for fairer treaties, including those by the UN agency UNCTAD. New Zealand government agencies need to move their thinking to include such models, so they can advise government from beyond a ‘‘business first’’ perspective.
Trade is fundamental to society, and legal rules on trade are essential. But trade law should not advance the interests of multinationals at the expense of working towards the public good.