NUPGE opposes the CPTPP

“The Comprehensive and Progressive Trans-Pacific Partnership is an affront to democracy and a threat to economic equality. It will create a private court system for foreign investors, giving them the right to sue democratically elected governments. And it will rig the Canadian economy in favour of powerful corporations. It is an outright betrayal of workers. It will do nothing to stop climate change, and it will certainly exacerbate income and wealth inequality.” ­— Larry Brown, NUPGE President

Ottawa (15 June 2018) — Yesterday the government of Canada introduced in the Parliament of Canada Bill C-79, legislation to ratify a multilateral investment agreement among 11 countries that is known as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

The National Union of Public and General Employees Union (NUPGE) stands together with the majority of Canadians in resolute opposition to this regressive CPTPP. This multilateral investment agreement is an outright betrayal of Canadian workers and their families.

It has provisions that create a private court system exclusively for foreign investors, and it promises no verifiable economic benefits to small or medium-sized businesses. In fact, there is no clear empirical evidence at all that this multilateral agreement will benefit anyone other than corporate executives, wealthy investors and Wall Street financiers. What’s worse, it will actually harm key exporting industries.

“The Comprehensive and Progressive Trans-Pacific Partnership is an affront to democracy and a threat to economic equality,” said Larry Brown, President of NUPGE. “It will create a private court system for foreign investors, giving them the right to sue democratically elected governments. And it will rig the Canadian economy in favour of powerful corporations. It is an outright betrayal of workers. It will do nothing to stop climate change, and it will certainly exacerbate income and wealth inequality.”

The original Trans Pacific Partnership (TPP), signed in February 2016, was deeply flawed. It would have undermined access to affordable medicines, harmed Canada’s auto and dairy industries, and would have undermined Canada’s ability to protect culture because it contained the weakest reference for cultural diversity of any modern free trade agreement.

The new CPTPP changes nothing.

Like other so-called free trade agreements, the original TPP paid no attention to broader social and economic issues. It failed to realistically address the negative consequences of increased trade and investment liberalization, such as rising inequality, climate change, job displacement, and lower work standards. 

The new CPTPP changes nothing.

Why we must oppose the CPTPP

1. Tiny economic gains, but big pains

As explained by Scott SInclair (Senior Research Fellow, Canadian Centre for Policy Alternatives), even the rosiest projections of the CPTPP suggest only tiny economic gains: for example, a 0.082 per cent increase in GDP by 2035. This represents a one-time increase after 15 years, not an annual increase. These models are also based on unrealistic assumptions (that include full employment). But even these models say that Canada’s overall trade with Asia-Pacific will worsen. And the biggest projected export gains will be concentrated in resource-based or agricultural industries — where the bulk of profits will likely be enjoyed by multinational commodities traders and processing companies, not farmers.

Meanwhile, Canada gave up market-access concessions for eggs and dairy. And the trade position of most higher-value-added manufacturing industries, like vehicles, will deteriorate for 2 reasons:

1. no Canadian-assembled vehicles will qualify for preferential treatment under the 45% minimum content required to enter those markets duty free (Rules of Origin); and
2. Japanese auto exporters, on the other hand, will not face any tariffs because the CPTPP will phase-out over 5 years the already puny 6.1% tariff on vehicles. This is why even the Detroit Big 3 are very glum about CPTPP.

2. Weak labour chapter

The labour chapter in the old TPP was so weak, it was totally ineffective at protecting even workers’ basic rights. It obliges the complainant to prove both that the member country has not enforced its own labour laws, and that this violation had an impact on trade. In practice, this burden of proof is so difficult that there’s never been a single successful labour complaint under the labour chapter of any free trade agreement containing this language.

The labour chapter in the CPTPP has the same regressive language. In fact it’s worse, because the labour protections were weakened to allow Vietnam up to a 5-year grace period before the labour provisions are enforced.

3. ISDS

The old TPP guaranteed extraordinary privileges to foreign investors in the form of an investor-state dispute settlement (ISDS) mechanism. The new CPTPP has the same unchanged regressive language, even though Prime Minister Trudeau promised a reformed system. 

This exclusive court system lets foreign investors use private tribunals to sue governments over any law, policy, rule, or practice that might limit their expected future profits. These tribunals can order governments to pay corporations unlimited sums of money, which the taxpayers of Canada would be forced to pay. And the rulings of the tribunals are not subject to appeal.

Any trade agreement that gives more rights to foreign investors than citizens living in that country cannot be called progressive.

4. No gender or Indigenous chapters

Other elements of Trudeau’s self-styled progressive trade agenda are nowhere to be found in CPTPP, for example gender equality and Indigenous rights.

5. Toothless environment chapter

The environment chapter has same mostly toothless protections found in the original TPP. The Trudeau government claims it achieved some wording in a new preamble that aligns with its progressive aspirations. But a treaty’s preamble is at best a guide to interpretation. It does not change, let alone override, the obligations of the treaty.

The same regressive TPP with a new name, and a pointless and unenforceable preamble

The original TPP represented the worst of what trade agreements have to offer. The new CPTPP is no better. It is nothing but the same old agreement with a different name: almost all of the original 29-chapter, 5,000-page text is preserved, except for a few pointless and unenforceable side letters and a preamble.

There is nothing progressive about the new TPP, despite an opportunistic and politically motivated attempt to change the agreement’s official title to the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership.” The new name is an insult to labour unions and civil society activists around the world who have spent decades demanding and struggling for an alternative, more humane, environmentally sensitive, and worker-friendly model for truly progressive international trade and development.

We have a choice!

Some might say that the Canadian government had no choice but to sign the CPTPP, or be left behind. That's certainly the position of the Canadian big business lobby, which was firmly behind the deal.

But there is always a choice.

The Canadian Centre for Policy Alternatives reminds us that trade with the Pacific Rim represents less than 5 per cent of Canadian global exports, of which almost all are already tariff free. With or without the CPTPP, this trade will continue. NUPGE agrees that the whole exercise of resurrecting the TPP, rather than starting fresh and working towards new global trade and investment rules, is a historic blunder.

As Scott Sinclair has argued, "if the Trudeau government’s rhetoric about progressive trade and inclusive growth means anything—which is an open question—then it requires a genuine rebalancing of trade treaties to better protect workers, citizens, and the environment, and to confront the 21^st-century challenges of extreme inequality and runaway climate change."

For these reasons, NUPGE demands that the Parliament of Canada defeat Bill C-79, and in its place consult with Canadians to create trade policy that benefits workers and their families.