Nobel Prize-winning economist Joseph Stiglitz says the Trans-Pacific Partnership may well be the worst trade agreement ever negotiated, and he recommends Canada insist on reworking it.
“I think what Canada should do is use its influence to begin a renegotiation of TPP to make it an agreement that advances the interests of Canadian citizens and not just the large corporations,” he said in an interview with CBC’s The Exchange on Thursday.
Stiglitz, a professor at Columbia University in New York, was a keynote speaker at a conference at the University of Ottawa on Friday about the complex trade deal.
Stiglitz takes issue with the TPP’s investment-protection provisions, which he says could interfere with the ability of governments to regulate business or to move toward a low-carbon economy.
Multinationals have right to sue
It’s the “worst part of agreement,” he says, because it allows large multinationals to sue the Canadian government.
“It used to be the basic principle was polluter pay,” Stiglitz said. “If you damaged the environment, then you have to pay. Now if you pass a regulation that restricts ability to pollute or does something about climate change, you could be sued and could pay billions of dollars.”
There were similar provisions in North American Free Trade Agreement that led to the Canadian government being sued, but the TPP goes even further.
He said the provision could be used to prevent raising of minimum wages or to overturn rules that prevent usury or predatory lending practices.
Stiglitz argues the deal, which is a 6,000-page mammoth and extremely complex, should have been negotiated openly.
“This deal was done in secret with corporate interests at the table,” he said.
He also forecasts the deal will have little impact on trade volumes, especially in advanced countries like the U.S. and Canada, where mostly capital-intensive goods are exported and labour-intensive goods are imported.
Rules of origin provisions
But it will change the basic legal framework that governs society shifting power to corporations, he said.
Stiglitz said the “rules of origin” provisions have the ability to hurt North American employment, because they allow very clever ways of hiding what’s going on.”
“You could have an automobile where the vast majority of the automobile was actually made in China and Thailand [which did not sign the TPP] but it comes into Canada as a Japanese good,” he said.
All the presidential candidates now are speaking out against the deal and it may never be passed in the U.S.
International Trade Minister Chrystia Freeland put Canada’s signature on the Trans-Pacific Partnership trade deal, but it has yet to be ratified here.
“I’m a little surprised that Canada would seriously consider going through the political fight that is associated with getting this agreement ratified until the U.S. adopts it,” he said.
He recommended Canada work with the Europeans, who have also objected to the investment protection provisions, to rework the deal.