At a luxury hotel in Maui, representatives from the 12 countries participating in the highly controversial and secretive Trans-Pacific Partnership trade deal are negotiating behind closed doors. Thanks to a secret letter from a 2013 meeting, released today by WikiLeaks, we now have a clearer idea of what they’re discussing.
Unsurprisingly, based on what we know about the Trans-Pacific Partnership, or TPP, so far, the letter is mostly about limiting the power of government in favour of private commercial development.
The TPP is a massive free trade deal that is set to impact everything from the cost of medicine in Australia, to milk production in Canada, to internet governance the world over.The letter was drafted for a ministerial meeting of the TPP countries in early December, 2013, and seeks guidance on key topics relating to the negotiations. Namely, how state-owned enterprises (SOEs) should be treated under the trade deal.
According to the letter, “the majority of TPP countries” support obligations for these companies—which can include public utilities, telecommunication providers, mining companies, and state-run investment firms—that “go beyond existing obligations” laid out in existing free trade agreements and by the World Trade Organization.
Such agreed-upon obligations would require SOEs to “act on the basis of commercial considerations,” the letter states, and governments should regulate both state-owned businesses and private enterprises with impartiality. State-owned businesses would also not be allowed to discriminate against private companies when purchasing or selling goods, the letter suggests.
“SOEs are almost always state-owned because they have functions other than those that are merely commercial,” Jane Kelsey, a law professor at the University of Auckland, wrote in an analysis that accompanied the document, “such as guaranteed access to important services, or because social, cultural, development and commercial functions are inextricably intertwined.”
Relatively wealthy nations, like Canada, have many government-owned businesses, and the role of SOEs in developing nations has been noted by the UN as being extremely important since they don’t follow market dynamics which may disadvantage poorer citizens. A 2013 report from the European Center for Economic Policy Research found that, globally, SOEs included in the Forbes Global 2,000 list of companies had combined sales of $3.6 trillion, about the size of Germany’s GDP. That’s nothing to sniff at.