Last summer, we wrote a bit about the Regional Comprehensive Economic Partnership (RCEP), a trade agreement that is being worked on by a bunch of Asian countries, and which is often described as an "anti-TPP" or, at the very least, a competitor to the TPP. It's being driven by China and India -- two countries who were not in the TPP process. Given how concerned we were with the TPP, we had hoped, at the very least, that RCEP would be better on things like intellectual property. Unfortunately, some early leaks suggested it was even worse. And while the TPP is still grinding through the ratification process in various countries, RCEP has continued to move forward, and the bad ideas have stuck around.
The RCEP will be a massive trade agreement and the content of the IP Chapter is important. It will bind India and China, two countries left out of the TPP. Japan and Korea are trying to push many of the worst ideas from ACTA, TPP and other trade agreements into the RCEP IP Chapter. Some of the issues that negotiators did not understand in the TPP, such as the damages provisions, are also lurking in this text, creating risks that negotiators will do worse than they think, because the secrecy of the negotiations insulates the negotiators from timely feedback on technically complex issues. Japan and Korea are pushing for test data monopolies, without the same safeguards available to patent monopolies. There are proposals for patent extensions, restrictive rules on exceptions to copyright, and dozens of other anti-consumer measures, illustrating the power of right-holder groups to use secret trade negotiations to limit democratic decisions that impact access to knowledge, the freedom to innovate and the right to health, in negative ways.
The TPP is not good on intellectual property (at all). But seeing RCEP apparently be just as bad, if not worse, is not exactly encouraging. As I've said in the past, I think free trade is an important ideal, but free trade agreements are increasingly about something entirely different, and it's about backdoor (and backroom) mechanisms for putting in place regulatory frameworks that favor certain legacy players.
One of central claims made by supporters of corporate sovereignty chapters in trade deals is that companies "need" this ability to sue the government in special tribunals. The argument is that if the extra-judicial investor-state dispute settlement (ISDS) framework is not available to a company, it will be defenseless when confronted with a bullying government. A new case in Australia shows why that's not true. A column in The Sydney Morning Herald provides the background, which concerns a US company called Nucoal:
In 2013, the NSW [New South Wales] Independent Commission against Corruption found that there had been corrupt conduct relating to the granting of mining licences to Nucoal and other mining companies and the NSW government cancelled the licences.
Naturally, Nucoal unleashed its lawyers:
[Nucoal] demanded compensation of more than $900 million in Australia's High Court, claiming the decision to cancel its licence without compensation was unconstitutional and had reduced the value of the company. The High Court found in April 2015 that under Australian law Nucoal was not entitled to compensation.
Now Nucoal had a problem. Normally, a company in this situation would invoke the corporate sovereignty chapter in a relevant trade deal, and move the case to secret ISDS tribunals, which were likely to be more favorable to its cause than the independent national courts. But with unusual foresight, Australia refused to accept ISDS in the 2004 AUSFTA trade agreement between the US and Australia -- which makes its decision to acquiesce to ISDS in TPP doubly foolish. Despite what fans of corporate sovereignty claim, Nucoal still has another option at this point:
Nucoal is pressuring the US government to put a case to the Australian government that the denial of compensation has violated the general investment terms of the [AUSFTA] agreement. This could result in a formal complaint from the US government demanding trade sanctions against the Australian government.
Last week The Australian reported that the CEO of the US Chamber of Commerce in Australia has announced that the US government will raise the issue in a closed-door review of the AUSFTA to be held in May.
That is, unable to avail itself of the investor-state dispute mechanism, Nucoal now wants to take advantage of the state-state dispute settlement process (pdf) whereby the US government formally complains to the other government concerned. Now, whether the US government should really be taking up a case involving corruption is another question. The key point is that it is not absolutely necessary to include corporate sovereignty provisions in a trade deal to protect companies, because there is always the state-to-state mechanism that can be invoked if necessary.
It was evident when the "three strikes" or "graduated response" was first proposed in France back in 2009 that it was a really bad idea. After all, in its crudest form, it cuts people off from what has become a necessity for modern life -- the Internet -- simply because they are accused of copyright infringement, an area of law that is notoriously full of uncertainties. Given that inauspicious start, it's no surprise that over the years, the three strikes system has failed everywhere, with some of the early adopters either dropping it, or putting it on hold. No wonder, then, that a latecomer, Australia, is also having problems with implementing the approach, as this report from c|net makes clear:
A three strikes scheme to track down individual pirates and send them warning letters about their downloading habits has been all but quashed, after rights holders and ISPs decided that manually targeting and contacting downloaders would be too costly.
However, as in the US, where the "six strikes" scheme is also flailing, the Australian copyright industry has no intention of seizing this opportunity to move on from this punitive approach. Instead, it wants to make it worse by automating the process. Village Roadshow Co-CEO Graham Burke, who Techdirt wrote about back in 2014, is quoted as saying:
"When automation occurs, instead of costing AU$16 or AU$20 a notice [about US$12 or US$15], which is just prohibitive, it will cost cents per notice," he said. "In other words, the ISPs will have an automated system that can be done simply, as opposed to at the moment it's manual."
Of course, an automated system is likely to be plagued by false positives even more than one operated by humans. The much lower cost involved -- cents rather than dollars per letter -- means that there will be no economic incentive to check for these in order to keep the numbers down, which are likely to balloon as a result. In other words, it seems clear that the three strikes system in Australia is about to get much worse -- and it was bad to begin with.
But there is one piece of positive news to emerge from this story. The Australian copyright industry says that it is not worth pursuing alleged copyright infringement cases unless the three strikes system costs almost nothing to use. Clearly, then, the real scale of the losses caused by online piracy is nowhere near as great as companies love to claim, otherwise basic economics would push them to use even a manual system. That's yet another reason to get rid of the flawed and disproportionate graduated response.
Techdirt has been writing about the question of what constitutes personal information in an online context for over half a decade. A recent decision in Australia, reported by the Guardian, suggests that the matter is far from settled around the world. The case concerns a journalist, Ben Grubb, who has been trying to get his personal data from the mobile phone company he uses, Telstra. Initially, the Australian privacy commissioner ruled that Telstra had failed to comply with local privacy laws when it refused to hand over the data, but that decision was overturned on appeal by an administrative appeals tribunal (AAT) on the following grounds:
In the AAT decision deputy president Stephanie Forgie took a narrow approach to defining personal information. She said that information such as IP and URL data were too remote to be considered personal information.
"That data is no longer about Mr Grubb or the fact that he made a call or sent a message or about the number or address to which he sent it. It is not about the content of the call or the message. The data is all about the way in which Telstra delivers the call or the message. That is not about Mr Grubb," she wrote.
That ignores just how much information even a single URL reveals about the visitor to the site and page in question. Moreover, putting all those URLs together can create an extremely detailed picture of the person concerned -- from things like their general character and beliefs to current concerns. It's an extension of the incorrect argument trotted out by governments that gathering and storing metadata isn't as intrusive as retaining content, when exactly the opposite is true. Since metadata is pre-sorted into handy conceptual categories, analysing and aggregating the information is extremely easy, even on a huge scale -- just ask the NSA and GCHQ.
However, the Australian privacy commissioner is not taking things lying down:
The privacy commissioner, Timothy Pilgrim, has launched a federal court challenge to a ruling that a journalist was not entitled to access parts of his personal mobile phone data.
The landmark challenge is believed to be the first time the Office of the Australian Information Commissioner has sought to appeal a case before the federal court.
As the Guardian rightly notes, the outcome of the case is likely to have important ramifications for future requests involving personal information under the country's privacy laws.
This past Friday, we published our response to an Australian lawyer, Stuart Gibson, who apparently works for a real law firm called Mills Oakley. I know that Gibson is a real lawyer, because he's represented big famous clients in the press before, including this impressive TV appearance in which he is left "categorically denying" statements that his client appears to have made directly and then having to defend himself when the news anchor points out what his client has actually said. Anyway, Mr. Gibson did not appear to appreciate my blog post on Friday, and sent a series of short emails over the weekend, with increasing fervor, in which he insisted that I "get proper legal advice instead of publishing your utter dribble," that my "legal theories" were "nonsensical" and finally demanded to know if I had "the guts" to face him in court.
I, as you know, am not a lawyer -- either in the US or Australia -- and honestly had no idea that one was supposed to make legal decisions based on whether or not one had "the guts." I had always assumed that this was the kind of thing that you need for bar brawls, rather than legal fights. But perhaps things are different down under. Either way, I did get "proper legal advice" (as I had before publishing my original post, but we'll leave that aside), and given Gibson's increasing email threats, our lawyer, the wonderful and well-regarded Paul Alan Levy from Public Citizen Litigation Group, has now responded to Gibson on our behalf. You can read it by following the link or embedded below.
In the meantime, others in the legal blogging world have begun to weigh in on Gibson's threat, including lawyer Scott Greenfield, who dubbed it Stuart Gibson's Really Bad Idea, and lawyer Ken White who noted that Milorad Trkulja is "not a gangster" but "Stuart Gibson Is, I Suppose, A Lawyer." I would recommend reading both posts, for further legal analysis of Mr. Gibson's threats (and make sure you stick around for his email exchange with Ken White). One wonders if this is the kind of publicity that Mills Oakley likes its lawyers to get.
Update: Stuart Gibson has replied to Paul's letter simply stating: "I wouldn't even be bothered to open this Spam." Apparently, Gibson thinks that detailed responses that actually include citations (unlike his own threat letters) from some of the most respected litigators around are "Spam." And the reputation of Mills Oakley continues to spiral down the drain...
Update, the second: Levy responded to Gibson by inserting the full text of the letter in the body of an email so that Gibson would not have to "open" the PDF he originally sent, and Gibson responded "Don't bother pal." Less than a minute later, he sent another email to Levy, saying just "Dribble." At this point I'm confused about Gibson and Mills Oakley and how they operate. Gibson himself had specifically requested that I seek out legal advice in responding to his letter. I have done so. And now he refuses to even read it? This is the professionalism that Mills Oakley and its lawyers demonstrate?
So... you may recall that, back in December, we received and responded to a ridiculous and bogus legal threat sent by one Milorad "Michael" Trkulja from Australia. Mr. Trkulja had sent the almost incomprehensible letter to us and to Google, making a bunch of claims, many of which made absolutely no sense at all. The crux of the issue, however, was that, back in November of 2012, we had an article about a legal victory by Mr. Trkulja against Google. The issue was that when you searched on things like "sydney underworld criminal mafia" in Google's Image search, sometimes a picture of Trkulja would show up. His argument was that this was Google defaming him, because its algorithms included him in the results of such a search and he was not, in fact, a part of the "underworld criminal mafia."
Either way, back in 2012 we wrote about that case, and Trkulja was upset that a comment on that story jokingly referred to him as a "gangster." Because of that, Trkulja demanded that we pay him lots of money, that we delete the story and the comments and that Google delist all of Techdirt entirely. Immediately, we pointed out in our response: the comment is not defamatory, the statute of limitations had long since passed if it was defamatory, as an American company we're protected by Section 230 of the CDA, and even if he took us to court in Australia, we're still protected by the SPEECH Act. Finally, we suggested that perhaps he chill out and not care so much about what an anonymous person said in the comments of an internet blog over three years ago -- especially when many people consider it a compliment to be called "a gangster."
Either way, it seemed fairly clear that there was no actual "harm" to Mr. Trkulja, given that he didn't even seem to care about it for over three years.
We had hoped that this would be the end of it, but apparently it is not. A few weeks back, we received the following, absolutely bogus legal threat from an Australian lawyer by the name of Stuart Gibson, who appears to work for an actual law firm called Mills Oakley. The original threat from Mr. Trkulja could, perhaps, be forgiven, seeing as he almost certainly wrote it himself (again, it was incomprehensible in parts, and full of grammatical and typographical errors). Our response was an attempt to educate Mr. Trkulja against making bogus threats.
However, now that he's apparently wasting money on a real lawyer like Gibson, we will address the rest of our response to Gibson: Your letter is ridiculous, censorious and not even remotely applicable. Going to court over this will make you and your client look extremely foolish. But let's dig in, because Mr. Gibson seems to think that blustery bullshit will scare us off. He's woefully misinformed on this.
First off, if you send a legal threat and say "NOT FOR PUBLICATION" at the top, it's tough to take you seriously, because such a statement is meaningless. We have no contractual agreement not to publish such information, and if you send us a bogus legal threat, we are damn well going to publish it:
And now on to the crux of Gibson's argument: we said mean things about his client and somebody's feelings may have been hurt.
If you can't read that, it says:
The matter that you have published conveys false and defamatory meanings including (but not limited to) the following:
Our client is a gangster;
That our client by virtue of his legal claims is incompetent and unfit to be a litigant;
That our client by virtue of his legal claims is a ridiculous litigant;
That our client is a criminal and a participant in organised crime;
That our client is unfit to be a litigant
None of these meanings is defensible. Our client is not a criminal and has never been a gangster nor associated with such persons. Accordingly there is no factual basis for the imputations published.
Let's go through these one by one. First off, we never said that Mr. Trkulja is a gangster. In fact, in both of our previous stories about him, we noted that his concern was over being called a gangster when he was not one. To claim otherwise is Mr. Gibson lying in his threat to us. As a suggestion, lying in your legal threat letter is not a very good idea.
Second, at no point did we state that Mr. Trkulja was incompetent or unfit to be a litigant. We merely published his own words -- admittedly including his misspellings, grammatical errors and general confusion -- and our responses to them. If Mr. Gibson thinks this implies that his client is unfit to be a litigant, perhaps he should check his own biases.
Third, again, Mr. Gibson seems to be assuming the claim. We did say that the threat against us was ridiculous -- an opinion we stand by. But we did not say he was a "ridiculous litigant." Also, "ridiculous" is a statement of opinion and even in nutty Australia, "honest opinion" is not defamation. And it is our "honest opinion" that the threat is ridiculous.
Fourth, this is a repeat of the first claim. It was false the first time, and it's still false. Repeating a false claim may allow Mr. Gibson to add to his billable hours, but doesn't seem like particularly good lawyering.
Fifth, this is a repeat of the second claim. See point four above. And point two above.
So let's be clear: we did not say that Mr. Trkulja was a gangster. We said, in our honest opinion, that he won a lawsuit the results of which we disagree with, and that his legal threat to us was ridiculous. This is all perfectly reasonable and protected free speech. Second, we posted Mr. Trkulja's own words which, again in our honest opinions, do show the "ridiculousness" of his threat to us in that it was filled with grammar and spelling errors and was, at points, (again, in our honest opinion) incomprehensible gibberish.
Mr. Gibson, then suggests that arrogance is somehow defamatory:
If you can't see that, it says:
Moreover your commentary that still resides on your website is an arrogant, false and poorly researched piece for the following reasons:
The reference to "gangster" is not "totally innocuous". The reference is grossly defamatory and indefensible. One could not conceive a more defamatory reference than that. It may be a throwaway line in the United States but it is certainly not in this jurisdiction.
Judgments against US companies especially those resident in California are enforceable particularly monetary judgments.
You are not protected by the Speech Act.
This firm has enforced numerous judgments against corporations in your jurisdiction.
Your reference to "free speech" is absolute nonsense. Speech may be free but it is also actionable.
You did publish the comment. Under Australian defamation law, you have a duty as a moderator to moderate third party comments. If you do not and refuse to take action when given notice, you are liable.
First off, I may not be an expert on Australian defamation law, but I can tell you I find it difficult to believe that "arrogance" or "poorly researched" information is defamatory there. It certainly is not defamatory in the US, and, furthermore, Mr. Gibson, you are wrong that it was poorly researched. It was well researched and backed up with a great amount of detail -- details I will note your own threat letter to us appears to be lacking. And I'm sorry if we come off as arrogant to you, but we're allowed to speak our minds.
Next, Mr. Gibson, you "could not conceive a more defamatory reference" than calling someone a gangster? Really, now? Because I'm at least moderately familiar with some Australian insults and many of them seem way, way worse than "gangster" -- which, again I will remind, you we never called your client (and, in fact, correctly noted that he was upset at someone calling him a gangster). And, yes, it is innocuous. No one cares that someone anonymously in a blog comment jokingly called your client a gangster. It was harmless as is fairly clearly evidenced by the fact that your client didn't even notice it for over three years.
Next, I'll note that for all your talk of enforcing Australian monetary judgments in California, you don't name a single one. And, you're wrong, because the SPEECH Act absolutely does apply, and you'd be exceptionally foolish to test this, though of course that is your decision to make. The text of the SPEECH Act is pretty explicit, first about when defamation rulings are enforceable in the US and (clue time!) it doesn't count if the statements wouldn't be defamatory in the US:
a domestic court shall not recognize or enforce a foreign judgment for defamation unless the domestic court determines that the exercise of personal jurisdiction by the foreign court comported with the due process requirements that are imposed on domestic courts by the Constitution of the United States.
Second, the law is also explicit that a service provider, such as us (in reference to comments published by readers on our site), if protected by CDA 230 in the US, would be similarly protected from foreign judgment:
a domestic court shall not recognize or enforce a foreign judgment for defamation against the provider of an interactive computer service, as defined in section 230 of the Communications Act of 1934 (47 U.S.C. 230) unless the domestic court determines that the judgment would be consistent with section 230 if the information that is the subject of such judgment had been provided in the United States.
I recognize that you're an Australian lawyer, not a US one, but I would suggest doing at least a tiny bit of research into the caselaw on Section 230 in the US. You will quickly learn that we do qualify as a service provider and that, no, we are not liable for statements in the comments. And, hell, even if we were, and even if the comments were defamatory under US law (which they're not), the statute of limitations on those original comments is long past anyway.
And, yes, in case you still have not read the SPEECH Act, the legal burden will be on you here:
The party seeking recognition or enforcement of the foreign judgment shall bear the burden of establishing that the judgment is consistent with section 230.
Good luck with that.
In case you still decide to ignore the actual text of the law, you can also go digging through the legislative record on the SPEECH Act, in which it was made explicit that the law was designed to protect against such forms of "libel tourism."
The purpose of this provision is to ensure that libel tourists do not attempt to chill speech by suing a third-party interactive computer service, rather than the actual author of the offending statement.
You can claim the law doesn't apply, but you are wrong. The text is clear. You can claim that you have won judgments or monetary awards in the past. And perhaps you have, but if you try to move against us, you will be facing the SPEECH Act and you will lose.
So, given all of the above, we will not be undertaking any of your demands. We will not apologize as we have nothing to apologize for. We will not retract anything, as we did not make any false or defamatory publications. We will not remove anything from our website. We will not pay your client anything, whether "reasonable costs" nor "a sum of money in lieu of damages."
Instead, we will tell you, as we did originally, to go pound sand and to maybe think twice before making bogus legal threats that you cannot back up.
from the would-anyone-run-a-business-like-this? dept
Mike has just written about the way the US public is being short-changed over the promised "debate" that would follow the completion of the TPP negotiations. That broken promise is just part of the general dishonesty surrounding the whole deal. For example, the public was told that it was not possible for it to make its views known during the negotiations, because they had to be secret -- even though many other trade deals aren't -- but that once everything was agreed there would be ample time for a truly democratic debate. Of course, at that point nothing could be changed, so the debate was little more than a token gesture, but now it seems the US public won't even get that.
It will be cold comfort to learn that US citizens are not the only ones being denied the opportunity to engage in a serious discussion with politicians about the merits or otherwise of TPP. Here's what's happening in Australia, as reported by the Guardian:
The trade minister, Andrew Robb, has rejected calls for an independent cost-benefit analysis of the Trans-Pacific Partnership after the World Bank estimated it could lift Australia’s economic output by just 0.7% by 2030.
Robb, who signed the regional trade pact with counterparts from 11 other nations in New Zealand on Thursday, dismissed opponents of the deal as "the usual suspects" who would not be persuaded by a new inquiry.
To dismiss those who want to weigh up the evidence for and against TPP as "the usual suspects" is insulting not just to them, but also to the Australian public, who are effectively being told that if they dare to question the value of TPP, they are just "the usual suspects." This is pretty rich, too:
There’s nothing that they’ve said that convinces me that they’re genuine about this ... I think the community accepts that we've got 25 years of uninterrupted economic growth in Australia, we've got millions of jobs which have come off the back of Australia opening up and participating in these sorts of major agreements around the world with all of our trading partners.
So Robb is saying that those who want a mature debate about TPP must convince him, rather than the other way around. And claiming that Australia's growth is due to trade agreements -- without providing any evidence -- expects people to be naive enough to fall for the old 'correlation implies causation' trick. In any case, it's the details of the deal that are being questioned, many of which are quite antithetical to genuine free trade -- enhanced monopoly protections for copyright and biologics being two examples.
Robb's problem is that the traditional instruments of government persuasion -- econometric models that purport to demonstrate the benefits of signing up to trade agreements -- reveal that TPP is likely to bring Australia vanishingly small economic benefits. As we wrote recently, the World Bank predicts that the annual boost to Australia's GDP thanks to TPP will be around 0.07%. The country's trade minister tries to side-step that awkward fact as follows:
Robb told Sky News there was "a war by modelling" occurring. He pointed to a US Department of Agriculture study that showed Australia's agriculture sector would be the "biggest winner by a country mile".
In other words, don't look at that World Bank study, look at this US Department of Agriculture (USDA) study instead. Techdirt discussed that analysis over a year ago, noting one rather pertinent fact that Robb somehow forgot to mention: the USDA predicted that the total boost to the Australian economy from TPP would be precisely zero, zip, zilch, nada. If Australia's agricultural sector is a big winner from TPP, there must also be some big losers to balance things out.
Those facts probably explains in part why Robb refuses to ask the Australian government's own Productivity Commission for an analysis of TPP, even though its job is precisely to provide "independent research and advice to Government on economic, social and environmental issues affecting the welfare of Australians." The other reason why he won't want them giving an expert opinion is probably because of this comment in the Commission's Trade and Assistance Review 2013-14:
Preferential trade agreements add to the complexity and cost of international trade through substantially different sets of rules of origin, varying coverage of services and potentially costly intellectual property protections and investor-state dispute settlement provisions.
The emerging and growing potential for trade preferences to impose net costs on the community presents a compelling case for the final text of an agreement to be rigorously analysed before signing. Analysis undertaken for the Japan-Australia agreement reveals a wide and concerning gap compared to the Commission's view of rigorous assessment.
Robb's reluctance may be understandable, but it is also unforgivable. The benefits for Australia from TPP are routinely exaggerated, but no account is ever taken of the costs of signing up to the trade agreement -- a situation that is plainly absurd. Any manager that suggested closing an important business deal without carefully weighing up both the benefits and the costs would be rightly dismissed for gross negligence and incompetence. And yet Robb expects 23 million Australians to agree to TPP on precisely that basis, simply because he says it's a good deal. That's not just appallingly arrogant, but also profoundly irresponsible.
As you may recall, late last year Australia put into effect a wonderfully ambitious data retention law that required ISPs in the country to do... well... something involving data retention. The problems began immediately, with ISPs unsure of exactly when they were supposed to start collecting all of this data, as the law allowed for some to petition to delay implementing the data collection, but the government hadn't bothered to get back to many of them. Never mind what would happen once this same inept government actually received the mountains of data it had requested.
But those concerns are all about the practical utility of such a law, not the larger concerns over whether this kind of data collection ought to be happening to begin with. To see an example of why a free people shouldn't allow the government to crack open this door, however, one needs only look again at the law in Australia. What was supposed to be collection chiefly to combat major criminal actions is now a collection that even the food police are trying to get in on. And, yes, I really do mean the food police.
If you are in the business of selling lamb chops, make sure you are weighing them properly: the National Measurement Institute wants warrantless access to Australians’ metadata to help them hunt down supermarkets skimping on portions. The NMI is one of 61 agencies that has applied to the attorney general, George Brandis, to be classed as a “criminal law-enforcement agency” in order to gain warrantless access to telecommunications data.
As part of the government’s assurances that there would be sufficient privacy safeguards, it reduced the number of agencies that could access the data. But agencies could reapply, with the permission of the attorney general, if they were involved in enforcing “serious contraventions” of criminal laws.
Now, this is still in the application phase, so the NMI, a government group tasked with investigating retailers to make sure they're packaging their goods properly, doesn't yet have access to Australian's metadata, but its petition did have to be approved by the attorney general as being relevant to even get that far. This is what happens when you crack open the door: the bulk of government will try to force its way in. Keep in mind that the efficacy of bulk collection practices for combating even terrorism and serious criminal actions is debatable, but now we're dealing with the food and retail packaging police wanting in on the action? This really should tell you everything you need to know.
Greens senator Scott Ludlam said: “The only saving grace the government was able to claim when they passed it was that they were narrowing the range of agencies that could access the data. On the face of it that was true, and obviously that’s just been blown to pieces.”
Just because slippery slope arguments are almost always lame, that doesn't mean they don't occasionally apply. It seems on bulk surveillance, they certainly do.
from the most-comprehensive-and-far-sighted-economic-agreement-of-all-time dept
As we've written recently, a report from the World Bank suggests that the economic benefits from TPP will be slight for the US, Australia and Canada. New Zealand is predicted to do better, but not much: the econometric modelling predicts a 3.1% boost to its GDP by 2030 -- roughly 0.3% extra GDP per year. That's a pretty poor payback given the price participant countries will have to pay in terms of copyright, biologics and corporate sovereignty. Such details have not prevented one of the main newspapers in the country, the New Zealand Herald, from banging the drum for TPP's signing ceremony, which is probably going to take place quite soon:
New Zealand is about to have the honour of hosting the formal signing of the Trans-Pacific Partnership agreement by trade ministers from 12 nations of the Pacific rim. And it is an honour. This is the most comprehensive and far-sighted economic agreement the world has seen in our lifetime, possibly of all time.
Rather bizarrely, the editorial goes on to list TPP's many problems:
The TPP's intellectual property discussions raised the risk that US patent law and copyright protection of pharmaceuticals and other products of investment in science and research could be strengthened at considerable cost to public purchasing agencies, such as Pharmac, and innovation in digital technology in other countries. Medical professionals and IT developers have been among those fearful of the TPP during the course of its negotiation. So were environmentalists and public health promoters. They feared the inclusion of investor-state dispute settlement procedures could stop governments taking action in the interests of public health or the environment that would reduce the value of commercial investments.
At this point, you might expect a refutation from the editorial, and a compelling explanation why all those concerns proved misguided. Instead, it notes that many of these fears were stoked by the insane secrecy surrounding the negotiations, and suggests that since the text was released two months ago, everything's OK now. The editorial has to admit that yes, there are 6000 pages that need to be read, but points out that the final text has provided great summer holiday reading for those in the Southern Hemisphere. It then makes the following claim:
The precise terms seem to have survived scrutiny so far.
In fact, the release of the TPP text has amply confirmed the main worries regarding just about every aspect of the deal. For anyone wanting a quick catch-up on the major problems there, Michael Geist is running a helpful series with the self-explanatory title "The Trouble with the TPP":
[I] wanted to expand on the trouble with the TPP in more detail. With that goal in mind, I plan to post each weekday until February 4th on problems associated with the TPP. The series will include posts on copyright, privacy, Internet governance, and many other issues.
Maybe the editors at the New Zealand Herald should read the series before the TPP signing ceremony, so that at least they understand why the following is not going to happen:
It is too much to hope any fears now assuaged [sic] will reduce the scale of protest at the signing. But it should not be too much to ask that those philosophically opposed to free trade respect the views of those who disagree with them, and let this country host the occasion with dignity and pride.
Dignity, maybe. But pride? That's hardly appropriate given what is really happening here.
Supporters of TPP generally insist it's absolutely worth doing, despite any infelicities it might contain, because of the huge overall economic benefit it will bring to participants. But when challenged, they are unable to cite any credible evidence for that claim. That's because there isn't any: despite the impact that TPP's measures will have on how the US and other countries do business, there are astonishingly few studies on whether it will indeed have a positive impact overall. Just over a year ago, we wrote about one of the rare attempts to model TPP, commissioned by the US Department of Agriculture, which came up with the following result for countries like the US and Australia:
TPP is projected to have no measurable impacts on real GDP
However, that particular study only looked at the effect of removing traditional tariffs; as it pointed out, TPP includes other elements that might also boost GDP. Fortunately, we now have a new report from the World Bank, no less, which took into account all aspects of the proposed deal. Here's the summary of what it found (pdf):
The model simulations suggest that, by 2030, the TPP will raise member country GDP by 0.4-10 percent, and by 1.1 percent, on a GDP-weighted average basis.
That's a little vague: 10% GDP increase is very different from only 0.4%, so it really matters who gets what. The detailed figures are as follows:
Vietnam -- 10%
Malaysia -- 8%
Brunei -- 5%
New Zealand -- 3.1%
Singapore -- 3%
Japan -- 2.7%
Peru -- 2.1%
Mexico -- 1.4%
Canada -- 1.2%
Chile -- 1%
Australia -- 0.7%
US -- 0.4%
But those figures too are misleading, because they refer to the cumulative GDP gain from TPP by 2030. It's not clear when the World Bank econometric model assumes TPP will come into effect, but by 2030 it's clearly been running for at least ten years, and maybe even 12. That means all of the figures above need to be divided by at least a factor of 10 in order to arrive at the annual boost to growth, which provides a better measure of TPP's impact than the overall figure.
So according to the World Bank's figures, the US will gain an extra 0.04% GDP per year on average, as a result of TPP; Australia an extra 0.07% annually, and Canada a boost of 0.12% per year. In other words, they differ from the USDA's earlier projection of "no measurable impacts on real GDP" by amounts that are so small they will be swamped by the general imprecision of the model -- trying to predict what will happen to a big chunk of the global economy out in 2030 is hard, and that's putting it mildly.
The fact that two econometric models of TPP's effects, both from highly-respected institutions, predict that TPP will produce vanishingly-small economic benefits for key countries, including the US, could explain why there are so few such studies. A cynic might suggest that others were started but generated such inconveniently-awful outcomes that they were quietly dropped and never published.