The leading economist and Nobel Prize laureate wrote in a column for The Guardian that the TPP could be the worst trade agreement in decades.
The Trans-Pacific Partnership (TPP) might turn out to be the worst trade agreement in decades, according to Joseph Stiglitz, the United States-based Economist and winner of Nobel Memorial Prize in Economic Sciences
In an opinion piece for the United Kingdom-based newspaper The Guardian, the leading economist argued that with the TPP U.S. President Barack Obama “has sought to perpetuate business as usual, whereby the rules governing global trade and investment are written by US corporations for US corporations.
This should be unacceptable to anyone committed to democratic principles.”
Stiglitz pointed to a few of the many problematic clauses and articles of the 6000-page agreement.
The problem, he says, is not so much with the agreement’s trade provisions but with the “investment” chapter, which “severely constrains environmental, health, and safety regulation, and even financial regulations with significant macroeconomic impacts.”
While the final negotiations were concluded and the agreement was signed between the governments of the countries participating in the agreement, the TPP faces major resistance within the U.S. political sphere including opposition for Democratic presidential candidate Bernie Sanders.
Leading Democratic lawmakers also came out against the TPP even before details were made public late last year.
Stiglitz says the troubling investment chapter gives foreign corporations and companies the right to sue governments in private international courts when they believe government regulations voilate the TPP’s terms.
“In the past, such tribunals have interpreted the requirement that foreign investors receive “fair and equitable treatment” as grounds for striking down new government regulations – even if they are non-discriminatory and are adopted simply to protect citizens from newly discovered egregious harms,” the Nobel prize laureate wrote.
Stiglitz further slammed another clause in the TPP referred to as the “most favoured nation” provision which “ensures that corporations can claim the best treatment offered in any of a host country’s treaties.” He said this article of the TPP is exactly the opposite of what Obama promised as the provision “sets up a race to the bottom.”
Also, Obama and his administration were out of touch with the emerging global economy, Stiglitz said, arguing that for the U.S. the TPP was about winning the battle against China on who would write the trade rules of the twenty-first century.
“The correct approach is to arrive at such rules collectively, with all voices heard, and in a transparent way,” he emphasized.
“In 2016, we should hope for the TPP’s defeat and the beginning of a new era of trade agreements that don’t reward the powerful and punish the weak.”