The Lie That “China Wins” if the TPP Kangaroo Tribunals are Stopped

By William K. Black, Associate Professor of Economics and Law at the University of Missouri at Kansas City, and the former head S&L regulator. Originally published at NewEconomicPerspectives.org.

Proponents of the Trans-Pacific Partnership (TPP) know that they have a major problem.  Bernie Sanders, Hillary Clinton, and Donald Trump each oppose the deal.  CEOs, however, have not given up on their dream of being able to rig the international system through the creation of kangaroo tribunals that can, effectively, destroy effective regulation and the enforcement of rules to protect the public.  As I explained in my most recent column on this subject, “trade” is simply the pretext for this assault on the rule of law and national sovereignty.  President Obama plans to try to get the TPP approved by the lame duck Senate after the November elections.  Outgoing officials no longer must fear (or respect the will of) the voters and they are eager to cash in on the corporate largess that will reward politicians that vote for the international CEO impunity deals.

The “serious people” of the lame stream media are encouraging the lame ducks to vote for the CEOs’ dream deal.  One of their principal claims is “If T.P.P. falls apart, China wins. It’s as simple as that.”  TPP is deliberately opaque, complex, and crafted in secrecy by the CEOs’ lobbyists to be the opposite of “simple.”  It has nothing to do with China winning or losing.  TPP is all about Article 9 of the TPP, which allows CEOs to rig the system so that the CEOs win and the people and nations lose.  If the TPP becomes law Chinese CEOs win because the kangaroo tribunals of Article 9 will intensify the global “race to the bottom” that is eviscerating what remains of the rule of law even in nations that are not parties to the TPP.

The ‘serious person’s” article never mentions Article 9, but it does include this carefully crafted attempt to mislead his readers:  “[TPP] binds Vietnam to countries where the rule of law is arbiter rather than authoritarian diktat.”  As Americans are now all too aware, the American “rule of law” is a threadbare pretense when it comes to powerful financial CEOs.  Article 9 is the “rule of law” only in the sense that it specifies that the “rule of law” does not apply to the kangaroo tribunals that can impose billions of dollars in penalties on a nation for the high crime of trying to discourage smoking.  Article 9 is designed to bypass one of the most important requisites of national sovereignty – a nation’s laws and judicial system.

Article 9 is authoritarian diktat – by the CEOs of multinational corporations.  CEOs share a community of interest to block effective regulation and enforcement against corporate crimes and abuses.  CEOs and their lobbyists were given unique access to craft the draft deal while the public was excluded.  Everything we know from human history tells us that they would use that power and secret access to rig the system to benefit their interests and ensure that they could use Article 9 to impair the ability of nations to use the “rule of law” to prevent corporate abuses and crimes.

The same newspaper article claims that Vietnam is required by the TPP to take a series of actions such as ending child labor, establishing a minimum wage, and allowing unions.  Those TPP provisions are unenforceable and no one believes that Vietnam will comply.  TPP was crafted in secret by the CEOs’ lobbyists – while the public was deliberately excluded – to ensure that the workers’ “rights” were unenforceable.  Workers have no ability under the TPP to sue Vietnam to enforce those provisions.

Article 9, by contrast, was drafted by the CEOs’ lobbyists to be enforceable.  It allows CEOs to sue before kangaroo tribunals to issue massive (enforceable) financial penalties against any signatory nation that adopts rules to protect its people from even life-threatening criminal acts by corporate officials as long as the kangaroo tribunal decides the rules are “arbitrary.”  The kangaroo tribunal decisions and penalties are subject to no meaningful right of appeal, so any supposed “legal standard” is simply Potemkin propaganda.

Hillary Clinton supporters should consider the same “serious person’s” comments on her position on the TPP.  (Note: I am an economic adviser to Bernie Sanders.)

As for Clinton, she believed in 2012 that the T.P.P. “sets the gold standard in trade agreements,” before deciding last October that “I am not in favor of what I have learned about it.” The best that can be said about this is that it was probably a tactical cave-in she would reverse if she wins.

Sadly, there is a precedent for this fear.  As a candidate, Senator Obama opposed the deal.  As President he has become its cheerleader.

The “serious person” ends his article with this sentence expressing his contempt for the American people’s increasing opposition to these CEO impunity deals.

Congress should resist populist ranting and ratify [the TPP].

We can stop the TPP.  People are increasingly coming to understand that it has nothing to do with “free trade” and everything to do with CEOs’ dream of rigging the system so that they can get even wealthier through the “sure thing” of fraud and abuse with impunity from the laws.  Conservatives are enraged when they discover that it represents a wholesale assault on American sovereignty in favor of kangaroo tribunals dominated by CEOs.  The CEOs used their government cronies to hide the TPP deal from the public for so many years because they knew it could not withstand scrutiny once the public became aware of its true nature.

Article 9 creates a new profit center for the CEOs of multinational corporations – suing the nations that sign the TPP and similar deals.  That puts the Treasury and the general public at risk, but it will maximize the CEOs’ bonuses at our expense.

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