Anti-TPP movement growing in Japan

While few Americans know about the secret negotiations for the Trans-Pacific Partnership agreement, there is a strong and growing anti-TPP movement in Japan, which isn’t even an official party to the negotiations, which include the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Leaked information about the TPP indicates that it would set up tribunals which would have authority to override national laws and court decisions deemed unfair to “investors.”   U.S. opponents of TPP cite precedents where trade agreements have been used to override laws and court decisions protecting public health and the environment.

But Nobuhiko Suto, a former member of the Japanese House of Representatives who is leading anti-TPP protests, told Real News that the TPP could destroy Japan’s successful health insurance system.  That is because, like all universal health insurance systems, it keeps average costs down by bringing rich, poor, healthy and unhealthy people into the same system.  He said the TPP would destroy this by forcing Japan to allow foreign health insurance companies to take the rich and healthy out of the system.  For Americans, this would mean that a single-payer health insurance system would be forever ruled out of consideration.

We don’t know for sure what is in the TPP—only that the negotiators fear an adverse public reaction if the draft agreement would be made public.  But Martin Khor, executive director of the South Centre, a think tank for developing countries, has the same concerns as Nobuhiko Suto.   He said these concerns are validated by agreements the United States has negotiated with individual countries such as Peru, and by statements of the Australian government.

Khor said the United States and Australian governments want a provision that requires any government service that duplicates private enterprise to operate on “strictly commercial considerations.”  He said they want to eliminate any inherent advantage that a government service might enjoy over private enterprise, including a requirement that the government service not merely break even, but earn a profit comparable to what a private company might demand.

Australia has … introduced the principle of “competitive neutrality” to discipline the SOEs [state-owned enterprises]. … …  This is based on the concept of a “government-owned business”.   The state-owned business enterprise which competes with private companies may obtain advantages, impeding the ability of the private sector to compete on equal terms.

… … These advantages include exemptions from taxes; cheaper debt financing (because of the low-risk classification or government guarantees); absence of need to make a commercial rate of return; and exemption from regulatory constraints or costs.

To offset these advantages, the Australian guidelines cover how government businesses should pay taxes in full; pay back to the central government the difference in their loan costs vis-à-vis private sector loan costs; pay license fees equivalent to the central government; and ensure that they obtain a commercial rate of return.

via TripleCrisis.

Of course these supposedly unfair advantages work to the benefit of the public.  The whole point of having government provide services is to do the things that private enterprise is unable or unwilling to do.   The Rural Electrification Administration extended electricity to farms that private utilities found unprofitable to service.  The U.S. Postal Service provides mail delivery to remote locations that the commercial carriers don’t serve directly (they use the USPS instead).   We have public trash pickup in Rochester because it means all the trash gets picked up, not just that trash of those who can afford a private service.

Now you may disagree that government does better than private business in these examples.  Reasonable people can differ about the role of government and business.  The problem with the TPP, unless all the information leaking out is completely wrong, is that decisions about this role would not be made by elected officials, but by an international body not accountable to the public.

Click on Serious Threat to Asian Economic Model for Martin Khor’s full analysis of the TPP.

Click on Trans Pacific Partnership: Background and Resources for background information from the Sierra Club New York City Group.

Hat tip to naked capitalism.

Tags: Investor-State Relations, Japan, State-Owned Enterprises, TPP, TPP Protests, Trans Pacific Partnership, Trans Pacific Partnership Agreement