Presentation on theme: "TPPA and Impact on Agriculture, Food Security & Environment"— Presentation transcript:
1 TPPA and Impact on Agriculture, Food Security & Environment BRIEFING TO PAKATAN RAKYAT MEMBERS OF PARLIAMENT"Trans-Pacific Partnership Agreement (TPPA) and Its Pervasive, Across-the-Board Implications for Malaysia" 26 June 2013Lim Li Ching, Third World Network
3 TPPA and subsidiesSubsidies cannot be negotiated under FTAs, only under the WTO (as subsidies are not partner specific)Therefore, countries like the US and Japan, which highly subsidize their farmers, will continue their agriculture subsidies
4 TPPA and zero tariffsThe TPPA will aim for reduction of tariffs to zero, including for agricultural productsMost developing countries have higher tariffs compared to developed countries, so have to reduce more as tariffs become zero/negligibleUS likely to require removal of 100% of tariffs on its agricultural products, unless listed and agreed to as an exception
5 US FTA threat to rice farmers in Malaysia Malaysian position in failed US-Malaysia FTA negotiations was to exclude riceAt the time, not much import of US rice into MalaysiaBut, US demand for rice tariffs to be reduced to zero (over a period of time)Malaysia had tariff on imported rice of 40%US rice highly subsidized, with export price below cost of production
6 Predicted effect of FTAs on agriculture Colombia: Farmers could experience overall 57% reduction in income and 35% reduction in employment among workers in 9 major agricultural sectors, if US proposals were acceptedSouth Korea: With US FTA, total annual production amount of local agricultural industries would drop US$ 1-2 billion/ year, and “it would be inevitable for some 70,000 to 140,000 people currently engaged in farming businesses to lose their jobs”
7 Experiences of Mexico under NAFTA (1994) US grains are sold with dumping margins of >25% because of its subsidiesE.g. rice is subsidised to an amount equivalent to 72% of cost of productionBefore NAFTA, Mexico was self-sufficient in maize and bean productionImports of subsidised maize from USA have nearly tripled under NAFTAEvery year, nearly 3 million tons of harvested Mexican maize is left to rot as it can’t compete with cheap US maize
8 Experiences of Mexico under NAFTA (1994) Genetically modified maize from the US has contaminated traditional varieties99% soybeans, 80% of rice now imported, displacing local productionImports rose over five times for soybean, wheat, poultry and beefNearly 3 million Mexican farmers have left the land since NAFTA beganResult: increased emigration, rural poverty and illegal drug productionMexican countryside has lost 1.3 million jobs since NAFTA, mainly of small and subsistence farmers
9 Impact of other chapters Services chapterLiberalizing financial services could mean less access for small farmers to affordable creditIntellectual property chapterUPOV 1991 and impact on access to seedsGovernment procurement chapterCould open government purchasing of food (e.g. for military/public schools or hospitals etc.) to be supplied with farm products from TPP countries, to our farmers’ disadvantage
10 Impact of other chapters Investment chapterCould open more land to foreign ownershipDispute settlement chapterMakes almost all TPPA chapters enforceable via state-to-state dispute settlementWhen a case is lost at the international tribunal for violating the TPPA, then tariffs can be raised on exports
12 Impact of investment chapter Requirement to allow investors from other TPPA countries to invest in all sectors unless listed and agreed to as an exceptionForeign ownership of land e.g. Peru-USFTARequirement to treat investors fairly and equitablyInterpreted as standstill on regulationExpropriation provisionEnvironmental laws, regulations and policies could be found to be expropriation
13 Impact of investment chapter Proposal to restrict technology transfer requirements (unless exceptions agreed)Impact on National Policy on Climate Change, National Policy on Environment, National Green Technology PolicyInvestor-state dispute settlement70% of the over USD719m paid out under USFTAs and BITs are from challenges to natural resource and environment policies
14 Case examplesVattenfall vs. Germany: Swedish power company sued German government for €1.4 billion plus interest after its coal-fired electricity plant in Hamburg-Moorburg was made to comply with stricter environmental regulations. German government settled in 2010 by reducing its environmental requirements.Vattenfall also sued Germany for US$4.8 billion after the government decided to phase out nuclear energy in Germany following the Fukushima nuclear disaster in Japan.
15 Case examplesEthyl vs. Canada: Canada was sued for its ban on a polluting chemical. It settled by reversing the ban, paying US$13 million to the company and issuing a statement for use in advertising that “current scientific information” did not demonstrate the chemical’s toxicity.SD Myers vs. Canada: Canada was successfully sued because of its temporary ban on PCBs (to assess obligations under the Basel Convention). Canada paid the investor US$5 million for the lost profits it would have made during the 16-mth ban.
16 Case examplesMetalclad vs. Mexico: Mexico was successfully sued for failure to allow a toxic waste dump in an area with unique biodiversity and water that could have been polluted. Mexican govt had to pay the foreign investor US$15 million; tried to recoup cost from local authority.What about Lynas? Licence given subject to a number of conditions, including compliance with safety provisions of the Atomic Energy Licensing Act 1984 and Environmental Quality Act If Lynas’ licence is in future revoked for failure to comply with these, or other, Malaysian laws, may lead to a claim of expropriation of its licence and any future profit expected to make.
17 Impact of other chapters Intellectual property chapterMore technologies could be patented, and patents would last longer – impact on access to environmentally sound techPatents on plants and animals, UPOV ‘91TBT and SPS chaptersMay impose additional restrictions including the information that can be required by government regarding GM food
18 Impact of other chapters Services chapterMay require services regulations at all levels of government (including local government) are based on objective and transparent criteria (rather than environmental ones) and that these are not more burdensome than necessaryMay restrict ability of federal, state and local governments to use licensing fees (including for use of natural resources) to raise revenue/cross-subsidise or discourage unwanted activities in the sectors liberalized
19 Impacts of other chapters Regulatory coherence chapterExceptions chapterBased on past USFTAs, the US will not allow the general environment exception to apply to the investment or IP chaptersDispute settlement chapterPreamble
20 What about the environment chapter? Most studies on the environmental effects of NAFTA provide negative or uncertain conclusions regarding benefits: can’t solve significant environmental problems; failure to strengthen domestic environmental lawsDoes not counter the problems for the environment that other chapters, including the investment chapter, will bring