Global trade deal threatens Paris climate goals, leaked documents show | Environment | The Guardian

Arthur Nelson, 20 September 2016

Controversial Trade in Services Agreement (Tisa) could make it harder for governments to favour clean energy over fossil fuels as part of efforts to keep temperature rises to 1.5C

A far-reaching global trade deal being negotiated in secret could threaten the goals of the Paris climate deal by making it harder for governments to favour clean energy over fossil fuels, a leak of the latest negotiating text shows.

The controversial Trade in Services Agreement (Tisa) aims to liberalise trade between the EU and 22 countries across the global services sector, which employs tens of millions in Europe alone.

But a new EU text seen by the Guardian would oblige signatories to work towards “energy neutrality” between renewable energy and fossil fuel power, although amendments proposed by the EU would exempt nuclear power from this rule.

The document, marked “limited distribution – for Tisa participants only”, would also force member states to legislate against “anti-competitive conduct” and “market distortions” in energy-related services. This is viewed by campaigners as code for state support for clean power sectors, such as wind and solar.

A right to regulate is explicitly mentioned in the paper, but governments would first have to prove the necessity for regulations that legally constrain multinationals.

The same clause was used in the World Trade Organisation’s Gatt and Gats treaties which entered into force in 1995, and led to 44 complaints by multinationals via their governments. Of these, 43 were upheld.

Susan Cohen Jehoram, a spokeswoman for Greenpeace, told the Guardian: “We fear the same thing will happen with Tisa but on a much larger scale, when legislation is proposed to keep temperature rises to 1.5C [above pre-industrial levels, as agreed at the Paris climate summit].

“If we want to reach that target, governments will need a toolbox of measures that can give incentives to cleaner energy. Tisa, like the proposed TTIP and Ceta trade agreements, would increase the power of multinationals to prevent governments taking desperately needed measures to decrease CO2 levels.”

The Paris climate agreement called for “making finance flows consistent with a pathway to low greenhouse gas emissions” but the deregulatory thrust of the negotiating text, which was obtained by Greenpeace Netherlands, seems to run counter to this.

Its energy annex says that the trade rules will apply to all legislative measures covering power generation services, “whether the energy source is renewable or non-renewable”.

It also contains a “standstill” clause freezing in perpetuity the high watermark of liberalisation in certain sectors, and a “ratchet” clause to stop countries reintroducing trade barriers that had been previously removed. Both mechanisms have been proposed by Australia.

Under their tenets, any government elected on a ticket of reversing the liberalisation of services contained in the treaty would thus be unable to do so, campaigners claim.

The UK’s shadow international trade and energy spokesman, Barry Gardiner, Labour MP, told the Guardian: “Whilst every effort should be made to promote business and trade, this must not be at the expense of the protection and enhancement of workers’ rights, environmental safeguards and the wider interests of the British people.”

While Brexit could prevent the UK from being bound by the planned trade treaty, any agreement allowing access to the EU’s single market would probably oblige it to follow the new rules.

Opposition to the proposed text from Theresa May’s government is thought unlikely. David Davis, the minister for Brexit, recently described the similar Ceta trade agreement with Canada as his preferred model for a trade arrangement with the EU.

Gardiner said: “The British people have voted to come out of the European Union to preserve the principle of parliamentary sovereignty, it cannot be right then that secret trade deals are currently being conducted entirely outside the scrutiny of national parliaments and law-makers.”

“The structure of such deals are like a lobster pot – once you have gone through and given power to the commercial interest it is no longer possible to recapture democratic control. What we do hear, through leaks and rumours, are terms which clearly prevent the ongoing capacity of governments to govern in the public interest.”

Before coming into effect though, any finalised Tisa text will most likely need to be approved by all EU member states – which currently includes the UK – and will also require approval from the European parliament.

Earlier this year, MEPs voted to back the deal, on the proviso that public services were excluded and that the deal legally secured the right to regulate at European, national and local authority level.

Parliament’s rapporteur, the former EU justice commisioner, Viviane Reding, has previously said that the assembly will “never consent” to any trade pact that diminished the EU’s right to regulate on climate, health and social laws.

Reding refused to comment on the leak but informed sources said that neither she nor the European parliament would consent to provisions which prevented public authorities from supporting renewables.

Reding, a conservative politician from Luxembourg, has also called on the Luxembourg government to demand an end to negotiations on the EU-US free trade deal known as TTIP, over the use of controversial secret investor courts, and threats to the environment and food safety.

Unlike TTIP, Tisa deals with the less tangible trade services sector that nonetheless constitutes more than half of the global economy, and could impact on an estimated 1.8 billion people.

As well as energy, any Tisa deal will apply to financial services, e-commerce, information and communications technology services, international maritime transport services, computer related services, postal and courier services, and government procurement of services.

A report by the UN conference on trade and development later this week is expected to say that mega-trade deals such as TTIP and Tisa are becoming increasingly politicised, and failing to provide a solution to the slowdown in global growth.

Source: Global trade deal threatens Paris climate goals, leaked documents show | Environment | The Guardian

China threatens reprisals on NZ dairy, wool and kiwifruit if government doesn’t back off cheap steel inquiry | Stuff.co.nz

Those seeking trading partnerships with China should be wary.
Manawatu dairy farmer Andrew Hoggard says struggling farmers can’t take another hit from a trade war with China. China has threatened “retaliatory measures” against New Zealand trade, warning it will slow the flow of dairy, wool and kiwifruit imports.

The world’s biggest trading nation is angry at New Zealand inquiries into a glut of Chinese steel imports flooding the market; the Chinese believe New Zealand is part of a US-led alliance to target Chinese national interests.

The behind-the-scenes threat comes just days before the arrival of US Vice President Joe Biden in New Zealand, forcing government and commerce officials to scramble to open urgent talks with China. New Zealand is angry that China should take such a combative approach, and is asking that it desist.

Manawatu dairy farmer Andrew Hoggard fears the impact of a vengeful China – but says New Zealand must stand up for its free trade principles. “The rules are the rules.”

Pacific Steel, the sister company of iron miner and processor NZ Steel, has lodged a confidential application, under local and World Trade Organisation rules, for an investigation into China dumping cut-price steel on the New Zealand market. The local industry is struggling to compete with the glut of sometimes substandard Chinese metal, which is being used in major projects like the $1.4 billion Waterview Connection and bridges on the Waikato Expressway.

Right now, lawyers for the Ministry of Business, Innovation and Employment are deciding whether the investigation should proceed, which could result in punitive anti-dumping tariffs against China.

But somehow, China learned of the application – and it is taking retaliatory action.

In the past week, representatives of New Zealand’s biggest export industries have been called in by Chinese officials, and told to exert their influence to make sure the MBIE investigation does not go ahead.

To up the ante, they have been told China has begun consulting with its local food producers about imposing reprisal tariffs to slow down the access of New Zealand dairy, wool, kiwifruit and potentially meat to the 1.35 billion-strong Chinese consumer market.

Local producers are alarmed.

“A trade war with China is definitely not in our interests,” says Andrew Hoggard, a Manawatu dairy farmer. “It’s about 20 per cent of our markets and we’re getting good market penetration with added value products in there.”

Hoggard, who chairs the Federated Farmers dairy division, said many farmers were still struggling to meet mortgage payments and a number had been forced off the land, after last year’s very low milk solid prices. The last thing they needed was to be slammed by Chinese trade barriers.

Highly-placed sources have confirmed China is applying pressure in an attempt to sway regulators away from imposing anti-dumping or countervailing duties – which are imposed when goods are subsidised – on imported Chinese steel. Zespri and Fonterra are said to have been heavied, and other exporters may have been.

Pacific Steel’s parent company BlueScope Steel has also been strongly critical of the anti-dumping protections against Chinese imports in Australia, and is said to have applied for punitive measures there, as well. In New Zealand, Pacific Steel did not respond to a request for comment, and MBIE’s acting manager of trade, Karl Woodhead, said the ministry could not confirm or deny if it had received an application.

Under World Trade Organisation rules “applications relating to anti-dumping or countervailing duties are confidential unless investigations are initiated”, begging the question of how China found out.

The world’s biggest trading nation believes the United States is leading an alliance of sycophantic nations, doing the US bidding by shutting down Chinese trade and trying to force its military out of the contested islands and atolls of the South China Sea.

Joe Biden landed on the USS John C Stennis aircraft carrier in the South China Sea on Friday, where he told crew, “we’re going to be active in the region as long as all of you are alive”.

He flies into New Zealand on Wednesday – and it seems certain relations with China will again be high on his agenda.

The US and the EU have been at the forefront of actions against Chinese steel exports. They believe China is dumping steel at prices far below the cost of production with its output far outstripping demand as its economy slows.

The US has imposed anti-dumping and anti-subsidy duties of up to 450 per cent on corrosion-resistant steel from China in the latest move against its steel exports. China described the move as “irrational”. China would likely view any New Zealand move on steel as part of an orchestrated attack on its steel exports led by the US. However NZ industry representatives and officials have made it clear MBIE’s processes are independent and rules-based and are not influenced by foreign powers.

China’s unusual tactics have caused government and industry to close ranks. The Ministry of Commerce of China (MOFCOM) has denied consulting on retaliatory tariffs. Fonterra spokesman Phil Turner and Zespri’s chief operating officer Simon Limmer both denied any knowledge of the Chinese industry consultation.

But trade expert Charles Finny, who has worked on China-New Zealand trade issues for decades, said sources in Government confirmed at least one major exporter had been told “the Chinese Government would like pressure to be applied to MBIE”.

New Zealand was the first country to recognise China as a market economy – a fact that is likely to have sharpened China’s response to any NZ move.

China believes any anti-dumping move against its 600,000 tonnes of exports to New Zealand would be out of proportion, when the value of the imports from China were less than 6 per cent of total New Zealand imports of similar productIt has said it thought New Zealand and China were “at peace” on trade issues – but apparently not.

Commerce Minister Gao Hucheng had been expected to raise the Pacific Steel complaint at his meeting with Trade Minister Todd McClay in China this week, where McClay was attending the G20 meeting. But McClay said no competition issues were raised.

Chinese ambassador Wang Lutong said there was no issue with the imported steel quality but the embassy had been discussing the industry’s concerns with New Zealand authorities.

Speaking to TV3’s The Nation in unscreened footage this weekend, he said: “I have no idea where the media got this information from. I couldn’t possibly comment on the motivation and intention of those reports. What I can say is, we will have a very detailed investigation of any report concerning the quality of steel, and we spoke to your people about that. But I think both sides are satisfied with this procedure.”

NZ First leader Winston Peters said China was “monstering” Fonterra, Zespri and the NZ steel industry. “And as for the upgrade of the trade agreement, it’s all dependent on what stance we take on the South China Sea. That’s the reality of it now.

“I can’t believe the ministers haven’t talked. You’ve got officialdom and business operating in isolation from government.”

The Chinese Embassy had not responded to specific questions, by deadline.

– Additional reporting Gerard Hutching

 – Sunday Star Times

 

Source: China threatens reprisals on NZ dairy, wool and kiwifruit if government doesn’t back off cheap steel inquiry | Stuff.co.nz

Chile’s ex-chief negotiator drops a bombshell on TPPA | Scoop News

Chile’s ex-chief negotiator drops a bombshell on TPPA | Scoop News.

‘Here is an insider who knows the texts. Rodrigo Contreras has sat in the negotiating room for several years and tried to get the US and others to back off their most damaging demands. He now believes the current direction of the TPPA poses a threat to his country’s economic and social development’.

‘The evidence continues to mount against this agreement every day. New Zealand cannot continue to negotiate the TPPA under the shroud of secrecy. With many chapters nearing closure, it is way past the time to release what is on the table so we can evaluate and debate its implications’, Kelsey said.
*For an English translation see: The New Chessboard – English Translation of Rodrigo Contreras