Here’s the Thing: So, Chinese companies now have more rights than you do

Originally published at The Vine, 26 November 2014

Who’d have thought a deal rushed through in secret might have a few worrying conditions attached?

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Trade has been enormously beneficial to the world –  at least, so long as you prefer it to war.

Throughout history the nations that traded the most became hubs of knowledge – Rome in the first century BC, Alexandria in the 6th century, Amsterdam in the 17th century, London in the 18th, Shanghai in the 19th, New York today – and there is a direct correlation between the amount of trade between nations and the global decline in armed conflict.

It’s not hard to see why. The Age of Empires was an expensive one; conquering new territory was a pricey process, and hanging onto it was even more costly.

Conversely, a trade partner offers plenty of material benefit and zero outlay on armed invasions or open-ended occupations.

Russia’s just learning that with regards its newly annexed resource-poor and people-that-expect-services-rich Crimea, and (as discussed before) ISIL are starting to face a similar challenge in Syria and Iraq.

And there’s a lot to be said for trade if, like me, you’d rather that people didn’t just straight up kill each other. It can be exploitative, sure, but it typically doesn’t end with quite so many corpses.

And the global marketplace has more countries talking and less countries bombing each other than ever before. Hell, we just had countries that have ongoing diplomatic hostilities – Japan and China, China and India, Russia and everyone else – sit down together in Brisbane the other week and have a civilised chat about trade. For all of the limitations of the G20 visit, this is actually significant progress.

Here’s the thing, though: there comes a point where free trade stops being liberating, and starts becoming dangerous and constrictive. And the newly-announced China-Australia Free Trade Agreement is a clear example of this.

As Trade Minister Andrew Robb admitted to SBS, the China-Australia Free Trade Agreement was rushed though at “five minutes to midnight” to make the photo-op that was the G20, and that there was no time to do actual modelling on how it would actually work.

Despite this, it was very swiftly hailed as a triumph of negotiation by the government, who then got very, very quiet about it.

The reasons for this were not hard to fathom as details of the deal emerged and it became clear that getting access to the massive Chinese market would require certain… shall we say, “flexibilities” on the part of Australia, and on the workings of our democracy.

But we’ll come to that. First up, let’s look at the economics.

The Nationals – the team sitting at the kids table of the Coalition dinner party – had the unfortunate job of admitting that local food prices would rise as a direct result of the deal.

Deputy PM and Nationals leader Barnaby Joyce conceded that “Another market means competition, and competition means that [Australian primary industries are] going to get a better price. And we’ve got to do that – we’ve been asking the supermarkets for so long… well now they’ve got somewhere else to go.”

Hear that, Middle Australia? The same rise in your household bills that was the apparent justification for killing the carbon tax is now being hailed as a triumph for the FTA. Huzzah!

Never mind the local price rises: there’s also very little evidence that Australia will actually make anything out of the deal at all.

The “$18 billion increase in by 2015” trade number that was bandied about at the time sounded impressive, but it transpires that it’s not quite as true as you might have assumed. Especially since, as Robb said, there was no actual modelling done.

More specifically, the $18 billion increase was based on modelling done in 2005, for a very different China-Australia deal that was assumed to have been signed that year. That number was the amount estimated for the subsequent ten year period – in other words, meaningless with regards the deal that was actually signed.

What are some of the differences? Well, this model assumed that tariffs would be immediately dropped (they weren’t: the majority of reductions are being phased out rather than eliminated) and that it would include sugar and rice (which it doesn’t) – and, more importantly, that prices for thermal coal and iron ore hadn’t plummeted dramatically since 2005, which they have.

Even if the modelling wasn’t worthless, going by its own conclusions the deal was pretty lousy, giving Australia’s GDP an annual increase per year of a pitiful 0.37%, according to an analysis by the Guardian’s Greg Jericho, which is approximately nothing. Hilariously, or distressingly, the same feasibility study also calculates growth at an even more pathetic 0.04%, or “a rounding error”.

And, as Jericho also points out, our 2005 FTA with the US – spruiked at the time as a deficit-killer by then-PM John Howard – increased our trade deficit by half, to its current level of $15.4 billion.

Adorably, Howard also predicted that the deal would open up the US market for Australian automotive manufacturing, with “a very big, potential, exciting market for Holden.” So, how’d that turn out?

However, the biggest problem is “a controversial clause in the deal that will allow Chinese corporations to sue the Australian government if the government introduces laws or regulations that damage the profits (or ‘future profits’) of Chinese companies,” as Fairfax’s Gareth Hutchens put it.

This clause will also be part of the upcoming Trans-Pacific Partnership Agreement and will retroactively be inserted into our current FTA with Japan.

And not that I wish to sound like a broken record on this subject, but… well, I bitched and moaned about the “investor-state dispute settlement provisions” as laid out in our FTA with South Korea in 10 Things back in December 2013.

You see, these clauses

… allow foreign corporations to sue our government if said government does something that the company deems threatening to its profits. For example, if you were a tobacco giant based in a country with which Australia had an ISDS, you could theoretically sue Australia for introducing plain packaging laws on cigarettes on the grounds that it was anti-competitive.

If that sounds like an alarmist stretch, be advised that this is exactly what has already happened.

See, the Hong Kong subsidiary of Philip Morris launched a High Court challenge against the Australian government over plain packaging, citing the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments. They lost the High Court case in August 2012, mainly on the grounds that they knew the laws were coming in when they bought out the Australian subsidiary’s operations, but immediately launched another case which is still before an international trade tribunal.

And if you’re wondering “hey, isn’t Philip Morris is a US company? Why is the Hong Kong arm suing us?” the answers are “yes” and “because the US and Australia don’t have a trade deal with an ISDS, but we and Hong Kong do”, respectively.

A similar case is currently before the courts in Canada where US energy company Lone Pine Resources is suing under the North American Free Trade Agreement after Quebec called a moratorium on fracking ahead of environmental studies about the likely impacts.

That’s what the China-Australia FTA already has in place, that’s what we’re about to get with the US and Japan. These clauses enshrine in law the principle that your health and wellbeing is secondary to the commercial interests of overseas companies.

Laws restricting emissions in Australia could be deemed anti-competitive and struck down. Ditto labelling on foods, or restrictions on harmful products. Want to ban a defective crib that puts babies at risk? You’d better hope it’s not from a country with whom we’ve signed an FTA.

And this isn’t crazed lefty fearmongering: as of the signing of this deal next year, Chinese mining companies will have more rights than you do when it comes to the level of pollution in your air and water.

Does this scare you? It should.

And there’s more to come.

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One of those wildly overdue update things, with bonus explainer about governments

A special post for newcomers who are itching to tell me I’m a lefty jerk

Our national coat of arms, featuring two emblematic creatures that work brilliantly in a curry.

Our national coat of arms, featuring two emblematic creatures that work brilliantly in a curry.

Hello, internet. You’re looking well.

I’m not going to lie to you, friend: it’s been a busy old time.

That’s mainly been because of my five-day-a-week online column at the Sydney Morning Herald, which is called View from the Street – yes, I’m the titular Street (here’s today’s column, if you’re interested) – and which is most likely the reason you came here. That, or a very creepily specific porn search.

Something that’s coming up increasingly often because of said column is that I have an anti-Coalition agenda. And that’s not really true: I disagree vehemently with most of the things they’re attempting to do, but that’s because I think they’re pursuing lousy policy rather than because I have a deep-seated loathing of conservatism.

See, conservatives can have good ideas. Progressives are occasionally wrong. The way to establish the quality of a political party’s idea, in my opinion, is to ask the question: does this specific policy contribute to human wellbeing and societal stability?

If the answer is yes, then congratulations: that’s a good bit of policy you have there! If not, then it’s bad policy and should be, at the very least, taken back to the shop for some serious remodelling, possibly with a mallet.

And most of the time it’s pretty straightforward to answer those questions, especially if you bother to ask them in the first place.

So, in order to better understand where I’m coming from, here’s an excerpt from my Here’s The Thing column at TheVine entitled “Governments: Why Do We Even?” explaining that governments are around for a reason, and it’s a pretty great one.

Humans are kinda rubbish at survival on our own. We’re naked and weak and we don’t run especially fast and we don’t have tough shells or huge claws or any of those other things that more robust species have.

One major problem is our big stupid heads, which we need because of our enormous brains. We walk upright in part because that’s the best way to distribute that hefty weight, and walking upright necessitates having a narrow pelvis. Combine narrow pelvises and gigantic skulls and you need to give birth to offspring that are basically fetuses that need a hell of a lot of looking after just to survive. In just about every other species a newborn can fend for itself more or less from birth: human babies are notoriously bad at it.

What we do have – the thing that we’re really, really good at – is working together. Our big brains are great at working out what other people are likely to be thinking, and therefore changing our behaviour accordingly so we can work better together. Lots of animals do that, of course, but we’re amazingly good at it.

About ten thousand years ago we started settling down in places rather than moving around, building permanent settlements and inventing stuff like agriculture as a way to feed a growing mass of people.

Societies started to grow, and the societies where people lived better lives became (understandably) more popular with people than those where things were terrible. Stability brought prosperity, and prosperity bought neat stuff like art and science and culture. Turns out that when humans aren’t living hand to mouth, they have time to think about stuff like “y’know, this shovel could be better designed” and “hey, what do you reckon stars are?”

And that’s also where the idea of laws, and for that matter religion, comes from: a series of rules under which society is stable, and in which the constituents live better lives than they otherwise could do on their own. As this became more codified we ended up with things like governments.

And stability doesn’t sound sexy – anarchy gets a cool symbol and everything – but it’s where where big-brained, small-teethed humans turned things to their advantage. We didn’t have to fight, and we had time to think. And that changed everything.

Once you conclude that governments are in place to maintain the stability that leads to prosperity, it becomes a hell of a lot easier to tell whether something is a great idea or a terrible one. Is society made better by a particular policy? Does it hurt people, or does it help people?

If that’s your criteria, you don’t need to speculate on whether a leader is a good and moral person or not, or whether a party is sticking to their guns or betraying their base or any of those other pointless questions. You can ask “is this specific piece of legislation or policy actually helpful to people?”

That’s the important question, and the challenge for governments is to answer that question with “yes, and here’s why”, rather than angrily insist that their opinion is more valid than evidence.

Yours ever,

APS

PS:

Speaking of Here’s the Thing, I wrote one today on why we should be protesting the cuts to the ABC. Yes, I really do write a lot.  That’s why I look so tired all the time.

Here’s the Thing: Surveillance Laws Don’t Reduce The T-T-T-Terrorisms

Originally published at TheVine, 5 November 2014. 

Are our new anti-terror laws necessary in order to protect us? Not if the US experience is any guide.

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Making loud noises about domestic security is a sure-fire way for a government to look all strong and resolute and leadery, especially if they’re – just for the sake of argument – still attempting to pass a budget six months down the track.

However, here’s a complete list of all the domestic Islamic terror plots successfully carried out on Australian soil prior to the new security laws being passed: zero.

The closest we’ve come is the Bali bombings which, while tragic, were not in Australia. And even if you travel to less secure locales on this exciting planet of ours, your risk of being affected by terrorist activity remains much where it’s been for the last two decades: utterly infinitesimal.

We’re terrible at noticing that, though.

That people are just straight up lousy at calculating risk can be gleaned by the fact people are terrified of Ebola – a disease which is not in this country and is zero risk to anyone not actively working among the stricken – and yet so blasé about measles that they’re not immunising their own damn children against a genuine, potentially deadly and entirely preventable disease.

But measles isn’t sexy, and Ebola is. And saying “honestly, you’re fine” isn’t nearly as exciting as “you’re right, you’re under perpetual threat: that’s why we need to know your phone and internet records.”

Indeed, in the briefing notes given to the government by the federal police included the bold claim that “metadata is central to virtually every counter-terrorism, organised crime, counter-espionage and cyber security investigation.”

Here’s the thing, though: it’s absolutely not.

To demonstrate this is the case, let’s have a little look-see at the experience in the United States.

After the World Trade Centre attacks in 2001 the Bush administration introduced the Patriot Act which, hilariously, is a backronym (the full title is “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001″.)

Aside from have the most ridiculous title imaginable, said Act gave the government sweeping powers over American citizens and non-citizens alike, including the warrantless gathering of metadata.

The argument at the time is that it was absolutely necessary in order to track and capture terrorists on US soil. And it’s still going: collection of said data is thought to be the work of the gigantic Intelligence Community Comprehensive National Cybersecurity Initiative Data Center, a massive data facility built last year at Camp Williams, about 40km out of Salt Lake City, Utah.

In fact, those powers have since been expanded: there was a ruling last year by the US Foreign Intelligence Surveillance Court – yep, that’s a thing you didn’t know existed – which removed the need to actually show that information collected or analysed needed to have anything to do with an investigation.

FISC Judge Clair Eagan wrote that the National Security Agency “requires neither ‘specific and articulable facts’ nor does it require that the information be material. Rather it merely requires a statement of facts showing that there are reasonable grounds to believe that the records sought are relevant to the investigation.”

So, how many terrorists has unfettered access to thirteen years of metadata caught?

The answer may surprise you: it’s one. And calling that person a “terrorist” is perhaps a little misleading.

That person is one Basaaly Moalin, a cab driver from San Diego. Access to his phone records allowed the FBI to successfully prosecute him for donating a total of $US8,500 in several transactions during 2007 and 2008 to al-Shabaab, an al-Qaeda affiliated group in Somalia.

This information comes from the New America Foundation, a non-partisan non-profit public policy organisation based in Washington DC. Their analysis of the records of 225 people charged with terrorism-related offences revealed that “that traditional investigative methods, such as the use of informants, tips from local communities, and targeted intelligence operations, provided the initial impetus for investigations in the majority of cases, while the contribution of NSA’s bulk surveillance programs to these cases was minimal.”

When they say “minimal”, they mean minimal: phone records were part of 1.8 per cent of investigations of US citizens, and 4.8 per cent of non-US persons.

Even in the Moalin case the phone data didn’t immediately cause the authorities to leap into action: the FBI waited two months between linking him to a number in Somalia and beginning their investigation. And while sending finances to a Somalian terror group is illegal – and also terrible, let’s be clear – it’s not exactly 9/11 Part Two.

Indeed, the authors conclude that “Surveillance of American phone metadata has had no discernible impact on preventing acts of terrorism and only the most marginal of impacts on preventing terrorist-related activity, such as fundraising for a terrorist group”.

Possibly not worth a staggeringly expensive decade-plus international programme of surveillance and analysis, in other words.

In Australia we’ve had some big showy events to remind us that we’re all at risk all the time.

And if you dispute the use of “showy”, please note that typically police don’t invite the media to join them when they’re sending 800 police to raid a number of properties in Sydney and Queensland, at least not unless they’re confident that there’s not going to be any sort of risk involved. And the result? Two arrests, and the confiscation of a plastic ceremonial sword, which was hung on a wall.

Also, just to be clear: the people yelling about ISIL on the internet and firing pellet guns at Muslim clerics are not actually, y’know, in ISIL.

They’re angry dickbags who feel powerless and are ready to take it out on whoever gets in their way – not helped by the sharp rise in Islamophobia that’s happened in recent times. If you’re already feeling pushed around, having politicians declare you’re un-Australian and people spit on your mum when she’s on a bus is hardly going to calm you down.

Thus if you’re a proud Australian with a Facebook avatar reading “STRAYA: LOVE IT OR LEAVE IT” then congratulations, dipshit: you’re doing a great job endangering the nation you ostensibly care about. You’re the problem, not the folks in the mosque.

The international experience has suggested that the best – actually, the only – defence against angry loners is the people around those angry loners. Those are the parents and siblings and colleagues who can either take said loner aside and say “listen, this isn’t like you” or, if they think the situation is escalating beyond their ability to help, contact the authorities.

Concerned citizens informing the police is pretty much how every plot has ever been uncovered, in Australia and everywhere else. So can you see a potential issue with sidelining one entire section of the community off as being “other”?

So, if you genuinely want Australia to be safe and you’re not just using “security” as a replacement for “I fear brown people”, then you have a duty to make everyone feel that Australia is home and therefore that everyone has a stake in helping protect the place.

You also get the bonus of, y’know, not being a racist dickbag. That’s pretty great for everyone too.

I say this a lot – A LOT – but it’s a sentiment that apparently needs repeating:

There is no Us-And-Them. There’s not even any Them. There is only Us.