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How new free trade agreements would
fuel climate change

In January, TransCanada announced it would seek $15 billion in damages from American taxpayers because of President Obama's decision to reject the Keystone XL pipeline. The pipeline, owned by TransCanada, would move fuel from the Canadian tar sands through the heartland of the U.S. to the Gulf of Mexico. Tar sands oil emits more greenhouse gases than other forms of fuel, and climate concerns were behind the decision. The legal action by TransCanada was brought under a special corporate rights provision in the North American Free Trade Agreement (NAFTA). The TPP contains the same corporate rights provision and would be available to corporations based in all 12 participating countries.

Unfortunately, the TPP is literally in climate denial: nowhere in its 5,000-plus pages do the words "climate change" appear. In December, the U.S. and more than 190 countries agreed to a global climate agreement to reduce global greenhouse gas emissions. Yet, the TransCanada case highlights one of several ways these new trade deals will hurt our efforts to address climate change.

In many ways, the TPP is a broad attack on locally based economies that protect natural resources and the climate and support renewable energy. Instead, the agreement tilts the playing field in favor of multinational corporations and financial institutions. Fortunately, it's far from a done deal.

The TPP is considered the largest free trade agreement ever negotiated, with the countries involved contributing 40 percent of global GDP. It sets a common system of regulations and rules for corporations operating in TPP countries-all designed to accelerate trade. While the TPP doesn't mention climate change explicitly, many of its provisions would have important implications for the climate, aside from the simple fact that expanded trade-related transportation increases greenhouse gas emissions.

Unfortunately, the TPP is literally in climate denial: nowhere in its 5,000-plus pages do the words "climate change" appear.


Here are five big reasons the TPP hurts our ability to respond to climate change:

It expands the rights of corporations to challenge regulations

It expands the rights of corporations to challenge regulations

The TPP establishes special legal rights for foreign corporations to challenge new regulations that it believes could impact future profits. These corporate rights, first established under NAFTA in 1994, would be granted to more than 9,000 additional foreign corporations based in TPP countries. These special rights provide the framework for corporations to mount legal challenges to regulations that don't suit them. All corporations have to do is claim a new law or regulation conflicts with the treaty and they have a case.

And corporations don't need a tribunal to win. By simply threatening a lawsuit, corporations often get what they want because they can afford to wage long and expensive court battles-something most communities and governments are unable to afford or unwilling to do. Although pollution and resource conservation rules are most threatened, even the right of the people to shape the future of their own communities through municipal government has been thrown into court. Corporate rights cases challenging fracking bans and the rights of oil companies to drill offshore point to how regulations that mitigate climate change could be challenged under the TPP. TransCanada's use of a NAFTA challenge over President Obama's rejection of the Keystone pipeline is a glaring example of how trade rules undermine climate goals.

It drives fossil fuel exports and production.

It drives fossil fuel exports and production

The TPP mandates the automatic approval of Liquified Natural Gas (LNG) export permits to TPP countries, a policy that is likely to lead to an increase in fracking. Japan is already the world's largest importer of natural gas and anticipates importing much more if the TPP is approved. Fracking has not only been linked to air and water pollution; the process is a high emitter of greenhouse gases, and it further locks in a fossil-fuel based system of energy over renewable options.

The TTIP trade deal, which is still being negotiated, could also drive further fossil fuel production. For a number of reasons, the European Union wants access to the North American energy market. Oil companies and U.S. and Canadian trade representatives are determined use TTIP to weaken Europe's emissions standards. Europe is committed, by 2020, to lower greenhouse gas emissions by 20 percent of 1990 levels. Europe is also exploring policies to reduce the lifecycle of greenhouse gasses released by transportation fuels by six percent. These directives have been continuously lobbied against by oil companies and effectively scrapped by the EU when it was discovered that bitumen-based oil-the oil that comes from tar sands-emits 22 percent more greenhouse gas than the current European average. Trade agreements' compromising effect on environmental policy is yet another example of how corporate-led globalization dismantles sovereignty and jeopardizes the planet and its inhabitants.

It limits support for local, renewable energy systems

It limits support for local, renewable energy systems

The U.S. Trade Representative is the government agency that represents the United States in trade negotiations. One of its priorities in the TPP has been to eliminate what it calls "localization barriers to trade," which means striking down government programs that give preference to local or national businesses. But this is not just for other countries-the same rules would apply here in the United States, making many U.S. states vulnerable to trade challenges for renewable energy policies that support local businesses. A recent trade tribunal at the World Trade Organization gives an example of what this looks like in practice: the tribunal ruled against an Ontario policy designed to create local green jobs through locally sourced renewable energy.

It expands production of high GHG emitting factory farms for the global meat industry

It expands production of high GHG emitting factory farms for the global meat industry

Much of the recent expansion in Confined Animal Feeding Operations (CAFOs) in the U.S. is geared toward growing export markets. When combined with the voluminous feed demands for CAFOs (see recent record U.S. corn and soybean crops), more and more agricultural land is being used to feed industrialized meat production. This model of production, which includes the heavy use of synthetic fertilizers for feed production and open animal manure pits, is responsible for most agriculture-related greenhouse gas emissions in the U.S. The global meat industry is aggressively supporting the TPP, which seeks to lower tariffs on meat imports in countries like Japan and Vietnam. TPP will likely bring an expansion of this type of high GHG emitting agriculture, while undermining more agroecological approaches to raising animals that both emit less and can actually sequester carbon.

Enforcing patent protections for multinational seed companies, limiting climate adaptation

Enforcing patent protections for multinational seed companies, limiting climate adaptation

A close look at the Intellectual Property Rights (IPR) chapter in the TPP reveals a big win for the biotech seed industry. The IPR chapter requires TPP countries to provide patent protection for seed biotech companies like Monsanto and Syngenta. The IPR chapter requires all 12 TPP countries to join a number of global intellectual property treaties that emphasize the rights of seed companies over farmers' rights, according to an analysis by Public Citizen and Third World Network (TWN). Of the TPP countries, Brunei, Malaysia, Mexico and New Zealand are not yet members of these intellectual property treaties. Chile is also not yet a member, though it is already required to become a member under a previous Free Trade Agreement with the U.S. Under the TPP, these countries could face major changes to laws and rules that protect farmers' rights when it comes to plant breeding and seed saving. Aside from forcing these countries to change their laws, the agreement locks in existing plant patent protections preventing reforms that might be needed in the future.

Maintaining genetic diversity in crop and animal production is seen as a critical tool for adapting to climate change, according to a report published earlier this year by the FAO. The report concluded: "It is likely that climate change will necessitate more international exchanges of genetic resources as countries seek to obtain well-adapted crops, livestock, trees and aquatic organisms."

A new approach to trade needed

A new approach to trade needed

The TPP opens the door for an important debate about how trade agreements impact the climate. The deal reinforces and reflects an old economic system tied to fossil fuels and dominated by multinational corporations. That older model runs head-on into growing new economy initiatives and businesses building more localized systems for food, energy and other services that are better for the climate and grounded in racial and economic equity. Future trade agreements need to be supporting efforts to address climate change-not undermine them.

For further reading

Tar Sands: How Trade Rules Surrender Sovereignty and Extend Corporate Rights
by Patrick Tsai

Neoliberalism exacerbates climate change and codifies the subjugation of indigenous communities through trade agreement rules that allow corporations to control natural resources and challenge government regulations. Liberalized trade and economic regimes promote policies that incentivize unrestricted extraction and access to resources without adequate consideration for maintaining social and environmental integrity.

Oilsands, heavy crudes, and the EU fuel-quality directive
by The Pembina Institute

This briefing note shows that there is a very clear distinction between the GHG intensities of natural bitumen and conventional crudes in the vast majority of production. The life cycle GHG emissions intensity (emissions per unit energy from "well to wheel") of oilsands ranges from around 12 to 40 per cent higher than the average intensity of conventional fuels used by Europeans. Only a small volume of conventional crudes have emissions intensities within the range of oilsands; however, all conventional crudes have consistently lower emissions intensities than the average oilsands. Even when comparing the oilsands with a subset of the heaviest crudes entering Europe or sources with high levels of illegal or unregulated flaring, there is a clear difference between averages. Given this clear distinction, the treatment of 'natural bitumen' as a separate feedstock is well justified.

Beneath the surface: a review of key facts in the oilsands debate
by Jennifer Grant

Because of the pace, scale, and longevity of impacts associated with the decisions we make today, it is urgent to understand the full economic, social and environmental costs associated with oilsands development — and to do what is necessary to bring the forecast cumulative footprint within the limits of our air, land and water systems. The competitiveness and productivity of Canada's economy, and our ability to avoid dangerous climate change and to transition to a clean energy future, depend on it.

As Long as the Rivers Flow
by Craig Candler

The Lower Athabasca River system, which includes the Peace-Athabasca Delta, is absolutely critical for the ability of our members to practice their Treaty 8 rights, and to sustain their unique aboriginal livelihoods, cultures, and identities as Cree and Dene peoples. Our First Nations have depended upon the bountiful ecology of the Delta to sustain our families, cultures, and livelihood for generations. The Athabasca River itself is our main travel route into the heart of our Traditional Lands. Without adequate water quality or quantity in the river system, we cannot access our important cultural, spiritual, and subsistence areas and we cannot sustain the health and well-being of our families on the traditional foods that we have always obtained from it.

Canadian Oil Sands: Life-Cycle Assessments of Greenhouse Gas Emissions
by Richard K. Lattanzio

Recent congressional interest in U.S. energy policy has focused in part on ways through which the United States could secure more economical and reliable petroleum resources both domestically and internationally. Many forecasters identify petroleum products refined from Canadian oil sands as one possible solution. Increased production from Canadian oil sands, however, is not without controversy, as many have expressed concern over the potential environmental impacts. These impacts include emissions of greenhouse gases (GHG) during resource extraction and processing.

IATP Trade Secrets

Trade Secrets is a series on how the United States’ international agreements influence a wide range of policies, laws and corporate activities within our borders—and beyond. From food safety to climate change and from labor to consumer protection, trade has an enormous and often invisible pull on the actions governments take and the choices available to citizens. Trade laws often displace hard-won domestic policies.

This series is a collection of primers on trade agreements and how they shape our daily lives, our workplaces and our governments.

ARC 2020

Trade Secrets is a joint project between
ARC 2020 and
Institute for Agriculture and Trade Policy.

Institute for Agriculture and Trade Policy