What Does the Trans-Pacific Partnership Mean for Lawyers?
“The biggest phase [where lawyers will get work] is after the agreement goes into effect,” says Steptoe’s Emerson. “Once it’s gone through ratification, you’ll find there are a couple areas where law firms can be involved, particularly in compliance.”
According to Emerson, that’s when lawyers will walk companies through the implementation of the agreement, further advising them on how the different rules affect their businesses and how to make sure their operations stay within the framework of the agreement. That latter piece will be ongoing, he notes, as long as the TPP is in force.
Herbert Smith Freehills Asia corporate head Austin Sweeney thinks it’s less certain that expanded trade will bring benefits to firms.
“The liberalization of trade and the increased levels [of commercial activity] that flow from that don’t always flow through to an awful lot of more work for lawyers,” he says. Sweeney makes one exception though: disputes.
Akira Kawamura, the former chairman of Tokyo’s Anderson Mori & Tomotsune, thinks most companies investing within the TPP will want to avoid getting bogged down in member nations’ national courts and will increasingly turn to alternatives.
“Then international commercial arbitration will be much more important than before,” he says.
Specifically, Kawamura and other lawyers expect a so-called Investor State Dispute Settlement clause to be a part of the TPP. The clause, which is a part of most of the United States’ free trade agreements, allows corporations to seek arbitration of claims against sovereigns they say are violating provisions of an FTA.
ISDS clauses have been controversial, though, as many see them as a way for multinational corporations to bypass individual country’s laws, especially with the regard to labor or the environment. Australia refused to include an ISDS clause in its FTA with the United States in 2004, and the Labor Party government that was in power when TPP negotiations began had said it would not sign on if it meant accepting ISDS. The government of Liberal Party Prime Minister Tony Abbott, which took power last month, has so far maintained that position with regard to the TPP, though it has said it may take a softer line on ISDS clauses in the context of bilateral free trade deals with China, Japan and Korea.
Laroski says countries are generally willing to accept provisions such as ISDS because they believe they will bring increased market access for their companies and their exports.
“In my view, this isn't a loss of sovereignty,” he says. “They've made a decision and are willing to submit to arbitration in the event that they breach their obligations.”