Hal Ginsberg argues "Economic inequality and climate change are the defining challenges of 2015. The rapid rise of international trade over the past twenty years has significantly exacerbated both. It is almost certain that any multi-lateral trade agreement, no matter how well-crafted, would continue these damaging trends."
/By Hal Ginsberg/ Opponents of the Trans Pacific Partnership (TPP), a proposed free trade agreement among 12 Pacific rim nations, can be forgiven for having breathed a little easier over the past couple of months. For a while there, it looked like this bad deal for the American public might not come to fruition even after an alliance of progressive Democrats and hard-right Republicans failed to derail the President's request for Fast Track Authority (FTA) back in April.
Provisions extending drug manufacturers' exclusive right to new medications and strengthening drug patent enforcement mechanisms caused a significant backlash in New Zealand. There the conservative governing party was forced to admit that if it signed on to the TPP as written, the National Health Service's drug costs, and hence taxes, would rise. Responding in late July, a Labour leader said his party would not support passage of any agreement that would result in “the extension of [drug] patents.”
Long-time free trade critic Bernie Sanders welcomed the setback and on August 1 exhorted Americans “Let's Defeat TPP.” Since then, the TPP has largely been out of the news and hopes correspondingly rose among labor and environmental activists that negotiators might not be able to finalize the language until the end of the year. Such a delay might prevent Congressional action until after the Presidential election and possibly kill it since President Obama's successor might not be nearly as gung ho a supporter.
Republican front-runner Donald Trump and Bernie Sanders, as noted above, both oppose the deal and have vowed that they will not sign off on it. A strong proponent while Secretary of State, Hillary Clinton is now saying she's not sure whether she would issue final approval. [Editor’s Note: Secy. Clinton announced opposition to the trade pact not long before the first Democratic debate.]
Recently, though, the Washington Post reported the “Obama administration is aiming to wrap up talks this week on an expansive Asia-Pacific free-trade accord between the United States and 11 other nations, starting the clock toward a vote in Congress by early next year.” Writer David Nakamura acknowledged thorny issues remain but notes that “officials are cautiously optimistic that they can close the gaps by week's end.” Meanwhile, environmentalists and unions are mustering the opposition in hopes of derailing the deal for good.
In light of recent events, it seems to be a good time to revisit my report of a town hall meeting on the TPP in Bethesda back on April 24:
Two Maryland Democratic members of Congress - Donna Edwards and Chris Van Hollen - spoke against the treaty. Also participating were: AFL-CIO Metro Washington Council President Joslyn Williams; Stephen Shaff, President of the Chesapeake Sustainable Business Council; Ilana Solomon, Director of the Sierra Club's Responsible Trade Program; Jorge Aguilar of Food and Water Watch's Southern Region Director, and Lindolfo Carballo, Virginia State Director of We Are CASA. In a short video, former US Labor Secretary Robert Reich explained his strong opposition to the TPP.
At the town hall, Congresswoman Edwards spoke first and denounced the TPP in no uncertain terms. She stressed the difficulties that she and other Congress members have when trying to review the plain language of the proposed treaty. It’s 29 chapters long, and she was afforded
an opportunity to review only one chapter at a time so she could not compare possibly contradictory passages in different parts of the bill. Note-taking was not permitted.
Edwards commented that the provisions protecting intellectual property like drug and electronic patents are strong and that corporations can enforce them in binding arbitration via the Investor State Dispute System (ISDS) - a group of international lawyers and arbitrators who are untethered to any country. The ISDS also serves as the dispute resolution system when companies challenge state action that, they claim, negatively impacts on their ability to make profits. These provisions are problematic since they will likely lead to higher prices for drugs, computers, and software and more corporate-friendly adjudication of civil disputes.
After Donna Edwards spoke, labor leader Joslyn Williams decried the exodus of American jobs that trail in the wake of trade deals like NAFTA. In response to President Obama's claim that he has been a friend of working people, Williams awarded him an F grade for championing job-killing bi-lateral "free trade" agreements with Colombia in 2011 and Korea in 2012.
He noted union labor leaders remain under constant threat of violence in Colombia with unsolved murders continuing to scar the landscape. Yet the provisions of the pact remain in full effect. Likewise, the Korea deal has harmed American workers, and Williams pointed out that a net of 55,000 American jobs have been lost as a result.
Speaking as a representative of small businesses, Stephen Shaff argued that free trade agreements like the TPP, which Robert Reich has called NAFTA on steroids, have been destructive. For retailers, the significant drop in the number of well-paid American workers means fewer customers. For many American manufacturers, the penetration of cheap imported goods into domestic markets has been fatal.
The Sierra Club's Ilana Solomon criticized the weak environmental provisions in the TPP. Acknowledging that the drafters did demonstrate a nodding concern for issues like deforestation and trade in endangered species, Solomon contended that there did not appear to be any viable enforcement mechanism for environmentalists to enforce the scant protections in the bill.
She noted that there have been no suits brought against corporate polluters pursuant to recent free trade agreements but hundreds by corporations against governments trying to prevent or reduce ecological harm.
Solomon also reviled the TPP's reliance on the ISDS to settle disputes. She noted that pursuant to NAFTA and CAFTA [the Central American Free Trade Agreement] multi-national corporations are even now using the ISDS to bludgeon towns, counties, provinces, and countries to choose between allowing them to engage in harmful but highly profitable activities or risking the award of a king's ransom in claimed lost profits.
One particularly egregious example is a lawsuit brought against the province of Quebec for banning fracking due to environmental risks under the St. Lawrence Seaway. Lone Pines Resources, a company with plans to drill for oil and gas using the controversial technique, is now suing Quebec claiming $241 million under the ISDS.
Up next was Jorge Aguilar who focused on probable negative effects on our food and water. The TPP would bar laws requiring country of origin and GMO labels. The dangerous trend towards self-inspection by food plant operators would likely accelerate.
After Aguilar's presentation, El Salvador native Lindolfo Caballo spoke passionately about the devastation that his home country has suffered due to "free trade" with the United States. He described peasants forced out of farming due to the crash in prices caused by a flood of cheap American foodstuffs. He attributed the high crime rate and endemic poverty in San Salvador to the resulting surplus of workers and low wages.
Congressman Chris Van Hollen was the last speaker. He noted that he supports international trade but opposes the TPP in its current form due to its reliance on ISDS, the absence of provisions addressing currency manipulation, and insufficient protections for workers. One attendee challenged Van Hollen's support for more international trade in the abstract. She noted that transnational transport by trucks and transoceanic transport by diesel-burning container ships and jet planes is a significant factor in global warming.
President Barack Obama supports the TPP and both houses of Congress passed – with bipartisan support – fast-track authority to negotiate terms. As a result, Congress cannot amend the language of the final agreed-upon proposal but is limited to a strict up or down vote.
Responding to concerns raised by Reich, Senator Elizabeth Warren, and others, President Obama and current Secretary of Labor Thomas Perez have staunchly defended the deal. Obama lashed out at those, including Warren, calling the deal secret: “Every single one of the critics who I hear saying, ‘this is a secret deal,’ . . . can walk over today and read the text of the agreement. There’s nothing secret about it.” Obama did acknowledge that the TPP is incomplete.
In his Saturday April 25 Weekly Address, the President claimed that he supports the TPP because it is in the best interests of working families:
It’s the highest-standard trade agreement in history. It’s got strong provisions for workers and the environment – provisions that, unlike in past agreements, are actually enforceable. If you want in, you have to meet these standards. If you don’t, then you’re out. Once you’re a part of this partnership, if you violate your responsibilities, there are actually consequences. And because it would include Canada and Mexico, it fixes a lot of what was wrong with NAFTA [the North American Free Trade Agreement], too.
On April 20, Labor Secretary Perez acknowledged that previous large trade deals like NAFTA have not necessarily benefited the American people but, he said, the TPP cleans up some of the more problematic aspects of that venerable deal. Specifically, Perez claimed, signatories to the TPP must enact meaningful protections for workers and cannot hide behind tariffs and other gimmicks that keep American imports out.
Both Obama and Perez have argued that the absence of penalties for currency manipulation shouldn't kill the bill since they are working on the issue in parallel discussions with the same countries. Currency manipulation occurs when countries keep the value of their currency artificially low. It makes American-made goods relatively more expensive and therefore uncompetitive versus similar goods manufactured in the manipulating nation. At least one study estimates that America has nearly one million fewer auto-manufacturing jobs due to Japanese currency manipulation.
So who's right? The President and other TPP supporters, including large corporations, their lobbyists, and politicians friendly to multi-nationals or labor and environmental leaders and more liberal politicos.
The President and Secretary of Labor Perez make some legitimate points. They claim that Vietnam, one of the worst countries when it comes to protecting workers and labor organizers, will have to enact pro-worker legislation if it wishes to enjoy the benefits of the TPP. It is true that penalties for currency manipulation can be agreed upon outside the TPP negotiations. Likewise, members of Congress have been afforded a chance to review the treaty's language.
Nevertheless, obvious flaws in the TPP render it untenable. The ISDS empowers foreign arbitrators to bankrupt American jurisdictions if they reject corporate demands. Given the centrality of currency manipulation to American job loss to countries like Japan, addressing the problem within the text of the TPP should be a prerequisite to approval.
Moreover, the President's heated reaction to those calling the deal secret smacks of disingenuousness. Yes, Senators and representatives can look at the text of the TPP. But severe restrictions on access and the fact that some aspects have not been committed to paper devalue that access. Although negotiations have been ongoing for over three years, much remains unknown to the public because a shroud of secrecy has enveloped the talks. What we do know strongly suggests that corporate interests have been paramount.
Ultimately, the concerns of labor and environmentalists cannot be dismissed. Economic inequality and climate change are the defining challenges of 2015. The rapid rise of international trade over the past twenty years has significantly exacerbated both. It is almost certain that any multi-lateral trade agreement, no matter how well-crafted, would continue these damaging trends.
Large integrated corporations are best-equipped to exploit the geographic and demographic advantages (including low wages and weak environmental protections) of manufacturing in one nation and selling in another. More goods being shipped means more diesel-powered trucks, trains, and container ships churning up sea waters and emitting CO2-dense smoke plumes. Simply put, more international trade means aggravating the environmental crisis and greater economic control by global elites. The TPP is a bad deal for Americans and for the world at large.