Nation of change 140315
The TPP won't expand U.S. exports, thus creating jobs and opportunities for small businesses—it will instead strengthen corporate rule. The international agreement undermines democracy, economic justice, the environment, human health and small business.
Published: March 14, 2015 | Authors: David Korten | YES! Magazine | Op-Ed
President Obama is currently pressing members of Congress to pass Fast-Track authority for a trade and investment agreement called the Trans-Pacific Partnership (TPP). If Fast Track passes, it means that Congress must approve or deny the TPP with minimal debate and no amendments. Astonishingly, our lawmakers have not seen the agreement they are being asked to expedite.
The rulings of these tribunals pre-empt national laws and the decisions of national courts.
The TPP is presented as an agreement to increase U.S. exports and jobs. But what is really at stake is democracy—in the United States as well as in the 11 other Pacific Rim countries that are parties to the TPP.
Given past agreements on which the TPP is modeled, including the North American Trade Agreement (NAFTA), TPP provisions will likely have significant implications for nearly every aspect of American life—including intellectual property rights, labor and environmental protections, consumer safety and product labeling, government procurement, and national resource management. Given the way these agreements are crafted, we can be quite certain that the implications will favor corporate profits over human well-being. And once the agreement is approved, its provisions will trump national and local laws, including the U.S. Constitution, and will not be subject to review or revision by any national legislative or judicial body—including the U.S. Supreme Court.
It is expected that the TPP will include an Investor State Dispute Settlement provision that gives foreign corporations the right to sue governments for lost profits due to laws—such as environmental standards and safeguards for workers—they claim deprive them of revenue they might otherwise have received. Such claims are settled in tribunals comprised of trade lawyers whose identities are secret. The rulings of these tribunals pre-empt national laws and the decisions of national courts and are not subject to review by any national judicial or legislative body.
Also in the mold of NAFTA and similar previous pacts, the TPP is being drafted in secret. The main players at the negotiating table are trade officials from the party countries and representatives from the world’s largest global corporations.
Since negotiations began in 2005, the public, press, and members of Congress and their staff have been denied access to the TPP meetings and to drafts of the agreement. In stark contrast, according to a 2014 report by The Washington Post, 566 advisory group members can view and comment on proposals. Of these members, 480 represent industry groups or trade associations and dominate the most important committees.
The secret gatherings of unelected government officials and corporate representatives in which agreements like the TPP are negotiated have become de facto transnational legislative bodies, drafting international laws the democratically elected legislative bodies of signatory countries then rubber stamp.
President Obama’s assurance that this time will be different carries little credibility.
Because such sweeping provisions supersede the U.S. Constitution, one might expect that their approval by the U.S. Congress would require the same high bar as a constitutional amendment. At a bare minimum, approval should be subject to the same review, debate, and approval process considered essential for any normal piece of legislation. Yet our elected representatives have time after time voted to approve such agreements under expedited rules that trade away the rights of people in favor of the rights of global corporations.
President Obama recently appeared on Seattle’s KOMO TV news making the claim that the TPP will expand U.S. exports, thus creating jobs and opportunities for small businesses. President Bill Clinton, Vice President Al Gore, and President George W. Bush all made the same promises on similar previous agreements.
But expanded trade not only means more exports; it also means more imports. Previous similar agreements have produced greater growth in U.S. imports than growth in U.S. exports. The result is a net loss of jobs, especially industrial jobs with good pay and benefits, and the closure of many small businesses. President Obama’s assurance that this time will be different carries little credibility, based on this historical experience.
These agreements are written by global corporations such as Wal-Mart, Monsanto, Goldman Sachs, Citibank, ExxonMobil, British Petroleum, HSBC, and JPMorgan. These companies are not in the business of creating jobs and benefiting small businesses. They are in the business of maximizing their own profits. In regard to small businesses, the agenda is to capture their markets, buy them out, or squeeze them to the bone as captive suppliers and contractors.
Because these trade and investment agreements are not in the public interest, their corporate and governmental sponsors go to great lengths to keep the negotiations secret. If the TPP provisions were truly beneficial, there presumably would be no need to press the members of Congress to expedite approval under Fast Track rules before the public and members of Congress have seen the text.
Members of Congress will surely receive copies of the TPP documents before their final vote on the actual agreement. But these agreements are typically more than a thousand pages of detailed legalese meaningful only to experienced trade lawyers. If past experience is any guide, our lawmakers will have little time to read the agreement, let alone do a meaningful assessment of its implications or discuss it with constituents before it is called to a vote.
The time has come to end the use of international agreements to strengthen corporate rule. In the case of the TPP, passing no agreement is better than passing one that undermines democracy, economic justice, the environment, human health, and small business. We have no need of stronger protections for corporate rights. Rejecting Fast Track will create the opportunity for a long-overdue public conversation on a new framework for international trade and investment agreements that strengthen democracy, hold global corporations accountable to the public interest, secure worker rights, raise working conditions, and strengthen environmental protections in every signatory country.
The Congressional Progressive Caucus has just released a report called “Principles for Trade: A Model for Global Progress.” The principles it outlines provide an excellent starting point for such a conversation:
• Protect the authority of national legislative bodies to set trade policy
• Restore balanced trade
• Put workers first
• Stop currency manipulation
• Secure each nation’s right to give preference to national procurement
• Protect the environment for future generations
• Prioritize consumers above profits
• Assure the right of national judicial systems to settle legal disputes with investors.
• Secure affordable access to essential medicines and services
• Respect human rights
• Provide a safety net for vulnerable workers
As the vote on Fast Track approaches, this is a good time for citizens to call for a national and global public conversation about economic policies that put the interests of living people, living communities, and living Earth ahead of corporate profits.
It is also the right time for each of us to let our members of Congress know where we stand on Fast Track and the TPP and that we are paying close attention to how they vote.
We can have democracy and a prosperous, just, and sustainable human future. Or we can have corporate rule. We cannot have both.
David Korten is co-founder and board chair of YES! Magazine, co-chair of the New Economy Working Group, president of theLiving Economies Forum, an associate fellow of the Institute for Policy Studies, and a member of the Club of Rome. His books include the international best-seller When Corporations Rule the World, which will be released in an updated 20th anniversary edition in June 2015.
David Korten
Bio: David Korten is co-founder and board chair of YES! Magazine, co-chair of the New Economy Working Group, president of the Living Economies Forum, an associate fellow of the Institute for Policy Studies, and a member of the Club of Rome. His books include the international best-seller When Corporations Rule the World, which will be released in an updated 20th anniversary edition in June 2015.
Tags Fast Track, global economy, politics, TPP, trade deal, U.S. Economy
Flush the TPP nationofchange 210315
President Barack Obama and the Republicans are united when it comes to so-called free-trade agreements. While Obama has been negotiating the agreements, which increase corporate power, grass-roots activists are organizing against the TPP.
Published: March 21, 2015 | Authors: Amy Goodman | NationofChange | Op-Ed
President Barack Obama and the Republicans in Congress are united. Yes, that’s right. No, not on Obamacare, or on the budget, or on negotiations with Iran, or on equal pay for women. But on so-called free-trade agreements, which increase corporate power and reduce the power of people to govern themselves democratically, Obama and the Republicans stand shoulder to shoulder. This has put the president at loggerheads with his strongest congressional allies, the progressive Democrats, who oppose the TPP, or the Trans-Pacific Partnership, one of the most far-reaching trade agreements in history. TPP will set rules governing more than 40 percent of the world’s economy. Obama has been negotiating in secret, and the Democrats are not happy.
The battle lines are being drawn over the TPP and TPA. If you are confused, well, that is exactly what many of the most powerful corporations in the U.S., and around the world, are counting on. Trade policy is arcane, complex and long the domain of economists and technocrats. But the real-world implications of these dry texts are profound. President Obama wants to pass the TPP, which is a broad trade agreement between the U.S. and 11 other countries in the Pacific Rim: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. In order to expedite the process, President Obama is seeking the second acronym, TPA, or Trade Promotion Authority, also called “fast-track.” Fast-track gives the president authority to negotiate a trade deal, and to then present it to Congress for a yes-or-no vote, with no amendments allowed. A growing coalition is organizing to oppose TPP and the president’s request for fast-track. The outcome of this conflict will reverberate globally for generations to come.
The TPP negotiations have been held in secret. Most people know what little they do because WikiLeaks, the document disclosure and whistle-blower website, released several chapters more than a year ago. Members of Congress also have been given limited access to briefings on the negotiations, but under strict secrecy rules that, in at least one instance recently, include the threat of imprisonment if details leak.
The TPP would be an expanded version of earlier trade agreements, like NAFTA, the North American Free Trade Agreement, involving the U.S., Canada and Mexico. NAFTA went into effect on Jan. 1, 1994, and was so harmful to the culture and economy of the indigenous people of Chiapas, Mexico, that they rebelled on that very day, in what is known as the Zapatista Uprising. Attempts to create a global trade deal, under the auspices of the World Trade Organization, provoked one of the largest protests against corporate power in history, in Seattle in late 1999. Thousands of protesters locked arms and literally blocked delegates from getting to the ministerial meeting. As unexpected solidarity between union members and environmentalists flourished in the streets, despite widespread police violence, the WTO talks collapsed in total failure.
The TPP, if passed, would implement trade rules that make it illegal for governments to create and enforce regulations on everything from environmental standards, to wage and labor laws, to the duration of copyrights. A law prohibiting the sale of goods made in sweatshops in Vietnam could be ruled illegal, for example, as a barrier to trade. Or certification requirements that lumber not be harvested from old-growth forests in Malaysia could be overturned.
Lori Wallach of Public Citizen’s Global Trade Watch program is one of the leading critics of TPP:
“It’s a delivery mechanism for a lot of the things [Senate Majority Leader Mitch] McConnell and the Republicans like. So, for instance, it would increase the duration of patents for Big Pharma and, as a result, give them windfall profits but increase our medicine prices. It could roll back financial regulation on big banks. It could limit Internet freedom, sort of sneak through the back door the Stop Online Piracy Act, SOPA,” Wallach explained. “It would give special privileges and rights for foreign corporations to skirt around our courts and sue the U.S. government to raid our treasury over any environmental, consumer health law that they think undermine their expected future profits, the so-called ‘investor-state’ enforcement system. Plus, it would have the NAFTA-style rules that make it easier to offshore jobs, making it easier to relocate to low-wage countries.”
The TPP, she went on, “was negotiated with the assistance of 600 corporate advisers, official corporate trade advisers in the U.S. The agreement has been the initiative of the Obama administration. It was started by [President George W.] Bush, but instead of turning it around and making it something different, the Obama folks picked it up and, frankly, have made it even more extreme.”
Grass-roots activists are organizing against the TPP and fast-track. They work on diverse issues ranging from human rights and Internet freedom to fair trade, labor rights and the environment. The moneyed interests in Washington have the ear of the president, so they need only whisper. Now people must raise their voices, in unison, and demand to be heard.
Denis Moynihan contributed research to this column.
(c) 2015 Amy Goodman
Distributed by King Features Syndicate
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Amy Goodman
Bio: Amy Goodman is the host of "Democracy Now!," a daily international TV/radio news hour airing on more than 900 stations in North America. She is the author of "Breaking the Sound Barrier," recently released in paperback and now a New York Times best-seller.
Tags activists, Free Trade Agreements, grassroots movement, politics, President Obama, republicans, TPP
Don’t Keep the Trans-Pacific Partnership Talks Secret
By MARGOT E. KAMINSKIAPRIL 14, 2015 NEW YORK TIMES
COLUMBUS, Ohio — WHEN WikiLeaks recently released a chapter of the Trans-Pacific Partnership Agreement, critics and proponents of the deal resumed wrestling over its complicated contents. But a cover page of the leaked document points to a different problem: It announces that the draft text is classified by the United States government. Even if current negotiations over the trade agreement end with no deal, the draft chapter will still remain classified for four years as national security information. The initial version of an agreement projected by the government to affect millions of Americans will remain a secret until long after meaningful public debate is possible.
National security secrecy may be appropriate to protect us from our enemies; it should not be used to protect our politicians from us. For an administration that paints itself as dedicated to transparency and public input, the insistence on extensive secrecy in trade is disappointing and disingenuous. And the secrecy of trade negotiations does not just hide information from the public. It creates a funnel where powerful interests congregate, absent the checks, balances and necessary hurdles of the democratic process.
Free-trade agreements are not just about imports, tariffs or overseas jobs. Agreements bring complex national regulatory systems together, such as intellectual property law, with implications for free speech, privacy and public health.
The level of secrecy employed by the Office of the United States Trade Representative is not typical of how most international agreements are negotiated. It’s not even how our negotiating partners say they want to operate. Yet it is the way that the Obama administration handles trade deals, from a failed anti-counterfeiting agreement more than two years ago to the TPP today. The trade representative’s office keeps trade documents secret as national security information, claiming that negotiating documents — including work produced by United States officials — are “foreign government information.”
The justification for secrecy in trade is that negotiations are like a poker game: Negotiators don’t want to reveal their hand too soon, or get pressured by concerned domestic constituencies. But the trade representative’s office takes this logic too far. After being forced to turn over documents in a 2002 lawsuit, it began regularly classifying trade documents. Now the office uses classification to invoke the national security exemption to open government law. Yale Law School’s Media Freedom and Information Access Clinic is challenging this behavior in a lawsuit. (I submitted testimony in the case.)
The peculiarity of this secretive approach is becoming more apparent as our foreign negotiating partners push toward transparency in trade. The European Union now voluntarily releases its side of trade negotiations in an effort to be as transparent as possible; New Zealand officials pressed for greater transparency in previous trade negotiations with the United States.
Secrecy has real costs. Because the negotiating process combines a general shield from the public with privileged access for industry advisers, the substance of American free trade agreements does not represent truly national interests. It represents the interests of those members of industry who sit on the office’s Industry Trade Advisory Committees, which have regular access to negotiating information.
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Free foreign trade benefits are articles of faith, with theoretical economists.No denying free trade hugely benefits less developed nations....
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The Republicans are trying to do and end-run around our democracy to obtain favorable terms for their wealthy donors. A few rich...
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Sir Humphrey Appleby noted that the purpose of the Official Secrets Act was not to protect secrets, but to protect officials. The real...
One justification for keeping trade negotiations in the executive branch is that it can keep lobbyists at bay. But the current system brings those entities inside, using classification to keep out citizens and competitors. Perhaps in response to these sorts of criticisms in 2014, the Obama administration announced the creation of a new public interest advisory committee. But that committee would be given less direct access than industry groups, and couldn’t discuss some issues with the public.
Secrecy also delegitimizes trade agreements: The process has been internationally criticized as undemocratic. The European Parliament, for example, rejected the Anti-Counterfeiting Trade Agreement in large part over legitimacy concerns. In some of our trading partner countries, citizens have objected to trade agreements by calling them undemocratic. And they rightly fear that the American commitment to these agreements is weak because the United States public might rebel once the texts are released.
Congress is soon likely to consider whether to authorize an up-or-down vote on a trade deal, with what’s known as “fast track” legislation. Free trade now involves dozens of areas with complex subject matter, and the agency responsible for negotiating it often fails to tap key expertise. The discussion over the trade negotiating authority is not a question of which is better: the executive branch or the legislative branch. It’s a question of whose input we’re getting on decisions that reach far beyond trade — into questions on the price of generic drugs or whether websites will have to monitor users online.
As it considers fast track here, Congress must address the secrecy, and the views of the privileged advisers, that shaped the agreement. Otherwise, “fast” will be little more than a euphemism for “avoid the public, and benefit the fortunate few.”
Margot E. Kaminski is an assistant professor of law at Ohio State University and a fellow of the Information Society Project at Yale Law School.
Gold standard trade deal is littered with pitfalls
Date
April 15, 2015 - 12:45AM the age
Leon Berkelmans
Trade deals were once about securing global trade. So, a shift towards negotiating issues other than trade is troubling.
Australian Prime Minister Tony Abbott meets with leaders of Trans-Pacific Partnership Agreement at the US Embassy in Beijing.
In 1983, Australia and New Zealand signed a trade agreement. The Australia-New Zealand Closer Economic Relations Trade Agreement ran to 24 pages. Additional annexes came in at 47 pages. Fast forward to 2004, and Australia signed a trade agreement with the United States that came in at 271 pages. I'll leave it to the interested reader to count the annexes, but Annex 2-B, for the US only, comes in at 560 pages. You get the idea.
Right now negotiators are sweating over another tome: the Trans Pacific Partnership. This is an agreement that covers 12 countries, $28 trillion in gross domestic product, and 800 million people (notably absent from the agreement is China). It appears to be continuing the trend towards complexity. The US takes 80 specialists to each negotiation, Japan 120, and Australia 22.
It is difficult to see documents with 500-page annexes leading to a simple, open system of world trade.
Clearly, somewhere along the way, we decided that bigger is better. The Trans Pacific Partnership has been touted as a "gold-standard" trade agreement. It is apparently going to include provisions on intellectual property, investor protection, along with ... well, many things, I guess. Nothing has been made public yet. Nothing will be until it is signed. We won't know, for example, if there will be provisions on currency manipulation.
This all represents quite a change for Australian trade policy. Once upon a time, it was all about trade. Negotiating on intellectual property and other mutations wasn't even contemplated. And when negotiating, it was all about getting a global deal done. It's time to return to those roots.
Let's start with the shift to bilateralism and regionalism. During the heady days of the 1980s, we were told that tariffs were generally bad, and free trade good. It would seem, then, that any agreement that brought tariffs down, whether it be multilateral or not, would be progress. That's not quite right.
Suppose that we import cars from the US and China and each face a tariff of 50 per cent. Now suppose we reduce the tariff on cars from China. There is a chance Chinese cars will crowd out US cars, but not actually lead to a substantial decline in price. If that happens, cars in Australia do not become much cheaper to buy, and the government misses out on tariff revenue. This is a well-known problem of trade liberalisation that is not multilateral. Economists call it trade diversion.
Trade diversion might, in part, be why we do not seem to have experienced large gains from the trade agreements already negotiated. In fact, the political process may tilt the field towards trade-diverting agreements. That was the conclusion of Elhanan Helpman, of Harvard University, and Gene Grossman, of Princeton University, in a paper they published in the world's top economics journal, the American Economic Review. They concluded "trade diversion [of an agreement] will enhance [its] political viability while contributing to an inefficient allocation of resources in the two partner countries".
The shift towards issues outside of trade is even more troubling. The benefits of free trade of goods and services have firm theoretical foundations. There's a theorem, called the "first fundamental theorem of welfare economics", that lays out general conditions under which free trade is efficient. Sounds important, doesn't it? It is.
Unfortunately for the proponents of expanding the scope of trade agreements, there is no similarly theoretically robust reason why, for example, intellectual property rules need to be harmonised. In fact, it's the opposite. In a paper written nearly 10 years ago, once again in the American Economic Review, Grossman and Edwin Lai, of the Hong Kong University of Science and Technology, concluded "harmonisation of patent policies is neither necessary nor sufficient for global efficiency". All harmonisation does is shift gains from the users of intellectual property to the producers.
Similar concerns pervade the other non-trade aspects of the Trans Pacific Partnership. Investor-state dispute settlement provisions would allow foreign investors to sue the Australia government, even though Australia's legal system and protections are already strong. This is not the kind of thing one finds in an economics textbook on market efficiency.
The desire to pursue trade agreements is understandable, given the problems the World Trade Organisation is having. There are hopes that trade agreements are a stepping stone to global free trade. It is possible, but difficult to sustain when looking at the complexity of these agreements. It is difficult to see documents with 500-page annexes leading to a simple open system of world trade.
As much as it might be hard to accept, the best course of action might be just to go back to the World Trade Organisation and focus on trade and our multilateral tradition. Progress might be slow, but at least when change is made, it is likely to be beneficial.
Dr Leon Berkelmans is director, international economy at the Lowy Institute for international policy.
`A Trade Rule that Makes It Illegal to Favor Local Business? Newest Leak Shows TPP Would Do That And More
The newest leaked text is full of dense legal jargon. But a close reading makes its corporate agenda crystal clear.
Published: April 17, 2015 | Authors: David Korten | Yes! Magazine | News Report
Secret negotiations on the Trans-Pacific Partnership (TPP), a trade and investment agreement involving 12 nations of the Pacific Rim, are coming to a close, and President Barack Obama will soon submit the final agreement to the U.S. Congress for approval.
Here are the Cliffs Notes in simple English.
Presumably, he will urge the deal’s passage with the same unsubstantiated and misleading claims his administration has offered all along: that the TPP will support Made-in-America exports, enforce fundamental labor rights, promote strong environmental protection, and help small business.
But a newly leaked document belies those claims. The Trans-Pacific Partnership’s text consists of a number of chapters, among the most important of which is the one on investments. On March 25, WikiLeaks released a confidential draft of that chapter dated January 20. The draft contains instructions indicating that it will be declassified only “Four years from entry into force … or, if no agreement enters into force, four years from the close of the negotiations.”
A quick reading of the leaked chapter makes it clear why TPP sponsors have gone to great lengths to keep their negotiations secret. The document substantiates claims by opponents that the TPP is a corporate-rights agreement designed to facilitate the export of U.S. jobs, allow corporations to sue governments for enacting labor and environmental protections, make it illegal for governments to favor local businesses, and advance the colonization of national economies by global corporations and financiers.
As problematic as this chapter is, we can be thankful that it is out in the open. Now the need is to understand what all the legalese means.
The leaked document includes many technical details decipherable only by trade lawyers. Here are the Cliffs Notes in simple English.
1. Favoring local ownership is prohibited
Let’s start with the Investment Chapter’s section on how the TPP’s member countries should treat foreign investors:
Each Party [country] shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
Put in plain English, the above paragraph means that signatory countries renounce their right to favor the domestic ownership and control of the lands, waters, and other productive assets and services essential to the lives and well-being of their people.
The 12 countries further renounce their right to favor locally owned businesses, corporations, cooperatives, or public enterprises devoted to serving their people with good local jobs, products, and services. They must instead give equal or better treatment to global corporations that come only to extract profits.
2. Corporations must be paid to stop polluting
Another provision limits what member countries can do in regard to corporate investments:
No Party may expropriate or nationalize a covered investment either directly or indirectly through measures equivalent to expropriation or nationalization (“expropriation”), except: (a) for a public purpose; (b) in a nondiscriminatory manner; (c) on payment of prompt, adequate, and effective compensation [emphasis added] … ; and (d) in accordance with due process of law.
This provision may sound reasonable, until you look at the chapter’s definition of “investment,” which includes “the expectation of gain or profit.” This odd definition means that a corporation can sue a signatory nation if the country deprives the corporation of expected profits by enacting laws that prohibit the company from selling harmful products, damaging the environment, or exploiting workers. Other language in the chapter makes it clear that this applies to actions at all levels of government.
In other words, a country in the TPP has every right to stop a foreign corporation from harming its people and the environment—but only if the country compensates the corporation for the expense of not harming them.
Similar provisions are already on the books in the North American Free Trade Agreement (NAFTA). According to Public Citizen’s Trade Watch.
Foreign firms have won more than $360 million in taxpayer dollars thus far in investor-state cases brought under NAFTA. Of the 11 claims currently pending under NAFTA, demanding a total of more than $12.4 billion, all relate to environmental, energy, land use, financial, public health and transportation policies—not traditional trade issues.
3. Three lawyers will decide who’s right in secret tribunals
The leaked chapter also describes how disagreements will be settled:
Unless the disputing parties otherwise agree, the tribunal shall comprise three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties.
The arbitrators are private lawyers who are not accountable to any electorate. They are empowered by the TPP to order unlimited public compensation to aggrieved investors. The proceedings and the identities of the tribunal members are secret, and the resulting decisions are not subject to review by any national judicial system.
According to The New York Times, NAFTA tribunals, on which the ones in the TPP are modeled, even have the power to overturn judgments of national courts—including the U.S. Supreme Court. John D. Echeverria, a law professor at Georgetown University, has called this method of dispute settlement “the biggest threat to United States judicial independence that no one has heard of and even fewer people understand.”
4. Speculative money must remain free
Yet another provision prohibits restrictions on movement of money from one country to another:
Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. …
Forms an investment may take include: (a) an enterprise; (b) shares, stock, and other forms of equity participation in an enterprise; (c) bonds, debentures, other debt instruments, and loans; (d) futures, options, and other derivatives.
Thus, the TPP guarantees the right of speculators to destabilize national economies through the manipulation of exchange rates and financial markets, without interference from national governments.
In so doing, the TPP strips national governments of the right to limit speculation in favor of investment in strong, stable, and productive national economies.
5. Corporate interests come before national ones
Another passage assures that corporations need bear no obligation to serve the interest of the people who live in the countries where they do business:
No Party may … impose or enforce any requirement or enforce any commitment or undertaking: (a) to export a given level or percentage of goods or services; (b) to achieve a given level or percentage of domestic content; (c) to purchase, use or accord a preference to goods produced in its territory, or to purchase goods from persons in its territory.
The article continues on with six additional provisions, which together prohibit governments from requiring that a foreign investor be under any obligation to serve the host country’s people or national interest.
The 12 countries would renounce their right to favor locally owned businesses
Obama administration officials say these provisions are needed to level the playing field for American companies doing business abroad. This raises an important question: What is an American company?
The Institute for Policy Studies reports that U.S. corporations and their subsidiaries currently hold $2.1 trillion in profits offshore to avoid paying taxes to the government of the United States. These include highly profitable companies like Microsoft, Google, Apple, General Electric, Exxon Mobil, and Chevron. One wonders on what basis we should consider these globe-spanning, tax-dodging, job-exporting corporations to be American.
Approval of the TPP means sacrificing our democracy and our right to manage our markets and resources for the public good. And for what gain? To secure rights for corporations—which claim an American identity only when convenient—to exploit the peoples and resources of other countries that have signed the same nefarious agreement.
David Korten
Bio: David Korten is co-founder and board chair of YES! Magazine, co-chair of the New Economy Working Group, president of the Living Economies Forum, an associate fellow of the Institute for Policy Studies, and a member of the Club of Rome. His books include the international best-seller When Corporations Rule the World, which will be released in an updated 20th anniversary edition in June 2015.
Tags TPP
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APRIL 22, 2015 New York Times
Mark Bittman
There’s an important issue out there you may never have heard of, which is just what its proponents would like. That’s the Trans-Pacific Partnership (TPP), currently being pushed by the Obama administration and its corporate (and mostly Republican!) allies. It’s a blatant attack on labor, farmers, food safety, public health and even national sovereignty.
And the details of the deal are largely secret. Other than what’s been leaked, the public has no access to its contents, and even members of Congress don’t know much. (On the other hand, “cleared advisers,” mostly corporate lawyers, have full access.) That’s because the TPP is way too important to its sponsors to allow little details like congressional or public input to get in its way, even though constitutional authority over trade is granted to the legislative, not the executive, branch.
Mark Bittman
Nutrition, agriculture and health policy.
This is a bipartisan effort if ever there was one; George Will has called the TPP “Obama’s best idea.” Thus we see the administration, along with pro-business Democrats and Republicans, trying to bulletproof the deal. Last week, a bill was introduced that would give the president “fast-track authority” on the TPP. If that passes, Congress could vote only up or down on the deal, not amend it. That’s quite a bit of presidential power for a scheme that would have a striking impact on the global economy — and the food on our table.
The TPP is little more than enhanced corporation power branded as free trade. It gives corporations the right to challenge government regulations and seek compensation if they think they’ve been treated unfairly by any of the 12 Pacific Rim nations in the deal. (China is currently, but not necessarily permanently, excluded; part of the thinking behind the TPP is to lock up an agreement with these partners before China does.)
Even if you look “only” at food and the environment, the TPP should be ripped apart and put back together with public and congressional input. The pact would threaten local food, diminish labeling laws, likely keep environmentally destructive industrial meat production high (despite the fact that as a nation we’re eating less meat) and probably maintain high yields of commodity crops while causing price cuts.
It would certainly weaken food safety. For example, more than 90 percent of our seafood is imported, a figure that includes fish that were caught domestically and sent overseas for processing before coming back in, which makes the inspection process even more complicated. All told, that’s more than five billion pounds of imports annually, and according to the Center for Food Safety, just 90 federal inspectors guarantee its safety. (The Food and Drug Administration inspects less than 2 percent of imported seafood.) By reducing restrictions on Southeast Asian imports, the TPP would allow more fish containing chemicals that are illegal in domestic aquaculture to reach our shores; by making inspections less effective, it would virtually guarantee that those chemicals make it to our tables.
The agreement would even allow countries to challenge one another’s laws, so that “equivalency” may simply mean that the least powerful regulations become the norm. The United States would have no special standing: If our laws are seen as restraining trade or limiting profits, they could be challenged in special courts, per the TPP’s “investor state” clause. Philip Morris is suing Uruguay over that country’s antismoking laws under just such circumstances; there are several examples of American companies’ flouting local laws and citing trade agreements as an excuse; and Mexico has been sued repeatedly for theoretically diminishing investor profits.
When individual governments have little say, corporate “efficiency” amounts to the global economy’s being run as an ill-regulated business model (an equally egregious trans-Atlantic agreement is currently being negotiated). The projected benefits to the public – as usual, “job creation” leads the list — are mythical, and you don’t have to take my word for it.
Historically, trade laws were geared to enrich the “mother” country — look at the 19th-century Opium Wars in China, which forced open illegal markets so Britain and its allies could benefit. Between World War II and the 1990s, free trade arguably benefited the economies of the countries involved. But the new laws, starting with 1994’s North American Free Trade Agreement (Nafta), recognized that capital is now mobile — it doesn’t “live” anywhere — and owes no allegiance to any flag; only shareholders matter.
Nafta is the paradigm of what are most accurately called deregulation deals. It promised better jobs in both the United States and Mexico. Instead, as well-paid workers in the United States were losing jobs to worse-paid workers in Mexico, badly paid Mexican workers were losing jobs to worse-paid workers in China, which in turn put more pressure on workers in the United States.
In fact, if you wanted to single out a culprit for income stagnation and the decline of the power of labor in the United States, Nafta would be a good candidate. It allowed large corporations to move where tax breaks were best and environmental regulations weakest, while forcing labor to compete against lower global wages. While likely not the only cause, since its passage collective and individual gains have been nearly frozen in Mexico; in the United States, the story is much the same.
The situation may be most dire for Mexican farmers. Millions have been displaced, many emigrating north for menial jobs. Meanwhile, imports of American corn (a basic staple in the form of tortillas for 5,000 years), increased fourfold. Imports of wheat, rice, cotton and soybeans have increased similarly. In brief, Mexican farmers have gone to work for transnational companies, whether in Mexico, the United States or elsewhere. Nor did this do much good for farmers to the north, who have seen corn prices fluctuate wildly, leaving them to scramble to maximize yields, which in turn causes environmental damage.
Former Labor Secretary Robert Reich called the TPP “Nafta on steroids” (“corporate coup d’état” is also good). As the economist Dean Baker said to Bill Moyers, “This really is a deal that’s being negotiated by corporations for corporations, and any benefit it provides to the bulk of the population of this country will be purely incidental.” At this point, nothing about Obama should surprise us, but it’s worth noting that in 2008, as a presidential candidate, he said, “I voted against Cafta, never supported Nafta, and will not support Nafta-style trade agreements in the future.”
Recent Comments
JoMo
28 minutes ago
Once again, the REAL issue facing all of us is sitting, sadly, quietly and behind the curtain of our denial; climate change/global warming!...
Daniel A. Greenbum
28 minutes ago
According to Paul Krugman, who is mildly against the TPP, says it just is not worth the effort both sides are putting into it. I am...
Lorraine R
28 minutes ago
Obama said in the Chris Matthews interview that Elizabeth Warren is “wrong” on fast tracking the TPP and he is “right.” What he meant is...
All of which is making for some very odd alliances and demonstrating that “far right” and “far left” labels are increasingly useless. That’s because this is a struggle between transnational corporations and just about everyone else.
Of course, some Republican opposition could be crafty positioning, so that when the TPP is found to cost jobs and endanger public health rather than create them and assure it, cynics could simply say, “I told you so.” But in this case Obama has asked for the bad publicity. And although Hillary Clinton’s husband was the architect of this kind of policy, and she worked hard for the TPP while secretary of state, she’s now backing away from what may well be a losing proposition.
That’s the good news: The opposition to fast-tracking appears strong. As Patrick Woodall, a senior policy advocate for Food & Water Watch, said to me, “The forces pushing fast-track are huge, but there is unbelievable public opposition, and at this point the wind is at our back.”
There is such a thing as a good trade agreement, though it’s barely conceivable that Obama and Congress could negotiate one. We could imagine, for example, something that did away with tax havens for corporate profits. (For a detailed analysis of this, see this paper from the Economic Policy Institute.)
But even to have a shot, fast-track must be defeated, and a solid debate must be opened among well-informed representatives, with plenty of public input. More exploitation of labor, fewer public health regulations, more facile production of useless goods and bad food — that is not the direction the global economy needs to go.
