The United States is in the final stages of negotiating the Trans-Pacific Partnership (TPP), a massive free-trade agreement with Mexico, Canada, Japan, Singapore and seven other countries. Who will benefit from the TPP? American workers? Consumers? Small businesses? Taxpayers? Or the biggest multinational corporations in the world?
One strong hint is buried in the fine print of the closely guarded draft. The provision, an increasingly common feature of trade agreements, is called “Investor-State Dispute Settlement,” or ISDS. The name may sound mild, but don’t be fooled. Agreeing to ISDS in this enormous new treaty would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty.
ISDS would allow foreign companies to challenge U.S. laws – and potentially to pick up huge payouts from taxpayers – without ever stepping foot in a U.S. court. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions – and even billions – of dollars in damages.
If that seems shocking, buckle your seat belt. ISDS could lead to gigantic fines, but it wouldn’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Maybe that makes sense in an arbitration between two corporations, but not in cases between corporations and governments. If you’re a lawyer looking to maintain or attract high-paying corporate clients, how likely are you to rule against those corporations when it’s your turn in the judge’s seat?
– From Sen. Elizabeth Warren’s Washington Post Op-Ed: The Trans-Pacific Partnership Clause Everyone Should Oppose
Trying to learn about the Trans-Pacific Partnership, or TPP, is like trying to walk through a minefield. The only information we really have is courtesy of leaks, and those snippets are definitely not encouraging.
Pretty much every piece of major legislation passed by Congress since 9/11 is either a taxpayer giveaway to mega corporations, or a major expansion of government power. The worst pieces of legislation are always marketed with positive sounding terms and soundbites. The latest swindle is no exception. At its core, the TPP appears to be nothing more than a ceding of national sovereignty to multi-national corporations. Then again, us skeptics could be wrong about that, but chances are we’re not. We just don’t know because the text is “classified.”
Passing this corporate giveaway masquerading as a “free trade deal” is a lengthy process; a process that begins today with a Senate vote on Trade Promotion Authority (TPA), also known as “fast track.” Passing TPA would be Congress agreeing to neuter itself to a yes or no vote on a trade pact and ceding its power to amend it. Even worse, it would give trade deals this expedited process for six years, thus outlasting the current Administration, and applying to other “trade” deals like the TTIP. Mind you, TPA is being voted on while the TPP text remains completely hidden from the public.
One thing that isn’t hidden, is the desperation of the Obama Administration in trying to get Democrats on board. In fact, his greatest ally on TPP in Congress at the moment is the biggest self-serving RINO there is: Mitch McConnell (if you forgot how awful this guy is, recall: GOP Establishment Queen Mitch McConnell Introduces Patriot Act Reauthorization with Zero NSA Reforms).
The Wall Street Journal describes Barry’s current predicament:
Senate Majority Leader Mitch McConnell has scheduled a procedural vote to start debate on the so-called “fast track” trade bill, which would set the rules for congressional passage of trade agreements like the one U.S. officials are negotiating in the Pacific.
Tuesday’s vote will be the first chance to take the temperature of the entire Senate on Mr. Obama’s trade policy, which has stirred fierce opposition among unions, environmentalists and other liberal and conservative organizations but is backed by many economists and business groups.
That’s the first warning sign.
Who is voting for it?
Nearly all of the Senate’s 54 Republicans are expected to vote for Mr. McConnell’s motion on Tuesday. Most Republicans and business groups back opening up trade and setting American-style rules of the road for commerce in the Pacific.
If it fails, is that the end of Mr. Obama’s divisive trade push?
Mr. McConnell could repeat the exercise with a different package, but the delay would add to the risk that the legislation stalls until after Memorial Day recess. That could weigh on the bill’s overall chances, since opponents are generating grassroots opposition across the country.
That just says it all doesn’t it? They need to pass it before the public has a chance to learn about it and oppose it. Typical Washington D.C. bullshit.
The good news is that fast track might actually fail. As the National Journal notes:
Some senior Republicans already are pointing fingers at Democrats for opposing a preliminary vote simply to move on to the bill. When asked if he had confidence that the Senate would get the requisite 60 votes Tuesday to advance, Senate Finance Committee Chairman Orrin Hatch, a principal negotiator and advocate for the trade package, said, “No.”
“Not without Democratic support,” he added. “We don’t know. There’s been some indication that they’re all going to vote against. If they do, only God knows what’s going to happen.”
But even though Democrats have historically opposed free trade agreements, it’s still shocking that President Obama may not be able to get enough of them to vote just to get to a bill on which he has spent so much political capital.
Obama has emphasized trade from this year’s State of the Union address to Friday’s stop at the Nike headquarters in Oregon. He’s cornered sophomore Democratic representatives, showered them with flights on Air Force One, and promised to campaign for them, according to The New York Times. The U.S. Trade Representative claims to have held nearly 1,700 congressional briefings on TPP over the past five years, and even set up an office in the Capitol Visitor Center where members and staff can read the draft language of the agreements. And yet it still might not be enough.
We can only hope it’s not enough.
Meanwhile, David Dayen at Salon, wrote a great piece titled: The 10 Biggest Lies You’ve Been Told About the Trans-Pacific Partnership. Here are some excerpts:
By way of response, here are ten moments where the President or his subordinates have lied – call it “misled” or “offered half-truths” or whatever; but I’m in an ornery mood so let’s just say lied – about his trade agenda:
1. 40 PERCENT: The President and his team have repeatedly described TPP as a deal involving nearly 40 percent of global GDP. This tells only part of the story. First of all, the U.S. by itself represents 22 percent of global GDP; a bill naming a post office would involve that much. Second, we already have free trade agreements with six TPP partners – Canada, Mexico, Australia, Singapore, Chile and Peru – and between them and us, that’s 80 percent of the total GDP in this deal. The vast majority of the rest is represented by Japan, where the average applied tariff is a skinny 1.2 percent, per the World Bank.
You can see this paragraph in graphic form here. The point is that saying TPP is about “40 percent of GDP” intimates that it would massively change the ability to export without tariffs. In reality it would have virtually no significance in opening new markets. To the extent that there’s a barrier in global trade today, it comes from currency manipulation by countries wanting to keep their exports cheap. The TPP has no currency provisions.
This is interesting. If the TPP isn’t really about trade, as many have suspected, what is it about?
2. JOB CREATION: Saying, as the White House has, that the deal would support “an additional 650,000 jobs” is not true. This figure came from a hypothetical calculation of a report by the Peterson Institute for International Economics, which the Institute itself said was an incorrect way to use their data. “We don’t believe that trade agreements change the labor force in the long run,” said Peter Petri, author of the report, in a fact check of the claim.
The deal is actually more about building up barriers than taking them down. Much of TPP is devoted to increasing copyright and patent protections for prescription drugs and Hollywood media content. As economist Dean Baker notes, this is protectionist, and will raise prices for drugs, movies and music here and abroad.
3. EXPORTS ONLY: The Administration constantly discusses trade as solely a question of U.S. exports. A recent Council of Economic Advisors report touts: Exporters pay higher wages, and export industry growth translates into higher average earnings. But the Economic Policy Institute points out that this ignores imports, and therefore the ballooning trade deficit, which weighs down economic growth and wages.
Recent trade deals have in fact increased the trade deficit, such as the agreement with South Korea. Senator Sherrod Brown notes that the deal has only increased exports by $1 billion since 2011, while increasing imports by $12 billion, costing America 75,000 jobs.
4. MOST PROGRESSIVE: Obama has called TPP “the most progressive trade deal in history.” First of all, so did Bill Clinton and Al Gore, when talking about NAFTA in 1993. Second, there’s reason to believe TPP doesn’t even clear a low bar for progressive trade deals. The Sierra Club, based on a leaked TPP environmental chapter, said that the deal is weaker than the landmark “May 10 agreement” for deals with Peru, Panama and Colombia, struck in 2007.
Labor groups can only ask the White House to enforce labor rights violations, and for the past several years, the Administration simply hasn’t. So when Obama says violators of TPP will face “meaningful consequences,” based on the Administration’s prior enforcement, he’s lying.
5. CHANGING LAWS: On the controversial topic of Investor-State Dispute Settlement (ISDS), where corporations can sue sovereign governments for monetary damages for violating trade agreements that hurt the company’s “expected future profits,” the White House has engaged in a shell game. They say, “No trade agreement is going to force us to change our laws.” But the point of a corporation suing the United States or any trade partner is to put enough financial pressure on a government to force them to alter the law themselves.
6. NEVER LOST: The White House assumes that the only thing America cares about with ISDS is the upsetting of our own laws. So they’ve stressed that the U.S. has never lost an ISDS case. This is irrelevant. What ISDS does is offer bailout insurance policy to multinational corporations. If they run into discrimination or regulatory squeezing by a foreign government, they can use an extra-judicial process to recoup their investment. Workers screwed over by trade agreements have no ability to sue governments; only corporations get this privilege.
The United States attracts businesses through our relative rule of law. When that insurance is granted to countries like Vietnam and Malaysia, it weakens our competitive advantage, and makes it simple for countries to outsource their operations. Their investment is protected, as is their ability to exploit cheap labor. This makes it impossible for America to compete.
7. WEAKENING DODD-FRANK: Obama reacted strongly to Senator Warren’s charge that a future President could overturn financial regulations or other rules through trade deals. “I’d have to be pretty stupid,” Obama told Yahoo News, to “sign a provision that would unravel” signature achievements like Dodd-Frank. I suppose he is, then, because modern trade agreements often seek to “harmonize” regulations, effectively setting a regulatory ceiling. This harmonization could, as Warren says, “punch holes in Dodd-Frank without directly repealing it,” by forcing regulators to roll back capital or leverage requirements.
“Pretty stupid,” or a complete Wall Street puppet? I think we’ve have enough proof over the last six years, but if you need a reminder:
Today’s vote on “fast-track” authority would give trade deals an expedited process, with no amendments or filibusters by Congress, for six years, outlasting the current Administration.
Bet you didn’t know that…
8. STOPPING CHINA: President Obama frequently casts TPP as a way to “contain” China. “If we don’t write the rules for trade around the world, guess what, China will,” he said on Friday. This is so facile as to be totally meaningless. China is a major Pacific Rim economy, and will have a presence regardless of our actions
9. SECRET DEAL: Obama has angrily dismissed the notion that TPP is a “secret” deal, saying that everyone will have public access to the TPP text for at least 60 days before a final vote. This is not the point opponents are making. The vote on fast track would severely limit Congressional input into the deal. And right now, members of Congress can only see the text in a secure room, without being able to bring staffers or take notes, or even talk about specifics in public. That makes the deal effectively secret during the fast track vote. “The president has only committed to letting the public see this deal after Congress votes to authorize fast track,” Warren told Greg Sargent. The President wants to filibuster-proof the bill in secret, then employ pretend transparency on TPP after that.
10. JUST A POLITICIAN: This idea from Obama that everybody opposing fast-track is acting like a mere “politician,” aside from demonizing the concept of representing constituents, neglects the fact that he’s a politician too. His interest in building a legacy, when practically nothing else has the potential to pass Congress the next two years, is a political interest. His possible interest in rewarding campaign contributors who would benefit from TPP is also political, or his desire to earn the respect of the Very Serious People who always support trade deals.
Personally, I don’t think it’s about politics for Obama. It’s about the money. It seems clear to me that Obama recognizes that passing this corporate giveaway is his best chance to be rewarded with enormous sums of cash for speeches, or whatever, after he leaves the White House. Who knows, he may even amass more than the $136 million earned by the Clinton crime family.
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