Planet Not For Sale

TPP Leak Reveals Extraordinary New Powers for Thousands of Foreign Firms to Challenge U.S. Policies and Demand Taxpayer Compensation

Eyes on Trade - 25 March, 2015 - 23:03

Unveiling of Parallel Legal System for Foreign Corporations Will Fuel TPP Controversy, Further Complicate Obama’s Push for Fast Track

The Trans-Pacific Partnership’s (TPP) Investment Chapter, leaked today, reveals how the pact would make it easier for U.S. firms to offshore American jobs to low-wage countries while newly empowering thousands of foreign firms to seek cash compensation from U.S. taxpayers by challenging U.S. government actions, laws and court rulings before unaccountable foreign tribunals. After five years of secretive TPP negotiations, the text – leaked by WikiLeaks –proves that growing concerns about the controversial “investor-state dispute settlement” (ISDS) system that the TPP would extend are well justified.

Enactment of the leaked chapter would increase U.S. ISDS liability to an unprecedented degree by newly empowering about 9,000 foreign-owned firms from Japan and other TPP nations operating in the United States to launch cases against the government over policies that apply equally to domestic and foreign firms. To date, the United States has faced few ISDS attacks because past ISDS-enforced pacts have almost exclusively been with developing nations whose firms have few investments here.

The leak reveals that the TPP would replicate the ISDS language found in past U.S. agreements under which tribunals have ordered more than $3.6 billion in compensation to foreign investors attacking land use rules; water, energy and timber policies; health, safety and environmental protections; financial stability policies and more. And while the Obama administration has sought to quell growing concerns about the ISDS threat with claims that past pacts’ problems would be remedied in the TPP, the leaked text does not include new safeguards relative to past U.S. ISDS-enforced pacts. Indeed, this version of the text, which shows very few remaining areas of disagreement, eliminates various safeguard proposals that were included in a 2012 leaked TPP Investment Chapter text.

“With the veil of secrecy ripped back, finally everyone can see for themselves that the TPP would give multinational corporations extraordinary new powers that undermine our sovereignty, expose U.S. taxpayers to billions in new liability and privilege foreign firms operating here with special rights not available to U.S. firms under U.S. law,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “This leak is a disaster for the corporate lobbyists and administration officials trying to persuade Congress to delegate Fast Track authority to railroad the TPP through Congress.”

Even before today’s leak, U.S. law professors and those in other TPP nations, the U.S. National Conference of State Legislatures, the Cato Institute and numerous members of Congress and civil society groups have announced opposition to the ISDS system, which would elevate individual foreign firms to the same status as sovereign governments and empower them to privately enforce a public treaty by skirting domestic courts and “suing” governments before extrajudicial tribunals. The tribunals are staffed by private lawyers who are not accountable to any electorate, system of legal precedent or meaningful conflict of interest rules. Their rulings cannot be appealed on the merits. Many ISDS lawyers rotate between roles – serving both as “judges” and suing governments for corporations, creating an inherent conflict of interest.

The TPP’s expansion of the ISDS system would come amid a surge in ISDS cases against public interest policies that has led other countries, such as South Africa and Indonesia, to begin to revoke their ISDS-enforced treaties. While ISDS agreements have existed since the 1960s, just 50 known ISDS cases were launched worldwide in the regime’s first three decades combined. In contrast, foreign investors launched at least 50 ISDS claims each year from 2011 through 2013. Recent cases include Eli Lilly’s attack on Canada’s cost-saving medicine patent system, Philip Morris’ attack on Australia’s public health policies regulating tobacco, Lone Pine’s attack on a fracking moratorium in Canada, Chevron’s attack on an Ecuadorian court ruling ordering payment for mass toxic contamination in the Amazon and Vattenfall’s attack on Germany’s phase-out of nuclear power.

“By definition, only multinational corporations could benefit from this parallel legal system, which empowers them to skirt domestic courts and laws, and go to tribunals staffed by highly paid corporate lawyers, where they grab unlimited payments of our tax dollars because they don’t want to comply with the same laws our domestic firms follow,” Wallach said.

Public Citizen’s analysis of the leaked text is available here

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Unhappy Third Birthday for Korea FTA Drags Down Obama Push for Fast Track

Eyes on Trade - 13 March, 2015 - 13:24

U.S. Exports Down, Imports from Korea Up and Job-Killing Trade Deficit With Korea Balloons 84 Percent on Third Anniversary of Korea Pact, Which Is TPP Template

Three years after implementation of the U.S.-Korea Free Trade Agreement (FTA), government data reveal that the administration’s promises that the pact would expand U.S. exports and create American jobs proved to be the opposite of the pact’s actual outcomes. The post-Korea FTA decline in U.S. exports to Korea and a new flood of imports from Korea have resulted in a major surge in the U.S. trade deficit with Korea that equates to nearly 85,000 lost U.S. jobs. The abysmal FTA record deals a fresh blow to the administration’s controversial bid to Fast Track the Trans-Pacific Partnership (TPP), for which the Korea FTA served as the U.S. template.

“Three years ago we heard the same ‘more exports, more jobs’ sales pitch for the Korea FTA that the administration is making for the TPP, but the reality is that tens of thousands of U.S. jobs have been lost as exports have fallen and trade deficits have surged,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “The only silver lining of the Korea FTA debacle is that it further cripples the administration’s push to Fast Track the TPP, which was literally modeled on the Korea deal, perhaps saving us from more of the same pacts that offshore jobs and push down middle-class wages.”

Contrary to the administration’s promise that the Korea FTA would mean “more exports, more jobs,” U.S. International Trade Commission and U.S. Department of Agriculture data reveal that:

  • The U.S. goods trade deficit with Korea has ballooned an estimated 84 percent, or $12.7 billion, in the first three years of the Korea FTA (comparing the year before the FTA took effect to the projected third full year of implementation). In January 2015, the monthly U.S. goods trade deficit with Korea topped $3 billion – the highest level on record.
  • The surge in the U.S. trade deficit with Korea under the FTA equates to the loss of nearly 85,000 American jobs, according to the trade-jobs ratio that the administration used to promise job gains from the deal.
  • U.S. goods exports to Korea have fallen an estimated 5 percent, or $2.2 billion, in the first three years of the Korea FTA. 
  • Had U.S. exports to Korea continued to grow at the rate seen in the decade prior to the Korea FTA’s implementation, U.S. exports to Korea in the FTA’s third year would have been 24 percent, or $9.8 billion, higher than they are actually projected to be.
  • Imports of goods from Korea have risen an estimated 18 percent, or $10.5 billion, in the Korea FTA’s first three years.
  • U.S. exports to Korea of manufactured goods have stagnated under the Korea FTA, growing an estimated zero percent in the first three years of the deal. U.S. manufactured imports from Korea, meanwhile, have grown an estimated 18 percent under the FTA. As a result, the U.S. manufacturing trade deficit with Korea has grown an estimated 44 percent, or $10.1 billion, since the FTA’s implementation.
  • U.S. exports to Korea of agricultural goods have stagnated under the Korea FTA, growing an estimated zero percent in the first three years of the deal – even as U.S. agricultural exports to the world increased 6 percent during the same period. U.S. agricultural imports from Korea, meanwhile, have grown an estimated 28 percent under the FTA. As a result, the U.S. agricultural trade balance with Korea has declined an estimated 1 percent, or $72 million, since the FTA’s implementation.

Given the bleak data, the Office of the U.S. Trade Representative (USTR) may repeat past efforts to try to obscure bad Korea FTA results. Congressional upset about the pacts is fueling opposition to the administration’s push to Fast Track the TPP through Congress. Typical USTR data omissions and distortions regarding the Korea FTA include:

  • The USTR likely will count foreign-produced goods as “U.S. exports,” falsely inflating the export figures that can be reported. It is by using this raw Census Department data versus the corrected official U.S International Trade Commission (USITC) trade data that USTR falsely claims that U.S. exports to Korea have grown and were at a record level in 2014.  Despite congressional demands to stop using the distorted data, USTR continues to report export figures that include “foreign exports,” also known as “re-exports.” These are goods made abroad that pass through the United States before being re-exported to other countries. By U.S. Census Bureau definition, foreign exports undergo zero alteration in the United States, and thus support no U.S. production jobs. Each month, the UCITC removes foreign exports from the raw data gathered by the U.S. Census Bureau. But the USTR regularly uses the uncorrected data, inflating the actual U.S. export figures and deflating U.S. trade deficits with FTA partners like Korea. In the first three years of the Korea FTA, foreign exports to Korea have risen an estimated 13 percent, or $284 million, which the USTR may errantly count as an increase in “U.S. exports.”
  • The USTR might misrepresent the relatively small increase in U.S. exports to Korea of passenger vehicles under the FTA as a large percentage increase, while omitting both that the touted increase amounts to an estimated 23,000 more passenger vehicles exported from a base of fewer than 15,000 and that imports of passenger vehicles from Korea have surged by an estimated 450,000 vehicles – from about 863,000 to more than 1.3 million in the first three years of the FTA. This trick was included in the USTR’s press release on the FTA’s second anniversary. While U.S. automotive exports to Korea have increased an estimated $686 million in the FTA’s first three years, U.S. automotive imports from Korea have ballooned an estimated $6.4 billion. As a result, the U.S. automotive trade deficit with Korea has increased an estimated 36 percent, or $5.7 billion, in the FTA’s first three years.
  • The USTR also may claim, as it did in its press release on the Korea FTA’s second anniversary, that the decline in U.S. exports to Korea under the FTA is due to decreases in exports of fossil fuels and corn. But even after removing fossil fuels and corn products, U.S. exports to Korea still have declined by an estimated $1.4 billion, or 4 percent, in the first three years of the FTA. Product-specific anomalies cannot explain away the broad-based drop in U.S. goods exports to Korea under the FTA.
  • The USTR also may try to dismiss the decline in U.S. exports to Korea under the FTA as due to a weak economy in Korea – another claim made in the USTR’s press release on the FTA’s second anniversary. But the Korean economy has grown each year since the FTA passed, even as U.S. exports to Korea have shrunk. Korea’s gross domestic product in 2014 is projected to be 9 percent higher than in the year before the FTA took effect, suggesting that U.S. exports to Korea should have expanded, with or without the FTA, as a simple product of Korea’s economic growth. Instead, U.S. exports to Korea have fallen an estimated 5 percent in the first three years of the FTA. 
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Coalition of NGOs Releases Nanotech Recommendation Reflecting Concern About Use of Nanotech In Foods

Subtitle:  Companies Urged to Address Potential Risks from Emerging Technology Language:  English Author(s) (external):  IATP, et al. File:  Nanotechnology policy press release -- 3-12-15 Minneapolis, MN – Responding to rising concern about manufacturers using unregulated nanomaterials in food, a coalition of advocacy groups in the U.S. and abroad has released a policy recommendation for companies in food-related industries to assist them in avoiding or reducing the risks from nanomaterials in food products and packaging. The recommendation requests that companies: adopt a detailed public policy explaining their use of nanomaterials, if any; publish a safety analysis for any nanomaterials being used; issue supplier...

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Nanomaterials Fact Sheet

Language:  English Author(s) (external):  IATP, et al. File:  Nano Fact Sheet 20150309.pdf Evidence indicates that engineered nanomaterials are beginning to be used and sold in common food products, but companies and their suppliers are failing to provide consumers with information about whether their products contain nanomaterials. In fact, many companies that sell products containing nanomaterials may not even know that nanomaterials are in their supply chain. Given recent scientific findings about potential health and environmental harm from engineered nanomaterials, companies that use, intend to use, or simply allow the use of nanomaterials in their food and food packaging products may face significant financial, legal, or reputational risk. Definition of Nanomaterials A nanomaterial...

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Policy for Nanomaterials in Food and Food Packaging

Language:  English Author(s) (external):  IATP, et. a File:  Nano Policy 20150309.pdf Policy for Nanomaterials in Food and Food Packaging Nanotoxicology studies indicate a range of harms can be caused by ingestion, inhalation, and/or dermal exposure to a variety of nanomaterials. We are concerned that food companies may use, or inadvertently, as a result of supply chain management failures, incorporate nanomaterials in their food products, food ingredients, food contact surfaces, feed or food packaging before such materials have been proven safe for manufacture, consumption, and release into natural ecosystems on a life-cycle basis. To minimize the risks to consumers, employees, researchers, companies, and natural ecosystems, we have developed the following policy recommendations for the...

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A 50 años del "No de Tokio"

Blog de Javier Echaide - 4 March, 2015 - 15:10
Cuando 21 países se opusieron a que el BM crea un organismo de arreglo de diferencias inversionistas-EstadosRecordando el “No de Tokio” cincuenta años despuésRobin Broad

Hace cincuenta años, durante la reunión anual de 1964 del Banco Mundial en Tokio, los gobiernos de veintiún países en desarrollo votaron en contra de la creación de una nueva sección del Grupo del Banco Mundial a través de la cual corporaciones extranjeras podrían llevar a juicio a gobiernos y eludir sus sistemas de justicia nacionales. Esta nueva sección del Banco Mundial se llamaría el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (CIADI). Los veintiún gobiernos incluían a los diecinueve países latinoamericanos presentes, así como a Filipinas e Iraq. [1]El histórico voto fue apodado el “No de Tokio”. [2]  Puede haber sido el voto colectivo más grande en la historia en contra de una iniciativa del Banco Mundial. Y tal vez la única vez que todos los representantes de América Latina votaron “no”.Así que escribo en parte para celebrar que el “No de Tokio” cumple cincuenta años. Pero también escribo porque es hora de reconocer que la historia ha demostrado lo justificado de ese voto de 1964.¿Cuáles fueron los veintiún países que votaron “no”? Permítanme citar al entonces representante de Chile, Félix Ruiz, quien habló en nombre de los países latinoamericanos:“Los sistemas jurídicos y constitucionales de todos los países de América Latina, miembros del Banco, brindan actualmente al inversionista extranjero iguales derechos y protección que al nacional; prohíben la confiscación y la discriminación y establecen que toda expropiación por causa justificada de utilidad pública debe ir acompañada de justa indemnización, determinada, en última instancia,por los tribunales de justicia. El nuevo sistema sugerido daría a un inversionista privado, por la circunstancia de ser extranjero, derecho a reclamar contra un Estado soberano fuera del territorio nacional, prescindiendo de los tribunales nacionales. Esta disposición es contraria a las normas jurídicas tradicionales de nuestros países y, de hecho, establecería un privilegio a favor del inversionista extranjero colocando al nacional en una situación de inferioridad.”[3]En suma, el nuevo sistema era tanto innecesario como injusto.El CIADI siguió avanzando, a pesar de los votos negativos. Cabe señalar que Brasil nunca se sumó, y de hecho no ha aceptado el sistema en ninguna ocasión.Quienes siguen de cerca a la Organización Mundial de Comercio (OMC) y su mecanismo para resolver disputas tal vez perciban la ironía: una de las reglas fundamentales del avance neoliberal actual hacia una “ultra-globalización”, tal como establece la OMC, es que las regulaciones nacionales deben tratar del mismo modo a inversionistas locales y extranjeros. La ironía, por supuesto, es que la existencia del CIADI parece sugerir que los defensores de la ultra-globalización no consideran problemático que los inversionistas extranjeros reciban un tratamiento privilegiado.A la luz del historial del CIADI durante las décadas siguientes, las críticas al “No de Tokio” fueron proféticas. El CIADI pasó a ocupar el centro de la escena con el auge de los tratados neoliberales de comercio, tanto bilaterales como multilaterales, que empezaron a reproducirse a partir de la década de los años 80. Cuarenta años después de que el primer caso fuese presentado ante el CIADI, en 1978, se han sumado otros 48 sólo durante el 2012.Al mismo ritmo en que se ha multiplicado el número de casos presentados ante el CIADI, se han multiplicado las críticas –en particular por parte de Estados soberanos, pero también cada vez más por parte de abogados especialistas en comercio. Los argumentos son que las reglas del CIADI, en primer lugar, están cada vez más orientadas a favorecer a los inversionistas por sobre el Estado (¿les suena familiar?)  y, en segundo lugar, que son demasiado estrechas en su enfoque en derechos “comerciales” (esto es, el inversor privado extranjero), en vez de cubrir también cuestiones “no comerciales” más amplias. Por ejemplo, ¿no debería un gobierno tener derecho a proteger una cuenca de agua de los efectos destructivos de la extracción de oro? ¿No debería ese gobierno, de hecho, ser recompensado en vez de enjuiciado por el CIADI? [4] ¿Y por qué debería poder el inversor, en tanto que actor no estatal, llevar a juicio al gobierno, mientras que otros actores presumiblemente no estatales como las comunidades afectadas no están siquiera autorizadas a escuchar las presentaciones muchas veces secretas ante el CIADI? (Es cierto: las comunidades pueden presentar testimonio como amicus curiae –si es que encuentran un abogado dispuesto a redactar una a nombre de ellos–. Pero no hay ninguna seguridad de que esos testimonios sean leídos por los abogados  certificados por el Banco Mundial que se ocupan de los casos particulares.)El destacado abogado de comercio George Kahale III causó revuelo recientemente al declarar de manera pública que los tribunales del CIADI, ante los cuales se había presentado algunas veces, son cada vez más parciales en pos de favorecer a los inversionistas extranjeros. Y dado que el CIADI no falla de acuerdo a precedentes legales ni permite apelaciones basadas en revisiones judiciales, no hay forma de corregir dichos fallos.De hecho, al expandirse la cantidad de casos considerados por el CIADI, las críticas verbales han empezado a verse acompañadas por  acciones. Bolivia, Ecuador y Venezuela –todos partes de aquel “No de Tokio” – han abandonado el CIADI;  Sudáfrica está en proceso de establecer una nueva ley de inversiones que permita a las corporaciones extranjeras presentar sus reclamos sólo a las cortes nacionales; Indiaestá llevando a cabo una revisión de sus tratados a la luz de varios juicios de corporaciones;  Indonesia ha anunciado su voluntad de no renovar sus acuerdos bilaterales de inversión;  Australia decidió no incluir estos derechos corporativos en su tratado de libre comercio de 2005 con Estados Unidos. Documentos filtrados de manera reciente sugieren que varios de estos países están intentando al menos reducir los derechos de los inversionistas (y, así, el poder del CIADI) en el Acuerdo Estratégico Trans-Pacífico de Asociación Económica (TPP por sus siglas en inglés). Lo mismo puede decirse de países de la Unión Europea—y de manera notoria Francia y Alemania–, que están expresando preocupación por este tipo de normas.Pero, un momento: ¿no se derrumbará la economía global sin estos derechos de los inversionistas y su órgano principal, el CIADI? ¿No desaparecerán las inversiones extranjeras? Bueno, en realidad no. Un caso ilustrativo es Brasil, uno de los destinos favoritos de la inversión extranjera pero también un país que nunca ha aceptado esta clase de normas. Puede hacerse una afirmación más amplia: si los inversionistas extranjeros consideran que están por hacer una jugada riesgosa pueden simplemente recurrir a las empresas de seguros de riesgo. Y, como los inversionistas locales, tienen la posibilidad de recurrir a las cortes nacionales que correspondan.Decir “No” al CIADI es cada vez más urgente. Si el Acuerdo Estratégico Trans-Pacífico y la Asociación Transatlántica para el Comercio y la Inversión son aprobados, tal como espera el presidente de los Estados Unidos, Barack Obama, el número de casos presentados ante el CIADI seguirá aumentando. Y podemos esperar aún más acciones por parte de los inversores, propensos a demandar a gobiernos no sólo por expropiaciones directas (el propósito original del CIADI) sino también por formas “indirectas” de expropiación como las regulaciones ambientales o sociales que puedan reducir sus futuros márgenes de ganancia.Así que aquí va un llamado a los veintiún países que con toda razón dijeron “No” en Tokio hace cincuenta años. Celebremos este aniversario exigiendo a los actuales gobiernos que se retiren del CIADI  pues pone en riesgo la democracia, la justicia y el bien común.Para tomar prestado un slogan que viene al caso: Cincuenta años son suficientes.(Traducción de Víctor Goldgel)- Robin Broad es Profesora en Desarrollo Internacional en la Escuela de Servicio Internacional de la American University en Washington, D.C.Notas[1] Los países que votaron “no” fueron los siguientes: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica, República Dominicana, Ecuador, El Salvador, Guatemala, Haití, Honduras, Iraq, México, Nicaragua, Panamá, Paraguay, Perú, Filipinas, Uruguay y Venezuela. Fuente: Antonio R. Parra, The History of ICSID (Oxford: Oxford University Press, 2012), pp. 66-67.  [2] Ver Andreas F. Lowenfeld “The ICSID Convention: Origins and Transformation” Georgia Journal of International and Comparative Law, (2009) 38, pp.47-62; y Fiezzoni, Silvia “The Challenge of UNASUR Member Countries to Replace ICSID Arbitration,” Beijing Law Review, (2011) 2, pp. 134-144.[3] Extracto de la declaración de Felix Ruiz, Gobernador por Chile, el 9 de septiembre de 1964  en Tokio, citado en: Parra, Antonio R. The History of ICSID, Oxford: Oxford University Press, 2012, p.67.  . Ver también pp. 66-68. Versión en español:[4] Este no es un ejemplo hipotético. Ver los documentos relativos al caso del CIADI Pac Rim Cayman Islands vs Republic of El Salvador, que le ha costado al gobierno de El Salvador más de  12 millones de dólares sólo por este juicio.
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Extending the Growing Season

Subtitle:  Technology and Practices used in the Upper Midwest Language:  English IATP author(s):  Pete Huff File:  2015_02_27_SeasonExtension_PH.pdf Introduction The Upper Midwestern states of Minnesota, Iowa and Wisconsin are simultaneously known for their cold winters and their high specialty crop production. Like many states in the country, these states are experiencing increasing interest in local and regional food procurement, particularly from institutions such as schools, childcare centers, universities and hospitals. While many farms in the Upper Midwest only produce during the typical growing season of mid-May through early October,1 the use of technology and practices to extend the growing season is rising, in part...

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Forthcoming TPP Sales Pitch So Predictable, We Decided to Predict It

Eyes on Trade - 27 February, 2015 - 14:38

In the coming days, the U.S. Trade Representative (USTR) will release its annual report on the Obama administration’s trade policy agenda.  We know that you can’t wait to see what it will say. 

Good news.  You don’t have to.  Below we present the world’s first look at the report’s contents. 

How do we know in advance what the annual trade report will say?  No, we don’t have a mole at USTR (though if any of our USTR readers would like to volunteer…). 

We have a pretty good idea of the report’s contents, given that these reports tend to recycle the same old sales pitches that the administration has been disseminating ad nauseam (figuratively and, sometimes, literally). 

Since the status quo trade platitudes have become predictable, we thought we might as well predict them. 

So, you heard it here first – below are some of the administration's standard TPP-related talking points likely to be rehashed in USTR’s forthcoming report, followed by an explanation of why they do not bear repeating:

95 percent of the world’s consumers live outside our borders.

[But our trade pacts have not helped us reach them.]

Yes, this statistic shows a basic understanding of geography and population.  But it shows little else.  The official government trade data reveal that past trade deals have not been successful in helping U.S. firms reach consumers who live abroad.  In fact, U.S. goods exports to our “free trade” agreement (FTA) partners have grown 20 percent slower than U.S. exports to the rest of the world over the last decade.

The TPP would grant U.S. firms greater access to the world's fastest-growing region.

[But the relevant TPP countries have been growing one-fourth as fast as that region.]

The United States already has FTAs with six of the 11 TPP negotiating partners.  The combined GDP of the other five countries (the ones that could offer “greater access”) has been growing at a paltry 1 percent annually over the last decade – one fourth of the growth rate of the Asia-Pacific region overall.  Yes, the region has been growing quickly.  That just happens not to be relevant to the TPP. 

Exporters tend to pay their workers higher wages.

[But jobs displaced by imports pay even higher.]

What this talking point fails to mention is that jobs lost to imports under unfair trade deals tend to pay even higher wages than jobs in exporting industries, according to new data unveiled by the Economic Policy Institute (EPI).  If a manufacturing worker making $1,020 per week loses her job to imports under a raw trade deal and gets re-hired in an exporting firm where she gets paid less than $870 per week (the actual numbers from EPI’s analysis), it’s probably small consolation that she could be making even less in a non-traded sector like restaurants.  But that is the very argument – that exporting industries pay more than non-traded industries – that the administration has been using to push for the TPP’s expansion of the trade status quo.

Their pitch omits the fact that far more jobs have been lost in the higher-paying import-competing industries than have been gained in exporting sectors under existing trade deals, judging by the burgeoning U.S. trade deficit with FTA partners, which has grown 427 percent since the deals took effect. It also does not mention that most trade-displaced workers do not actually get rehired in exporting industries, but in non-traded sectors, spelling an even bigger pay cut than the example given above.

China wants to write the rules for commerce in Asia. Instead, we should write the rules.

[We didn’t write the TPP’s rules – multinational corporations did. The TPP would hurt our national interests while failing, like past FTAs, to affect China’s influence.]

Ah yes, the boogeyman tactic.  When the economic sales pitch for a controversial new FTA falters on the existing FTA record of lost jobs, lower wages and increased trade deficits, FTA proponents frequently resort to raising the specter that without the controversial pact, the influence of a foreign opponent will rise further.  But the notion that the establishment – or not – of any specific U.S. trade agreement would affect China’s rising influence is contradicted by the record.  Proponents of the North American Free Trade Agreement (NAFTA) and NAFTA expansion pacts similarly warned that those deals were necessary to prevent rising foreign influence in Latin America.  But in the first 20 years of NAFTA, the share of Mexico’s imported goods coming from China increased from 1 to 16 percent, while the U.S. share dropped from 69 percent to 49 percent.  And from 2000 to 2011, a period in which U.S. FTAs with eight Latin American countries took effect, the share of Latin America’s imported goods coming from China increased from 1 percent to 7 percent, while the U.S. share fell from 25 percent to 16 percent.  Why should we believe the recycled pitch that another FTA would keep China’s economic influence in check?  

And the attempt to paint the TPP as a battle between “our rules” and China’s rules is absurd.  “We” did not write these rules.  The draft TPP text was crafted in a closed-door process that granted privileged access to more than 500 official U.S. trade advisors, nine out of ten of them explicitly representing corporations.  It is little surprise then that leaked TPP terms include new monopoly patent rights for pharmaceutical companies that would increase healthcare costs, limits on efforts to reregulate Wall Street, a deregulation of U.S. gas exports that could increase domestic energy prices, maximalist copyright terms that could thwart innovation and restrict Internet freedom, and new investor protections that incentivize offshoring.  Good luck selling that as advancing U.S. interests. 

The TPP is a 21st-century agreement with strong labor and environmental standards.

[Government reports show that those standards have proven ineffective.]

The vaunted inclusion in the TPP of labor and environmental provisions that were hatched in a May 10, 2007 deal is nothing new. These provisions have been included in existing FTAs, but have proven ineffective. The George W. Bush administration, for example, included "May 10" terms in the FTA with Colombia, where anti-union violence and repression remain rampant. Indeed, a U.S. Government Accountability Office report released in November 2014 found broad labor rights violations across five surveyed FTA partner countries, regardless of whether or not the FTA included the “May 10” labor provisions. As for environmental standards, the TPP would empower foreign corporations (e.g. oil/gas companies) to demand taxpayer compensation before extrajudicial tribunals for new environmental protections in TPP countries (e.g. rejection of a proposed controversial pipeline). 

And despite recent claims to the contrary, the evidence shows no correlation between an FTA’s inclusion of the “May 10” standards and its trade balance impact. Though the Korea FTA, the U.S. template for the TPP, included the “May 10” standards, the U.S. trade deficit with Korea has grown more than 70 percent in the three years since the deal’s passage. According to the administration’s trade-jobs ratio, that equates to the loss of more than 70,000 U.S. jobs – the same number of jobs that the administration promised would be gained under the deal. 

98 percent of U.S. exporters are small or medium-sized enterprises (SMEs).

[The few small businesses that export have endured slow and falling exports under FTAs.]

Only 3 percent of U.S. SMEs export any good to any country. In contrast, 38 percent of large U.S. firms are exporters. Even if FTAs actually succeeded in boosting exports, which government data show they do not, exporting is primarily the domain of large corporations, not small businesses.

The relatively few small businesses that do actually export have endured even more disappointing export performance under FTAs than large firms have experienced.  U.S. small businesses have watched their exports to Korea decline even more sharply than large firms under the Korea FTA (a 14 percent vs. 3 percent decrease).  And small firms’ exports to Mexico and Canada under NAFTA have grown less than half as much as large firms’ exports. Indeed, small firms’ exports to all non-NAFTA countries has exceeded by more than 50 percent the growth of their exports to NAFTA partners.

Categories: Planet Not For Sale

Minnesota Farm to Institution Markets

Subtitle:  A 2014 Producer Survey Snapshot Language:  English IATP author(s):  IATP File:  2015_02_13_ProducerSurveySnapshot.pdf Aimed at improving access to and profitability from Minnesota’s farm to institution markets (i.e. schools, hospitals, child care centers, etc.) for Minnesota producers, the survey engaged 142 producers operating in 56 counties in Minnesota, Wisconsin and South Dakota. It was a joint project of the Institute for Agriculture and Trade Policy, the Sustainable Farming Association and Renewing the Countryside – with input from over 15 organizations, agencies and farms. Approximately 29% of respondents reported institutional sales in 2013 – including schools, hospitals,...

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Categories: Planet Not For Sale

Exports Lag 20%, Trade Deficits Surge 427% under "Free Trade" Deals

Eyes on Trade - 25 February, 2015 - 14:36

A recent parade of reports from corporate lobbies and think tanks has played a familiar but discordant refrain, alleging that more of the same "free trade" agreements (FTAs) would boost U.S. exports and reduce the U.S. trade deficits that displace U.S. jobs.  It sounds nice.  But this tired promise is simply not supported by the data.  

According to the official government trade data from the U.S. International Trade Commission, the aggregate U.S. goods trade deficit with FTA partners is more than five times as high as before the deals went into effect, while the aggregate trade deficit with non-FTA countries has actually fallen. The key differences are soaring imports into the United States from FTA partners and lower growth in U.S. exports to those nations than to non-FTA nations.

Why do we keep hearing arguments that more of the same will produce different results?  Well, if you (or your corporate backers) wanted to Fast Track through Congress the controversial Trans-Pacific Partnership (TPP), which would expand the status quo FTA model, you might also find it convenient to parrot the standard FTA sales pitch of higher exports and lower trade deficits.  In doing so, you would need to ignore these facts:

  • Growth of U.S. goods exports to FTA partners has been 20% lower than U.S. export growth to the rest of the world over the last decade (annual average growth of 5.3 percent to non-FTA nations vs. 4.3 percent to FTA nations from 2004 to 2014). 
  • The aggregate U.S. goods trade deficit with FTA partners has increased by about $144 billion, or 427 percent, since the FTAs were implemented. In contrast, the aggregate trade deficit with all non-FTA countries has decreased by about $95 billion, or 11 percent, since 2006 (the median entry date of existing FTAs). See the chart below. Using the Obama administration’s net exports-to-jobs ratio, the FTA trade deficit surge implies the loss of about 780,000 U.S. jobs.
  • The North American Free Trade Agreement (NAFTA) contributed the most to the widening FTA deficit – under NAFTA, the U.S. trade deficit with Canada has ballooned and a U.S. trade surplus with Mexico has turned into a nearly $100 billion deficit.
  • More recent deals have produced similar results. Since the 2011 passage of the Korea FTA, the U.S. template for the TPP, the U.S. trade deficit with Korea has already surged 72 percent.

“Higher Standards” Have Failed to Alter FTA Legacy of Ballooning Trade Deficits

Some proponents of status quo trade have claimed that post-NAFTA FTAs have included higher standards and thus have yielded trade balance improvements. But the Korea FTA included the higher labor and environmental standards of the May 10, 2007 deal, and still the U.S. trade deficit with Korea has grown over 70 percent in the three years since the deal’s passage. Meanwhile, most post-NAFTA FTAs that have resulted in (small) trade balance improvements did not contain the “May 10” standards. The evidence shows no correlation between an FTA’s inclusion of “May 10” standards and its trade balance impact. Reducing the massive U.S. trade deficit will require a more fundamental rethink of the core status quo trade pact model extending from NAFTA through the Korea FTA, not more of the same.

Corporate FTA Boosters Omit Imports, Use Errant Methods to Claim Higher Exports under FTAs

Members of Congress will invariably be shown data by defenders of our status quo trade policy that appear to indicate that FTAs have generated an export boom. Indeed, to promote congressional support for new NAFTA-style FTAs, the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) have funded an entire body of research designed to create the appearance that the existing pacts have both boosted exports and reversed trade deficits with FTA partner countries. This work relies on several methodological tricks that fail basic standards of accuracy:

  • Ignoring imports: U.S. Chamber of Commerce studies regularly omit mention of soaring imports under FTAs, instead focusing only on exports. But any study claiming to evaluate the net impact of trade deals must deal with both sides of the trade equation. In the same way that exports are associated with job opportunities, imports are associated with lost job opportunities when they outstrip exports, as dramatically seen under FTAs.
  • Counting “foreign exports”: NAM has errantly claimed that the United States has a manufacturing surplus with FTA nations by counting foreign-made goods as “U.S. exports.” NAM’s data include “foreign exports” – goods made elsewhere that pass through the United States without alteration before being re-exported abroad. Foreign exports support zero U.S. production jobs and their inclusion distorts FTAs’ impacts on workers.
  • Omitting major FTAs: The U.S. Chamber of Commerce has repeatedly claimed that U.S. export growth is higher to FTA nations that to non-FTA nations by simply omitting FTAs that do not support their claim. One U.S. Chamber of Commerce study omitted all FTAs implemented before 2003 to estimate export growth. This excluded major FTAs like NAFTA that comprised more than 83 percent of all U.S. FTA exports. Given NAFTA’s leading role in the 427 percent aggregate FTA deficit surge, its omission vastly skews the findings.
  • Failing to correct for inflation: U.S. Chamber of Commerce studies that have claimed high FTA export growth have not adjusted the data for inflation, thus errantly counting price increases as export gains.
  • Comparing apples and oranges: The U.S. Chamber of Commerce has claimed higher U.S. exports under FTAs by using two completely different methods to calculate the growth of U.S. exports to FTA partners (an unweighted average) versus non-FTA partners (a weighted average). This inconsistency creates the false impression of higher export growth to FTA partners by giving equal weight to FTA countries that are vastly different in importance to U.S. exports (e.g. Canada, where U.S. exports exceed $260 billion, and Bahrain, where they do not reach $1 billion), despite accounting for such critical differences for non-FTA countries.
Categories: Planet Not For Sale

Midwest Bioeconomy and Safer Products Summit

Subtitle:  Regional Innovations Solving Global Problems IATP author(s):  IATP File:  2015_02_11_GreenChemistryConference_PR.pdf Minneapolis – Business, political, academic, and community leaders will convene in Pohlad Hall at the Minneapolis Central Library on Thursday, February 19th, 2015 to explore how the rapidly growing Bioeconomy and green chemistry sectors in the Midwest are providing clean, safe and economical solutions to many of the problems that face us here and around the world. Cohosted by the Institute for Agriculture and Trade Policy (IATP) and Aveda, the Midwest Bioeconomy and Safer Products Summit features national leaders and businesses from the region setting trends in green chemistry, innovative product design and manufacturing, renewable energy production, waste...

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2014 Trade Data Deal Further Blows to the Push for Fast Track

Eyes on Trade - 10 February, 2015 - 18:28

2014 Trade Data Reveal Surging U.S. Trade Deficits Under Korea FTA and NAFTA, and a Dramatic Failure to Meet Obama’s Export-Doubling Goal

Today’s release of the corrected 2014 annual trade data from the U.S. International Trade Commission reveal that President Barack Obama’s goal of doubling exports has failed dramatically, with a growing trade deficit with Korea under the U.S.-Korea Free Trade Agreement (FTA) and a burgeoning non-fossil fuel trade deficit with North American Free Trade Agreement (NAFTA) partners. Even as overall U.S. exports increased slightly due to growing U.S. fuel exports, manufacturing exports stagnated, according to projections. The data show that continuing with more-of-the-same trade policies would kill more middle-class jobs, dampen wages and increase income inequality – outcomes contrary to Obama’s “middle-class economics” agenda. The abysmal trade data are likely to reinforce congressional opposition to Obama’s bid to expand the status quo trade model by Fast Tracking the Trans-Pacific Partnership (TPP). 

  • Obama’s Five-Year Export-Doubling Plan Failed, in Part Thanks to His 2011 Korea FTA: The context for Obama’s 2015 State of the Union ask for Fast Track for the TPP is the abysmal failure
    of his 2010 State of the Union trade initiative – a plan to double U.S. exports in five years. The 2014 data show U.S. goods exports over those five years have increased by just 36 percent, falling more than $660 billion short. U.S. goods exports grew by less than 1 percent in 2014 – the same average rate of the prior two years. (The first two years of stronger export growth represented recovery from the worldwide crash in trade flows after the global financial crisis.) At the paltry 2012-2014 annual export growth rate, which is a fraction of the 4 percent average annual export growth seen in the decade before the Obama administration, Obama’s export-doubling goal would not be reached until 2057 – 43 years behind schedule.
  • U.S. Exports Declined Under the Korea FTA, While Imports and the U.S. Trade Deficit with Korea Soared: Today’s data release also reveals a 14 percent increase in the U.S. goods trade deficit with Korea in 2014, marking the third consecutive year of substantial growth in the U.S. trade deficit with Korea since the 2011 passage of the Korea FTA, which U.S. negotiators used as the template for the TPP. The 2014 U.S. goods trade deficit with Korea topped $26 billion, a 72 percent increase over the trade deficit in 2011 before the FTA took effect. U.S. exports remain lower than the level before the FTA went into effect, as imports have increased 17 percent. Had U.S. exports to Korea continued to grow at the rate seen in the decade before the FTA’s implementation, exports would be about 18 percent, or $7 billion, higher in 2014 than they actually were. The resulting trade deficit increase represents more than 70,000 lost American jobs, according to the ratio the Obama administration used to project gains from the deal. Ironically, 70,000 is the number of jobs the Obama administration promised would be gained from the Korea FTA.
  • Non-Fuel NAFTA Trade Deficit Grows: The 2014 trade data are also projected to show a more than 12 percent, or $10 billion, increase in the non-fossil fuel U.S. goods trade deficit with NAFTA partners Canada and Mexico. The overall U.S. goods trade deficit with NAFTA partners, which also increased in 2014, has ballooned $155 billion, or 565 percent, under 21 years of the pact, reaching $182 billion in 2014.
  • Contrary to the Administration’s TPP Sales Pitch That More FTAs Would Boost U.S. Exports, U.S. Exports to FTA Partners Have Grown More Slowly Than U.S. Exports to the Rest of the World Over the Past Decade. Taking into account the data for 2014, average annual U.S. export growth to all non-FTA partners in the past 10 years outpaced that to FTA partners by 24 percent.
  • The United States Has a Large Trade Deficit with FTA Partners: Overall, the aggregate U.S. trade deficit with all U.S. FTA partners topped $177 billion in 2014, marking a more than $143 billion, or 427 percent, increase in the aggregate U.S. FTA trade deficit since the pacts were implemented. In contrast, the aggregate deficit with all non-FTA countries has decreased by more than $95 billion, or 11 percent, since 2006 (the median entry date of existing FTAs). Despite this, U.S. Trade Representative (USTR) Michael Froman testified to Congress last month that we have a trade surplus with the group of FTA nations.

Heads Up for Distorted Data…

Given that the record of lagging U.S. exports and surging trade deficits under U.S. FTAs jeopardizes Obama’s prospects for obtaining Fast Track, the administration may try to obscure the results with distorted data. The USTR has taken to lumping foreign-made products in with U.S.-produced exports, which artificially inflates U.S. export figures and deflates U.S. trade deficits with FTA partners.

“Foreign exports,” also known as “re-exports,” are goods made abroad, imported into the United States, and then re-exported without undergoing any alteration in the United States. Foreign exports support zero U.S. production jobs. Each month, the U.S. International Trade Commission (USITC) reports trade data with foreign exports removed, providing the official government data on made-in-America exports. But the USTR likely will choose to use the uncorrected raw data, as it has in the past, that the U.S. Census Bureau released last Thursday, which counts foreign-made goods as U.S. exports. Our figures are based on the corrected data.

By using the distorted data, the USTR may errantly claim an aggregate trade surplus with all U.S. FTA partners, though the actual 2014 U.S. goods trade balance with FTA partners is a more than $177 billion trade deficit. By counting foreign exports as “U.S. exports,” the USTR can artificially eliminate more than two-thirds of this FTA deficit, shrinking it to less than $57 billion. The USTR may misleadingly claim an FTA trade surplus by then adding services trade surpluses with FTA partners, which pale in comparison to the massive FTA trade deficit in goods when properly counting only American-made exports.

The USTR also may repeat its bogus claim that the United States has a trade surplus with its NAFTA partners by errantly including foreign exports as “U.S. exports,” removing fossil fuels and adding services trade data. But even after removing fossil fuels (coal, oil and natural gas) and adding services trade surpluses, the United States still had a projected NAFTA trade deficit of $50 billion in 2014. Indeed, the fossil fuels share of the NAFTA trade deficit declined in 2014, and U.S. exports of services to NAFTA partners fell, according to projections. The USTR can make its errant claim of a “NAFTA surplus” only by including foreign exports, which artificially reduces the NAFTA goods trade deficit to less than half of its actual size.

The USTR also may boast about an increase in U.S. exports to Korea in 2014, while ignoring the much larger increase in imports from Korea. While U.S. goods exports to Korea in 2014 increased by $2.3 billion, imports from Korea have risen by $5.6 billion, spelling a $3.3 billion increase in the U.S. goods trade deficit with Korea in the third calendar year of the Korea FTA.

Moreover, U.S. exports to Korea have declined since the FTA went into effect and did not return to the pre-FTA level in 2014. Monthly imports from Korea repeatedly broke records in 2014, such as in October when imports from Korea topped $6.3 billion – the highest level on record.

Expect the administration to repeat the same data trick it employed last year with respect to U.S. auto sector exports to Korea. Exports to Korea of U.S.-produced Fords, Chryslers and General Motors vehicles increased by fewer than 3,100 vehicles per year in the first two years of the Korea FTA. But given that exports of “Detroit 3” vehicles before the FTA were also tiny – fewer than 8,200 vehicles per year – the USTR expressed the small increase as a significant percentage gain in a press release. The USTR did not mention that more than 184,000 additional Korean-produced Hyundais and Kias were imported and sold in the United States in each of the Korea FTA’s first two years, in comparison to the two years before the FTA, when Hyundai and Kia imports already topped 1 million vehicles per year.

Categories: Planet Not For Sale

Negociación entre países desarrollados y no desarrollados en relación a la Propiedad Intelectual

Blog de Javier Echaide - 6 February, 2015 - 20:34
Javier Echaide es miembro comisionado de la Comisión de Auditoría Integral de Tratados de Inversión y del Sistema de Arbitraje (CAITISA) de Argentina. Él hace un análisis de cómo se negocia la propiedad intelectual en organismos como la Organización Mundial del Comercio (OMC) o en tratados bilaterales de inversión y en otros instrumentos internacionales.

El tema de la propiedad intelectual es importante hoy en día porque no solamente es donde se centra la cuestión de la generación del conocimiento, sino también de donde los países desarrollados se agarran para producir mayor cantidad de riquezas.

Hoy en día, en organizaciones como la OMC, o en tratados bilaterales como son los de Libre Comercio o los de Protección de Inversiones, tratan de asegurar, reservar o garantizar la propiedad intelectual para los países desarrollados. La razón de ello es que principalmente son los que tienen las patentes, los que registran los descubrimientos o las invenciones que realizan y los que tienen -sobre todo- la mayor capacidad de generar esas inversiones.

Estas condiciones, estas reglas de juego lo que hacen hasta el momento es garantizar el statu quo. Los desarrollados se quedan así y los en vías de desarrollo también. Nuestros países van a estar condenados a exportar materias primas sin desarrollarse, sin generar polos de industrialización o de conocimiento o de sofisticación de su propia producción. Y en ese sentido, siempre vamos a estar rezagados recibiendo tecnología atrasada, poco know how, poca distribución del conocimiento a nivel global.

Los países desarrollados necesitan de la riqueza cultural y natural con que han sido beneficiados la mayoría de países en desarrollo. En ese sentido, la propiedad intelectual es estratégica en tanto se puede vincular con montón de temas, no solamente la denominación de los productos, como son las indicaciones geográficas o denominaciones de origen, sino también cuestiones que tienen que ver con la biodiversidad de una zona.

Todo esto está en pugna dentro de lo que es la OMC, en lo que se conoce como la Ronda de Doha o la Ronda para el desarrollo. La Ronda de Doha es históricamente la Ronda más larga en la historia de las negociaciones en el ámbito del libre comercio a nivel global. Arrancó en el 2001 y todavía no ha terminado. ¿Y por qué no ha terminado? Precisamente por el enfrentamiento que hay o la falta de consensos entre las distintas delegaciones de los distintos países, precisamente sobre qué temas hay que profundizar y qué temas hay que tratar de resguardar para la soberanía de los países.

Lo que los países desarrollados negocian y firman con los países en desarrollo, legalmente lo hacen en términos de reciprocidad, pero en los hechos ya existe una ventaja, una brecha entre unos y otros.

La cuestión de la propiedad intelectual está relacionada precisamente a esta brecha. Los países desarrollados son los que tienen las patentes, los que tienen los centros del conocimiento, las empresas para poder invertir sobre esos sectores, y los países en desarrollo son los que tienen conocimientos ancestrales, biodiversidad, recursos naturales en donde se pueden extraer todavía nuevas patentes y nuevas denominaciones.

Ahora, la puja se en que los países en desarrollo, desde hace ya varios años, están tratando de reservarse para sí ciertos cuidados sobre lo que es la biodiversidad, en todos los aspectos que tienen que ver con la propiedad intelectual. En el pasado, cuando se empezaron a negociar este tipo de tratados, los países en desarrollo, quizás por desconocimiento o por entrega, no pensaron que podían llegar a dar tanto de su propio patrimonio soberano. Sobre esta brecha, los países en desarrollo y las comunidades y la ciudadanía de esos países ya están empezando a interiorizarse mucho más y empiezan a tener mejor poder de negociación.

Yo creo que han mejorado las condiciones por distintas cuestiones. Hay factores que se han mejorado desde dentro de las negociaciones y también factores que se han mejorado desde fuera. Desde dentro, los Estados han empezado a tener mayor recelo de su propio conocimiento. En ese sentido están mejorando su posición de negociadores. Ya saben cómo cuidarse, ya saben qué tipo de estrategias los países desarrollados han llevado a cabo, ya saben de qué se trata este tipo de acuerdos, este tipo de organizaciones a nivel internacional y entonces se cuidan mucho más.

Desde fuera, esto también empieza lentamente a ser conocimiento de la ciudadanía en general. La ciudadanía está mucho más alertada, y le interesa. Entonces, todas estas estrategias de libre cambio, de libre flujo de capitales, que han sido garantía para desarrollar a los grandes monopolios empresariales a nivel global, lo que han causado es que las comunidades empiecen a interiorizarse, y eso también conforma un entramado social que es muy distinto a lo de hace 30 o 40 años atrás, en donde la ciudadanía estaba totalmente apartada de estos temas.

Enlace para ver esta noticia: Negociación entre países desarrollados y no desarrollados en relación a la Propiedad Intelectual o, mismo, en el video que se postea aquí abajo.
Categories: Planet Not For Sale

If Pinocchio Were Trying to Sell a Controversial Trade Deal

Eyes on Trade - 4 February, 2015 - 14:17

Four Pinocchios.  That’s the rating, reserved only for the biggest whoppers, that The Washington Post has given to the Obama administration’s most recent assertion of truthiness about the controversial Trans-Pacific Partnership (TPP) - that the deal could boost income and “support 650,000 new jobs” in the U.S. 

How far off was the administration’s claim that the deal could create 650,000 jobs?  By about 650,000 jobs. 

As Glenn Kessler, Washington Post fact-checker, explained, “the correct number is zero (in the long run), not 650,000, according to the very study used to calculate this number.”

That’s right – the study itself, from the Peterson Institute for International Economics, did not produce an estimate of job growth from the TPP.  Indeed, the study used an assumption of full employment, under which projected job gains would be precisely zero. 

The Peterson Institute has been hesitant to project employment impacts of controversial trade pacts since inaccurately predicting that NAFTA would create jobs, on the basis that the U.S. trade surplus with Mexico would rise.  Just two years into NAFTA, the $3 billion trade surplus with Mexico turned into a $26 billion trade deficit.  At that point, one of the study’s authors told The Wall Street Journal, “the lesson for me is to stay away from job forecasting.”

The Obama administration has yet to learn that lesson, apparently.  But how did the administration get a jobs number from a study that did not produce one?  (If this sounds familiar, the Chamber of Commerce pulled this same trick last year.)

The administration took the study’s projection that the TPP might yield a 0.4% increase in aggregate income in 2025 and used a back-of-the-envelope calculation to determine how many jobs could be created if that income went to new jobs instead. But then they claimed that the TPP not only could create these jobs, but simultaneously could create the income gains that they had just exhausted to produce their jobs prediction. 

In short, they double-counted, taking the Peterson Institute’s projection for the TPP’s economic impact and multiplying by two.

It’s hard to blame them – the study’s projection for the deal’s economic impact amounts to less than 40 cents per person per day in 2025 (at present value).  If you were selling the TPP, you’d want to double that too.  (Not that “less than 80 cents per day” is a great motto for a deal likely to make medicines more expensive, offshore jobs, and undermine health, environmental and financial protections.) 

But, you may say, let’s set aside the administration’s fast-and-loose numbers – don’t the Peterson Institute results still mean income gains from the TPP, however meager?  

That depends – do you make more than $88,330 per year?  If not, you’d be more likely to see income losses from the deal - not gains. 

The Peterson study made no attempt to determine the impact that the TPP would have on inequality, despite an academic consensus that trade flows under such deals have exacerbated U.S. income inequality.  So, in a study in 2013, the Center for Economic and Policy Research (CEPR) took the projected TPP gains from the Peterson Institute study and added an analysis of how the TPP would affect income inequality.  Taking the Peterson Institute's income projections as given, CEPR used the empirical evidence on the trade-inequality relationship to show that even with the most conservative estimate of trade's contribution to inequality (that trade is responsible for just 10 percent of the recent rise in inequality), the losses from projected TPP-produced inequality would wipe out the tiny projected gains for the median U.S. worker.  

If one assumes the still-conservative estimate that recent trade flows have been responsible for 15 percent of the rise in inequality, then CEPR calculates that the TPP would mean wage losses for all but the richest 10 percent of U.S. workers.  So if you're making less than $88,330 per year (the current 90th percentile wage), the TPP would mean a pay cut.  

And that’s probably still too kind to the TPP, given that it requires accepting the array of outsized assumptions that the Peterson Institute used to produce its small income gain projection.  Nearly half of the study’s projected income gains come from what the study presumes will be a surge in foreign investment resulting from the TPP. But a raft of studies has produced, at best, contradictory evidence as to whether or not TPP-like investment protections included in past trade and investment agreements have actually had any impact on foreign investment.  Indeed, the most recent studies have concluded that such terms have failed to boost foreign investment.  If the Peterson study reflected this reality, the projected aggregate income gain (which would only reach the pockets of the wealthiest) would be halved.

The study also assumes that the workers who the TPP would displace would be able to rapidly find new jobs and that these new jobs would be just as high-paying as the old jobs, meaning no negative impact on consumer demand.  This runs counter to U.S. government data.  According to the Bureau of Labor Statistics, three out of every five displaced workers in the manufacturing sector (where we could expect significant TPP-induced displacement) were forced to take a lower paying job upon being rehired last year.  For one third, the pay cut was more than 20%.  Why should we assume that the same losses would not befall TPP-displaced manufacturing workers?   

The Peterson study itself projects that during the final years of TPP implementation, about 100,000 U.S. workers would be displaced each year, and that’s only counting those who take jobs in entirely new sectors.  It’s unreasonable to assume that job replacements for all these workers would be immediate, that pay cuts would be nonexistent, and that there would be zero resulting impact on demand.  Back in reality, the hit to consumer demand would depress further the tiny aggregate income gain projected from the deal, spelling even tinier gains for the richest and even steeper income losses for the rest of us. 

So yes, the administration’s claim of 650,000 jobs from the TPP definitely deserves its four Pinocchios.  Or, to borrow a card from the administration, let’s call it eight.  

Categories: Planet Not For Sale

Hopkins, MN Public Schools and Minnesota-grown Wheatberries Case Study

Language:  English IATP author(s):  Erin McKee VanSlooten Author(s) (external):  JoAnne Berkenkamp, Tomorrow's Table LLC; Kaylee Skaar, IATP intern File:  2015_02_02_GrainsAndPulses_MinnesotaCaseStudy.pdf Overview Located just west of Minneapolis, MN, the Hopkins Public Schools system serves nearly 7,400 students. The district is composed of six elementary schools, one magnet Chinese immersion school, two junior high schools and one high school. Thirty-eight percent of the district’s students qualify for free or reduced-price meals. Hopkins Public Schools strives to offer menus composed of minimally processed foods. Approximately 90 percent of the food served in the high school is prepared from scratch, as is 75...

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Alaska Grown Barley and the Fairbanks North Star Borough School District Case Study

Language:  English IATP author(s):  Erin McKee VanSlooten Author(s) (external):  JoAnne Berkenkamp, Tomorrow's Table LLC; Kaylee Skaar, IATP intern File:  2015_02_02_GrainsAndPulses_AlaskaCaseStudy.pdf Overview Located in interior Alaska, the Fairbanks North Star Borough School District serves daily lunches for over 5,000 of its 14,300 students.1 The district includes 35 public, charter, magnet, and specialized schools that range in size from a rural elementary school of fewer than 100 students to a high school of 1,200 students. Fairbanks’ efforts to incorporate Alaska Grown foods into its meal program is part of an extensive Farm to School movement in Alaska. The state Legislature passed legislation to formally...

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Montana-grown Lentils and the Kalispell, Montana Public Schools Case Study

Language:  English IATP author(s):  Erin McKee VanSlooten Author(s) (external):  JoAnne Berkenkamp, Tomorrow's Table LLC; Kaylee Skaar, IATP intern File:  2015_02_02_GrainsAndPulses_MontanaCaseStudy.pdf Overview Located in rural northwestern Montana, the Kalispell Public School District has about 6,000 students, about 3,500 of which are served lunch daily.1 The district places a strong emphasis on providing locally grown products, and its Farm to School program now involves 12 to 15 local producers. Lunch menus include more than a dozen varieties of local fruits and vegetables, as well as local whole grains, meat and dairy products. The Kalispell district prioritizes growers from very nearby areas whenever possible,...

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Portland Public Schools and Regionally Grown Legumes and Grains Case Study

Language:  English IATP author(s):  Erin McKee VanSlooten Author(s) (external):  JoAnne Berkenkamp, Tomorrow's Table LLC; Kaylee Skaar, IATP intern File:  2015_02_02_GrainsAndPulses_PortlandCaseStudy.pdf Overview The largest school district in Oregon, the Portland Public Schools (PPS), is composed of 47,000 students in 81 schools. PPS is a diverse district with 46 percent of children eligible for free or reduced-price meals. About half of its student body is white, 16 percent are Hispanic, 11 percent are African American, eight percent are Asian, and seven percent are multi-racial. Portland’s Nutrition Services1 serves 11,000 school breakfasts, 20,000 school lunches and 1,800 suppers daily and employs...

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Ithaca City School District and New York-Grown Organic Dry Beans and Tofu Case Study

Language:  English IATP author(s):  Erin McKee VanSlooten Author(s) (external):  JoAnne Berkenkamp, Tomorrow's Table LLC; Kaylee Skaar, IATP intern File:  2015_02_02_GrainsAndPulses_IthacaCaseStudy.pdf Overview The Ithaca City School District (ICSD) is located in Ithaca, New York, 225 miles northwest of New York City. Nestled at the southern end of Cayuga Lake in the Finger Lakes Region, Ithaca’s beautiful bucolic setting and proximity to an abundance of farmland has been credited with inspiring a food culture that prioritizes local, fresh and often vegetarian cuisine. ICSD serves 5,400 students in grades K-12 with eight elementary schools, two middle schools, one high school, and one alternative middle school/high...

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Categories: Planet Not For Sale

Grand Rapids Public Schools: Michigan-grown dry beans Case Study

Language:  English IATP author(s):  Erin McKee VanSlooten Author(s) (external):  JoAnne Berkenkamp, Tomorrow's Table LLC; Kaylee Skaar, IATP intern File:  2015_02_02_GrainsAndPulses_GrandRapidsCaseStudy.pdf Overview Grand Rapids Public Schools (GRPS) is Michigan’s fourth-largest public school district, serving more than 17,000 students. GRPS’ Nutrition Services1 serves approximately 25,000 meals a day with 86 percent of students being eligible for free lunch. About 36 percent of the student body is African American, 33 percent Hispanic/Latino, 22 percent Caucasian, and six percent are multi-racial. Through its central commissary, Grand Rapids School District also manages food services for the East Grand Rapids Public...

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Categories: Planet Not For Sale