Planet Not For Sale

Language:  English IATP author(s):  Dr. Steve Suppan File:  2013_04_23_Nanotech_SS.pdf Overview To feed a growing population under increasing natural resource constraints, the World Bank, the United Nations Food and Agriculture Organization (FAO) and other international organizations are promoting “sustainable intensification” as the future of agricultural production.1 The application of nanotechnology techniques to agricultural crop inputs is one of the proposed tools for “sustainable intensification.”2 These applications include reducing the volume of pesticide use through adding nano-silver particles to pesticides to make them more effective in targeting pests with a smaller pesticide volume; adding nano–metal oxides to target soil pathogens, e.g., those...

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Subtitle:  Lessons from Water Trading in the U.S. and Australia Language:  English IATP author(s):  Shiney Varghese File:  2013_03_27_WaterTrading_SV.pdf As water insecurities increase globally, there is an increasing emphasis on demand management approaches, which for the most part emphasize market mechanisms as a means to ensure water security for all. Water trading is one of the market-based mechanisms that helps transfer water from one user to another. This approach is gaining ground as climate uncertainties grow, as corporations want to control water for their value chain and as scarcity conditions give rise to the idea of water primarily as an economic good. This paper focuses on the experiences in the western United...

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In December we reported that Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, had announced its intent to use the extreme foreign investor privileges enshrined in NAFTA to directly challenge Canada's entire basis for granting patents.  Eli Lilly's audacious attempt, sparked by Canadian courts' invalidation of an Eli Lilly medicine patent, marks the first time a patent-holding pharmaceutical corporation has tried to use the extraordinary investor privileges provided by U.S. “free trade” agreements (FTAs) as a tool to push for greater monopoly patent protections, which increase the cost of medicines for consumers and governments. Because Canada has dared to enforce its own patent policy, Eli Lilly is demanding $100 million in compensation from Canadian taxpayers. 

We've just released an updated and expanded analysis of this worrisome NAFTA attack, available here.  In this expanded briefing paper, we uncover more bogus but dangerous legal claims that Eli Lilly asserts as backing for its attempt to take down Canada's entire legal basis for granting patents.  For example, the corporation accuses Canada of using a patent policy that "contravenes" the company's "expectations."  Eli Lilly claims that NAFTA guarantees the company the "right" to see its expectations fulfilled by the Canadian government.  To make such a cavalier claim, the company ignores the consistent opinions of multiple governments (including the U.S. government) that even NAFTA's sweeping investor protections guarantee no such "right," instead drawing on the inventive interpretations of FTA investor-state tribunals comprised of three private attorneys.  As the U.S. government stated in another NAFTA investor-state case, "if States were prohibited from regulating in any manner that frustrated expectations – or had to compensate for any diminution in profit – they would lose the power to regulate." 

Eli Lilly also invokes the national treatment privileges that NAFTA provides to investors (that governments should treat foreign and domestic investors alike), but instead of using NAFTA's already broad provisions, the company decides to invent a wholly new goverment obligation to foreign investors.  Eli Lilly complains that Canada's patent standards are different from those found in the U.S. and EU, and then asserts that Canada is obliged by NAFTA to enforce those foreign standards.  The notion of such a bizarre obligation is rather unprecedented even among the musings of creative investor-state tribunals.  In short, Eli Lilly is alleging that Canadian taxpayers should fork over $100 million because their government enforced its own patent laws rather than those of other countries.  

Not yet finished, the company alleges an additional national treatment violation by claiming that the Canadian courts' invalidation of its patent for an ADHD drug gives a prohibited advantage to Canadian generic firms that are now allowed to sell the drug.  Um, of course the removal of patents helps generic producers – it always does, but it does so regardless of whether the generic firms and/or the patent holders are foreign or domestic. Were Eli Lilly’s skewed logic to be accepted by the investor-state tribunal, any invalidation of a foreign investor’s patent, regardless of the basis, could be construed as a violation of FTA-protected investor privileges. 

Finally, Eli Lilly argues that Canada's invalidation of its patent monopoly in accordance with the country's established patent policy constitutes an "indirect expropriation" of the pharmaceutical giant's investment.  This avant garde legal claim, one rejected by most nations' courts, would require a government to compensate a corporation even for a nondiscriminatory regulatory policy that happens to diminish the value of the company's "property" (including, according to Eli Lilly, a patent monopoly).  In making this allegation, Eli Lilly skirts the fact that even NAFTA allows nations the flexibility to determine their own patent policy standards, and that such autonomously-defined standards cannot be the basis for claims of "expropriation."  

As far-fetched as Eli Lilly's allegations are, the anomalous investor-state system enshrined in NAFTA-style deals now empowers three attorneys sitting on a FTA-created tribunal (a body that has become notorious for imaginative and sympathetic approaches to investor claims), to determine the validity of Canada's patent policy.  Unfortunately, this radical system would be expanded by the Trans-Pacific Partnership (TPP), a NAFTA-style deal being negotiated between the U.S., Canada, and nine other countries.  The TPP's leaked investment chapter would extend the scope of NAFTA's investor privileges to explicitly cover "intellectual property," making it easier for pharmaceutical corporations to launch Eli-Lilly like attacks on sovereign governments' patent polcies. 

Will Eli Lilly prove successful in undermining Canada's patent laws to protect its patent monopoly in the ironic name of "free trade?"  The outcome of the corporation’s investor-state attack under NAFTA is critical for those seeking to safeguard countries’ ability to determine their own patent standards, a prerogative that is essential for preventing patent “evergreening” and ensuring access to affordable medicines. It is critical not just so that Canadian taxpayers can make sure that the demanded $100 million goes to more worthy ends than enhancing Eli Lilly’s profit margin, but to avoid emboldening other pharmaceutical firms contemplating the launch of similar investor-state demands against other governments that dare to set their own patent policies. As the Eli Lilly case gets underway, negotiations for the TPP and its proposed expansion of the investor-state system continue. Stopping the NAFTA expansion deal presents health advocates with today’s biggest opportunity to halt the advance of the system that empowered Eli Lilly’s audacious threat.

For more analysis of this threat, click here to see our newly expanded briefing paper.  

The 2008 global financial crisis reaffirmed the need for robust regulation to address the increasingly reckless banking and financial sector. One of the most important regulatory tools in this post-crisis era of reform is the use of capital controls to regulate cross-border finance, a policy that even institutions long-opposed to capital controls, such as the International Monetary Fund, have now formally recognized as beneficial. However, there is growing concern that the rules of trade and investment treaties may not provide enough policy space for countries to take advantage of these necessary regulatory measures.

In response to this concern, a task force convened in June of 2012 in Buenos Aires, Argentina to review the rules of the WTO and various Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs) and examine the extent to which global trade rules are compatible with the ability to deploy effective capital control regulations. The result of this meeting is a comprehensive report released this month titled Capital Account Regulations and the Trading System: A Compatibility Review, which is comprised of chapters written by experts from around the globe (including Todd Tucker, former Research Director at Global Trade Watch and former editor-in-chief of Eyes on Trade).

The report highlights several alarming areas where trade and investment treaties conflict with and impede the ability to use important regulatory tools such as capital controls.  It goes on to offer several changes that should be made to outdated trade policies to ensure that countries have sufficient policy space to take the regulatory measures necessary to avoid future financial crises.

Unfortunately, despite concerns expressed by members of civil society, economists, policymakers, and various other international experts, the current negotiations of the Trans-Pacific Partnership (TPP) are on track to lock in the antiquated trade model of extreme deregulation, including a prohibition of bans on risky financial products and a restriction on now widely-endorsed capital controls.

Click here to check out the full report.

On Friday we sent out a press release exposing the export-chilling, deficit-expanding, job-eroding track record of the Korea Free Trade Agreement (FTA) on the first anniversary of its implementation.  That same day, the U.S. Trade Representative (USTR) sent out a press release singing the export-boosting praises of the Korea FTA.  What could explain this riddle of dueling press releases?   

Some basic data tricks.  USTR’s press release relied on five sleights of hand to gussy up the unsightly Korea FTA data and generate some misleading, albeit rose-colored, conclusions:

• Cherry-picking.  Overall U.S. exports to Korea have fallen 9 percent under the FTA.  USTR first tries to get around this inconvenient fact by simply “disregarding” particularly large exports that declined (e.g. corn) so as to produce a sanitized illusion of an increase in “total U.S. exports.” (By “total U.S. exports” they mean “some U.S. exports, excluding particularly important export sectors that would contradict our argument of a total export increase.”)  USTR saves most of its FTA-touting words for some narrow sectors that were export-increasing exceptions to the export-falling rule of the Korea FTA.  For example, while total U.S. agricultural exports to Korea have plunged 29% under the FTA, USTR spotlighted export rises in specific agricultural products like soybeans and grape juice.  Such “soybean-picking” avoids the essential question: what has been the total effect of the Korea FTA on U.S. exports and jobs?  The inconvenient answer: a loss. 

• Using the wrong timeframe.  The USTR press release acted as if the Korea FTA was in effect for the full 2012 calendar year, though it only took effect on March 15, 2012 (hence the timing of the press release).  The agency errantly compared the full year of data for 2011 with the full year from 2012, claiming the results to be due to the Korea FTA.  This timeframe starts and ends too soon.  An accurate assessment of the Korea FTA’s legacy would begin the data comparison with the first full month in which the FTA was actually in effect: April 2012 (vs. April 2011).  Also, the timeframe would not stop with the end of 2012, but with the most recent month for which we have data: January 2013.  Perhaps USTR decided to omit January because it marked the highest monthly U.S.-Korea trade deficit on record.  Whatever their reasons, the timeframe mistake skews each starry-eyed data point that USTR presents in its release. 

• Ignoring imports.  As per usual, USTR has examined only one side of the trade equation.  The word “imports” doesn’t appear once in their press release.  But 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 the Korea FTA.  Under the deal, the U.S. trade deficit with Korea has swelled 30 percent, costing tens of thousands of U.S. jobs.  By ignoring rising imports, USTR claims a gain for auto manufacturers under the FTA.  But while U.S. auto exports to Korea have increased by $65 million under the deal, U.S. auto imports from Korea have ballooned by $2.3 billion.  The resulting 18 percent increase in the U.S. auto trade deficit with Korea is a net loss for U.S. automakers, not a net gain. 

• Counting foreign-made “exports.”  USTR once again inflates the value of U.S. exports by counting goods that actually are made overseas – not by U.S. workers.  These “re-exports” are goods made elsewhere that are shipped through the United States en route to a final destination.  To assess what the Korea FTA has actually meant for U.S. jobs, our release eliminated re-exports in calculating the 9 percent drop in U.S.-made exports to Korea under the deal. 

• Forgetting about inflation.  It appears that USTR forgot to adjust its numbers for inflation, an omission that artificially magnifies the value of U.S. exports in 2012 relative to 2011.  All of the data contained in our press release is properly inflation-adjusted to show a truer picture of U.S. exports under the Korea FTA – a picture that unfortunately does not look too pretty without all of USTR’s cropping and airbrushing.    

If we want trade policy that behooves the majority, rather than an expansion of the damaging Korea FTA model, then we have to look honestly at the Korea FTA track record.  If instead we twist the data to make mistakes look like successes, we are binding ourselves to the replication of failure.  

Subtitle:  Agriculture organizations ask FDA to halt antibiotic use in fuel byproduct sold as animal feed Language:  English IATP author(s):  Andrew Ranallo Author(s) (external):  Elisabeth Holmes, Center for Food Safety File:  2013_03_15_DGSPetition_PR.pdf WASHINGTON, D.C. – According to a petition submitted today to the Food and Drug Administration (FDA), antibiotic use in ethanol production is illegal, unnecessary and adds to the catastrophic public health threat from antibiotic-resistant infections in humans. The petition, submitted by the Center for Food Safety (CFS) and the Institute for Agriculture and Trade Policy (IATP), makes the case that...

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Para los supersticiosos: un histórico martes 13. Para los fieles: la elección de un Papa histórico. La designación del cardenal argentino Jorge Bergoglio como Sumo Pontífice de la Iglesia Católica y máxima autoridad de la Santa Sede causó sorpresa por motivos diversos, no solamente porque la elección por parte del cónclave vaticano de cardenales decidió rápidamente (Bergoglio fue elegido en la quinta votación y en dos días de duración del cónclave y con un alto concenso dentro del mismo), sino también por razones que ya los periódicos de todas las latitudes se encargan de subrayar: que se trata del primer Papa sudamericano, es más, el primer Papa no europeo, pero además el primer Papa jesuita en la historia de la Iglesia.

En lo personal entiendo que este último dato resalta de una importancia mucho mayor que la nacionalidad argentina de la autoridad papal. Ya se oyen opiniones referidas al hecho de que al ser argentino el Papa, podría significar ciertos beneficios para la población local o posicionamientos determinados de ciertos sectores locales llevados ahora a foros "más importantes" a nivel internacional. Pero en realidad ello no va más allá de una expresión de deseos que poco tiene que ver con la realidad política, institucional e incluso religiosa del hecho que sorprendió a todos.

Resalto la condición de la orden a la que el ahora Papa Francisco pertenece -la Compañía de Jesús- dado que era el único cardenal de dicha orden dentro del cónclave, lo cual lo diferencia del resto de sus compañeros participantes y lo posiciona en un claro sector minoritario dentro en esta especie de "asamblea" de la cúspide colegiada de la Iglesia Católica.

Es preciso considerar dos planos antes de proseguir: el primero es el plano del posicionamiento político-ideológico de Jorge Bergoglio en el ámbito local y respecto de la política (llamémosle) laica, más afín a sectores conservadores aunque no de los más rancios, pero que sin embargo no demoró en posicionarse duramente contra el reconocimiento de derechos maritales a personas del mismo sexo o cuestiones de salud reproductiva (ejemplo: la enseñanza de educación sexual en las escuelas) y ni qué decir respecto a temas aún más urticantes para la Iglesia como el aborto. En ese plano, Bergoglio no se ha diferenciado de los aspectos más básicos y mayoritarios de la Iglesia Católica y una opinión en contrario sería efectivamente la sorpresa. En este ámbito es que también pueden incluirse las acusaciones y denuncias existentes contra el ex cardenal respecto de la última dictadura militar argentina en cuanto a que hubo una colaboración a nivel institucional entre el clero y los sectores de poder que perpetuaron aquel golpe y que fueron en minoría los casos de religiosos y religiosas que se identificaron con los sectores sociales perseguidos en esos nefastos momentos.

Hoy el Vaticano responde aduciendo una "campaña de una izquierda anticlerical" contra Francisco. No texiste ni tal complot contra el nuevo Papa como tampoco pruebas acabadas que hayan fundamentado judicialmente las acusaciones que giran en su entorno. Sí es cierto que Bergoglio fue llamado como testigo por la desaparición de sacerdotes durante la dictadura entre 1976 y 1983 y que fue un testigo reticente y hay quienes le reclaman por no haber hecho lo suficiente con los curas bajo sus órdenes y que fueron desaparecidos por la dictadura. También fue toda la institución eclasiástica la que colaboró con la comisión de delitos de lesa humanidad, a la que el hoy Papa Francisco pertenece, por supuesto. Pero la justicia no halló responsabilidad individual del ex cardenal sobre los hechos que se le imputaban.

Pero esto no es lo único. Existe además otro plano sobre el cual se dirimen las distintas corrientes internas en materia dogmática, litúrgica y por supuesto ideológica y política hacia adentro de la llamada Iglesia Universal y que da la puja de poder hacia el interior del clero. Este plano permite hacer ciertas disquisiciones hacia adentro de la Iglesia, que si bien no modifica la realidad macro del Vaticano y de la institución eclesiástica, sí hace jugar factores de poder internos en las pujas dentro de la Iglesia. En este sentido, el hecho de que el Papa Francisco sea de la orden jesuita es un hecho sumamente relevante que debe ser sopesado como el verdadero factor sorpresivo de la elección del día de ayer.

La Compañía de Jesús es una orden fundada en 1540 por varios sacerdotes vascos entre los cuales resalta San Ignacio de Loyola. Loyola decidió, con la formación de esta orden, encabezar el movimiento de la contrarreforma católica, opuesta a los sectores reformistas del seno de la Iglesia de Roma que se alzaron en protesta en contra de la corrupción de la institución y por un retorno a los orígenes litúrgicos y del credo católico: la "Reforma Protestante" encabezada por sacerdote germano Martín Lutero, entre otros. Este perfil dado por Loyola en virtud de la contrarreforma motivó la creación de un cuerpo especial ligado al Papa de Roma por "un vínculo especial de amor y servicio", tal como dicen los estatutos originales de la orden. Así, los religiosos miembros de la orden (la misma también permite laicos como miembros) realizan los tres votos esenciales del sacerdocio (obediencia, pobreza y castidad) sumados a un cuarto voto por el cual se someten en obediencia directa al Papa de Roma. La fórmula de su jura dice: "Militar para Dios bajo la bandera de la cruz y servir solo al Señor y la Iglesia, su Esposa, bajo el Romano Pontífice, Vicario de Cristo en la tierra." Esto no es solamente una frase consuetudinaria sino toda una declaración política en momentos en que el Papado se hallaba en guerra contra los sectores reformistas y contra las monarquías que se declaraban protestantes, o bien en otros momentos históricos en los que se contó con dos o más Papas en diversas sedes siendo Roma y Avignón las más recordadas.

Así, para actuar precisamente contra la reforma protestante, los jesuitas se dedicaron especialmente a la educación y la formación como también a la evangelización en territorios más allá de los conocidos entonces: por ello son famosas las "misiones jesuitas" en América y cuyos resabios perduran hoy en colegios religiosos primarios y secundarios así como en universidades (la Universidad del Salvador en Argentina, por ejemplo, en su momento fundada por los jesuitas), en ruinas como las de San Ignacio (Argentina) o incluso en referencias nominales de algunas jurisdicciones nacionales (la provincia argentina de Misiones, por ejemplo).

Los jesuitas poseen una formación muy estricta especializándose en humanidades, filosofía y por supuesto teología. Son una clase de "sector intelectual" dentro de la Iglesia Católica dada su profunda formación en las áreas mencionadas. Por sus actividades seculares y su involucramiento social, supieron también desarrollar la gestión de sus misiones, lo cual supo originar un grueso cuerpo administrativo y un fuerte sector financiero que se sumó a su tarea de evangelización. Esto significó, en el devenir del tiempo, en una acumulación de poder que dependía directamente del Papa y por fuera de cualquier estructura interna de la Iglesia así como de jurisdicciones laicas de las monarquías europeas. Ello comúnmente hizo que entraran en conflicto en los territorios donde actuaban las misiones y que, a la vez, pertenecían a las distintas coronas europeas, como en América, y que originó que fueran perseguidos durante varios, conociéndose por ejemplo su expulsión de las colonias americanas a raíz de la sombra que significaron en cuanto a poder político en las colonias de los reyes de Portugal y de España, sobre todo con la llegada de la dinastía Borbón a esta última corona.

Supieron ganarse enemigos no solo con los sectores protestantes o con los monarcas celosos de su poder político, sino también con los movimientos ilustrados posteriores durante la Revolución Francesa: liberales como Voltaire o Montesquieu, los monarcas que adhirieron al Despotismo Ilustrado del siglo XVIII, los masones o mandatarios como Napoleón, John Adams -segundo presidente de los EE.UU.- e incluso Otto von Bismarck. Todas estas complejidades hicieron que a través de los años los jesuitas fueran expulsados sucesivamente de casi todos los lugares donde actuaban y que ello significara a su vez tensiones con el Papado ante los límites de la protección de la autoridad papal sobre la orden en contradicción con su férreo voto obediencia directa.

Pero también cosecharon enemigos dentro de la Iglesia con los sectores más conservadores. Esto es a raíz del conocido Concilio Vaticano II de 1962 que motivó distintos perfiles doctrinarios en el seno de la Iglesia Católica, así también con distintos sectores nada menores dentro de la orden que abrazaron la llamada "Teología de la Liberación" u"opción por los pobres", por lo que la propia Compañía se nutrió tanto de sectores conservadores hacia adentro de la misma como de sectores progresistas en términos políticos.

Esta es la orden jesuita de donde proviene el actual Papa -que con su sola designación ha ganado la tapa de la revista Time-, de hecho no de los sectores más conservadores dentro de la Curia Romana, aunque tampoco identificable con los perfiles más progresistas de transformación doctrinaria o incluso social. Sólo entendiendo sus orígenes se comprende que los "gestos" del Papa Francisco pueden sorprender o asombrar a los desprevenidos, pero que no hacen más que honrar ese perfil meticuoso, bien formado, austero y leal de la orden. De hecho, se trata de una orden que fue profundamente crítica -y en esto es inclusivo al Papa Francisco- de las políticas neoliberales a nivel mundial, más aún en América Latina, algo que los sectores conservadores parecen haber olvidado muy fácilmente.

Conocida es su posición opositora sobre el gobierno de Cristina Fernández de Kirchner, lo que puede trasladarse a la generalidad de los "gobiernos populistas" o post-neoliberales en la región, aunque suene ello apresurado. ¿Será acaso apresurado hacer una comparación con la elección de Karol Wojtyla (ferviente anticomunista) para la Polonia de 1978 bajo los influjos de la URSS? Hay tela para cortar sin dudas, pero entiendo que los cambios pueden ser más gesticulares -a veces no menores en una institución cargada de símbolos- que materiales.

Por todo esto es esperable que la asunción de un Papa jesuita genere un reflujo de las pujas internas vaticanas. Puede significar un alejamiento de los sectores más conservadores identificados con Benedicto XVI debido a los escándalos de pederastía y las filtraciones del llamado "Vatileaks", pero no necesariamente ello repercutirá en cambios estructurales de la Curia Vaticana. El nombre elegido por la autoridad papal, en alusión a San Francisco de Asís, es sin dudas uno de los varios gestos simbólicos que en estos primeros días el Papa ha manifestado y que ratifican el perfil ya cultivado por Bergoglio en Buenos Aires: un perfil bajo, sencillo, de actitudes no confrontativas. Y ello le vale a la confrontación con los poderes internos de la Iglesia.

Though U.S.-Korea Free Trade Agreement Outcomes Are Abysmal, Obama Pushes for Trans-Pacific and European Agreements Based on Same Model

WASHINGTON, D.C. – The actual outcomes of the U.S.-Korea Free Trade Agreement (FTA) that took effect one year ago, March 15, have been exactly the opposite of what the Obama administration promised, Public Citizen said today. Despite government data once again demonstrating the damage caused by yet another “trade” agreement based on the model of the North American Free Trade Agreement (NAFTA), the Obama administration is trying to sell massive Trans-Pacific and European agreements based on the same model with the same false promises.

U.S. export growth to countries with pacts like the U.S.-Korea FTA has been particularly lackluster; growth of U.S. exports to countries that are not FTA partners has exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade. In contrast to the Obama administration’s promise that the U.S.-Korea FTA would mean “more exports, more jobs,” U.S. goods exports to Korea have dropped 9 percent (a $3.2 billion decrease) since the Korea FTA took effect, in comparison to the same months in the year before FTA implementation. U.S. imports from Korea have climbed 2 percent (an $800 million increase). The U.S. trade deficit with Korea has swelled 30 percent (a $4 billion increase). The January data from the U.S. International Trade Commission show that the U.S. trade deficit with Korea skyrocketed 81 percent above December’s level, topping $2.4 billion – the largest monthly U.S. trade deficit with Korea on record. The ballooning trade deficit indicates the loss of tens of thousands of U.S. jobs.

“I suspect that most Americans are likely to be angry with the politicians who got us into another one of these NAFTA-style deals, rather than surprised at the damaging outcome. Polls show that majorities of U.S. independent, Democratic and GOP voters consistently oppose these deals because they think they are bad for their families and the American economy,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “The Obama administration is inviting the public to focus on the debacle of its Korea Free Trade Agreement by using the same failed claims to push a Trans-Pacific FTA with 10 Asian and Latin American nations that is literally based on the Korea FTA text.”

The decline in U.S. exports under the Korea FTA contributed to an overall disappointing U.S. export performance in 2012, placing the United States far behind Obama’s stated goal to double U.S. exports by the end of 2014. At the sluggish 2012 export growth rate of 2 percent, the United States will not achieve the president’s goal until 2032, 18 years behind schedule.

“The data show that these Obama administration-supported FTAs are undermining the national goals set by the president of boosting our exports, reviving U.S. manufacturing and creating American jobs,” said Wallach. “This kind of data makes everyone wonder just why the administration keeps pushing so-called ‘trade’ agreements like the Korea FTA, and now the Trans-Pacific Partnership, that facilitate offshoring, ban Buy American provisions and erode manufacturing jobs, utterly contradicting the president’s domestic agenda.”

Many of the sectors that the Obama administration promised would be the biggest beneficiaries of the Korea FTA have actually been some of the deal’s largest losers. U.S. pork exports to Korea have declined 18 percent under the FTA relative to the same months in the year before FTA implementation, while beef exports have fallen 9 percent and poultry exports have plunged 41 percent. While U.S. auto exports to Korea have increased 7 percent under the FTA, U.S. auto imports from Korea have surged 17 percent, causing an 18 percent rise in the U.S. auto trade deficit with Korea.

Read additional analysis of the government data on U.S. trade with Korea under the U.S.-Korea FTA.

Chevron is using the investor-state system to avoid paying $18.2 billion to residents of the contaminated Lago Agrio region in Ecuador (pictured above).
As global criticism of the investor-state dispute system mounts, Ecuador is taking concrete steps to secede from pacts that enshrine this system, which exposes the country to direct attacks on its public interest policies from foreign investors.  In 2009, Ecuador formally withdrew from the International Centre for Settlement of Investment Disputes (ICSID), an institution which facilitates foreign corporations' legal claims against sovereign governments' policies. On Monday, President Rafael Correa put forth a bill to request that Ecuadorian lawmakers annul Ecuador's Bilateral Investment Treaty (BIT) with the United States, declaring that such treaties “favor foreign investors over human beings.”

The U.S.-Ecuador BIT binds Ecuador to the controversial investor-state system, which uniquely empowers foreign investors to directly challenge a country’s environmental, health, and other public interest laws by claiming that they violate BIT-created investor privileges and threaten “expected future profits.” These cases skirt national court systems and are instead decided by private three-person tribunals composed of arbitrators who bill by the hour. If a corporation wins, taxpayers of the losing country are expected to foot the bill, with no cap on the awarded amount (and even if a country “wins,” they often have to pay exorbitant court fees).

Ecuador has seen some of the most egregious examples of these cases, so it is not surprising that President Correa would want to protect Ecuador’s citizens from further lawsuits.  For instance, after 18 years of persistence, residents of Lago Agrio in the Ecuadorian Amazon won a historic ruling of $18.2 billion dollars against Chevron for the massive contamination of the region between 1964 and 1990 which is alleged to have caused a cancer epidemic and decimated local indigenous groups.  Instead of complying with the Ecuadorian court’s ruling, Chevron has so far made good on its promise of "a lifetime of appellate and collateral litigation" in order to avoid paying out the award.  To evade justice, Chevron launched an investor-state case against Ecuador under the same U.S. BIT that Correa now seeks to annul.  The tribunal in that case ordered the Ecuadorian government last year to interfere in the operations of Ecuador’s independent court system so as to stop enforcement of Chevron's $18.2 billion penalty. 

To add insult to injury, last October Ecuador was slammed with a record $1.8 billion judgment in a case filed by Occidental Petroleum -– the highest amount to ever come out of an ICSID tribunal. The company launched the case against Ecuador under the same U.S. BIT that Correa hopes to annul.  Occidental asked for billions in damages after the company violated a contract with the government, prompting the government to terminate Occidental's investment as contemplated by Ecuadorian law.  To impose a $2.4 billion penalty on Ecuador's taxpayers (including interest and fees), the investor-state tribunal employed astonishing leaps of logic that a dissenting member of the tribunal described as "egregious." 

Ecuador is not alone in its resistance to the harmful investor-state system. As the “egregious” judgments continue to pile up (tribunals have already awarded over $3 billion to foreign corporations under U.S. BITs and free trade agreements, and more than $15 billion is still pending), more countries are denouncing the investor-state system:

• The Brazilian Parliament has refused to ratify any investor-state agreements.
• India has made a move to abolish investor-state dispute clauses in Free Trade Agreements (FTAs).
• South Africa is re-examining its policy on investor-state disputes and has refused to renew BITs with the EU. 
• Bolivia and Venezuela have also pulled out of ICSID.

Unfortunately, a leaked draft text of the investment chapter tells us that these harmful rules are being replicated and expanded under the Trans-Pacific Partnership (TPP), a NAFTA-style "free trade" agreement currently under negotiation between the U.S. and 10 Pacific Rim nations. Australia, a TPP negotiating Party, has already refused to be subjected to investor-state dispute settlement as part of the deal, and other TPP negotiating Parties have grown increasingly wary of the prospect.  Now more than ever, it is crucial that other countries join the lead of Ecuador, Australia, et al. and refuse to bind themselves to a radical system that puts their environmental quality, public health, and sovereignty at risk.

The just-released monthly trade data from the U.S. International Trade Commission reveals an expanding U.S. trade deficit with the world as U.S. exports dropped and imports rose in January, relative to December of last year.  But the deficit picture is even starker for U.S. trade with Korea under the tenth month of the Korea Free Trade Agreement (FTA).  While U.S. goods imports from all countries rose 3% in January, U.S. imports from Korea soared 18%.  While U.S. goods exports to the world slipped 6%, exports to Korea fell 8%.  And while the U.S. trade deficit with the world climbed 21% in January, the deficit with Korea jumped 81%.  January's U.S. trade deficit with Korea topped $2.4 billion -- the largest monthly deficit with Korea on record.  In short, another month of trade with Korea under the Korea FTA has produced another month of remarkably large job-displacing trade imbalances. 

The U.S.-Korea trade imbalances of recent months are remarkable not just in comparison with most other U.S. trade partners, but in comparison to how U.S. trade with Korea looked before the Korea FTA took effect in March of last year.  In nine of the ten first months of the FTA's implementation, including the most recent month, U.S. exports to Korea fell below pre-FTA levels (relative to the same months in the prior year), spelling an overall 9% fall in exports under the FTA.  In six of those ten months, including the most recent month, U.S. imports from Korea exceeded pre-FTA levels, yielding a 2% increase in imports under the FTA.  As a result, the U.S. trade deficit with Korea under the FTA's first ten months is 30% -- or $4 billion -- larger than in the same months before the deal took effect.  The graph below summarizes this none-too-pretty picture for U.S. jobs, depicting the difference between Korea trade levels under the FTA (April 2012-January 2013) and those occurring in the same months one year earlier, before the FTA took effect.  

As Obama administration trade negotiators meet in Singapore this week to hash out the details of the Trans-Pacific Partnership, a massive expansion of the Korea FTA model, they should take a gander at this data. If the Obama administration hopes to fulfill its promise of a rebirth in U.S. manufacturing, a restoration of middle-class wages, and a recovery of decent jobs, it cannot afford to sign another sweeping FTA that expands upon the Korea FTA's sorry track record.  

This guest post comes from Dominique Aulisio, a concerned community member from Lakeland, FL:

Earlier this year, Alisa Simmons, Global Trade Watch’s National Field Director, came to Florida to speak at engagements in nine cities throughout the state to expose and explain the Trans-Pacific Partnership (TPP) agreement. The speaking tour came together thanks to a true grassroots effort on the part of individuals and organizations determined to push past the silence on the TPP from the Obama administration and the media. Together we organized events in Tallahassee, Jacksonville, Gainesville, Orlando, Lakeland, Tampa, Immokalee, Lake Worth, and Miami. At each stop, community members who are aware of the negative impacts of NAFTA or are simply wary of expanding corporate power came out to learn about the TPP.

In Orlando, community members and Central Florida Jobs with Justice met with Senator Nelson and Senator Rubio’s offices. We thanked Senator Nelson for signing onto Senator Al Franken’s (D - Minn) letter concerning jobs and labor standards in the TPP. We asked that both Senators demand a release of the TPP negotiating text for review by Congress and the public. We also asked that they vote “No” on “Fast Track,” which would allow the Obama administration to ram approval of the TPP through Congress, without members having a chance to say what should or should not be in the secretive TPP text.

Throughout the speaking tour stops, we found that most attendees had never heard of the TPP before the tour. Many reacted with surprise and anger when they learned about the provisions the Obama administration is secretly negotiating that give more power to corporations. Many responded with comments about “global corporate governance” and “loss of national sovereignty” when they learned about the private tribunals the TPP will create to allow corporations to sue countries for impacting profits by enforcing their own environmental and labor laws. Participants were stunned when they learned that aspects of the Stop Online Piracy Act (SOPA) are being swept under the rug in the TPP, and that there are provisions included to ease offshoring of jobs, decrease food safety standards, and decrease access to medication. One student at Florida State University said, “It just sounds preposterous that it’s being allowed to happen.”

In each city, participants showed great interest in learning more about the TPP and educating their communities. A truly diverse and vibrant network has sprung up organically to facilitate further trainings and organize demonstrations throughout Florida. Various actions are taking place across the state this week, culminating with a march on Saturday the 9th, as negotiators meet for the 16th round of TPP talks in Singapore. We are thrilled that so many people across the state feel as passionate as we do about stopping the TPP, and we invite others across the country to join in on the week of action. Communities in Florida are convinced that the TPP is a bad deal for us here in the States and also find it crucial to show solidarity with people around the world who will be negatively impacted by the TPP. 

Tras una lucha muy dura contra el cáncer por dos años, Hugo Chávez Frías, Presidente de la República Bolivariana de Venezuela,  falleció en La Habana hoy 5 de marzo, durante el proceso de recuperación de su última intervención por su enfermedad. Es un hecho de trascendencia que podía encontrarse dentro de los escenarios posibles, por lo que no caben sorpresas de lo ocurrido. Sí es de trascendencia porque fallece un referente de las luchas sociales y a la vez de un conjunto de perfiles políticos dentro de la región que podríamos llamar genéricamente “post-neoliberales” y del cual, sin dudas, era una de sus cabeceras. En ese sentido, y más allá de las simpatías o de los rechazos, Chávez fue una locomotora dentro de la integración regional en la América Latina de estos tiempos. Fuera por el petróleo, fuera por su voluntad política, por visión o por oportunidad, o por todo eso junto, con saldos positivos y negativos, pero sin duda alguna es una impronta de la cual será imposible narrar la historia de la primera década del siglo XXI sin mencionar siquiera su nombre. Hacerlo sería un error histórico y grave, de la talla de no mencionar el fin de la 1ra Guerra Mundial sin mencionar la Revolución Bolchevique, o de la amenaza a las monarquías del siglo XVIII sin mencionar la Revolución Francesa, o de no comprender la complejidad política argentina del último medio siglo sin la existencia del peronismo.
Chávez asumió en 1999 cuando nadie en América Latina se decía “de izquierda”, ni siquiera él, convencido de que era necesario dar vuelta definitivamente la página nada pequeña del neoliberalismo en Venezuela, para lo cual era necesario romper con el bipartidismo gobernante entre los democristianos y la socialdemocracia del COPEI, que habían traído una quietud política que hacía juego al conservadurismo del establishment local y su juego a ciertos intereses internacionales, principalmente los norteamericanos como principal fuente regional de abastecimiento de petróleo.
El primer camino elegido por Chávez fue tras el “Caracazo” (1989), y fue mediante el quiebre de las instituciones venezolanas. Fue golpista y dirigió el intento de Golpe de Estado de febrero de 1992 en Venezuela. Intento que acabó con su fracaso y que pagó con la cárcel por sedición, haciéndose personalmente cargo por tales actos, actitud que el pueblo venezolano observó con asombro: era la primera vez que un militar golpista y una figura política decía “sí, fui yo, y asumo la total responsabilidad por esto”. Así Chávez, junto con los principales líderes de la intentona golpista, pasó 2 años en la prisión de San Francisco de Yare esperando juicio. En prisión co-escribió Cómo salir del laberinto, mientras su popularidad aumentaba como una figura política alternativa al sistema gobernante. Finalmente fue liberado el 27 de marzo de 1994 tras el sobreseimiento que le otorgó el ex-presidente Rafael Caldera, parlamentario y principal dirigente del COPEI en el poder, como parte de un acuerdo político con sectores de izquierda para lograr un apoyo al gobierno en medio de una crisis política y económica de pocos precedentes en Venezuela.
En 1998 organizó el Frente por la V República: partido político que lo llevaría al poder al año siguiente con un inmenso apoyo popular, producto de la acumulación política de más de un lustro. Ello rompía el esquema del bipartidismo, pero no necesariamente se diferenciaba de otros ex militares golpistas que asumían la presidencia de su país con el fin de hacerse de los recursos del Estado y negociar prebendas personales. Su gobierno prometía cambios aparentemente radicales basados en una reforma constitucional, pero los compromisos anteriormente asumidos por Venezuela respecto de sus contratos petroleros hacían que ese país tuviera poco margen de maniobra para tales cambios. Sin embargo, Chávez asumió la presidencia con un genuino ánimo de trasformación sobre todo respecto de la situación en la que vivían las mayorías sociales venezolanas. Para ello, en un “pero-Estado” como Venezuela, el control sobre la producción de crudo era esencial como fuente de divisas que distribuir en planes sociales, en programas de educación, de salud y de vivienda, por ejemplo. Pero lo que sí sorprendió –y de no muy buen modo en los estamentos estadounidenses- fue que a ello se le sumase la reforma constitucional, la cual hizo efectiva en el año 2000. Eso modificó las bases del aparato del Estado venezolano, otorgó nuevos derechos sociales y barajó de nuevo la política sobre los recursos económicos en Venezuela. Y la respuesta no se hizo esperar demasiado tiempo... Cuando en 2002 fue el nuevo intento de Golpe de Estado, esta vez contra Chávez, los golpistas respondieron a una organización que funcionó al ritmo de Washington y que, tras el fracaso dos días después de la deposición de Chávez, no tuvieron la altura de asumir la prisión por lo que pidieron sendos indultos.
De este modo, el “proceso bolivariano” se radicalizó y pasó a ser una abierta “revolución bolivariana y socialista”. Es a partir del golpe de 2002 que Chávez vira decididamente hacia una izquierda más radical, y es el momento en que acuña su “socialismo del siglo XXI” para reflejar la necesidad de reescribir un ideario y una práctica de izquierda, transformadora, que no se atara a los formatos soviéticos, socialdemócratas o demás procesos identificados con la guerra fría, como el maoísmo. Se acerca mucho más en su alianza con Fidel Castro y se profundiza a partir de allí su persecución y estudio por un camino nuevo dentro de la izquierda latinoamericanista.
La reforma constitucional fue clave no solo para Venezuela sino para las demás naciones de la región en donde también se vivieron reformas constitucionales. El hecho de una renovación constitucional como la de la Constitución Bolivariana de 2000 puede ser tomado como un hecho de referencia frente a otras reformas constitucionales igualmente profundas o de incluso una mayor hondura política, como ser en los casos de las enmiendas constitucionales de Bolivia (2007) y de Ecuador (2008).
Aparejado a estos cambios, el proceso que significó el chavismo fue un quiebre en cuanto a la política histórica venezolana comparable en este sentido con el peronismo en Argentina. Con ello no digo que Chávez sea Perón, sino que el chavismo como proceso político en la historia de Venezuela ha dado una marca tan profunda como la dio en su momento el peronismo en los años ´40 en Argentina. Así como el paso de Perón no puede ser ninguneado en términos históricos para entender la historia argentina de este último siglo, tampoco ha de poder obviarse la huella que el chavismo ha dejado marcada en la historia venezolana.
Pero tampoco este proceso quedó exento de críticas o de rasgos nada envidiables. La marcada tendencia a una concentración unipersonal del poder es un rasgo que Chávez ha encarnado casi como ninguno. Ello marcó un problema notable dentro de las propias filas del chavismo al momento de tener que afrontar elecciones presidenciales frente a escenarios donde la reelección no fuera posible –como ocurrió con el último mandato, cuya candidatura solo pudo ser posible mediante una interpretación de puntos oscuros de la Constitución Bolivariana- o mismo frente a la propia enfermedad del Presidente y la continuidad del gobierno. El dilema de los procesos personalistas es precisamente cuando se pone en riesgo la continuidad del proceso sin la figura del líder. Y esto se ha vivido en distintos momentos y lugares (y vuelve a mi mente el “peronismo sin Perón” de Augusto Vandor, y quien fuera hasta el día de hoy calificado como no menos que “traidor” por los propios peronistas. Pero cierto es que estos procesos viven su impronta al son del latido de la figura de su líder, lo cual le pone piso y a la vez techo: nadie tiene comprada una vida eterna o un poder ilimitado. y esta debió ser una de las principales encrucijadas a las que Chávez debió someterse, y lo hizo no por propia voluntad sino frente a una enfermedad terminal avanzada y con un posible escenario complicado para su tratamiento. Y solo en ese marco, Chávez designó como sucesor político a Nicolás Maduro, su Vicepresidente.
Otro de las críticas más recurrentes es la del carácter “dictatorial” de Chávez. Y en este punto hay que resaltar que, de haberlo sido, Chávez tuvo un perfil notable como dictador: se trataría, pues, del dictador más votado en la historia. Chávez gano 14 de 15 procesos electorales, lo cual marca un récord electoral tanto en cantidad de veces como en cantidad de sufragios. Debe tenerse en cuenta también el hecho de que en Venezuela las elecciones no son obligatorias, como ser en caso de Argentina, pero que ello no ha quitado que haya acudido el 80% del padrón electoral en forma recurrente para apoyar al chavismo. Esto es algo que dictadores en serio no contaron… Pero hay más. Podría decirse que todas estas elecciones, todas ellas, durante nada menos que 14 años, han estado todas arregladas, que la corrupción (que no es menor en Venezuela como tampoco en el resto de América Latina) ha percudido el sistema electoral venezolano de forma tal que las elecciones fuesen un mero trámite, una opereta ligera, un montaje. Pues la mayoría de estas elecciones ocurrieron con la observación de organismos internacionales tales como la OEA o la Fundación Jimmy Carter, ninguna de ellas precisamente “aliadas” del chavismo, sin que se le pudieran hacer objeciones que menoscabaran un ápice la legitimidad y la legalidad de todas estas elecciones. De hecho, Jimmy Carter –Premio Nobel de la Paz- elogió el sistema electoral venezolano bajo las presidencias de Chávez, con lo cual el calificativo de “dictadura” es cuanto menos fuertemente debatible incluso desde la óptica liberal norteamericana, es decir desde un punto objetivamente anti-chavista. Sí pueden resultar válidas las críticas a la concentración de poder, al “estilo” de su ejercicio, pero no a su legitimidad o legalidad, por lo menos no desde un punto de vista serio.
Luego del intento de golpe contra Chávez, fue el paro petrolero de PDVSA a fines de 2002 e inicios de 2003: un lock-out organizado desde dentro y desde fuera de Venezuela todavía más graves que los realizados contra Allende durante su mandato en Chile. Y no obstante pudo soportar el paro. La respuesta del gobierno fue –y nuevamente por más- controlar PDVSA, que pasó a ser una empresa con control estatal, pieza clave de la economía del país.
El otro factor central que había operado durante el golpe de 2002 habían sido los medios de comunicación, quienes le habían declarado al régimen chavista mucho más que una abierta oposición: una guerra mediática declarada, incluso apelando a abiertos llamados al Golpe de Estado y hasta el magnicidio. En España críticas mucho menores sobre la figura del monarca Juan Carlos de Borbón merecen penas de prisión inmediatas. En Venezuela parecieran “justificadas” en pos de una presunta libertad de expresión que parece poder justificar hasta la apología del delito contra un mandatario. Pero no hay normas de prisión en Venezuela contra este tipo de prácticas… Pese a ello, cuando a los años caducó la concesión de Globovisión –entre otras cadenas golpistas- el gobierno de Chávez no renovó tales permisos obligando al cierre de tales medios. Nada inocente la maniobra, pero tampoco fue hacia niños lactantes empapados de inocencia y candidez precisamente. A pesar de ello, la relación entre el chavismo y los medios de comunicación siempre fue más que tirante, incluso mucho más que en Argentina, lo cual también ha ayudado a distorsionar las lecturas de los hechos tanto desde el oficialismo como de la oposición, por lo que “la voz de la verdad” parece sonar más balbuceante que de modo nítido y claro.
También tuvo el raro privilegio de ser el primer mandatario en el mundo en poner a disposición su cargo para ser revocado. En 2004 la sociedad venezolana participó en un referéndum revocatorio del mandato presidencial, luego que la oposición hubiera conseguido una victoria parcial y haber acumulado las firmas suficientes como para solicitar tal referendo bajo las normas constitucionales que el propio Chávez había sancionado con la reforma. Pero el referendo favoreció fuertemente al chavismo, para sorpresa de la oposición que quedó derrotada nuevamente.
En 2006 impulsó un proceso político polémico con la creación del Partido Socialista Único (PSU) de Venezuela, de cara a las elecciones presidenciales de ese año, y que luego pasó a llamarse Partido Socialista Unido. La idea de desmantelar el FVR como “confederación de partidos” y sustituirlo como un “partido único”, alejaba al proceso del ideario original de inicios del 2000, y ello le valió duras críticas incluso desde dentro de las filas del chavismo. Del mismo modo fue el golpe más duro que recibió el régimen y que quiso ser minorizado por el propio Chávez con poco éxito: la única derrota electoral con el pedido de una nueva reforma constitucional en 2007. Chávez adujo que la derrota había obedecido a faltas de comunicación sobre su proyecto, pero la reelección indefinida así como otras medidas incluidas en la nueva reforma mostraban los límites del proceso bolivariano y de una sociedad no lista para aceptar tales modificaciones. El mandatario dijo en su momento que volvería a presentar la reforma “en días”, pero fueron días que se convirtieron en años, y fue una reforma que se hizo enmienda: recién en 2009 hubieron modificaciones a la constitución ya sancionada en 2000, con lo que el intento del chavismo se vio fuertemente frustrado.
Dentro del contexto regional, en medio de una crisis internacional muchas veces ya comparada con la Gran Depresión de los ´30, hace que el fallecimiento de una personalidad como Chávez, dirigente del principal país fuente de petróleo en la región para EEUU y un componente energético clave para el Mercosur, ideólogo además de procesos de integración como el ALBA, la creación de Petrocaribe, el Banco del Sur, o máximo referente en su rechazo declarado al ALCA, así como mentor de la CELAC, o como vinculo en las negociaciones entre Colombia y las FARC (principal conflicto armado en la región hoy), solo para mencionar algunas cuestiones de alto impacto en las que Chávez protagonizó, hace que su fallecimiento sea un hecho que deba sopesarse como un momento bisagra en la historia reciente de la región y también en algún modo a nivel internacional.
Se pone en juego nada menos que la continuidad del proceso bolivariano en Venezuela. Maduro ya ha sido designado formalmente como candidato a las nuevas elecciones –obedeciendo lo normado en el Art. 233 de la Constitución Bolivariana reformada con el chavismo- que impide una sucesión presidencial automática y manda a un nuevo proceso electoral, a pesar de haberse celebrado uno este mismo año en donde Chávez fue reelegido como mandatario por un nuevo período. Capriles será nuevamente el principal candidato por la oposición y nuevamente el referente de los sectores de la era política previa al chavismo. Pero pocas son las señales que puedan dar como resultado un vuelco del proceso bolivariano en Venezuela, lo cual no quita que el mismo pueda tener modificaciones –como también las tuvo el propio Chávez en estos 14 años-.
Pero más allá de los resultados electorales por venir, que no dejarán de ser importantes, la dirección que Hugo Chávez supo dar en la región será difícil de reemplazar. El liderazgo brasileño en ese tono no fue tan claro incluso durante las presidencias de “Lula” como tampoco con Dilma, y otros perfiles cercanos como ser los de Correa, Evo Morales o Mujica no llegan al peso de la impronta de Chávez. Una posibilidad sea que esos ojos de dirección comiencen a mirar a la Argentina de CFK, quien lo sabe… En tal caso, muy distinta sería esa dirección y –en términos personales- quizás no lleguen a alcanzar la misma dimensión que supo colocar el comandante de las fuerzas paracaidistas de Venezuela. El retiro del CIADI, el control sobre los recursos naturales, las fuertes tensiones con EEUU, no son factores con los que –hasta hoy- cuente el kirchnerismo para tal comparación. Y esto hace que la región sienta la ausencia de ese actor: un Chávez políticamente molesto en la región para los intereses acomodados que sea el “factor radical” que pueda promover cambios entre regímenes más o menos moderados como los habidos en los países de mayor peso en América del Sur: Brasil y Argentina.
Chávez deja una Venezuela como tercer país en términos de peso político y económico dentro de Sudamérica, una pobreza reducida a la mitad, avances en educación y salud nunca antes vividos en la historia venezolana, una inflación galopante y un crecimiento económico hoy endeble aunque en el contexto de una crisis internacional en la que el principal país petrolero de América Latina no puede verse ajeno, y una sociedad dividida entre chavistas y anti-chavistas que no merece menos que reconocer la huella histórica que ha dejado, guste o no guste. No se trata de un tema de “gustos”, sino de reconocer que Venezuela no será la misma antes ni después de Hugo Chávez Frías.

Language:  English IATP author(s):  Karen Hansen-Kuhn File:  2013_02_28_TPP_KHK.pdf The Trans-Pacific Partnership (TPP) has the potential to become the biggest regional free-trade agreement (FTA) in history, both because of the size of the economies participating in the negotiations and because it holds open the possibility for other countries to quietly “dock in” to the existing agreement at some point in the future. What started as an agreement among Brunei Darussalam, Chile, New Zealand and Singapore in 2005 has expanded to include trade talks with Australia, Canada, Malaysia, Mexico, Peru, the United States and Vietnam. Japan and Thailand are considering entering into the negotiations, and others are waiting in the wings. As of 2011, the eleven countries already involved in...

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More Than 400 Civil Society Groups Call for Transparency and Core Principles for International Economic Pacts, While the AFL-CIO Releases New Organizational Resolution Criticizing Direction and Process of TPP Talks

WASHINGTON, D.C. – With the sixteenth round of Trans-Pacific Partnership (TPP) negotiations slated to begin today in Singapore, opposition to the deal in the United States continues to mount. More than 400 groups representing a diverse range of causes – from labor rights, to environmental conservation, to public health, to Internet freedom and much more – have signed on to a letter to Congress calling the lack of transparency in TPP negotiations “inconsistent with democratic principles” and outlining expectations of how key issues should be addressed in commercial agreements of the 21st century.

Adding to the criticism, on February 27, the AFL-CIO released an executive council statement questioning the current path of TPP negotiations. It stated, “The United States cannot afford another trade agreement that hollows out our industrial base and adds to our substantial trade deficit.” It continued, “We do not need another trade deal that simply boosts corporate profits by encouraging offshoring good jobs while undermining wages, benefits and worker rights. We must do better.”

Members of Congress have been signaling their growing concern with the TPP process and substance with respect to threats to American manufacturing and Buy American procurement preferences, the undermining of Internet freedom and more.

President Barack Obama has called for completion of the TPP, which would be the largest U.S. trade agreement since the 1995 World Trade Organization, by early October. To date, Congress and the public have been denied access to draft texts of the massive pact, which has been under negotiation for three years.

Only five of the TPP’s 29 chapters pertain to traditional trade matters. The rest would set policies to which the U.S. Congress and state legislatures would be required to conform U.S. non-trade policies relating to regulation of energy and other services, financial regulation, food safety, procurement policy, patents and copyright policy, and more.

The draft pact also includes NAFTA-style foreign investor rules that facilitate job offshoring by removing many of the risks and costs of relocating U.S. production to low-wage countries. Among TPP negotiating countries is Vietnam, the lower cost offshoring alternative to China.

The Office of the U.S. Trade Representative (USTR) just released the 2012 annual trade report and 2013 trade agenda of the President.  It reads a bit like a used car salesman trying to do his best with a lemon.  The report/car’s well-polished sheen looks pretty… until you take a peek under the hood. 

Take the first sentence: “Trade is helping to drive the success of President Obama’s strategy to grow the U.S. economy and support jobs for more Americans.”  Almost makes you forget that last year’s non-oil trade deficit rose to a five-year high, implying the loss of millions of jobs, doesn’t it?  How about the second sentence: “The Obama Administration’s trade policy helps U.S. exporters gain access to billions of customers beyond our borders to support economic growth in the United States and in markets worldwide.”  That’s an interesting way to frame a year whose sluggish two percent export growth rate put us 18 years behind schedule in achieving Obama’s export-doubling goal.  The report continues on with its pitch, trying its darndest to pretty up what amounts to a year of ugly trade policy impacts for workers and consumers, and what appears to be more of the same planned for the 2013 trade agenda. 

Before you buy this “certified pre-owned” trade policy, let us help interpret some of the report's glossy claims:

Fast Track

The report’s first page features these two sentences: “To facilitate the conclusion, approval, and implementation of market-opening negotiating efforts, we will also work with Congress on Trade Promotion Authority. Such authority will guide current and future negotiations, and will thus support a jobs-focused trade agenda moving forward.”  Those lines have prompted a frenzy of press speculation that the Obama administration could ask Congress for Fast Track, the controversial tool that presidents from Nixon to Bush II have used to seize Congress' constitutional prerogative to set trade policy.  Fast Track has been newly euphemized as "Trade Promotion Authority." (It's not a "clunker," it's a "mechanic's dream.")  Much of the press hubbub has been over whether or not Congress would or should revive the "politically contentious" Fast Track authority for Obama. But that's not the right question. We should be asking: what kind of trade negotiating system should replace Fast Track?  It's time for a modern, democratic trade negotiating process to replace an autocratic Fast Track system that predates disco. 

It's interesting that the administration decided to devote two lone sentences to Fast Track in a 382-page report. Why not be more forthright in heralding a new push for Fast Track?  Because when asking for something unpopular, it makes sense to whisper.  And Fast Track is vastly unpopular.  Before being allowed to die in 2007, Fast Track was a Nixon-conceived attempt to sidestep checks, balances and other pesky features of a democratic republic by taking from Congress its Constitution-granted prerogative to determine trade policy. In one fell swoop, Fast Track 1) delegated away Congress’ authority to choose trade partners and set the substantive rules for “trade” pacts that have deep ramifications for broad swaths of non-trade domestic policy, 2) permitted the executive branch to sign and enter into FTAs before Congress voted on them, 3) forced a congressional vote on FTAs, and 4) suspended amendments and truncated debate when that vote occurred.  It was under this legislative luge run that we got NAFTA, CAFTA, the Korea FTA, etc.  Fast Track's extreme approach has created many an opponent (right, left, and center), spurring politically costly battles for past presidents that have attempted to wrest the unpopular authority from Congress.  

If Fast Track carries such political liability, why is the Obama administration pursuing it?  Well, according to today's report, it's to “facilitate” the passage of FTAs like the TPP (see below).  But if the TPP is such a “high-standard” agreement, what’s the harm in letting Congress get a good look at it, rather than handcuffing their involvement with Fast Track?  Doing so would save Obama the political grief of a Fast Track fight.  Or maybe there’s something even more objectionable about the TPP itself that requires Fast Track’s unparalleled sequestration of congressional power to get the deal enacted?  

Again, the choice is not Fast Track or no Fast Track.  It's Fast Track or a sensible model of trade policymaking for a modern democracy.  A new model of delegated authority would respect Congress' responsibility to play the lead role in determining the outcome of “trade” deals that intend to rewrite policies regarding financial regulation, immigration, climate and energy policy, healthcare, food safety, etc.  

Trans-Pacific Partnership

USTR reiterates throughout the report its standard definition of the Trans-Pacific Partnership (TPP) as “a high-standard regional trade agreement that will link the United States to dynamic economies throughout the rapidly growing Asia-Pacific region.” (italics added)  The primary problem with this pitch is that we’re already quite linked with these economies -- as in, 90 percent linked.  The United States already has trade deals with six of the seven largest TPP negotiating economies, which constitute 90 percent of the combined GDP of the negotiating bloc.  The TPP “dynamic economies” with which we don’t already have liberalized trade include Vietnam, where annual income per person is $1,374, and Brunei, which has a population smaller than Huntsville, Alabama.  As we’ve said time and again, this deal is not primarily about trade. 

What is it about?  It's about banning Buy American policies that support U.S. jobs; discreetly enacting provisions of the congressionally-defeated, Internet-freedom-threatening Stop Online Piracy Act; restricting safety standards for imported food; empowering foreign investors to directly challenge governments’ public health and environmental policies while demanding taxpayer compensation for “expected future profits;” counteracting efforts to reregulate Wall Street; giving pharmaceutical corporations better tools to undermine drug cost containment policies; and more.  USTR appears to have omitted such details in today's report.   

Under a section entitled “Inclusion of stakeholders at Trans-Pacific Partnership negotiations,” USTR boasts that “Stakeholder engagements and briefings provided an opportunity for the public to interact with negotiators from all of the participating countries and provide presentations on various trade issues, including public health, textiles, investment, labor and the environment.”  We have indeed given such presentations…while TPP negotiators were simultaneously scheduled to be on the other side of the negotiating venue.  It’s hard to engage trade negotiators who are supposed to be in two places at once.  We do appreciate the attempt at engagement, but would appreciate a more concerted effort. 

After patting its back for being “open” and having “unprecedented direct engagement with stakeholders,” USTR includes this: “At the same time, the Administration will vigorously defend and work to preserve the integrity of confidential negotiations, because they present the greatest opportunity to achieve agreements that fulfill U.S. trade negotiation objectives.”  Here USTR is trying to explain the equivalent of a used car's missing motor: an unbending commitment to not release the TPP negotiating text.  While claiming “unprecedented” engagement with stakeholders, USTR’s decision to keep the TPP negotiating text secret from the public, the press, and even congressional offices is “unprecedented” among 21st-Century trade deals of this scope.  The World Trade Organization (WTO), hardly a paragon of transparency, posts key texts online for public review. In addition, when the last major regional “trade” agreement (the Free Trade Area of the Americas) was at the same stage as the TPP is now, the text was formally released by the U.S. and other negotiating governments (in 2001). It’s hard to claim genuine engagement with stakeholders when those stakeholders cannot see the thing in which they hold such a stake. 

Trans-Atlantic FTA

The report reiterates President Obama’s State of the Union surprise: that the United States intends to not just negotiate a NAFTA-style pact spanning the Pacific (the TPP), but also one spanning the Atlantic. In brief discussion of the Trans-Atlantic FTA (TAFTA), the report says, “Such a partnership would include ambitious reciprocal market opening in goods, services, and investment, and would offer additional opportunities for modernizing trade rules and identifying new means of reducing the non-tariff barriers that now constitute the most significant obstacle to increased transatlantic trade.”  But this deal, even more than most, is not about trade.  Says who?  USTR itself.  U.S. Trade Representative Ron Kirk, in a briefing on the deal said that the administration has resisted including the word “trade” in the name of the deal “because it is so much broader than trade.” 

With tariff levels already quite low between Europe and the United States, this FTA appears to be primarily about those “non-tariff barriers” standing in the way of “regulatory coherence.”  What might such opaque terms mean?  In the past, they have been code for a lowest-common-denominator approach to reducing all those safety, environmental, health, financial stability and other domestic regulations that corporations have not been able to roll back via domestic pressure.  “Trade” deals provide a handy forum in which to write binding rules that contravene such regulations.  What regulations in particular might be on the hoped-for chopping block?  European firms have already taken aim at U.S. financial regulations, while U.S. corporations have long been annoyed by Europe’s tougher policies against unsafe food, GMOs, and carbon emissions.  Big agribusiness, oil and gas, chemical, and financial firms on both sides of the Atlantic may be hoping to undermine such policies in a new TAFTA, to the detriment of, well, just about everyone else. 

Exports and Jobs

The report informs the reader that “Data from 2012 showed that every $1 billion in U.S. goods exports supported an estimated nearly 5,400 American jobs...”  Good to know.  What about an additional $1 billion in imports?  As per usual, USTR trumpets the gains of exports without looking at the other side 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 occurred last year.  The non-oil U.S. deficit in goods rose six percent in 2012 to $628 billion, the largest non-oil U.S. trade deficit in the last five years.  According to the Obama administration’s own math, that degree of negative net exports implies the loss of 3.4 million jobs.  That data from 2012 didn’t make it into the report. 

Readers of Eyes on Trade know that U.S. exports to Korea under the Korea FTA have been faring particularly poorly: they fell 10 percent in 2012 after the deal took effect (compared to the same months for 2011).  How did USTR deal with this inconvenient truth in its annual report?  It didn’t.  With respect to the three FTAs implemented in 2012, the report states “…in 2013 we will work with Korea, Colombia, and Panama to ensure that the bilateral trade agreements that went into effect last year continue to operate smoothly…”  A ten percent fall in exports for a deal that was sold under the unrelenting promise of “More Exports. More Jobs?”  Real smooth.  It seems that these are not the things one mentions in an annual report when one’s accompanying agenda for the next year includes more of the same FTAs (e.g. TPP), sold under the same “More exports. More jobs” pitch.   

Buy American and Green Procurement Policies

Wonder why our exports and job growth has been so sub-par recently?  USTR thinks it has found the answer—that scourge of our economic woes called “localization.”  Here’s what the report has to say on the topic: “We are also actively combating “localization barriers to trade” – i.e., measures designed to protect, favor, or stimulate domestic industries, service providers, and/or intellectual property (IP) at the expense of goods, services, or IP from other countries…Localization barriers to trade that present significant market access obstacles and block or inhibit U.S. exports in many key markets and industries include: requiring goods to be produced locally; providing preferences for the purchase of domestically manufactured or produced goods and services; and requiring firms to transfer technology in order to trade in a foreign market…Building on progress made in 2012, the localization taskforce will coordinate an Administration-wide, all-hands-on-deck approach to tackle this growing challenge in bilateral, regional, and multilateral forums…” 

Before the USTR dedicates the few hands it has on deck to scour the globe for pernicious localization policies, it might want to check out a few of our own.  Namely, Buy American.  This program, widely-supported among Republicans, Democrats and independents, provides a textbook example of USTR’s definition of a “localization barrier.” Buy American explicitly “provides preferences for the purchase of domestically manufactured or produced goods,” by requiring that U.S. tax dollars be spent on domestic firms when the U.S. government purchases construction equipment, vehicles, office supplies, etc.  Did USTR have in mind the elimination of this job-supporting program? Their trade agenda would certainly indicate so –- the TPP and other FTAs ban the Buy American treatment for any foreign firms operating in new FTA partner countries. 

“Localization” also implicates Buy Local and other green procurement policies that governments are increasingly using to transition to a greener economy.  Ontario, for example, has employed a renewable energy program that requires energy generators to source solar cells and wind turbines from local businesses so as to cultivate a robust supply of green goods, services, and jobs.  The program has earned acclaim for its early success in generating 4,600 megawatts of renewable energy and 20,000 green jobs.  But one group hasn’t had much acclaim to offer: the WTO.  In a ruling at the end of last year, the WTO decided that the successful program’s local requirements violate WTO rules.  Today's report confirms indications that USTR now also intends to take on such climate-stabilizing “barriers to trade." Last month, the United States initiated a WTO case against India, attacking buy-local components of its solar energy policy.  A refurbished trade agenda that undermines an urgently-needed clean-energy agenda?  Sounds like a lemon. 

Subtitle:  Submission to the UNFCCC under Workstream 2 of the Ad Hoc Working Group on the Durban Plat- form for Enhanced Action File:  2013_03_01_UNFCCCSubmission.pdf Overview: Agriculture and the climate change challenge Agriculture plays a central role in providing global food security and ensuring rural livelihoods for two-thirds of the developing world and 40 percent of the world’s population; it is undoubtedly a unique sector. Linkages between agriculture and climate change are complex, and international rules that address climate and agriculture will impact food security and sovereignty at the global, regional, national and local levels. Yet, climate change is already having devastating and costly impacts on the global food and agriculture system and national budgets that support agriculture. These impacts are set to intensify in the coming...

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File:  Food Aid Reform WG Statement - Support for Food Aid Reform-FINAL.pdf Washington, D.C., February 26, 2013 – The below groups welcome reports that the Administration may propose helpful reforms to the U.S. food assistance program in its FY2014 budget submission to Congress. We urge the Obama Administration to include a bold reform proposal that builds upon the United States’ historic leadership as the world’s most generous donor of food aid.  When 870 million people around the world go hungry every day, making every food aid dollar count is not only a responsible use of taxpayer money, it is a moral imperative. For that reason, it is critical that any reforms seek efficiencies rather than cuts, and do not alter the basic programmatic focus of the U.S. food aid program. These programs help to feed 55 million people in need around the world, supporting both emergency responses and addressing...

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Today Japanese Prime Minister Shinzo Abe arrives in Washington for a Friday meeting with President Obama. A hot item on the agenda is the possibility of Japan joining the Trans-Pacific Partnership (TPP), a U.S. NAFTA-style “free trade” agreement currently under negotiation between 11 Pacific Rim nations. Japan is not now involved in TPP negotiations and Prime Minister Abe’s party, the Liberal Democratic Party (LDP), explicitly campaigned against joining the TPP in the December elections that restored Abe and his party to power.

Recent indications that Abe may contradict those campaign pledges have ignited a torrent of criticism within Japan and prompted the Japanese press to flood the Abe administration with tough questions regarding his TPP intentions. Meanwhile, key Obama constituencies, such as the auto industry and unions, have vocally opposed Japan’s inclusion, while U.S. congressional leaders from both parties have expressed opposition to the entire deal alongside consumer, labor, environmental, public health, Internet freedom and other public interest groups.

Here are 12 questions on the TPP that President Obama and Prime Minister Abe do not want to hear during Abe’s visit this week:

For both Prime Minister Abe and President Obama:

• The TPP replicates provisions from prior NAFTA-style agreements that empower foreign investors to skirt domestic laws and courts and privately enforce the terms of a public treaty by directly challenging governments’ public interest policies before foreign tribunals to demand unlimited sums of taxpayer compensation. The premise for including such extreme extra-judicial enforcement procedures in past agreements has been that the domestic legal systems of developing country trade partners have not been sufficiently trustworthy. President Obama, do you see Japan’s domestic legal system as not sufficiently trustworthy, or do you plan to exempt U.S. firms operating in Japan from these investor privileges? Prime Minister Abe, I would ask the same question with regard to the U.S. domestic legal system and Japanese firms operating in the United States.

• The TPP would bar both of your governments from favoring domestic companies with fiscal stimulus, or from requiring that taxpayer dollars be directed toward domestic firms in government procurement. China, meanwhile, remains free to pursue such pro-growth, domestically-focused strategies. If both Japan and the United States intend to compete with China, why would either country benefit from such limiting provisions in the TPP?

For President Obama:

• In your recent State of the Union, you stated a priority of “making America a magnet for new jobs and manufacturing.” Given that wages in Vietnam are approximately one-third of those in China, how do you see the TPP – a NAFTA-style deal with Vietnam – contributing to your manufacturing growth goals for America?

• Japan’s powerful rice lobby has successfully pushed Prime Minister Abe’s party to conditionally reject the TPP unless Japan is granted an exemption from tariff cuts on sensitive products like rice. Vietnam, as one of the world’s largest rice exporters and a TPP negotiating party, is unlikely to accept such an exemption unless the United States grants Vietnam greater access to its own sensitive economic sectors, such as the manufacturing sector that you pledged to expand in your State of the Union speech. How do you expect to simultaneously satisfy Japan and Vietnam and grow American manufacturing?  

• The U.S. auto industry and unions, key supporters of your administration, have rejected Japan’s inclusion in the TPP, citing Japan’s resistance to lowering import barriers on U.S. autos. Have you been able to extract from Japan a commitment to lower these barriers as a precondition to joining the TPP?

For Prime Minister Abe:

• Your party has stated that it is not interested in joining the TPP unless you are guaranteed that there is no precondition that tariffs must be cut on all products without exception. Given that no such assurance has been given, what do you have to discuss with President Obama regarding the TPP?

• Given the LDP campaign pledge to protect the national healthcare system, have you been able to extract from the United States a commitment to exempt Japan from the provisions in the proposed TPP text that would extend medicine patents and challenge national drug formularies?

• Japan’s legal associations have opposed the TPP’s proposed inclusion of investment provisions that would allow foreign corporations to skirt Japan’s laws and courts and directly challenge Japanese domestic policies in foreign tribunals, demanding taxpayer compensation for public interest laws that they claim to be violations of TPP-granted investor privileges. Have you been able to extract a commitment from the United States to exempt Japan from these provisions?

• Japanese consumer safety groups have opposed proposed TPP rules that would require Japan to accept meat, poultry and other food from the United States and other TPP countries that are deemed to have roughly “equivalent” food inspection systems, even if Japan’s specific food safety requirements were not met. Have you been able to extract a commitment from the United States to exempt Japan from these rules?

• Japan’s economy relies heavily on the use of existing technologies to spur innovation and growth. Given that the TPP’s proposed text would significantly expand intellectual property protections so as to inhibit open-source usage of existing technologies, have you been able to extract from the United States a commitment to exempt Japan from these rules?

• Japan’s farm ministry calculates that the TPP would cause a ¥7.9 trillion downfall in Japan’s gross domestic product and the loss of 3.4 million jobs. How do you see the TPP fitting into the economic growth goal that is one of the three pillars of your reform platform? 

• Have you been able to extract from the United States commitments to exclude rice, beef, pork, dairy, sugar or other sensitive agricultural sectors from the TPP’s tariff-cutting requirement, given the intense anti-TPP pressure exerted by the farmers in these sectors who helped return the LDP to power in December?  Have you been able to extract such a commitment for construction, postal services, insurance or other sensitive service sectors that have also opposed the TPP? 

Subtitle:  The Role of Globalization Language:  English IATP author(s):  Sophia Murphy File:  2013_02_14_LandGrabsFoodSystem_SM.pdf Executive Summary IATP has worked on trade and agriculture for more than 25 years. In all that time, we have consistently argued that trade agreements need to respect and promote human rights, not drive a process of globalization that privileges commercial interests and pushes public interests aside. This paper concludes that the globalization enshrined in the free trade and investment agreements of the 1990s and 2000s have led to yet another manifestation of commercial interests trampling human rights: land grabs. “Land grabs” is a term coined by the media to describe large-scale...

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While President Obama's State of the Union reiterated the tired "free trade" = exports = jobs refrain, the newly-released government trade data for 2012 shows that job-eroding U.S. trade deficits have ballooned with "free trade" agreement (FTA) partners while declining with the rest of the world. Why? In part, because export growth has actually been slower under FTAs. Why then did Obama commit on Tuesday night to expand this deficit-boosting FTA model across both the Pacific and the Atlantic in the name of jobs?  Maybe he hasn't seen the data.  Here it is (click here for the PDF version): 

U.S. Trade Deficits Grow More Than 440% with FTA Countries, but Decline 7% with Non-FTA Countries

The aggregate U.S. trade deficit with FTA partners is more than five times as high as before the deals went into effect, while the aggregate deficit with non-FTA countries has actually fallen slightly.1 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. Incredibly, the U.S. Chamber of Commerce website states, “For those worried about the U.S. trade deficit, trade agreements are clearly the solution – not the problem.” Their pitch ignores the import surges contributing to growing deficits and job loss, while their export “data” is inflated, using tricks described below.

The aggregate trade deficit with FTA partners increased by more than $144 billion (inflation-adjusted) since the FTAs were implemented. In contrast, the aggregate deficit with all non-FTA countries decreased by more than $55 billion since 2006 (the median entry date of existing FTAs). Two reasons: a sharp increase in imports from FTA partners – notably Mexico and Canada under the North American Free Trade Agreement (NAFTA) – and significantly lower export growth to FTA partners than to non-FTA nations over the last decade. Using the Obama administration’s net exports-to-jobs ratio, the FTA trade deficit surge implies the loss of nearly one million American jobs. (Scroll to the bottom for a chart giving the country-by-country data.)  

Trade with Canada and Mexico (our first and third largest trade partners, respectively) contributed the most to the widening FTA deficit. Under NAFTA, the U.S. deficit with Canada ballooned and the small U.S. surplus with Mexico turned into a $100 billion-plus deficit. The trend persists under new FTAs – nine months into the Korea FTA, our deficit with Korea has jumped 26 percent. Reducing the massive trade deficit requires a new trade agreement model, not more of the same.

U.S. Export Growth Falters under FTAs

Growth of U.S. exports to countries that are not FTA partners has exceeded U.S. export growth to countries that are FTA partners by 38 percent over the last decade.2 Between 2002 and 2012, U.S. goods exports to FTA partner countries grew by an annual average rate of only 4.8 percent. Goods exports to non-FTA partner countries, by contrast, grew by 6.6 percent per year on average. Since 2006, when the number of FTA partner countries nearly doubled with the implementation of the Central America Free Trade Agreement (CAFTA), the FTA export growth “penalty” has only increased. Since then, average U.S. export growth to non-FTA partner countries has topped average export growth to FTA partners by 46 percent.

Corporate FTA Boosters 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 appears 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 “re-exports:” NAM has misleadingly claimed that the United States has a manufacturing surplus with FTA nations by counting as U.S. exports goods that actually are made overseas – not by U.S. workers. NAM’s data includes “re-exports” – goods made elsewhere that are shipped through the United States en route to a final destination. Determining FTAs’ impact on U.S. jobs requires counting only U.S.-made exports.

• 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 441 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. This artificially magnifies claimed FTA 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 $244 billion, and Bahrain, where they do not reach $2 billion), despite accounting for such critical differences for non-FTA countries.

Chart: U.S. Trade Deficit Rises by $144 Billion with FTA Partners, Falls by $55 Billion with Rest of the World

FTA Partner

Entry Date

Pre-FTA Trade Balance

2012 Balance

Change in Balance Since FTA

Israel*

1985

($1.0)

($12.4)

($11.4)

Canada

1989

($23.3)

($79.7)

($56.5)

Mexico

1994

$2.5

($101.2)

($103.7)

Jordan

2001

$0.3

$0.5

$0.2

Chile

2004

($1.9)

$7.9

$9.8

Singapore

2004

$0.7

$6.9

$6.2

Australia

2005

$7.2

$19.3

$12.1

Bahrain

2006

($0.1)

$0.4

$0.6

El Salvador

2006

($0.2)

$0.2

$0.4

Guatemala

2006

($0.5)

$1.0

$1.5

Honduras

2006

($0.7)

$0.9

$1.6

Morocco

2006

$0.1

$1.3

$1.2

Nicaragua

2006

($0.7)

($1.7)

($1.0)

Dominican Republic

2007

$0.6

$2.4

$1.8

Costa Rica

2009

$1.2

($5.4)

($6.6)

Oman

2009

$0.5

$0.3

($0.2)

Peru

2009

($0.2)

$1.6

$1.8

Korea

2012

($15.0)

($17.9)

($2.9)

Colombia

2012

($9.8)

($10.3)

($0.5)

Panama

2012

$7.6

$8.7

$1.1

         

FTA TOTAL:

 

($32.7)

($177.2)

($144.4)

Non-FTA TOTAL:

[2006]

($776.1)

($720.7)

$55.4

FTA Deficit INCREASE:  441%             Non-FTA Deficit DECREASE:  7%

Source: U.S. International Trade Commission. Units: billions of 2012 dollars. (*Measured since 1989 due to data availability.)

1The change in the aggregate U.S. trade deficit with FTA partners is found by comparing 1) the combined inflation-adjusted U.S. trade balance in goods for all current FTA partners in the year before the FTA entered into force, and 2) the combined U.S. trade balance with those same countries in 2012. The change in the aggregate trade deficit with non-FTA countries is found by comparing 1) the combined inflation-adjusted U.S. trade balance in goods in 2005 (the year before the median entry date of existing FTAs) for all countries that are not current FTA partners, and 2) the combined U.S. trade balance with those same countries in 2012. All data comes from U.S. International Trade Commission, “Interactive Tariff and Trade DataWeb,” accessed February 11, 2013. Available at: http://dataweb.usitc.gov/.

2All figures in this section use an inflation-adjusted weighted average to find average annual growth rates of domestic exports for both FTA partner countries and non-FTA partner countries. All data comes from U.S. International Trade Commission, “Interactive Tariff and Trade DataWeb,” accessed February 11, 2013. Available at: http://dataweb.usitc.gov/.