Planet Not For Sale
The heads of state of the 12 nations involved in Trans-Pacific Partnership (TPP) negotiations meeting on the sidelines of the Bali APEC Summit are expected to announce again that the outlines of a TPP deal have been achieved. But wait, that was the story pitched after a similar meeting at the Hawaii APEC summit in 2011. (USTR Release: On November 12, 2011, the Leaders of the nine Trans-Pacific Partnership countries … announced the achievement of the broad outlines of an ambitious, 21st-century Trans-Pacific Partnership (TPP) agreement…”) Until recently, USTR Michael Froman was declaring that the TPP was in its “end game.” Except:
- There is no text agreed for major swaths of at least three of the pact’s 29 chapters.
- There are multi-year deadlocks on a long list of controversial “behind the borders” issues in a dozen other chapters – one chapter has 300 “brackets.” (Brackets mark disputed text.)
- There are no deals on any of the controversial market access issues— from sugar and dairy to textiles/apparel and autos, in part because the most basic question remains contested: how will the TPP relate to the more than 30 bilateral trade pacts already existing between the parties?
And, as details have leaked out about the draft texts that have emerged from three years of extremely secretive negotiations, political opposition is building in several TPP countries among parliamentarians, powerful professional associations, business sectors, unions and the public. Signatory countries would be required to conform all of their domestic laws to the TPP terms. And, only five of the pact’s chapters cover traditional trade matters. The rest would set rules on patents and copyright, medicine pricing policies and health care, financial regulation, food safety, immigration visas, government procurement, land-use, energy policy and more.
CHECK LIST: WERE THESE CONTROVERSIAL TPP ISSUES SUDDENLY RESOLVED*?
□ Entire patent section of Intellectual Property chapter and text on medicine pricing rules both deadlocked
A U.S. proposal that would deliver on Big Pharma’s demands for extended patents, data exclusivity and other monopoly powers that raise medicine prices has faced unwavering multi-year opposition by most other TPP countries. The entire patent section of the IP text is in brackets. In another chapter, an Annex cynically dubbed “Annex on Transparency and Procedural Fairness for Healthcare Technologies,” is also deadlocked. This text would allow Big Pharma to challenge the decisions of doctors and pharmacologists who determine the cost-saving medicine formularies of countries’ healthcare systems. These issues have become a major political liability in numerous TPP nations.
□ Deadlock over enforceability of labor rights
The U.S. seeks labor standards that are enforceable on equal terms with the pact’s other provisions. Most TPP countries oppose enforceable labor standards altogether.
□ Environment chapter at an impasse
The text still has 300 brackets - connoting text that is not agreed, which is most of the text.
□ Deadlock over the State Owned Enterprises (SOE) text
To start with, there is no agreed definition of SoEs! The U.S. has proposed disciplines on SoEs forbidding the use of government resources to subsidize SoE activities within TPP nations. A sizable bloc of nations opposes the U.S. text absolutely. Recently Australia tabled an alternative text altogether. The result: this text is all brackets and no agreement.
□ United opposition to the U.S. demand that TPP ban the use of capital controls
With the IMF now endorsing the usage of capital controls as a legitimate policy to avoid floods of speculative capital that cause financial crises, it is not surprising that there is united opposition to the unbending U.S. demand that TPP include a ban on countries’ use of various common-sense macro-prudential measures, including capital controls and financial transaction taxes.
□ Deadlocks over various aspects of controversial “investor-state” private corporate enforcement of TPP
Australia’s newly-elected conservative government has reiterated that it will not be bound to the investor-state enforcement system, which elevates individual corporations to equal status with sovereign nations in order to enforce privately a public treaty by demanding compensation from governments before panels of private-sector attorneys for government actions that undermine expected future profits. Japanese Prime Minister Abe’s Liberal Democratic Party parliamentary majority has set as a condition for Japan’s TPP participation that the deal not include investor-state enforcement. Other TPP nations oppose the U.S. demand that government natural resource concession, private-public-partnership utility management contracts and procurement contracts be subject to such extra-judicial processes. Key text remains in brackets with respect to both the substantive rights which investors would be granted and the enforcement system.
□ Negotiations on sensitive Market Access issues not even started
Japan’s parliament has listed five “sacred” commodities – rice, beef and pork, wheat and barley, sugar and dairy - that it demands be excluded from TPP rules zeroing out tariffs. Other TPP countries insist that no sector can be excluded. The rules of origin – how much of a product’s value must come from TPP countries – have not been agreed for sensitive sectors such as apparel/textiles, autos and more, so actual tariff-cutting negotiations have not started on these products. Battles over sugar, dairy and more remain unresolved.
□ Impasse on Copyright Rules
Hollywood and recording industry-inspired proposals to limit internet freedom and access to educational materials, to force internet providers to act as copyright cops, and to cut off peoples’ internet access have triggered public outrage and led to a negotiation stalemate. There is entrenched disagreement about whether copyright should be able to keep works of art and literature out of the public domain 70 years after death of the author, with no resolution in sight.
□ Negotiations on Currency Disciplines Not Even Started
Despite bipartisan demands in recent weeks by 60 U.S. Senators and 230 Representatives that TPP include disciplines against currency manipulation, talks on the subject have not even begun.
* And, that’s just a sample of the issues that are raising opposition in both the negotiations suites and TPP nations’ streets…
Corporate America has just felled a (closed) national park’s worth of trees to draft 51 fancy, fanciful factsheets in attempt to better sell to a skeptical Congress the controversial Trans-Pacific Partnership (TPP) –the sweeping 12-country “free trade” agreement (FTA) mired in deadline-missing negotiations.
In projecting TPP impacts, the factsheets are heavy on platitudes and light on, well, facts.
The factsheet series was released yesterday by the Business Roundtable (e.g. Goldman Sachs, Verizon, Pfizer, Exxon Mobil), the Coalition of Services Industries (e.g. Halliburton, Walmart, Citigroup), the National Association of Manufacturers (e.g. Lockheed Martin, Merck, Smithfield Foods), the U.S. Chamber of Commerce and other corporate conglomerates. The series posits one set of counterfactual claims, and then replicates them in 50 state-specific variations. The resulting 306-page ream of TPP cheerleading is impressive for its girth, if not its veracity.
Here are the corporate alliances’ three claims about the TPP – sourced from conjecture – followed by some inconvenient and contradictory facts – sourced from data:
1. Claim: The TPP will “expand trade between the United States and existing FTA partners.”
Fact: The U.S. is not even discussing trade expansion (i.e. tariff reduction) with most existing FTA partners in the TPP negotiations. How can something not under discussion be promised as a result of the deal?
Of the 11 countries negotiating the TPP with the United States, six already have FTAs with the U.S.: Australia, Canada, Chile, Mexico, Peru, and Singapore. The U.S. Trade Representative has stated that the U.S. is not negotiating tariff reductions with most of these countries, in part because tariffs with these FTA partners are already relatively low. Despite this, the corporate factsheets state, “the TPP negotiations provide an opportunity to…address a range of important tariff…barriers that currently impede exports to these countries.” Even the TPP-promoting government officials negotiating the deal would have to disagree.
2. Claim: The TPP will “open new markets in countries that are not current FTA partners.”
Fact: U.S. exports have actually suffered under FTAs, not gained. How can we do more of the same and expect different results?
U.S. goods exports to Korea fell 10 percent in the first year of the U.S.-Korea FTA, a template for the TPP that took effect in March 2012. Overall, U.S. export growth has actually been better without FTAs than with them. 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. Repeating the tired claim that we need FTAs to boost exports does not make it true.
In addition, some of the particular export growth “opportunities” highlighted by the corporate groups require a reality check. For example, they cite New Zealand’s 5% tariff on U.S. lactose products as a barrier that, if only reduced via TPP, would herald an increase in U.S. dairy exports to New Zealand. But U.S. dairy producers fear just the opposite. U.S. dairy producers have lobbied against the reduction of dairy tariffs between New Zealand and the U.S., fearing that it would lead to their displacement, not a new export “opportunity.” The corporate factsheets’ tariff reduction promises are dotted with such inconvenient facts that, like flies on ointment, tarnish the rosy picture painted for Congress.
3. Claim: The TPP will “encourage companies based in TPP countries to increase their business investment in the United States.”
Fact: Study after study has shown no correlation between a country’s foreign investment levels and its willingness to be bound to the extreme sort of investor privileges enshrined in the TPP. With no proven upside, why would we sign up for the proven downside of empowering foreign investors to bypass domestic courts, drag the government to an extrajudicial tribunal, and demand taxpayer compensation for public interest policies that they find inconvenient?
The corporate factsheets identify corporations based in TPP countries with operations in the United States, arguing (despite the evidence) that TPP investor privileges would encourage them to boost their business. In fact, the TPP would empower these foreign firms, on behalf of any of their 30,000 subsidiaries in the U.S., to directly attack U.S. health, financial, environmental and other public interest policies that they view as undermining new foreign investor rights that the TPP would establish. Extrajudicial tribunals, comprised of three private attorneys unaccountable to any electorate, would be authorized to determine the validity of the challenged policies and order unlimited taxpayer compensation if the policies undermined corporations’ “expected future profits.”
This extreme “investor-state” system already has been included in a series of U.S. FTAs, forcing taxpayers to hand more than $400 million to corporations for toxics bans, land-use rules, regulatory permits, water and timber policies and more. Just under U.S. pacts, more than $14 billion remains pending in corporate claims against medicine patent policies, pollution clean ups, climate and energy laws, and other public interest polices. Are these the “barriers” to investment that the corporate alliances hope the TPP will remove?
In the wake of this corporate factsheet flurry, the message to Congress is simple: check the facts. For they are not found on these sheets. And they reveal a truer and uglier picture of the TPP than the corporations’ latest attempt at airbrushing.
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This Week’s U.S. International Trade Commission Study Assumes Total Elimination of U.S.-EU Consumer, Environmental, Financial Policy Differences, Follows British Embassy’s 50-State Rehash of Discredited 2009 Study Based on Similar Assumption
On Thursday, the U.S. International Trade Commission (USITC) sent a report to the U.S. Trade Representative (USTR) on the projected economic impact of the Trans-Atlantic Free Trade Agreement (TAFTA), a report that is premised on the ridiculous assumption that 100 percent of the differences between U.S. and EU health, safety, environmental and financial regulations will be eliminated. Given that the report, which is not being made available to the press or public, relies on a premise that can only lead to fanciful results, U.S. negotiators should not consider it, much less use it to guide their approach to the agreement.
That study comes two days after yet another think tank report that recycled a litany of flawed assumptions from a 2009 study on TAFTA, chopping up baseless findings to present a 50-state version of imaginative projections of economic gains from a similar dismantling of public interest safeguards.
The core premise of these studies is the unproven business mantra that rolling back Wall Street reforms, food health standards and medicine safety regulations will somehow deliver economic gains to us all. The main contribution of the recent flurry of studies is the addition of extra gloss and fancy printing to the old, debunked assumption that such an assault on consumers, workers and the environment would have zero costs.
In its request for Thursday’s study, the USTR asked the USITC to assume an impossible outcome of U.S.-EU negotiations: “that any known U.S. non-tariff barrier will not be applicable” to imports from the EU if the sweeping deal were to take effect. By the USTR’s own definition, “non-tariff barriers” include differences in domestic financial regulations, food safety standards, product safety rules and other U.S. public interest safeguards that TAFTA apparently would render null.
Even the most fanciful pro-TAFTA study, the 2009 ECORYS study prepared for the European Commission that has been regularly rehashed, including in a British Embassy report this week, avoided such an outlandish assumption, stating, “It is unlikely that all areas of regulatory divergence identified can actually be addressed … because this would require constitutional changes … ; because there is a lack of sufficient economic benefit to support the effort; …because of consumer preferences…; or because of political sensitivities.”
On Tuesday, the findings of the 2009 study were revived in another TAFTA-touting study, commissioned by the British Embassy in Washington, the Bertelsmann Foundation and the Atlantic Council. That glossy piece recycled the 2009 study’s improbable assumptions – breaking them down to state-by-state projections – to hypothesize the “gains” that TAFTA could deliver to each state if public interest safeguards were sufficiently weakened. The study assumes that TAFTA would eliminate one of every four “non-tariff barriers” – from the Volcker Rule at the center of Wall Street reform to safety standards for children’s toys to the U.S. ban on beef linked to mad-cow disease – at no cost to consumers.
While ignoring costs, the report uses a computable general equilibrium model to generate projections of hypothetical economic gains, despite studies showing that this methodology is inchoate and unreliable when studying non-tariff policies. Past studies using this cost-ignoring, gain-inflating methodology have still producedmeager projections for TAFTA’s “gains.” A pro-TAFTA study whose findings were recycled in Tuesday’s report estimated that, if TAFTA would significantly dilute or eliminate public interest regulations, the deal could produce a tiny 0.2 – 0.4 percent blip in U.S. gross domestic product (GDP). According to economists, that’s a smaller contribution to GDP than was delivered by the latest version of the iPhone.
The list of “non-tariff barriers” slated for elimination in the underlying 2009 study includes food safety standards such as “Grade A dairy safety … rules and inspection requirements” for milk and financial stability measures such as the Sarbanes-Oxley Act that enacted accounting and anti-fraud standards to prevent a recurrence of Enron-like corporate accounting scandals. The study ignored the predictable social and economic costs that would result from such extreme regulatory rollback, such as an increase in the incidence of foodborne illness and a rise in financial instability.
Tuesday’s report, like its predecessors, made clear that TAFTA is not primarily about trade. Acknowledging that tariffs between the United States and the EU are “already quite low,” USTR and EU officials have made clear that TAFTA’s primary focus will be on the “elimination, reduction, or prevention of unnecessary ‘behind the border’” policies, such as the health, financial and environmental regulations targeted by Tuesday’s study. Attempts to exclusively measure the economic impact of TAFTA-prompted tariff reductions have produced embarrassingly meager results, estimating that even in the unlikely scenario of 100 percent tariff elimination, TAFTA would deliver economic benefits equivalent to three extra cents per person per day.
Construction workers stopped working and peered down from the scaffolding high above. Tourists stopped to take pictures. The sound of chanting could be heard blocks away. It was a beautiful day for a rally.
Last Friday, nearly 100 environmental, labor, family farm, faith, public health and trade activists gathered outside the U.S. Trade Representative’s (USTR) office to show the Trans-Pacific Partnership (TPP) lead negotiators that people in the U.S. do not want a “free trade” deal that puts corporate interests over those of the middle class.
The TPP negotiators were not in Washington, D.C. for a formal round of negotiations, but for a below-the-radar “intersessional” meeting. Such secretive meetings are now being scheduled at a moment’s notice in countries across the Pacific Rim as the U.S. cracks the whip in desperate attempt to get negotiations all wrapped up and tied with a neat bow by the end of the year, despite the yawning controversies and gaps in agreed-upon text.
These “intersessionals” drive the backdoor TPP talks even further underground and away from public scrutiny. Unlike the formal rounds, USTR is not even revealing the location, timing or agenda of the intersessionals. And there are no “stakeholder sessions" to which concerned groups and the general public are invited.
So we created our own stakeholder session. On the street. Outside of USTR’s office.
Not about to let top-secret meetings get in their way, the crowd gathered in front of the USTR office last week filled the air with demands for fair trade, against the TPP’s corporate coup, and against Obama’s plan to railroad the controversial deal through Congress with Fast Track.
A medical student in his white coat waved a sign next to a union member demanding the end of "trade" agreements that jack up the cost of medicines while shipping U.S. jobs overseas. Student activists held signs calling for greater transparency. As the D.C. lunchtime crowd merged with tourists walking by, the rally swelled to incorporate newcomers who grabbed signs and joined the cries for justice:
“Regulating Wall Street is what we need, it’s time to flush the TPP!”
“People with AIDS under attack, No TPP and no Fast Track!”
“It might be really good for Monsanto, but it sure ain’t good for us!”
“The TPP has gone astray, there’s no shame to walk away!”
With a crowd diverse enough to include a middle aged white man in a suit, a tattooed girl with dreads, a Chinese exchange student, and a modern day hippie in clogs, it was clear that the TPP impacts each and every one of us in profound ways. Across the U.S., people from all walks of life with all sorts of different interests are coming together to derail Fast Track and stop the TPP. The contagious, hopeful, and determined energy that rocked the crowd on that sidewalk outside the USTR building is increasingly being manifested all over the country in rallies, town hall meetings, teach-ins, and meetings with members of Congress.
In D.C., protests continued throughout the negotiators’ visit. One of the most dramatic moments happened on Monday when activists from FlushTheTPP.org, CODEPINK, Veterans for Peace, and Earth First! emblazoned the very headquarters of TPP scheming with anti-TPP banners. Disguised as construction workers, activists scaled scaffolding to reach the roof of the USTR’s buildings, and then covered the USTR offices with banners saying no to the TPP and demanding transparency for the sweeping deal.
The fight is on. No matter how deep into the shadows the TPP negotiators try to hide, activists all over the world will be there to shine a light on a deal gone terribly wrong.
If you say something enough times, does it become true? That seems to be the calculation of some proponents of the Trans-Atlantic Free Trade Agreement (TAFTA), a sweeping deal that would require the U.S. and EU to conform domestic safeguards to deregulatory rules currently being negotiated under corporate supervision. Pro-TAFTA think tanks have been rehashing the same set of starry-eyed prognostications of TAFTA economic benefits at a frequency (and concern for accuracy) that rivals iterations of the “Fast and the Furious” movie series.
But repetition does not truth make. As we’ve pointed out time and again, these reports keep using sweeping assumptions to project that TAFTA would bring a surprisingly miniscule economic blip. And to get that blip, they assume that we’ll be willing to watch corporate-advised TAFTA negotiators dismantle a swath of health, environmental, financial, and other safeguards. Click here for our retort to this parade of studies.
Another TAFTA-touting report came out today, commissioned by the British Embassy in Washington, the Bertelsmann Foundation, and the Atlantic Council (whose advisors include executives from J.P. Morgan and Big Pharma).
The report offers 71 glossy pages of rewarmed speculations. Here are the five main takeaways:
1. The “new” study is not really new. It is largely a recycled version of another recycled version of a study that appeared in 2009. Today’s report hypothesizes what TAFTA could mean for each U.S. state, assuming economic gains primarily from the weakening of financial regulations, climate policies, food and product safety standards, data privacy protections and other “trade irritants.” Those “gains” were tabulated about four years ago, dusted off in a study disseminated in March, and sliced up by state in today’s report.
2. The study confirms again that TAFTA is not about trade. Since tariffs (an actual trade issue) are “already quite low” between the EU and U.S., pro-TAFTA government officials have readily stated that TAFTA’s primary goal is not tariff reduction, but the “elimination, reduction, or prevention of unnecessary ‘behind the border’” policies, ranging from Wall Street reforms to milk safety standards to GMO food labels.
That’s why attempts to measure the economic impact of TAFTA-prompted tariff reductions have produced embarrassingly meager results. A frequently cited pro-TAFTA study estimates that even in the unlikely scenario of 100% tariff elimination, TAFTA will deliver economic benefits equivalent to three extra cents per person per day. To project a higher benefit, the study released today had to not just repeat this unrealistic assumption of 100% tariff reduction, but also assume that TAFTA would reduce health, financial and environmental regulations that have been euphemistically renamed “non-tariff barriers.”
3. The study assumes zero downside of eliminating consumer and environmental safeguards. Today’s study assumes that TAFTA would eliminate one out of every four “non-tariff barriers” – from the Volcker Rule at the center of Wall Street reform to safety standards for children’s toys to the ban on beef linked to mad-cow disease – at no cost to consumers. In addition to an obvious social and environmental toll, such a degradation of safeguards would also result in quantifiable monetary costs for U.S. consumers and the broader economy.
For example, the 2009 study on which today’s report relies counts “Grade A dairy safety…rules and inspection requirements” for milk and “a US ban on the import of uncooked meat products” in the case of “a health risk” as “non-tariff barriers” that could be slated for dismantling under TAFTA. The elimination of such consumer protections would likely result in greater incidence of food-borne illness in the United States, which would not only increase the medical costs of affected consumers, but would reduce their productivity levels and number of days at work, spelling a negative impact on aggregate economic output.
In financial services, the study names the Sarbanes-Oxley Act of 2002 as a “non-tariff barrier” on the target list of EU businesses and officials. The Act created enhanced accounting and anti-fraud standards to prevent a recurrence of the Enron, WorldCom, and other corporate accounting scandals that destroyed billions of dollars of U.S. investments. Undermining such critical financial reregulation via TAFTA would risk a return to such costly scandals. Today’s study ignored such costs.
4. The study uses contested models with assumptions that can turn economic losses into gains. While ignoring costs, today's study strives to capture all theoreticaly plausible benefits by relying on assumptions-laden methods, such as using a computable general equilibrium (CGE) model to assess removal of “non-tariff barriers” (NTBs). A U.N. study has questioned the reliability of this inchoate approach. It argues, “ongoing liberalization policy efforts to eliminate the restrictive effects of NTBs are proceeding with little economic analysis…the modeling of NTBs using general equilibrium modeling techniques is still in its early stages.” The U.N. study tested the usage of differing assumptions in a CGE model to estimate the economic effects of NTB removal and found that a change in the assumptions meant that the net economic effect of NTB removal actually switched from positive to negative for some countries (even before taking into account the above costs). If today’s study performed any such testing of assumptions, it did not reveal the results.
5. The study assumes a massive rollback of Buy American and Buy Local policies. Another assumption of today’s study is that TAFTA would eliminate one half of all “procurement barriers,” a euphemism for popular policies like Buy American and Buy Local to ensure that U.S. government projects, funded by U.S. taxpayers, are used to create U.S. jobs. It is rather fanciful to think that the U.S. Congress, state legislatures, or the U.S. public would accept such a clear-cutting of policies that enjoy 90% support. Indeed, today’s study assumes an even greater undercutting of Buy American and Buy Local than the EU negotiators themselves are hoping for. In a leaked EU position paper on government procurement, the EU explicitly names 13 U.S. states and 23 U.S. cities it is targeting for rollback of Buy Local policies. Today’s study assumes that the U.S. will offer to eliminate Buy Local in about twice as many states as the EU itself requested.
For more information on the lineage of TAFTA-touting studies from which today’s rosy report descended, click here to see our factsheet.
Yesterday, just before a meeting of the President’s Export Council, we asked whether the powerful, Obama-advising group would recognize that U.S. export growth is seriously lagging and that status-quo “free trade” deals have failed to fulfill promises of increased exports.
Somehow the room full of corporate representatives and government officials, “the principal national advisory committee on international trade,” which exists to “promote export expansion” and “discuss and resolve trade-related problems,” made it through two hours of prepared speeches without once acknowledging that we’re 18 years behind schedule to meet Obama’s goal to double exports.
Groupthink is one plausible explanation. The members of Obama's top "export" panel include:
- 17 executives of Fortune 500 corporations and 8 other business representatives
- 17 administration officials, 9 hand-picked members of Congress, and 2 state and local government officials
- 0 representatives of labor, environmental, health, consumer, family farmer, or any other public interest groups
It turns out that Obama's "principal national advisory committee on international trade" doesn't need to include a broad cross-section of groups and concerns implicated by trade policy. Perhaps if a single worker, farmer, or advocate had been present, someone would have pointed out the obvious: exports (i.e. the group's raison d'être) are not doing well.
Instead, the group touted insignificant data points as “gains.” For example, President Obama declared, “Part of the reason we set up the Export Council was to make sure we meet our goal of doubling exports in a relatively short period of time. And we now sell more goods overseas than ever before.”
Um, the second sentence’s mundane “achievement” is irrelevant to the first sentence’s central goal. We have actually “sold more goods overseas than ever before” in 43 of the last 53 years – rising exports has been a longstanding accompaniment to economic growth, not a novel cause for bragging rights.
Actually, Obama’s unremarkable claim may not even prove true for 2013. The most recent government data indicates that U.S. goods exports so far this year are actually one percent lower than they were in the same period last year. At the current rate, we’d expect 2013 to be a historically unique year of falling exports.
If so, Obama’s export-doubling goal, which already looked impossible after last year’s sluggish two percent growth rate (mentioned just once during the Export Council meeting), would become even more remote.
Choosing to ignore this elephant in the room, the President’s Export Council called for a hearty embrace of status quo trade policy. Corporate CEOs and administration officials praised two more-of-the-same pacts currently under negotiation: the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Free Trade Agreement (TAFTA).
No one brought up how exports have actually fared under similar pacts. No one mentioned that exports to Korea have actually fallen 10 percent under the Korea “free trade” agreement (FTA), a blueprint for the TPP. No one mentioned that export growth to countries that are not FTA partners has actually exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade.
Instead, the Council affirmed the tired and counterfactual narrative that deals like the TPP and TAFTA, which would rewrite wide swaths of non-trade domestic policies, are necessary for export promotion.
And they reiterated that getting the increasingly controversial deals past a skeptical Congress and a critical U.S. public would require Fast Track – the undemocratic tool used to ram through Congress the Korea FTA, NAFTA, and other past controversial deals whose results the Council resolutely ignored.
In a decision that took less than thirty seconds, and entailed zero deliberation, the Council approved a resolution supporting Obama’s push for Fast Track. The Chair, representing Boeing, did not even bother to call a voice vote, opting instead to “assume no objection” and then declare approval of the resolution by stating, “I so move, all in favor, okay.”
So is the President’s Export Council really blind to the current export problems that are central to its mandate? Are they really unaware of the shoddy export record of “free trade” deals to which they are unblinkingly committed?
Or do the Council members, representing some of the country’s most aggressive corporate interests, have something else to gain by advocating for the TPP and TAFTA? For example, Council member J.P. Morgan, Wall Street’s largest firm, might be less concerned with the deals’ implications for exports and more interested in the constraints that the pacts would impose on the reregulation of Wall Street.
Maybe Pfizer and Merck, both incoming Council members, decided to join the powerful body to push for the TPP proposal to expand their monopoly patent protections, increasing their profit margins and our medicine prices. And Walt Disney may be particularly keen, as a Council Member, in pushing for the TPP to include some of the draconian copyright provisions that the corporation failed to get enacted in the Stop Online Piracy Act (SOPA), defeated in Congress as a threat to Internet freedom. Archer Daniels Midland, meanwhile, would probably like to use its Council membership to push for TAFTA to weaken EU limits on genetically-modified food, while Council member Verizon has already expressed its hope that the pact can be used to roll back Europe’s data privacy safeguards.
It’s possible that the President’s Export Council is delusional about the shoddy export record of the status-quo “trade” model that the TPP and TAFTA would expand. It’s more likely that they are willfully ignorant. The corporations’ unqualified support for the pacts likely stems not from data-defying hopes of export promotion, but from realistic expectations that the sweeping deals would rewrite health, environmental, financial, and other domestic safeguards that the corporations find inconvenient – and that most of the rest of us find essential.Will President Obama grant the wishes of his corporate Council members? In his closing remarks for the meeting, Obama joked, “I am expecting a gold watch from Boeing at the end of my presidency, because I know I’m one of the top salesmen for Boeing.” As Obama continues attempting to sell the TPP and TAFTA to the U.S. public and fast track the controversial pacts through Congress, the likes of Boeing, J.P. Morgan, and Pfizer must be lining up the gold watches.
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As President’s Export Council Meets, No Chance to Meet Obama’s Export Doubling Goal; Exports Fall Under Free Trade Agreements
Obama’s Quest for Fast Track Authority and for Support for Trans-Pacific Partnership Pact Undermined by FTA Outcomes; U.S. Exports Have Declined in Each of 16 Months Since Korea FTA Implementation
As President Barack Obama’s Export Council convenes today to discuss his request for Fast Track authority and the status of the increasingly controversial Trans-Pacific Partnership (TPP), recent government data show it will be virtually impossible to meet Obama’s stated goal of doubling exports by the end of 2014. The same data shows that in 16 out of 16 months since the Korea “free trade” agreement (FTA) took effect last year, U.S. goods exports to Korea have fallen below the average export level in the year before the deal. At last year’s sluggish overall two percent U.S. export growth rate, the United States will not achieve Obama’s export-doubling goal until 2032, 18 years behind schedule.
The actual dismal outcomes of the current free trade agreement model are having a significant impact in Congress, where skepticism is growing about both Obama’s request for the rarely used Fast Track trade authority and the TPP.
“Given the dismal data on U.S. export growth, it would be very revealing if the Export Council just calls for more of the same policies and procedures that have gotten us these bad results,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “But whatever the Export Council says, many members of Congress are well aware that the Korea pact has been a loser and that this Trans-Pacific deal would just expand that model to more countries, which seems to be fueling opposition to the president’s request that Congress delegate its constitutional authority over trade to him via the Fast Track process.”
The overall U.S. export record under FTAs has not been helping Obama make his case for Fast Track or the TPP. Growth of U.S. exports to countries that are not FTA partners has actually exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade.
The export record of the Korea FTA is even worse. In the first year of the deal, U.S. exports to Korea fell 10 percent (a $4.2 billion decrease), imports from Korea rose 2 percent (a $1.3 billion increase), and the U.S. trade deficit with Korea swelled 37 percent (a $5.5 billion increase), compared to the prior year. Approximately 40,000 net U.S. jobs were lost under the deal’s first year, according to an economic study.
“If the president is serious about growing exports, he would do well to ditch these NAFTA-style so-called ‘trade’ pacts that export U.S. investment dollars and American jobs and look for a new model,” said Wallach. “As long as the administration keeps pushing more of the same instead of acknowledging the damaging record of the past trade deals, of course members of Congress must maintain their constitutional authority over trade so they can make sure we do not end up with yet another damaging pact.”
Click here for a PDF of this release.
The verdict is in: most U.S. workers would see wage losses as a result of the Trans-Pacific Partnership (TPP), a sweeping U.S. "free trade" deal under negotiation with 11 Pacific Rim countries. That's the conclusion of a report just released by the non-partisan Center for Economic and Policy Research (CEPR).
TPP's corporate proponents have tried to sell the NAFTA-style deal to the U.S. public and policymakers by claiming that it will result in gains for the U.S. economy. They often cite a study from the Peterson Institute for International Economics that used sweeping assumptions to project a tiny benefit from the TPP. We brought that study down to size back in January, showing that, even if one accepts the pro-TPP authors' litany of optimistic assumptions, the much-touted "benefit" from the TPP would amount to an extra quarter per person per day.
As this week's CEPR report points out, the pro-TPP study projected a meager 0.13 percent increase to U.S. gross domestic product (GDP) by 2025 if the controversial TPP would be signed, passed, and implemented. By comparison, economists have estimated that Apple's iPhone 5 contributed a 0.25 - 0.5 percent increase to U.S. GDP.
That is, the TPP's total contribution to the U.S. economy is expected, by TPP proponents, to be about one half to one fourth of the contribution of the latest iPhone version.
Well, you might say, a nearly invisible blip in GDP is better than no blip in GDP. (You might say this if you ignore the host of dubious assumptions used to project said blip, and ignore the TPP's expected threats to medicines affordability, environmental protections, food safety, Internet freedom, and financial stability.)
But what would such a paltry GDP rise mean for your pocket? Answering that requires taking into account the increase in income inequality that typically results from such "free trade" deals. The author of the CEPR report, economist David Rosnick, explains, "There are winners and losers from trade, and research has shown that trade contributes to inequality. In fact, it would take only a very small contribution to inequality due to trade to wipe out all of the gains that most workers would get from this agreement." Rosnick then uses the empirical evidence on the trade-inequality relationship and shows that even taking the most conservative estimate of trade's contribution to inequality (that trade is responsible for just 10% of the rise in inequality), the losses from projected TPP-produced inequality indeed would "wipe out" the tiny projected gains for the median U.S. worker.
That is, as a result of the TPP, the median U.S. income would fall. It would not just fall in comparison to the incomes of the wealthy (which would rise). It would fall in absolute terms, forcing middle-class U.S. workers to take home less in 2025 than they earn today.
Such wage losses would afflict most U.S. workers. Rosnick shows that if we assume that trade has contributed just 15% of the recent rise in inequality (a still conservative estimate), then the TPP would mean wage losses for all but the richest 10% of U.S. workers. So if you're making less than $87,000 per year (the current 90th percentile wage), the TPP would mean a pay cut. And if you're making more than $87,000 per year, you may still be a tad concerned about how the deal could jeopardize the safety of your food, threaten clean water protections, roll back Wall Street reforms, etc.
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At this week's G20 summit in Russia, President Obama has been trying once again to sell two enormous "trade" pacts -- the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Free Trade Agreement (TAFTA) -- using the beleaguered pitch that such deals will deliver jobs by boosting exports.
But government trade data released this week douses Obama's export promise with another bucket of cold reality. Under the Korea "free trade" agreement (FTA), a model for the TPP, U.S. exports have been steadily falling, imports have been rising, and job-displacing trade deficits have surged.
In fact, in every single month since the Korea FTA took effect in March 2012, U.S. goods exports to Korea have fallen below the average export level seen the year before the deal took effect. Average monthly exports to Korea since the FTA have sunk 11% below the average monthly level before the FTA.
The U.S. monthly trade deficits with Korea, meanwhile, have soared about 50% higher than the pre-FTA level. In 16 out of 16 months since the FTA took effect, the U.S. trade deficit with Korea has exceeded the average monthly deficit seen the year before the deal.
The dismal record of the Korea FTA for U.S. exports and jobs does not bode well for the administration’s attempt to push the controversial TPP through Congress on a democracy-defying Fast Track under the tired and counterfactual promise of export promotion. Members of Congress are not likely to be persuaded to revoke their constitutional authority over trade and allow the TPP to be railroaded through Congress after seeing the disappointing data for a deal upon which the TPP is modeled.
Peruvian lawmaker Verónika Mendoza, signatory to the resolution, speaks at a Public Forum on the TPP.
While the negotiations of the ultra-secretive Trans-Pacific Partnership (TPP) have gone further underground, lawmakers in Chile and Peru are urging their country to open a public debate to shed light on the deal's sweeping implications for their countries.
Last week, members of the Peruvian parliament put forth a resolution (English translation available below) requesting that the government open a "public, political, and technical debate" on the binding rules being negotiated in the TPP. The request mentions several of the lawmakers' specific concerns, including the lack of transparency of the process, proposed TPP provisions limiting access to affordable medicines, and the TPP's expansion of the investor privileges model known as investor-state dispute resolution. Under this system, a wealthy U.S. magnate has demanded that Peru's government pay $800 million for asking the company to comply with its contractual obligation to clean up the grave pollution caused by its metal smelter in La Oroya, one of the world's most polluted communities.
The resolution put forth by the Peruvian lawmakers was introduced a few weeks after four Chilean senators sent a very similar formal request to open a public debate about the TPP in Chile. The document introduced by the Chilean senators quotes Rodrigo Contreras, the ex-lead TPP negotiator for Chile who has been publically critical of the TPP.
Considering that large swaths of domestic policies -- from environmental protections to financial regulations to public health laws -- would need to be rewritten to conform to the TPP's deregulatory rules, it is outrageous that elected lawmakers have been excluded from access to the text or the negotiating process. A public debate about this expansive "trade" deal is long overdue.
Here's the translated text of the Peruvian resolution:
The undersigned Members of Congress of the Republic, members of the group Parlamentario Acción Popular-Frente Amplio, under Article 68 of the Congressional Rules of the Republic, propose the following motion:
Whereas the Transpacific Economic Partnership (TPP), which aims to integrate 12 economies: the U.S., Canada, Peru, Mexico, Brunei, New Zealand, Singapore, Australia, Malaysia, Vietnam, Chile and Japan, into a free trade zone of the Pacific, seeks to finalize an agreement on goods, services, and agriculture, as well as agreements on intellectual property rights, investment, rules of origin, competition, labor and environmental standards;
Whereas our attention is drawn to the excessive zeal of the negotiations, declared secret, and the lack of transparency making it impossible to know the contents of the TPP negotiation texts and therefore what standards we as a country are implicating.
Whereas the document that leaked in 2011 about the intellectual property chapter proposed by the U.S., proposes to require TPP signatory countries to conform to copyright rules that impose serious limits to intellectual and artistic creation as well as technological innovation putting at risk freedom of expression, privacy and the capacity to innovate of all Peruvians. This being a new attempt to tighten intellectual property rules;
Whereas the TPP promotes mechanisms, rejected in other negotiations, which limit competition and the entry of generic medicines into the market and endanger the aim to protect biologic medicines, particularly important cancer-fighting medicines, and this is a proposal that should not be accepted;
Whereas, additionally, it threatens the free access to information, the use of the internet and cultural goods: the U.S. proposal seeks to impose rigid copyright rules, similar to those criticized in SOPA (Stop Online Piracy Act) recently rejected in that country, because it would impose serious threats to the right to information, the free use of the internet and other cultural goods (books, software, music, etc.);
Whereas, furthermore, it promotes a model of investment protection that is being questioned internationally because it allows anonymous private capital and transnational corporations to evade domestic courts and challenge necessary measures and the sovereignty of countries, affecting the development of laws in favor of public health or environmental sustainability. We urge the correction of errors that have allowed an $800 million lawsuit to be filed against Peru by Doe Run in the case of La Oroya under the investment chapter of the FTA with the U.S., and to not expand these advantages for corporations with a new set of nine [sic] countries;
With respect to the agreement of the Chilean Senate, dated August 13, 2013, demanding that the President of the Republic open a public debate about the TPP, alerting how it affects national and regional interests.
The agreement says: “Requesting your excellency the President of the Republic that, beyond diplomatic procedures and mechanisms in the context of the negotiation the government is conducting in the Trans-pacific Partnership (TPP), to open a public debate, that is technical and political, timely and open, about the implications that the agreement could have for Chile economically and for international relations, especially with respect to the process of regional integration of which we are a part, and of our relationship with China, the country’s main trading partner.”
Whereas it is necessary to have a strong negotiating position in the face of the ambitions and pressure by economically stronger states and reject the imposition of a model conceived for the purpose of the realities of countries with higher incomes, which are very different than the other participating countries;
Whereas it is essential to analyze the impacts and the cost-benefit analysis for the country and determine the reasons for Peru to adhere to this trade agreement;
By the above considerations, the full Congress of the Republic,
First: We ask the government to open a public, political, and technical debate on the proposals of the Trans-Pacific Partnership (TPP) negotiations of which Peru is a part.
Second: We invite the Minister of Foreign Trade and Tourism and the technical team in charge of the Trans-Pacific Partnership (TPP) negotiations to report on the matter.
Lima, 28 de Agosto del 2013
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Colombian farmers are dumping tons of oranges onto highways. Roadways have been blocked throughout the country. Hundreds of thousands of Colombian protestors are risking rubber bullets and even live ammunition to take to the streets.
Unfair trade is one of the rallying cries of the underreported protests currently wracking Colombia. Protesting groups are asking the Colombian government (among other things) to suspend and renegotiate the U.S.-Colombia “Free Trade” Agreement (FTA). Thanks largely to the FTA, which took effect in May 2012, highly-subsidized U.S. agricultural products have started to swamp Colombia’s small-scale farmers, contributing to their displacement, the deterioration of livelihoods across Colombia, and the loss of the country’s food security.
Before the FTA was passed, Colombia’s own Minister of Agriculture predicted a miserable outcome for the country’s farmers. He warned that if the asymmetric deal took effect, Colombian farmers “would have no more than three options: migration to the cities or other countries (especially the United States or bordering countries), leaving to work in drug cultivation zones, or affiliating with illegal armed groups.” Not content to accept any of those three fates, Colombia’s farmers are now making their voices heard.
For an on-the-ground perspective on the FTA-fed tumult in Colombia, Julia Duranti of Witness for Peace’s team in Colombia offers this guest post:
A Struggle for Survival in Colombia’s Countryside
Julia Duranti, Witness for Peace Colombia International Team
Though you wouldn’t know it from most English-language media or from heads of state, last week tensions in Colombia’s countryside came to a head. But not between the military and armed groups like the FARC, the usual suspects in foreign reporting on Colombia. The source of this uprising lies in policies not up for discussion in the country’s current peace talks: the impact of the U.S.-Colombia FTA – implemented in May 2012 – and policies that have similarly afflicted Colombian campesinos (small-scale farmers).
Colombia’s campesinos launched the protests – which have overtaken the nation – because they perceive the FTA, and policies like it, to be a threat not just to their production, but their very existence.
The National Grassroots and Agrarian Strike began on August 19 when over 200,000 potato, rice, fruit, coffee, dairy and livestock farmers; miners; truck-drivers; teachers; healthcare workers; and students left their work activities and blocked roadways in 30 key corridors around the country, with the provinces of Boyacá, Valle del Cauca and Nariño being most affected.
The diverse protesters’ list of demands includes suspension and renegotiation of the U.S.-Colombia FTA, financial and political support for agricultural production, access to land, recognition of campesino, indigenous and Afro-descendant territories, the ability to practice small-scale mining, the guarantees of political rights of rural communities, and social investment in rural areas, including in education, healthcare, housing and infrastructure.
Along with roadblocks and marches, in symbolic acts intended to express their inability to earn a living and their frustration at government inertia, dairy farmers in Boyacá poured out over 6,000 liters of milk while citrus farmers in Valle del Cauca dumped 5,000 tons of oranges onto the highway.
What could possibly bring farmers to willingly destroy their own products? Campesino livelihoods have been devastated, a process that began with economic liberalization under President Cesár Gaviria in the early 1990’s and continued with a host of Colombian laws that cleared the way for the U.S-Colombia FTA. Then came the FTA itself. Just over a year old, the deal is already taking its predicted toll on Colombia’s countryside. An FTA-enabled influx of heavily-subsidized U.S. products has contributed to the breakdown of Colombia’s local economies and the displacement of its farmers, fueling the urgency of the current protests.
Despite promises of more jobs and increased exports, the balance after year one of the U.S.-Colombia FTA is dismal for Colombia. According to Colombian paper El Espectador, Colombia’s exports to the U.S. actually fell 4.5% between May 2012 and March 2013, while Colombia’s imports from the U.S. rose 19.7%. In the agroindustrial sector on which many Colombians depend for their livelihood, U.S. imports from Colombia rose 11.5%, but Colombian imports from the U.S. skyrocketed 70%. An economic study conducted prior to the FTA’s passage predicted that just such a scenario would lead to income losses of up to 70% for the vast majority of Colombia’s farmers, contributing to their displacement.
It is not only that strikers feel they cannot compete with heavily-subsidized U.S. production: they are actually prohibited from doing so. The FTA prohibits the Colombian government from subsidizing agriculture for export or domestic consumption, even as the U.S. government subsidizes U.S. agribusinesses to the tune of $15 billion each year.
Along with the FTA came Colombian laws that cleared the way for the deal’s implementation and that similarly plagued campesinos. These include:
- Prohibition of the production, marketing and consumption of panela, a semi-refined sugar that is a Colombian staple (Resolutions 002546 of 2004 and 0779 of 2006)
- Prohibition of the sale of raw milk (Decree 2838 of 2006)
- Limits on the ability of small-scale farmers to raise and slaughter cattle (Decree 1500 of 2007)
- Prohibition of the production and marketing of heritage-breed chickens (Resolution 000957 of 2008)
- Controls on the production, use and marketing of all seeds in the country (Resolution 970 of 2010)
- Expansion of intellectual property rights to include seeds (Law 1518 of 2012).
All of these laws favor large-scale industrial production over small-scale producers that do not have the resources to comply with such regulations. Campesinos are incredulous: “When we produce things like milk or chickens for our communities, of course we ensure that those products are safe because our families are the ones consuming them. It is an economy based on trust. But these new laws destroy that,” expressed one community member in Cauca to a recent Witness for Peace delegation.
Whereas Colombia used to meet its food production needs internally, it is now importing food, including the coffee for which it is so famous. The “mining engine” promoted by the Santos administration as a mechanism for economic growth focuses entirely on resource extraction to generate wealth, using the profits to import almost everything else. This includes replacing land that was previously used for food cultivation with palm oil and sugarcane monoculture for biofuel production. Left landless and without their livelihoods, rural communities are forced to migrate to cities, where they face urban poverty and social breakdown.
Protestors and their allies recognize that the effects of such policies are not confined to rural areas and that they are already spreading to Colombia’s working class and urban dwellers as well. In a march of solidarity through the capital of Bogotá on Sunday, protestors carried signs defending food security, small-scale producers, and Colombia’s national sovereignty, chanting, “Amigo mirón, únase al montón. Su abuelo es campesino y usted trabajador.” “Bystander, join the struggle! Your grandfather was a farmer and you are a worker,” and, “Queremos papa. Queremos maiz. Multinacionales fuera del pais.” “We want potatoes, we want corn—multinationals, get out of our country.” They made their way peacefully to the central Plaza de Bolívar to share their message with their government, a government that wants to pretend that they don’t exist.
In spite of President Juan Manuel Santos’s claim on August 25 that “the supposed agricultural strike doesn’t exist,” since day one of the protest his administration has met peaceful protestors with extreme repression by the Army, police and anti-riot police (ESMAD). Reports indicate that clashes between protestors and public security forces have claimed five lives, wounded hundreds on both sides and led to over 175 arrests, including four human rights workers and six journalists, who had their equipment confiscated.
Protestors have been fired upon by public security forces using rubber bullets and even, in some cases, live ammunition. Police forces have also fired tear gas at protestors, including from helicopters. Protestors have been threatened, intimidated and had their food supplies stolen by police, who have used broad interpretations of anti-terrorism legislation passed two years ago to detain demonstrators on public roadways on the basis of anything from disrupting public order to terrorism. Predictably, Defense Minister Juan Carlos Pinzón claimed the strike has been infiltrated by the FARC.
The government’s response has been incoherent – attempting to paint the strike as simultaneously nonexistent yet infiltrated by terrorists, as insignificant yet necessitating 16,000 troops in full riot gear using brutal repression tactics. Meanwhile, the government has so far ignored the calls of coordinators for national-level negotiations related to economic and agricultural policy. The government has extended some offers of negotiation at the local level, as in the provinces of Cauca and Boyacá, only under the condition that protestors remove their roadblocks. But protestors, weary of similar offers made in the past that were not followed through, refuse. As potato farmer Cesár Pachón said, “We’re not asking for more money. We’re asking for conditions and agricultural policies that allow us to survive.”
The current strike, therefore, represents more than a demand for agricultural subsidies or protections for certain industries. It is a response to a neoliberal model whose relentless crusade for natural resources and whose stark social inequalities are at the heart of Colombia’s conflict; a response to a model that has no room for the small-scale production that defines the livelihoods of campesinos.
The Obama administration has drawn sharp criticism from leading health organizations, U.S. state representatives, and New York mayor Michael Bloomberg by caving to pressure from Big Tobacco to abandon safeguards for tobacco control policies in the Trans-Pacific Partnership (TPP), the pending "free trade" deal with 11 Pacific Rim countries. The administration has scrapped a proposal to provide a "safe harbor" for tobacco control measures.
Instead the administration will issue a proposal in the current Brunei round of TPP negotiations that clears a path for tobacco corporations to use the TPP to directly challenge governments' progressive public health measures.
In response to the announcement, a major victory in tobacco corporations' effort to use TPP-like deals to roll back anti-smoking safeguards, Dr. Gregory Connolly of the Harvard School of Public Health stated, "Our government’s trade policy is promoting the tobacco epidemic."
The American Cancer Society, the American Heart Association, the American Lung Association, and the Campaign for Tobacco Free Kids denounced the Obama administration’s decision to cave to Big Tobacco's TPP demands at the expense of public health. Legal and health experts at the Harvard School of Public Health, Georgetown University Law Center, and Action on Smoking and Health blasted the TPP proposal, finding it "will do little to protect governments’ right to regulate tobacco." The state of Maine's Citizen Trade Policy Commission concluded, "it would be better to not offer this text at all than to give the false impression that the United States is serious about protecting government authority within the TPP to regulate tobacco to protect health."
New York City mayor Michael Bloomberg also weighed in on the TPP controversy by releasing a scathing op-ed in yesterday’s New York Times. Bloomberg noted that not only would the U.S. proposal restrict tobacco control measures and significantly decrease the price of cigarettes, but also expose TPP governments to direct "investor-state" challenges launched by tobacco corporations against public health laws:
If the Obama administration’s policy reversal is allowed to stand, not only will cigarettes be cheaper for the 800 million people in the countries affected by the trade pact, but multinational tobacco corporations will be able to challenge those governments — including America’s — for implementing lifesaving public health policies. This would not only put our tobacco-control regulations in peril, but also create a chilling effect that would prevent further action, which is desperately needed.
He's right. The TPP's extreme investor privileges would empower tobacco corporations to skirt domestic legal systems and attack tobacco control policies before extrajudicial tribunals as a means of intimidating policymakers who would dare to enact such safeguards. The Obama administration's proposal does nothing to limit, or even to address, this empowerment of Big Tobacco.
Unfortunately, the investor-state threat is not a hypothetical one. Phillip Morris has already used such investor privileges in other treaties to attack landmark anti-smoking laws in Australia and Uruguay after failing to undermine those health laws in domestic courts. As Andrew Martin points out in Bloomberg, Philip Morris has been leading Big Tobacco's battle to pressure the Obama administration to weaken tobacco-control safeguards in the TPP.
The Obama administration's caving to that pressure makes clear the TPP's very real threat to public health. As Laurent Huber of Action on Smoking and Health stated, the new tobacco-friendly proposal for TPP "will mean more lives lost, both here in the US and abroad.” It is more crucial than ever to expose the TPP and to stop it from being fast tracked through Congress. Our health depends on it.
With No Text Agreed for Several Entire Chapters and Most Tough Political Decisions Unresolved, the So-Called ‘Final Round’ of Trans-Pacific Partnership (TPP) Talks Will Not Be the End of Negotiations
Will TPP Negotiations Become Even More Secretive After Imminent 19th Round of TPP Talks in Brunei, Which is Being Called the Last Formal Negotiating Round?
After announcing for a domestic audience that the Trans-Pacific Partnership (TPP) negotiations were in their “end game,” U.S. Trade Representative (USTR) Michael Froman will face quite a different reality when he meets with TPP nations united in opposition to many core U.S. TPP proposals this week at the start of the 19th round of negotiations in Brunei. Without text for two TPP chapters and no deals on any of numerous difficult market access issues, from dairy and sugar to apparel and rice, it is clear that the Brunei Round will, in fact, not be the final negotiating session. The real question is whether the TPP negotiations coming after the Brunei Round will be unannounced and even more secretive, Public Citizen said today.
Among the most contested aspects of the deal include the U.S. proposals on medicine patents, state-owned enterprises, Internet policy, financial regulatory limits, and environment and labor standards.
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, relating to regulation of energy and other services, financial regulation, food safety, procurement policy, patents and copyright policy, and other non-trade issues. 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.
One can see why negotiators being deadlocked over entire TPP chapters to the extent that there is not even text is a detriment to the Obama administration’s announced October deadline for signing the TPP on the sidelines of the Asian Pacific Economic Cooperation summit. However, reporters at the Brunei Round or participating in USTR briefings during the round are likely to get the “TPP End Game” spin. As Obama administration officials try to convince Congress that the TPP is almost completed, some questions that the Obama administration would undoubtedly rather avoid:
1. Is the fact that there is no intellectual property chapter text to even negotiate over – even a heavily bracketed text – related to unwavering multi-year opposition to U.S. patent and copyright text proposals?
2. Is the multi-year deadlock over the TPP’s state-owned enterprises chapter going to be resolved in Brunei by the four nations in absolute opposition to the U.S. suddenly changing its position, or by the U.S. giving up on state-owned enterprise disciplines?
3. And what about the labor rights chapter, which is “done”… except for staunch opposition by many TPP countries to it being enforceable. Given that the Obama administration has pledged to Congress that the pact will have labor rights enforceable on par with the pact’s commercial provisions, what will happen to the non-undecided enforcement section of the TPP chapter?
4. And what about the environment chapter? There is a deadlock over not only the chapter’s enforceability but also the key rules such as enforcement of countries’ obligations in environmental treaties.
5. Has the U.S. now conceded to Vietnam the right to have duty-free treatment for apparel products assembled from Chinese textiles and other inputs so that Vietnam is now participating in closing up negotiations on other chapters, which it has not done to date?
6. Given united opposition by the other TPP countries that has thwarted closure to date of several TPP chapters, has the U.S. relented in its insistence that the TPP forbid any signatory country from using capital controls, speculation, or transaction taxes and other common macroprudential financial measures?
7. Have other countries dropped unified opposition to the U.S. proposal in the investment chapter to extend the controversial investor-state system to procurement and private-public-partnership utility management and natural resource contracts through an “umbrella clause”?
8. Will the United States allow Japan to exclude the five “sacred” commodities – rice, wheat and barley, beef and pork, sugar and dairy – from the TPP tariff zeroing, which is the condition for participating in the TPP that was set by the majority LDP party?
“The fact that entire chapters of the TPP remain without even a draft text to fight over won’t be a popular talking point in Brunei, given that the Obama administration is claiming that the agreement is almost done while in reality negotiations will just continue on in even greater secrecy,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Apparently, the response to the growing opposition to the TPP among the U.S. Congress and the public here, and legislators and the public in other countries, is to drag negotiations even further underground and claim a deal is almost done.”
Today, Simon Lester over at the Cato Institute, posted a Huffington Post piece called "The TPP Trade Talks: Forget Secrecy, Let's Talk Substance." In it, he cited our New York Times critique of the Obama Administration's inexplicable decision to keep the sweeping Trans-Pacific Partnership (TPP) "trade" deal behind a wall of secrecy.
Simon argued that we should not focus on the TPP's secrecy, but on its substance.
First, that's a tad difficult when said secrecy is obscuring said substance. Second, insofar as we have been able to opine on the shady substance (e.g. thanks to leaked TPP texts), we've not really held back in doing so. See here, here, here, here, here, here, here, here, here, here, and here. Oh, and here.
Here's our full exchange with Simon, also posted at Huffington Post (thanks to Simon for his engagement):
3:43pm, Ben Beachy
Simon, it’s difficult to talk about the substance of a deal that cannot be seen. For 19 rounds and more than three years of TPP negotiations, the U.S. public and even most members of Congress have been kept in the dark on the TPP’s content, which could rewrite swaths of non-trade domestic policies. Those of us tracking the secretive deal have had to rely on rumors, vague characterizations, and a few leaked texts to get an idea of its sweeping substance.
Indeed, the worrisome TPP provisions you point to are themselves the results of leaks, confirming the need for greater transparency. We only know about the deal’s overreaching copyright extensions that you mention because of a leaked intellectual property text. Similarly, it is only because of a leaked investment text that we have seen the extreme TPP provisions that, as you note, would actually empower foreign corporations to surpass domestic legal systems and drag sovereign governments before extrajudicial tribunals to demand taxpayer compensation for health and environmental policies they find inconvenient.
Meanwhile, the vast majority of the TPP’s 29 chapters remain tightly under wraps. When a few leaked chapters of a 29-chapter deal include alarming threats to the public interest, how can the appropriate conclusion be that we should “not get hung up too much on transparency issues?” The disquieting leaks provide all the more reason to amplify the call for a long-overdue unveiling of the secretive TPP.
4:16pm, Simon Lester
There is some truth to what you say. However, a lot of what will be in the TPP was also in prior agreements (e.g., investor-state). As a result, I think we have the basis already for a pretty good debate! We probably know about 95% of what will be in it. Of course, like you, I am eager to hear about the remaining 5%. But we can't have complete transparency in a negotiation (and we certainly don't have it in Congress either, with the legislative process). So let's get started talking about that 95%.
When I hear Elizabeth Warren complain about secrecy, I get frustrated because I would rather see her weigh in on the substance. What does she think about investor-state? Or about copyright extensions? Or, for that matter, protectionist tariffs? Many prominent people seem wary of weighing in on these difficult issues, and instead focus on secrecy. To me, that seems like a bit of a copout.
6:00pm, Ben Beachy
I cannot see how a few leaked chapters in a 29-chapter deal counts as knowledge of 95% of that deal's contents. For the gaping holes not filled in by leaks, we (like you) indeed have been looking at past deals to get a hint at what the TPP could hold. But that's hardly a substitute for release of the official and current TPP text, which has already undergone 18 rounds of negotiations and alterations.
And insofar as we have been able to ascertain the TPP's shady substance (e.g. via leaks), we (like you) have not exactly held back in commenting on said substance. We have repeatedly spotlighted the threats to access to medicines, Internet freedom, and health and environmental safeguards posed by the TPP's leaked investment and intellectual property chapters. And we have quite openly noted the havoc that the TPP could pose to Wall Street reform (also raised by Sen. Warren), food safety, and jobs if the TPP replicates the deregulatory rules of past pacts.
It is precisely because of such threats that it is so critical to unveil the rest of the TPP’s content.
As we pointed out in the NYT op-ed you cited, even the Bush administration released online the negotiating text of the last similarly sweeping “trade” deal (the FTAA). We're simply asking the Obama administration to uphold the same standard of transparency used by the Bush administration. Until that modest request is granted, harping on the TPP’s secrecy is merited.
Friends of the Earth, U.S. has released a video highlighting the threat that the Trans-Pacific Partnership (TPP) poses to the environment and human rights. Check out the video below to learn more about how the TPP's investment chapter (a draft of which has leaked) favors corporations over people and the environment by allowing comapnies to drag a government to an extrajudicial tribunal if they feel that a public interest law has affected their ability to make a profit.
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