Planet Not For Sale

10 Tall Tales on Trade: Fact-Checking Obama’s Top Trade Official

Eyes on Trade - 28 January, 2015 - 15:07

Yesterday was a difficult day for U.S. Trade Representative (USTR) Michael Froman.  He had to go before Congress and explain how the administration’s plan to expand a trade model that has offshored U.S. manufacturing jobs and exacerbated middle class wage stagnation fits with President Obama’s stated “middle class economics” agenda.

Inconveniently for Mr. Froman, it does not.

That did not stop Froman from trying to paint the last two decades of Fast-Tracked, pro-offshoring trade deals – and the administration’s plan for more of the same – as a gift to the middle class. 

The facts he cited to support this depiction actually sounded great.  They just didn’t have the added advantage of being true. 

Here’s a rundown of the top 10 fibs and half-truths that Froman uttered before the Senate Finance Committee and House Ways and Means Committee yesterday in his sales pitch for the administration’s bid to expand the NAFTA “trade” pact model by Fast-Tracking through Congress the controversial Trans-Pacific Partnership (TPP).

1. Fast Track Puts Congress in the Driver’s Seat (of a Runaway Car, without Brakes or a Steering Wheel)

Froman: “[Fast Track] puts Congress in the driver’s seat to define U.S. negotiating objectives and priorities for trade agreements.”

Okay, let’s go with this analogy.  If reviving Fast Track puts Congress in the driver’s seat, it also removes the brakes and steering wheel.  Reviving Fast Track would empower the administration to negotiate and sign a sweeping “trade” pact like the TPP – implicating everything from the cost of medicines to the safety of food to the reform of Wall Street – before Congress had any enforceable say over the deal’s contents, even if they contradicted Congress’ stated negotiating objectives.  Goodbye steering wheel.  Congress’ role would be relegated to an expedited, no-amendments, limited-debate vote on the already-signed deal.  Goodbye brakes. 

Also, if we’re talking about Fast Tracking the TPP, the car is already going 60mph.  As a couple of members of Congress pointed out to Froman, the administration has been negotiating the TPP for more than five years, and Froman himself stated that TPP negotiations are in their endgame.  Even if Froman’s assertion were true that Fast Track allows Congress to define priorities for trade agreements (rather than ensuring that such priorities are not enforceable), it’s a little late for members of Congress to be naming priorities for a deal that has been under negotiation since 2009 and that Froman hopes to close in the coming months.

2. A Trade Surplus with Our FTA Partners (Does Not Appear in Official Government Data)

Froman: “You take all of our FTA partners as a whole, [and] we have a trade surplus. And that trade surplus has grown.”  Froman also claimed that the United States has a trade surplus in manufactured goods with its FTA partners.  And he tried to use red herrings to explain away the surging U.S. trade deficit with Korea under the Korea FTA.

These claims defy official U.S. government data.  Data from the U.S. International Trade Commission show that the United States has a $180 billion U.S. goods trade deficit with all free trade agreement (FTA) partners (in 2013, the latest year on record).  In manufactured goods, the United States has a $51 billion manufacturing trade deficit with all FTA partners.  Froman claimed otherwise, in part, by counting billions of dollars’ worth of "foreign exports" – goods produced abroad that simply pass through the United States without alteration before being “re-exported.”  These goods, by definition, do not support U.S. production jobs.

Contributing to our FTA deficit is the 50 percent surge in the U.S. goods trade deficit with Korea in just the first two years of the Korea FTA, which literally was used as the U.S. template for the TPP. This deficit increase, owing to a drop in exports and rise in imports, spells the loss of more than 50,000 American jobs in the FTA's first two years, according to the ratio used by the administration to claim the pact would create jobs. Froman tried to explain away the ballooning U.S. trade deficit under the Korea FTA as due to decreases in corn and fossil fuel exports.  But even if discounting both corn and fossil fuels, U.S. annual exports to Korea still fell under the FTA, and the annual trade deficit with Korea still soared.  Product-specific anomalies cannot explain away the broad-based downfall of U.S. exports to Korea under the FTA, which afflicted nine of the top 15 U.S. sectors that export to Korea. The disappointing results also cannot be blamed on low growth in Korea since the FTA.  Though Korea's growth rates in the last several years have not been spectacular, the economy has still grown since the FTA (3 percent in 2013), as has consumption (2.2 percent, adjusted for inflation, in 2013). Koreans are buying more goods, just not U.S. goods. 

 

3.  We Wish to Ensure Access to Affordable Medicines in the TPP (but Big Pharma Won’t Let Us)

Froman: “In negotiations, like TPP, we are working to ensure access to affordable life-saving medicines, including in the developing world, and create incentives for the development of new treatment and cures that benefit the world and which create the pipeline for generic drugs.”

These words play politics with people’s lives. They cloak the tragic reality that if the TPP would take effect as USTR has proposed, with leaks showing even greater monopoly protections for pharmaceutical corporations than in prior pacts, people would needlessly die for lack of access to affordable medicines. A new study finds, for example, that the TPP would dramatically reduce the share of Vietnam’s HIV patients who have access to life-saving antiretroviral medicines.  The study reveals that while 68 percent of Vietnam’s eligible HIV patients currently receive treatment, U.S.-proposed monopoly protections for pharmaceutical corporations in the TPP would allow only 30 percent of Vietnam’s HIV patients to access antiretrovirals.  As a result, an estimated 45,000 people with HIV in Vietnam who currently receive antiretroviral treatment would no longer be able to afford the life-saving drugs.

Froman also indicated in the Senate hearing that USTR is pushing to include a special monopoly protection for pharmaceutical firms that contradicts the Obama administration’s own stated objectives for reducing the cost of medicines in the United States. President Obama’s budget proposes to reduce a special monopoly protection for pharmaceutical firms with regard to biologic medicines – drugs used to combat cancer and other diseases that cost approximately 22 times more than conventional medicines.  To lower the exorbitant prices and the resulting burden on programs like Medicare and Medicaid, the Obama administration’s 2015 budget would reduce the period of Big Pharma's monopoly protection for biologics from 12 to seven years. The administration estimates this would save taxpayers more than $4.2 billion over the next decade just for federal programs. However, Froman suggested yesterday that USTR continues to push for the 12 years of corporate protection in the TPP, which would lock into place pharmaceutical firms’ lengthy monopolies here at home while effectively scrapping the administration’s own proposal to save billions in unnecessary healthcare costs.

4. Most Exporters are Small Businesses (that Have Endured Slow and Falling Exports under FTAs)

Froman: “15,600 firms export from Pennsylvania. Almost 90 percent of them are small and medium sized businesses. And the question is whether with these trade agreements we can create more opportunities for these kinds of businesses.”

Implying that exporting is mainly the domain of small businesses because they make up most exporting firms is like implying that the NBA is a league of short people because most NBA players are shorter than 7 feet tall.  The reason small and medium enterprises (defined as 500 employees or less) comprise most U.S. exporting firms is simply because they constitute 99.7 percent of U.S. firms overall (in the same way that those of us below 7 feet constitute more than 99 percent of the U.S. population).  The more relevant question is what share of small and medium firms actually depend on exports for their success. Only 3 percent of U.S. small and medium enterprises export any good to any country. In contrast, 38 percent of large U.S. firms are exporters.  Even if FTAs actually succeeded in boosting exports (which they don’t, per the government data noted below), exporting is primarily the domain of large corporations, not small businesses.

As for whether “with these trade agreements we can create more opportunities” for small firms, the record of past FTAs suggests not. Under the Korea FTA, U.S. small businesses have seen their exports to Korea decline even more sharply than large firms (a 14 percent vs. 3 percent downfall in the first year of the FTA). And small firms’ exports to Mexico and Canada under NAFTA have grown more slowly than their exports to the rest of the world. Small businesses’ exports to all non-NAFTA countries grew over 50 percent more than their exports to Canada and Mexico (74 percent vs. 47 percent) during a 1996-2012 window of data availability. The sluggish export growth owes in part to the fact that small businesses’ exports grew less than half as much as large firms’ exports to NAFTA partners (47 percent vs. 97 percent from 1996-2012).

5. We Try to Be Transparent (with the Corporate Advisors Who Can Access Secret Texts)

Froman: “And to ensure these agreements are balanced, we seek a diversity of voices in America’s trade policy. The Administration has taken unprecedented steps to increase transparency… We have held public hearings soliciting the public’s input on the negotiations and suspended negotiating rounds to host first-of-a-kind stakeholder events so that the public can provide our negotiators with direct feedback on the negotiations.”

“A diversity of voices” is an odd way to describe the more than 500 official trade advisors with privileged access to secretive U.S. trade texts and U.S. trade negotiators.  About nine out of ten of these advisors explicitly represent industry interests. Just 10 of the more than 500 advisors (less than 2 percent) represent environmental, consumer, development, food safety, financial regulation, Internet freedom, or public health organizations.  It’s little wonder that so many of these groups, excluded from setting the content of the TPP, have denounced leaked TPP texts as presenting threats to the public interest.  And as for the claim of “unprecedented steps to increase transparency,” the reality is closer to the opposite. When the Bush administration negotiated the last similarly sweeping trade pact – the Free Trade Area of the Americas – USTR published the negotiating text online for anyone to see amid negotiations. In a step backwards from the degree of transparency exhibited by the Bush administration, the Obama administration has refused repeated calls from members of Congress and civil society organizations to release TPP texts. This secrecy limits the utility of the public hearings and stakeholder events that Froman touts, as it is difficult to opine on a text you are prohibited from seeing.

6. Supporting Manufacturing and Higher Wages (Is a Goal in Spite of Our Trade Policies)

Froman: “In 2015, the Obama Administration will continue to pursue trade policies aimed at supporting the growth of manufacturing and associated high-quality jobs here at home and maintaining American manufacturers’ competitive edge.”

The only objectionable word in this sentence is “continue.” Since NAFTA, we have endured a net loss of nearly 5 million manufacturing jobs – one out of every four – and more than 57,000 manufacturing facilities. While not all of those losses are due to NAFTA, the deal’s inclusion of special protections for firms that relocate abroad certainly contributed to the hemorrhaging of U.S. manufacturing. The U.S. manufactured goods trade balance with Canada and Mexico in NAFTA’s first 20 years changed from a $5 billion surplus in 1993 to a $64.9 billion deficit in 2013. The U.S. Department of Labor has certified (under one narrow program) more than 845,000 specific U.S. workers – many of them in manufacturing – as enduring “trade-related” job losses since NAFTA due to the offshoring of their factories to Mexico or Canada, or import competition from those countries. And under just two years of the Korea FTA, U.S. manufacturing exports to Korea have fallen. Overall, the United States has a $51 billion trade deficit in manufactured goods with its 20 FTA partners. Reviving manufacturing and reviving Fast Track for the NAFTA-expanding TPP are incompatible.

Froman: “At a time when too many workers haven't seen their paychecks grow in much too long, these jobs typically pay up to 18% more on average than non-export related jobs.” 

Froman neglects to mention a key reason that too many workers haven’t seen their paychecks grow: NAFTA-style deals have not only incentivized the offshoring of well-paying U.S. manufacturing jobs, but forced these workers to compete for lower-paid service sector jobs, which has contributed to downward pressure on wages even in non-offshoreable sectors.  According to the U.S. Bureau of Labor Statistics, about three out of every five displaced manufacturing workers who were rehired in 2014 experienced a wage reduction. About one out of every three displaced manufacturing workers took a pay cut of greater than 20 percent. As increasing numbers of American workers, displaced from better-paying jobs by current trade policies, have joined the glut of workers competing for non-offshoreable jobs in retail, hospitality and healthcare, real wages have actually been declining in these growing sectors. A litany of studies has produced an academic consensus that such trade dynamics have contributed to the historic increase in U.S. income inequality – the only debate is the degree to which trade is to blame. The TPP would not only replicate, but actually expand, NAFTA’s extraordinary privileges for firms that relocate abroad and eliminate many of the usual risks that make firms think twice about moving to low-wage countries like Vietnam – a TPP negotiating partner where minimum wages average less than 60 cents an hour, making the country a low-cost offshoring alternative to even China.

7. The TPP Supports an Internet that Is Open (to Lawsuits for Common Online Activity)

Froman: "We will continue to support a free and open Internet that encourages the flow of information across the digital world."

Repetition of this platitude has failed to assuage the concerns of Internet freedom groups that point out that leaked TPP texts do not support Froman’s assurances. In a July 2014 letter, an array of Internet service providers, tech companies, and Internet freedom groups wrote to Froman about leaked TPP copyright terms, some of which resemble provisions in the defeated Stop Online Piracy Act (SOPA), which could “significantly constrain legitimate online activity and innovation.”  Noting the deal’s terms on Internet service provider liability, the groups stated, “We are worried about language that would force service providers throughout the region to monitor and policy their users’ actions on the internet, pass on automated takedown notices, block websites and disconnect Internet users.”

8. Our Exports Have Grown (More Quickly to Non-FTA Countries)

Froman: “Our total exports have grown by nearly 50 percent and contributed nearly one-third of our economic growth since the second quarter of 2009. In 2013, the most recent year on record, American exports reached a record high of $2.3 trillion...” “By opening rapidly expanding markets with millions of new middle-class consumers in parts of the globe like the Asia-Pacific, our trade agreements will help our businesses and workers access overseas markets...”

U.S. goods exports grew by a grand total of 0 percent in 2013.   The year before that, they grew by 2 percent.  As a result, the administration utterly failed to reach President Obama’s stated goal to double U.S. exports from 2009 to 2014. Most of the export growth Froman cites – which is less than half of the administration’s stated objective – came early in Obama’s tenure as a predictable rebound from the global recession that followed the 2007-2008 financial crisis.  At the abysmal export growth rate seen since then, we will not reach Obama’s stated goal to double 2009’s exports until 2054, 40 years behind schedule.  

Froman ironically uses this export growth drop-off to argue for more-of-the-same trade policy (e.g. the TPP).  The data simply does not support the oft-parroted pitch that we need TPP-style FTAs to boost exports.  In the first two years of the Korea FTA, U.S. exports to Korea have fallen 5 percent.  Overall, 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 30 percent over the last decade.  That’s not a solid basis from which to argue, in the name of exports, for yet another FTA. 

And if we’re seeking to export to those countries that are growing the fastest, then the TPP is the wrong trade pact.  Of the TPP countries with which we do not already have an FTA, all but one are actually growing more slowly than the per capita growth rate of the East Asian and Pacific region overall.     

9. Increases in Food Exports (Have Been Swamped by a Surge in Food Imports)

Froman: “In 2013, U.S. farmers and ranchers exported a record $148.7 billion of food and agricultural goods to consumers around the world.”

Yes, U.S. food exports have increased, but not nearly as much as food imports. In 2013, the total volume of U.S. food exports stood just 0.5 percent higher than in 1995, while imports of food into the United States had more than doubled (growing 115 percent since 1995). Existing FTAs have contributed to the imbalanced food trade. The average annual U.S. agricultural deficit with Canada and Mexico under NAFTA’s first two decades reached $975 million, almost three times the pre-NAFTA level. And under the first two years of the Korea FTA, U.S. agricultural exports to Korea plummeted 34 percent. Smaller-scale U.S. family farms have been hardest hit. About 170,000 small U.S. family farms have gone under since NAFTA and NAFTA expansion pacts have taken effect, a 21 percent decrease in the total number.

10. The TPP Takes Heed of NAFTA’s Mistakes (and Builds on Them)

Froman: “I think the President has made clear that as we pursue a new trade policy, we need to learn from the experiences of the past and that’s certainly what we’re doing through TPP and the rest of our agenda. For example, when he was running for President, he said we ought to renegotiate NAFTA. What that meant was to make labor and environment not side issues that weren’t enforceable, but to bring labor and environment in the core of the agreement and make them enforceable just like any other provision of the trade agreement consistent with what Congress and the previous administration worked out in the so-called May 10th agreement.”

When candidate Obama said in 2008 that he would renegotiate NAFTA – a pact that had become broadly unpopular for incentivizing the offshoring of U.S. manufacturing jobs – most people probably didn’t imagine that he meant expanding those offshoring incentives further. But the TPP would extend further NAFTA’s extraordinary privileges for firms that relocate abroad to low-wage countries (like TPP negotiating partner Vietnam).  Most people also probably would not expect “learning from the experiences of the past” to lead to an expansion of the monopoly protections that NAFTA gave to pharmaceutical corporations, thereby reducing the availability of generics and increasing the cost of medicines. But Froman himself stated yesterday that such corporate protections – antithetical to textbook notions of “free trade” – are part of the TPP’s NAFTA-plus provisions.

And though Froman touts the May 10 deal as an improvement over NAFTA for labor rights, a recent government report has shown the May 10 provisions to be ineffective at curbing labor abuses in FTA partner countries. A November 2014 report from the U.S. Government Accountability Office found broad labor rights violations across all five surveyed FTA partner countries, regardless of whether or not the FTA included the labor provisions of the vaunted May 10 deal, including unionist murders in Colombia and impunity for union-busting in Peru.  Several of the TPP negotiating partners are notorious labor rights abusers – four of them were cited in a recent Department of Labor report for using child and/or forced labor. Vietnam, meanwhile, outright bans independent unions. Why would incorporation of the same terms that have failed to curb labor abuses in existing FTAs be expected to end the systematic labor rights abuses of TPP partners? 

And despite the May 10 deal’s environmental provisions, the TPP’s extraordinary investment provisions would empower thousands of foreign firms to bypass domestic courts, go before extrajudicial tribunals, and challenge new domestic environmental protections as "frustrating their expectations." Corporations have already used such foreign investor privileges under existing U.S. FTAs to attack a moratorium on fracking, renewable energy programs, and requirements to clean up oil pollution and industrial toxins.  Tribunals comprised of three private attorneys have already ordered taxpayers to pay hundreds of millions to foreign firms for such safeguards, arguing that they violate sweeping FTA-granted investor privileges that the TPP would expand.  Provisions, such as those in the May 10 deal, that call for countries to enforce their environmental laws sound hollow under a TPP that would simultaneously empower corporations to “sue” countries for said enforcement. 

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Obama vs. Obama: The State of the Union's Self-Defeating Trade Pitch

Eyes on Trade - 21 January, 2015 - 04:46

In his State of the Union address tonight, President Obama called for job creation, reduced income inequality, more affordable healthcare and better regulation of Wall Street. 

He also called for Fast Tracking the Trans-Pacific Partnership (TPP) – a controversial “trade” deal that would undermine all of the above.

Here's a side-by-side analysis of how Obama's push to Fast Track the TPP contradicts his own State of the Union agenda:

Obama’s Agenda

The TPP’s Counter-Agenda

Income Inequality: “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”

An “economy where only a few of us do spectacularly well” is actually the projected outcome of the TPP. A recent study finds that the TPP would spell a pay cut for all but the richest 10 percent of U.S. workers by exacerbating U.S. income inequality, just as past trade deals have done

Manufacturing revival: “More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.”

The TPP would give manufacturing firms a reason to offshore jobs to Vietnam, not bring them back from China. The TPP would expand NAFTA’s special protections for firms that offshore American manufacturing, including to Vietnam, where minimum wages are a fraction of those paid in China. Since NAFTA, we have endured a net loss of more than 57,000 U.S. manufacturing facilities and nearly 5 million manufacturing jobs.

American jobs: “So no one knows for certain which industries will generate the jobs of the future. But we do know we want them here in America.”

 

TPP rules would gut the popular Buy American preferences that require government-purchased goods to be made here in America, preventing us from recycling our tax dollars back into our economy to create U.S. jobs.

Exports: “Today, our businesses export more than ever, and exporters tend to pay their workers higher wages.”

Those who wish for more exports should wish for a different trade agenda. U.S. exports to countries that are part of TPP-like deals have actually grown slower than exports to the rest of the world, according to government data. Under the Korea deal that literally served as the template for the TPP, U.S. exports have actually fallen.

Small businesses: “21st century businesses, including small businesses, need to sell more American products overseas.”

Small businesses have endured declining exports and export shares under pacts serving as the model for the TPP. Small businesses suffered a steeper downfall in exports than large firms under the Korea trade pact, and small businesses’ export share has declined under NAFTA.

Economic growth: “Maintaining the conditions for growth and competitiveness. This is where America needs to go.”

An official U.S. government study finds that the economic growth we could expect from the TPP is precisely zero, while economists like Paul Krugman have scoffed at the deal’s economic significance.

Middle class wages: “Of course, nothing helps families make ends meet like higher wages.”

The TPP would put downward pressure on middle class wages, just as NAFTA has, by offshoring the jobs of decently-paid American manufacturing workers and forcing them to compete for lower-paying, non-offshoreable jobs.

Legacy of past trade deals: “Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense.”

Past trade deals have resulted in massive trade deficits and job loss not because the pacts’ rules have been broken, but because of the rules themselves. The TPP would double down on NAFTA’s rules – the opposite of Obama’s promise to renegotiate the unpopular pact – by expanding NAFTA’s offshoring incentives, limits on food safety standards, restrictions on financial regulation and other threats to American workers and consumers.

Affordable medicines: “…middle-class economics means helping working families feel more secure in a world of constant change. That means helping folks afford …health care…”

The TPP would directly contradict Obama’s efforts to reduce U.S. healthcare costs by expanding monopoly patent protections that jack up medicine prices and by imposing restrictions on the U.S. government’s ability to negotiate or mandate lower drug prices for taxpayer-funded programs like Medicare and Medicaid.

Wall Street regulation: “We believed that sensible regulations could prevent another crisis…Today, we have new tools to stop taxpayer-funded bailouts, and a new consumer watchdog to protect us from predatory lending and abusive credit card practices…We can’t put the security of families at risk by…unraveling the new rules on Wall Street…”

Senator Warren has warned that the TPP could help banks unravel the new rules on Wall Street by prohibiting bans on risky financial products and “too big to fail” safeguards while empowering foreign banks to “sue” the U.S. government over new financial regulations.

Internet freedom: “I intend to protect a free and open internet…”

The TPP includes rules that implicate net neutrality and that would require Internet service providers to police our Internet activity – rules similar to those in the Stop Online Piracy Act (SOPA) that was rejected as a threat to Internet freedom.

National interests: “But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen?”

With the TPP, multinational corporations want to write the rules that would put our workers at a disadvantage and undermine our national interests. TPP rules, written behind closed doors under the advisement of hundreds of official corporate advisers, would provide benefits for firms that offshore American jobs, help pharmaceutical corporations expand monopoly patent protections that drive up medicine prices, give banks new tools to roll back Wall Street regulations, and empower foreign firms to “sue” the U.S. government over health and environmental policies. Why would we let that happen? 

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Obama’s Legacy: Middle-Class Jobs, Affordable Medicine and Financial Stability, or Fast-Tracked Trade Agreements – But Not Both

Eyes on Trade - 15 January, 2015 - 16:13

New Report ‘Prosperity Undermined’ Fact Checks Administration, Corporate Lobbyists and GOP Leadership With 20 Years of Data on Jobs, Economy

Fast Tracked trade deals have exacerbated the income inequality crisis, pushed good American jobs overseas, driven down U.S. wages, exploded the trade deficit and diminished small businesses’ share of U.S. exports, a new report from Public Citizen’s Global Trade Watch shows. The report, “Prosperity Undermined,”compiles and analyzes 20 years of trade and economic data to show that the arguments again being made in favor of providing the Obama administration with Fast Track trade authority have repeatedly proved false.

President Barack Obama is expected to push Fast Track for the Trans-Pacific Partnership (TPP). The pact, initiated by George W. Bush, literally replicates most of the job-offshoring incentives and wage-crunching terms found in the North American Free Trade Agreement (NAFTA) and would roll back Obama administration achievements on health, financial regulation and more. 

“It’s not surprising that Democrats and Republicans alike are speaking out against Fast Track because it cuts Congress out of shaping trade pacts that most Americans believe cost jobs while empowering the president to sign and enter into secret deals before Congress approves them,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “In their speeches and commentary, the administration, corporate interests and GOP leadership disregard the real, detrimental impacts that previous fast tracked trade deals – which serve as the model for the Trans-Pacific Partnership – have had on America’s middle class over the past 20 years.”

With unprecedented unity among Democratic members of Congress, there will be a handful of Democratic House votes in favor of Fast Track. Last year, seven of 201 House Democrats  supported Fast Track legislation. Meanwhile, a sizable bloc of GOP House members oppose Fast Track, which would grant the president extensive new executive powers and delegate away core congressional constitutional authorities.

The new report shows a 20-year record of massive U.S. trade deficits, American job losses and wage suppression. More specifically, data show that:

  • Trade Deficits Have Exploded: U.S. trade deficits have grown more than 440 percent with Fast Tracked U.S. FTA countries since the pacts were implemented, but declined 16 percent with non-FTA countries during the relevant period. Since Fast Track was used to enact NAFTA and the World Trade Organization, the U.S. goods trade deficit has more than quadrupled, from $216 billion to $870 billion. Small businesses’ share of U.S. exports has declined, while U.S. export growth to countries that are not FTA partners has exceeded U.S. export growth to FTA partners by 30 percent over the past decade.  ‘
  • Good American Jobs Were Destroyed: Nearly 5 million U.S. manufacturing jobs – one in four – were lost since the Fast Tracking of NAFTA and various NAFTA-expansion deals. Since NAFTA, more than 845,000 U.S. workers have been certified under just one narrow U.S. Department of Labor (DOL) program for Americans who have lost their jobs due to imports from Canada and Mexico and offshored factories to those countries.
  • U.S. Wages Have Stagnated, Inequality Soared: Three of every five manufacturing workers who lose jobs to trade and find reemployment take pay cuts, with one in three losing greater than 20 percent, according to DOL data. Overall, U.S. wages have barely increased in real terms since 1974 – the year that Fast Track was first enacted – while American worker productivity has doubled. Since Fast Track’s enactment, the share of national income captured by the richest 10 percent of Americans has shot up 51 percent, while that captured by the richest 1 percent has skyrocketed 146 percent. Study after study has revealed an academic consensus that status quo trade has contributed to today’s unprecedented rise in income inequality.
  • Food Exports Flat, Imports Soared: Under NAFTA and the WTO, U.S. food exports have stagnated while food imports have doubled. The average annual U.S. agricultural deficit with Canada and Mexico under NAFTA’s first two decades reached $975 million, almost three times the pre-NAFTA level. Approximately 170,000 small U.S. family farms have gone under since NAFTA and WTO took effect.
  • Damaging Results of Obama’s “New and Improved” Korea Trade Deal: Since the Obama administration used Fast Track to push a trade agreement with Korea, the U.S. trade deficit with Korea has grown 50 percent – which equates to 50,000 more American jobs lost. The U.S. had a $3 billion monthly trade deficit with Korea in October 2014 – the highest monthly U.S. goods trade deficit with the country on record. After the Korea FTA went into effect, U.S. small businesses’ exports to Korea declined more sharply than large firms’ exports, falling 14 percent.

“Big dollars for big corporations and special interests calling the shots – that’s what the American people hear when only the country’s top corporate lobbyists are shaping America’s trade agreements,” said Wallach. “With such high stakes, we cannot let the Fast Track process lock Congress and the public out of negotiations that will have lasting impacts on the livelihoods, rights and freedoms of American families, workers and businesses.”

Read the report.          

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Deepening Food Democracy

Language:  English IATP author(s):  Dr. M. Jahi Chappell Author(s) (external):  Jill Carlson File:  2015_01_06_Agrodemocracy_JC_JC_f.pdf Introduction Imagine a group of 15 citizens from your community. These citizens are a cross-section from your community, representative in gender, age, education, party affiliation and ethnicity. They gather to discuss their concerns about the impacts of climate change on their lives and potential steps to overcome those challenges. After days of discussing their collective community vision of what a sustainable and resilient community is, they draft a citizen’s report. This report is used as a launching pad for conversations and actions with their local government and their community...

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Report: Fungicide resistance poses serious threat to human health, agriculture

Language:  English IATP author(s):  Andrew Ranallo File:  2015_01_07_Fungicide_PR.pdf Minneapolis – The beneficial effects of fungicides are rapidly dwindling, opening a vulnerability to fungi in plants and animals, says a new report from the Institute for Agriculture and Trade Policy (IATP). Fungicide Resistance: Risk and Consequences in Modern Agriculture takes an in-depth look at how and why fungicide resistance is growing and the connection to agriculture and public health. “While fungal resistance is evolutionary biology at work, there are human activities and practices that contribute to and speed up resistance,” says IATP’s VP for Communications Dale Wiehoff. The report identifies factors such as industrial agriculture based on multi-year mono-cropping; the...

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Fungicide Resistance

Subtitle:  Risk and Consequence in Modern Agriculture Language:  English Author(s) (external):  L.F.T. Luce File:  2014_12_23_Fungicide_LL.pdf Executive Summary Fungi are ubiquitous and vital members of nearly all ecosystems on our planet, from untouched wilderness to carefully managed agriculture. In our interaction with these creatures we have experienced both extraordinary benefits—including harnessing the process of fermentation—and terrible losses—including the Irish Potato Famine. The majority of fungal species are detritivores, quietly decomposing and recycling organic matter in soil or water. But some species are parasites, and they can threaten the health of humans, our crops and livestock, and...

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Congressional Leaders Reject Wall Street’s Push for Deregulatory “Trade” Pacts

Eyes on Trade - 19 December, 2014 - 17:15

The Obama administration needs to stop negotiating so-called “trade” deals with deregulatory rules pushed by the likes of Citigroup that would undermine the re-regulation of Wall Street. 

That’s the message that Senator Elizabeth Warren – champion of financial reform and member of the Senate Banking Committee, Congresswoman Maxine Waters – Ranking Member of the House Financial Services Committee, and other congressional leaders have delivered to the administration in recent letters.  

The members of Congress warn against expanding the deregulatory strictures of pre-financial-crisis trade pacts, crafted in the 1990s under the advisement of Wall Street firms, via two pacts currently under negotiation: the Trans-Pacific Partnership (TPP) and Trans-Atlantic Free Trade Agreement (TAFTA, also known as TTIP). 

As proposed, both pacts would include controversial foreign investor privileges that would empower some of the world’s largest banks to demand U.S. taxpayer money for having to comply with U.S. financial stability policies.  

Yesterday, Sen. Warren and Sens. Tammy Baldwin and Edward Markey sent U.S. Trade Representative Michael Froman a letter calling for such “investor-state dispute settlement” (ISDS) provisions, which have sparked global controversy, to be excluded from the TPP.  The letter states:

Including such provisions in the TPP could expose American taxpayers to billions of dollars in losses and dissuade the government from establishing or enforcing financial rules that impact foreign banks. The consequence would be to strip our regulators of the tools they need to prevent the next crisis.

Earlier this month, Rep. Waters and Reps. Lacy Clay, Keith Ellison, and Raúl Grijalva sent a similar letter to Froman that called for ISDS to be excluded from TAFTA to safeguard financial stability, stating:

Private foreign investors should not be empowered to circumvent U.S. courts, go before extrajudicial tribunals and demand compensation from U.S. taxpayers because they do not like U.S. domestic financial regulatory policies with which all firms operating here must comply. 

TPP and TAFTA negotiators are also contemplating pre-crisis rules that would threaten commonsense prudential regulations such as restrictions on derivatives and other risky financial products, measures to keep banks from becoming “too big to fail,” firewalls to protect our savings accounts from hedge-fund-style bets, capital controls to prevent financial crises, and a Wall Street tax to counter speculative and destabilizing bubbles.  

Senators Warren, Baldwin, and Markey made clear in their letter that such anachronistic rules must not be inserted into a binding pact:

To protect consumers and to address sources of systemic financial risk, Congress must maintain the flexibility to impose restrictions on harmful financial products and on the conduct or structure of financial firms. We would oppose including provisions in the TPP that would limit that flexibility.

So did Representatives Waters, Clay, Ellison, and Grijalva:

TTIP should also not replicate rules from past trade agreements that restrict the use of capital controls, which the International Monetary Fund and leading economists have endorsed as legitimate policy tools for preventing and mitigating financial crises. Nor should TTIP include provisions that could limit Congress’ prerogative to enact a financial transaction tax to curb speculation while generating revenue.

Similar warnings were recently issued by more than 50 of the largest civil society organizations concerned with financial stability on both sides of the Atlantic – including Americans for Financial Reform, which itself represents 250 organizations.  In a letter to Froman and other TAFTA negotiators in October, the groups wrote:

We believe it is highly inappropriate to include terms implicating financial regulation in an industry-dominated, non-transparent “trade” negotiation. Financial regulations do not belong in a framework that targets regulations as potential “barriers to trade.” Such a framework could chill or roll back post-crisis efforts to re-regulate finance on both sides of the Atlantic whereas further regulation of the sector is much needed.

While governments across the world strive to rein in risk-taking by the financial firms that brought us the worst economic crisis since the Great Depression, U.S. trade negotiators (advised by many of those same firms) appear to be moving in the opposite direction.  We cannot afford to insert into binding “trade” pacts more deregulatory constraints pushed by Wall Street.  We cannot afford the TPP or TAFTA. 

The recent letter from civil society organizations made this clear:

We are only now implementing the lessons of the last financial crisis. Let us not lay the groundwork for the next one.

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Nonprofits sue EPA for failure to regulate novel pesticide products created With nanotechnology

Subtitle:  Lawsuit will compel unlawfully delayed agency answer to groups’ 2008 legal petition demanding regulation Language:  English IATP author(s):  IATP Author(s) (external):  Center for Food Safety, International Center for Technology Assessment, Beyond Pesticides, Center for Environmental Health, Clean Production Action File:  Nano-silver petition lawsuit.pdf Washington, DC – Center for Food Safety (CFS) filed a lawsuit late yesterday against the U.S. Environmental Protection Agency (EPA) over the agency’s failure to regulate novel nanomaterial pesticides. In 2008 CFS filed a legal petition demanding the agency take action; today nonprofits...

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Should the World’s Largest Chemical Corporations Be Allowed to Attack States’ Chemical Safety Protections?

Eyes on Trade - 16 December, 2014 - 14:45

Patrick Gleeson, Trade and Policy Researcher of Global Trade Watch  

How would you feel about the U.S. government paying foreign corporations to keep cancer-causing chemicals out of your water bottles?

That is a risk we’d face under a sweeping U.S.-EU “trade” deal under negotiation – the Trans-Atlantic Free Trade Agreement (TAFTA), also known as TTIP.  As proposed, TAFTA would empower thousands of European firms – including chemical giants like BASF, Bayer, and Royal Dutch Shell – to bypass U.S. courts, go before extrajudicial tribunals and demand taxpayer compensation for U.S. policies – including chemical regulations.  

We depend on such regulations every day to keep toxic chemicals out of our food, toys, rivers, and clothes.  This past July, more than 100 organizations on both sides of the Atlantic sent a letter to TAFTA negotiators to warn against TAFTA’s threats to such commonsense protections:

Stricter controls (including restrictions on some or all uses) of hazardous chemicals – including carcinogens and hormone disrupting chemicals – are vital to protecting public health…EU and U.S. trade policy should not be geared toward advancing the chemical industry’s agenda at the expense of public health and the environment – but that appears to be exactly what is currently underway with TTIP.

While U.S. federal chemical regulations are sorely outdated – with no major overhaul since the 1976 Toxic Substances Control Act (TSCA) – U.S. states have been filling in the gap, enacting forward-looking policies to protect us from chemicals that pose a threat to human health and the environment.  State chemical safety policies cover everything from mandatory disclosure of chemical compounds on the packaging of consumer goods to outright bans on specific chemical compounds and additives.  According to Safer States, 35 U.S. states have enacted 169 chemical safety policies, while 114 more such policies are pending in 29 states.  

But this web of state-level protections on which most U.S. consumers depend could come under attack if TAFTA were to expand the controversial system known as investor-state dispute settlement (ISDS).  Six of the world’s 15 largest chemical firms are based in EU countries. The largest among them have facilities in many of the U.S. states that are currently contemplating new chemical restrictions.

Using TAFTA’s ISDS provisions, these foreign firms would be empowered to challenge U.S. state-level chemical protections with which U.S. firms must comply.  They could do so on the basis of sweeping rights available only to foreign investors, alleging, for example, that new chemical restrictions violated their rights by frustrating their expectations.  Such cases would be decided by tribunals unaccountable to any electorate, composed of three private lawyers authorized to order U.S. taxpayer compensation for “expected future profits” that the corporations claim they would have earned if not for the challenged chemical safety policies.

Recognizing the threat that ISDS poses to the autonomy of U.S. states to regulate in the public interest, the National Conference of State Legislatures (NCSL), a bipartisan association representing state legislatures, has repeatedly stated it will oppose any deal that includes ISDS.

“The unpopular proposal to include ISDS in TTIP would force the public and their representatives to decide between compensating corporate polluters for lost profits due to stronger laws, or continuing to bear the health, economic and social burdens of pollution,” stated the July 2014 letter from more than 100 organizations.

To launch ISDS attacks against U.S. states’ chemical safety measures under TAFTA, European chemical firms would just need to have an investment in the United States – a broad criterion that many of the largest firms easily fulfil.  

BASF, the world’s largest chemical company, is based in Germany but has 66 subsidiaries in the United States.  BASF has particularly large facilities in 20 states, including Arkansas, Colorado, Connecticut, Delaware, Florida, Kentucky, Louisiana, Michigan, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, and South Carolina.  Each of these states has considered new chemical safety legislation this year, the likes of which BASF would be empowered to challenge before extrajudicial tribunals under TAFTA. 

As a major supplier of chemicals to the U.S. market, BASF has already actively lobbied the U.S. Congress specifically to halt proposed restrictions on chemicals that it manufactures.  In 2014 alone, BASF has spent $2.3 million to lobby Congress on chemicals-related policies. TAFTA would give BASF a new tool to chill the development of U.S. chemical safety measures.

Other European chemical corporations have facilities scattered throughout the United States, manufacturing products ranging from synthetic fibers to rubber chemicals to pesticides.  Bayer, based in Germany, has subsidiaries in nine U.S. states, seven of which have been considering pending chemical safety legislation this year.  Royal Dutch Shell, headquartered in the Netherlands, has a U.S.-based chemical division that claims to make “approximately 20 billion pounds of chemicals annually, which are sold primarily to industrial markets in the United States.”  Shell’s U.S. chemicals division has facilities in Louisiana, which has been enacting new chemical safety measures. Were such new state-level regulations to be imposed on these corporations’ products out of concern for chemical safety, they would be empowered under TAFTA to demand taxpayer compensation.

Fifteen states, for example, are currently considering legislation related to a notorious chemical called bisphenol A, or BPA.  BPA has been identified as an endocrine disruptor, a class of chemicals that, according to the National Institutes of Health, “may interfere with the body’s endocrine system and produce adverse developmental, reproductive, neurological, and immune effects in both humans and wildlife.” BPA is used extensively as a plastics coating and hardener in food and beverage containers, including water bottles and the lining of metal cans. BPA can seep into the foods and beverages it contains, leading to human consumption.  

Though usage of BPA in baby bottles, pacifiers, and other baby products was phased out in recent years due to broad consumer concerns and government reports of potentially harmful impacts on infants’ development, BPA is still widely used in other consumer products.  Recent studies have continued to indicate health concerns for adults, including a 2014 Duke Medicine study finding that BPA stimulates the growth of breast cancer cells and lowers the efficacy of cancer treatments.  Another study this year, from the University of Cincinnati, finds a link between BPA levels in men and prostate cancer.

According to the NCSL, 12 states and the District of Columbia have enacted BPA restrictions thus far, including, for example, bans on BPA in reusable food containers and thermoses. With 15 states considering additional BPA-related protections just this year, we are likely to see more states enact policies to limit consumers’ exposure to this toxin.  

The risk is real that such policies could become the target of ISDS attacks by European chemical firms under TAFTA.  Some of these firms, including ones with investments in the United States, have already been lobbying against BPA restrictions in Europe for years.  Bayer is even a member of an industry alliance known as the BPA Coalition, dedicated to convincing the public and policymakers “that the safe use of BPA poses no known health risk to people.”

Might such firms be interested in using TAFTA to demand U.S. taxpayer compensation for new efforts to keep our water bottles free of carcinogens?  Let’s not find out.  

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Entrevista a Javier Echaide. Tema: Tratados Bilaterales de Inversión

Blog de Javier Echaide - 13 December, 2014 - 12:47
Entrevista que me realizaran la semana pasada en la TV ecuatoriana -Canal CN Plus- sobre los TBI y la auditoría que se est´realizando en Ecuador sobre este tema (12min).

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Congressional spending deal rewards Wall Street over Main Street

Subtitle:  Bailout guarantee blocks financial reform effort for fair, transparent markets Language:  English IATP author(s):  Andrew Ranallo Dr. Steve Suppan File:  2014_12_11_CongressionalSpending_PR.pdf Minneapolis – The Institute for Agriculture and Trade Policy (IATP) today urged the U.S. House of Representatives to vote against a midnight amendment that would protect Wall Street’s riskiest trading by granting it Federal Deposit Insurance Corporation (FDIC) guarantees against losses. House Republicans placed the FDIC protection for Wall Street into the omnibus spending bill that must be passed by Congress in a scheduled Thursday vote to prevent another government...

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At Export Council, Obama Expected to Urge Corporate Interests to Help Him Obtain New Fast Track Powers to Expand the Status Quo U.S. Free Trade Pact Model That Congressional Democrats, Obama’s Base Oppose

Eyes on Trade - 11 December, 2014 - 16:07

At today’s meeting of the President’s Export Council, President Barack Obama is expected to urge yet another audience dominated by the corporate interests that opposed his election to help him obtain broad new Fast Track trade powers. Obama’s Fast Track request faces opposition by most Democratic members of Congress and base organizations as well as a bloc of conservative Republicans.

Obama also is likely to tout the Trans-Pacific Partnership (TPP), a pact that would expand the status quo U.S. trade agreement model that has led to staggering U.S. trade deficits, job loss and downward pressure on wages. When Obama picked up TPP negotiations from former President George W. Bush in 2009, consumer and environmental organizations, unions and congressional Democrats urged him to use the process to implement his 2008 election campaign promises to replace the old U.S. trade model based on the North American Free Trade Agreement (NAFTA). Instead, the administration has sided with the corporate interests that represent the majority of the approximately 600 official U.S. trade advisors and has replicated many of NAFTA’s most damaging provisions in the TPP.

“With the TPP, Obama is doubling down on the old, failed NAFTA trade pact status quo and even expanding on some of the NAFTA provisions that promoted American job offshoring, flooded us with unsafe imported food and increased medicine prices,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Given the TPP terms that would newly empower thousands of foreign firms to attack American health and environmental laws in foreign tribunals, incentivize even more U.S. job offshoring and ban the use of Buy American and Buy Local preferences, most Americans would be better off with no deal than what is in store with the TPP.”

Obama’s efforts to obtain Fast Track in the 113th Congress were rebuffed, as almost all House Democrats and a bloc of House GOP members indicated opposition.

Obama’s efforts to push more-of-the-same trade policies have been sidelined by the dismal outcomes of his 2011 U.S.-Korea FTA: The trade deficit with Korea in the first two years of the pact. In fact, the record shows that U.S. export growth with U.S. Free Trade Agreement (FTA) partners lags behind the rate of export growth with non-FTA nations. In addition, the aggregate U.S. trade deficit with the group of 20 countries with which the U.S. has FTAs has increased more than fivefold since the FTAs took effect, due in part to a massive NAFTA trade deficit.

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Outside of TPP Negotiations, Protestors Declare "No Fast Track Ever!"

Eyes on Trade - 9 December, 2014 - 19:35

As negotiators gather in Washington, D.C. this week for closed-door meetings on the Trans-Pacific Partnership (TPP), hundreds of activists from labor, environmental, consumer, human rights, public health, Internet freedom, faith and family farm activists joined concerned citizens to loudly make their voices heard outside of the secretive negotiations on Monday.  (Meanwhile, a select group of official trade “advisors,” largely representing corporations, enjoys unprecedented access to the TPP negotiators meeting behind closed doors).

The rallying cry from the activists, who gathered in front of the United States Trade Representative’s office, was loud and clear: "No Fast Track now, No Fast Track ever!  The TPP is a lost endeavor!"  

Fast Track was a controversial maneuver that allowed past presidents to railroad through Congress unpopular deals like the North American Free Trade Agreement (NAFTA).  Corporations have called for Fast Track to be revived to empower the Obama administration to unilaterally negotiate and sign the TPP before Congress gets an expedited vote, with no amendments allowed and debate strictly limited.

Fast Track faces widespread opposition in the U.S. Congress and among the U.S. public.  Though a Fast Track bill was tabled about one year ago, it has gone nowhere due to massive opposition from most Democrats and a sizeable bloc of Republicans.  This past September, nearly 600 organizations sent a letter opposing Fast Track to Chair Ron Wyden.  A poll earlier this year found that 62 percent of U.S. voters oppose Fast Tracking the TPP.  

Civil society and lawmakers have good reason to reject corporations' push to Fast Track the TPP. Although it’s impossible to know the full scope of the secret deal, leaks have confirmed some of the worst speculations: the TPP would empower corporations to offshore jobs, increase the price of medicines, weaken environmental standards, and chill domestic interest laws by "suing" the government for public interest policies that frustrate their "expectations." 

Given the stakes, the energy of the rally was high.  Protestors circled the building carrying signs and chanting the death knell of Fast Track and TPP: “Fast Track is a sneak attack -- we’re taking our democracy back! Good paying jobs are what we need, but TPP spells corporate greed!"

If you weren't able to make it to the rally, you can still make your voice heard by writing to your member of Congress to urge them to voice their opposition to Fast Tracking the TPP.

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Obama Laments Inequality, Calls for Another Inequality-Spurring Trade Deal

Eyes on Trade - 4 December, 2014 - 18:39

Yesterday President Obama, speaking to a room full of corporate executives, tried to downplay the contribution of corporate-pushed trade deals to the historic rise in U.S. income inequality.  

Obama knew his audience -- corporate representatives eager to expand the status quo trade model by Fast Tracking through Congress the controversial Trans-Pacific Partnership (TPP) are probably keen to deny that this model has been exacerbating inequality.  

But such denial defies a consensus position among economists that recent trade flows have indeed contributed to today's yawning gap between rich and poor -- the only debate is how big of a role status quo trade has played.  

It also defies U.S. public opinion -- in a recent Pew poll, a mere 17 percent of the U.S. public thought that trade has boosted U.S. wages, while 45 percent, across the political spectrum, saw trade as contributing to falling wages for U.S. workers.

Obama acknowledged yesterday that TPP proponents will have a tough time arguing that this time is different -- that reviving Fast Track authority in attempt to push through Congress another more-of-the-same trade pact would not fuel further inequality growth. Fast Track was the Nixon-created maneuver that allowed the executive branch to railroad through Congress controversial, inequality-spurring pacts like the North American Free Trade Agreement (NAFTA) by negotiating and signing the pacts before Congress got an expedited, no-amendments, limited-debate vote.  A study by the Center for Economic and Policy Research finds that were the TPP to be Fast Tracked through Congress, all but the wealthiest among us would lose more to inequality increases than we would gain in cheaper goods, spelling a pay cut for 90 percent of U.S. workers.

Recognizing the unpopularity of Fast Track and the TPP, Obama told the business executives: “There are folks in my own party and in my own constituency that have legitimate complaints about some of the trend lines of inequality, but are barking up the wrong tree when it comes to opposing TPP, and I’m going to have to make that argument.”

Having to make that argument is not an enviable position -- it requires explaining away decades of evidence that Fast-Tracked deals have fostered greater U.S. income inequality.  Here's a sampling of that evidence:

U.S. Wages Stagnate, Despite Doubled Worker Productivity

  • Trade agreement investor privileges promote offshoring of production from the United States to low-wage nations. Today’s “trade” agreements contain various investor privileges that reduce many of the risks and costs previously associated with relocating production from developed countries to low-wage developing countries. Thus, many imports now entering the United States come from companies originally located in the United States and other wealthy countries that have moved production to low-wage countries. For instance, nearly half of China’s exports are now produced by foreign enterprises, not Chinese firms. Underlying this trend is what the Horizon Project called the “growing divergence between the national interests of the United States and the interests of many U.S. multinational corporations which, if given their druthers, seem tempted to offshore almost everything but consumption.” American workers effectively are now competing in a globalized labor market where some poor nations’ workers earn less than 10 cents per hour.
  • Manufacturing workers displaced by trade have taken significant pay cuts. The United States has lost millions of manufacturing jobs during the Fast Track era, but overall unemployment has been largely stable (excluding recessions) as new low-paying service sector jobs have been created. Proponents of status quo trade raise the quantity of jobs to claim that Fast Tracked deals have not hurt U.S. workers. But what they do not mention is that the quality of jobs available, and the wages most U.S. workers can earn, have been degraded. According to the U.S. Bureau of Labor Statistics, about three out of every five displaced manufacturing workers who were rehired in 2014 experienced a wage reduction. About one out of every three displaced manufacturing workers took a pay cut of greater than 20 percent. For the average manufacturing worker earning more than $47,000 per year, this meant an annual loss of at least $10,000.
  • Trade policy holds back wages even of jobs that can’t be offshored. Economists have known for more than 70 years that all workers with similar skill levels – not just manufacturing workers – will face downward wage pressure when U.S. trade policy creates a selective form of “free trade” in goods that non-professional workers produce. When workers in manufacturing are displaced and seek new jobs, they add to the supply of U.S. workers available for non-offshorable, non-professional jobs in hospitality, retail, health care and more. As increasing numbers of American workers, displaced from better-paying jobs by current trade policies, have joined the glut of workers competing for these non-offshorable jobs, real wages have actually been declining in these growing sectors
  • The bargaining power of American workers has been eroded by threats of offshoring. In the past, American workers represented by unions were able to bargain for their fair share of economic gains generated by productivity increases. But the investor protections in today’s trade agreements, by facilitating the offshoring of production, alter the power dynamic between workers and their employers. For instance, a study for the North American Commission on Labor Cooperation – the body established in the labor side agreement of NAFTA – showed that after passage of NAFTA, as many as 62 percent of U.S. union drives faced employer threats to relocate abroad, and the factory shut-down rate following successful union certifications tripled.
  • Even accounting for Americans’ access to cheaper imported goods, the current trade model’s downward pressure on wages outweighs those gains, making most Americans net losers.  Trade theory states that while those specific workers who lose their jobs due to imports may suffer, the vast majority of us gain from trade “liberalization” because we can buy cheaper imported goods. But when the non-partisan Center for Economic and Policy Research (CEPR) applied the actual data to the trade theory, they discovered that when you compare the lower prices of cheaper goods to the income lost from low-wage competition under current policies, the trade-related losses in wages hitting the vast majority of American workers outweigh the gains in cheaper goods from trade. U.S. workers without college degrees (63 percent of the workforce) have lost an amount equal to 12.2 percent of their wages, even after accounting for the benefits of cheaper goods. That means a net loss of more than $3,400 per year for a worker earning the median annual wage of $28,000.

Income Inequality Increases in America

  • The inequality between rich and poor in America has jumped to levels not seen since the robber baron era. The richest 10 percent of Americans are now taking more than half of the economic pie, while the top 1 percent is taking more than one fifth. Wealthy individuals’ share of national income was stable for the first several decades after World War II, but shot up 51 percent for the richest 10 percent and 146 percent for the richest 1 percent between 1974 and 2012 – the Fast Track era. Is there a connection to trade policy?
  • Longstanding economic theory states that trade will increase income inequality in developed countries. In the 1990s a spate of economic studies put the theory to the test, resulting in an academic consensus that trade flows had indeed contributed to rising U.S. income inequality. The pro-“free trade” Peterson Institute for International Economics (PIIE), for example, found that nearly 40 percent of the increase in U.S. wage inequality was attributable to U.S. trade flows. In 2013, when the Economic Policy Institute (EPI) updated an oft-cited 1990s model estimate of trade’s impact on U.S. income inequality, it found that using the model’s own conservative assumptions, one third of the increase in U.S. income inequality from 1973 to 2011 – the Fast Track era – was due to trade with low-wage countries. The role of trade escalated rapidly from 1995 to 2011 – a period marked by a series of Fast-Tracked “free trade” deals – EPI found that 93 percent of the rise in income inequality during this period resulted from trade flows. Expressed in dollar terms, EPI estimates that trade’s inequality-exacerbating impact spelled a $1,761 loss in wages in 2011 for the average full-time U.S. worker without a college degree.
  • Changes in technology or education levels do not fully account for American wage pressures. Some have argued that advances in computer technology explain why less technologically-literate American workers have been left behind, asserting that more education – rather than a different trade policy – is how America will prosper in the future. While more education and skills are desirable for many reasons, these goals alone will not solve the problems of growing inequality. First, as documented in a Federal Reserve Bank paper, inequality started rising as systematic U.S. trade deficits emerged, in the early Fast Track period, far before most workers reported using computers on the job. Second, college-educated workers have seen their wage growth stagnate, even in technologically sophisticated fields like engineering. Thus, addressing trade policy, not only better educating American workers, will be an essential part of tackling rising income inequality.
Categorías: Planet Not For Sale

U.S. Workers Should Not Be Pitted against Child Labor in Vietnam

Eyes on Trade - 1 December, 2014 - 17:57

by Global Trade Watch intern Allie Gardner

You’ve likely heard about the proposed Trans-Pacific Partnership (TPP), a sweeping deal under negotiation that would expand the North American Free Trade Agreement (NAFTA) model of trade across the Pacific.  And you probably know of the damaging effects the TPP would have on American jobs, public health, food safety, and Internet freedom.  But have you heard what the TPP would mean for labor rights? 

Vietnam, one of the countries negotiating the TPP, is notorious for its labor rights abuses.  Today, the Department of Labor issued a report declaring Vietnam as one of just four countries in the world that uses both child labor and forced labor in the apparel sector.

Through the use of such unethical labor practices, in addition to union repression and abysmal wages, Vietnam has been able to keep its production costs low. Under the TPP, U.S. businesses and workers would be forced to directly compete with Vietnamese firms on this uneven playing field.

A report last year by the Worker Rights Consortium found the Vietnamese apparel industry guilty of “the trafficking of persons as young as twelve years old from rural areas to work in ‘slave labor factories’… in Ho Chi Minh City.”  In another recent report on Vietnam, the International Labour Organization revealed that more than nine out of ten Vietnamese factories it audited were violating the legal overtime limit for workers, who still did not earn a living wage. The average minimum wage in Vietnam is 52 cents per hour, half of the average minimum wage in China

Given Vietnam’s labor abuses, in addition to human rights violations such as an increased crackdown on political dissidents, voices ranging from the Washington Post editorial board to Human Rights Watch have lambasted the Obama administration’s plan to sign the TPP with Vietnam.  

You can add your voice to this chorus of support for labor and human rights: ask your congressional representatives to say no to Fast Tracking the TPP. Tell them that U.S. workers should not be pitted against workers in Vietnam whose basic rights are being violated.

While telling Congress to say no to unfair trade, you can also say yes to fair trade. Tomorrow is “Fair Tuesday,” an opportunity to support workers by buying fairly traded products that respect their rights.  Because the apparel and textile industries are part of buyer-driven commodity chains, consumers have the power to influence production practices by selectively buying from only those brands and companies that choose to treat their workers well. 

Just as consumer activism means telling companies we do not support unethical labor practices, political activism means telling Congress that we do not support trade deals with countries in which such labor abuses are rampant.  As this year’s holiday shopping season gets underway, say yes to workers’ rights by saying no to the TPP

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Activists Worldwide Rally Against the TPP

Eyes on Trade - 21 November, 2014 - 14:37

While leaders from the 12 countries negotiating the controversial Trans-Pacific Partnership (TPP) agreement met around the margins of the Asia-Pacific Economic Cooperation (APEC) summit in China to discuss the agreement, activists and civil society from across the globe decided to stage some events of their own.

Throughout the week, rallies, creative actions, meetings, and town halls were planned in a number of countries to draw attention to the secret deal that threatens to limit domestic policies that promote food safety, access to medicine, internet freedom, and environmental protection. The deal would also empower corporations to sue governments in extrajudicial foreign tribunals, challenging public interest laws that they claim frustrate their expectations. (And that’s just what we know based on leaked texts, because the negotiations are taking place entirely in secret).

 

 Over 700,000 petitions against Fast Track are delivered to U.S. Congress

In the United States, a broad coalition of labor unions, environmental, consumer, faith, online, and other groups assembled on Capitol Hill to deliver 713,674 petition signatures opposing “Fast Track,” the Nixon-era procedure that would empower President Obama to sign the deal before Congress is able to vote on it. Corporations are trying to revive Fast Track to railroad the TPP through Congress, as it would greatly limit lawmakers’ oversight over the content of the agreement by only allowing 20 hours of debate and forcing an up or down vote (with no opportunity for amendments).

The groups also launched an online campaign resulting in thousands of calls and hundreds of thousands of e-mails to Members of Congress urging them to vote “No” on Fast Track. Across the country, 20 rallies and town halls brought the anti-Fast Track message to lawmakers’ home districts.

  Thousands protest against the TPP in New Zealand

More than 10,000 New Zealanders took to the streets in 17 locations to protest the TPP, gaining national news attention and social media buzz, and pushing the #TPPANoWay hashtag to number 2 worldwide. Protesters were joined by lawmakers from a number of political parties, including leaders from the Green Party and Labour Party. Participants rallied against the secrecy of the negotiating process and TPP's inclusion of the controversial Investor-State Dispute Settlement (ISDS) mechanism, among other issues.

Meanwhile in Japan, 50 activists staged an action outside of Prime Minster Shinzō Abe’s official residence in opposition to the TPP. More than 100 individuals representing farmers, labor groups, consumer organizations, medical advocates, lawyers, and university professors met with Japanese lawmakers to discuss concerns related to the TPP.

A number of flash mobs were organized around Australia. Opposition to the TPP was heard in Sydney, Canberra, Perth, Hobart, Adelaide, and Melbourne. A few days later, concerns about the TPP were represented during G-20 educational forums and protests which attracted thousands.

    Australian protestors rally against the TPP in Perth, Hobart, and Sydney

While negotiators and corporate advisors are hiding their agenda in confidential documents, activists worldwide are spreading their concerns on the Internet, Twitter, Facebook, and e-mail blasts. While leaders and trade ministers are meeting behind closed doors in undisclosed locations, thousands of citizens are responding by gathering on the streets, in libraries, town halls, and their lawmakers’ offices.

The message of citizens across the globe is clear: we are not willing to accept a "trade" deal negotiated in secret in the interest of corporations and at the expense of our rights to safety, democracy, and health.  

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A Letter to Fair Trade Activists: While They Play Poker, Let’s Play Chess

Eyes on Trade - 18 November, 2014 - 18:59

Is President Obama really going to sell us out on trade? Did Sen. McConnell have a full or half smile in the last press conference where he talked about Fast Track? Is Rep. Boehner really going to have a showdown with President Obama over immigration and how will that impact Fast Track? What about the news stories stating that TPP will be signed next month? Oh, and how do the XL pipeline and deal with China on carbon emissions factor in?

Comrades, don’t let the results of the elections, and the political posturing that’s happened since, drive you crazy, distract you, or cause you to lose hope. We have a path to victory! Democrats lost control of the Senate, but we did not lose control over our campaign to stop corporate-driven, job-offshoring, democracy-stifling “free trade” agreements by stopping President Obama from getting Fast Track trade authority. In fact, we have a chance to bury Fast Track once and for all.

Don’t mistake my resolve and optimism as a suggestion that our victory is inevitable. Nothing can be further from the truth. We’re going to have to dig deep and fight harder than we ever have. There’s a giant corporate lobby fighting for Fast Track because they want the Trans-Pacific Partnership (TPP) more than they’ve wanted any other trade deal. All their hopes and dreams for a global race to the bottom are wrapped up in the TPP. I live in Washington, D.C. and see the lobbying firsthand. Our opponents are out in full force. But over the past two years I’ve seen a bigger force. I’ve seen the power of us.

Truth be told, President Obama could have had Fast Track a long time ago. But we’ve been on the case day in and day out and we’ve stopped Fast Track thus far. This past Saturday, November 15, marked the one year anniversary of the game-changing letter to President Obama that Reps. Rosa DeLauro and George Miller released in which 151 Democratic members of the House of Representatives stated that, “…we will oppose ‘Fast Track’ Trade Promotion Authority or any other mechanism delegating Congress’ constitutional authority over trade policy that continues to exclude us from having a meaningful role in the formative stages of trade agreements and throughout negotiating and approval processes.” And just three days prior, on November 12 a block of Republican members of the House of Representatives sent their own letters voicing their opposition to Fast Track to President Obama. Can you believe that it’s already been a year?! Our work together has been extraordinary, truly. We’ve been steady and consistent and we surely can’t stop and won’t stop now.

While the President and some congressional leaders sit in backrooms on Capitol Hill playing poker with the lives of over 800 million people across the world, let’s play chess. The fight to stop Fast Track has always been and will continue to be won or lost in the U.S. House of Representatives. Learning about the history of Fast Track will give you insightful perspective. Above all, don’t let the opposition distract us from our strategic path to victory. The corporate lobby is hard at work spinning a narrative of the inevitability of Fast Track because Republicans gained control of the Senate. That’s simply not reflective of reality. They’re trying to psych us out. In fact, here’s what Lori Wallach thinks:

“…a close look at the interplay of the actual politics and policy on Fast Track and the TPP show that the GOP election sweep may, counterintuitively, actually not promote the corporate trade agenda.”

Our strategy must remain sharp and vision focused on stopping Fast Track in this current Lame Duck session of Congress and in 2015 by demanding that our representatives vote NO on Fast Track. House, House, House!

Over the past few years, I’ve had the pleasure and honor of working with activists from all over the country. I’ve been lucky to reconnect with folks who were a part of the historic Battle in Seattle and Free Trade Area of the Americas (FTAA) protests. Wow, we’ve been at this a long time! But back to my point, the World Trade Organization protests in Seattle in 1999 and the FTAA protests in Miami in 2003 remind us that we indeed do have the power to shut these “free trade” agreements down! But here’s the thing, we don’t need another Seattle to stop the TPP and Trans-Atlantic Free Trade Agreement (TAFTA). All we have to do is stop Fast Track. That’s our greatest contribution to the international campaign to stop the TPP and TAFTA. So, keep up the great work!

Gather your comrades, build your resources, stay focused on the House of Representatives and steel yourself for the fight of a lifetime. Stopping Fast Track and the Trans-Pacific Partnership is so much more than a victory for fair trade. Stopping Fast Track now is about putting business-as-usual to rest and building a space for us to shape the future and world we all want to live in. Almost every issue that we care about (good-paying jobs, food safety, access to affordable medicines, environmental protections, Internet freedom, democracy, workers’ rights and much more) will be significantly negatively impacted if Congress gives President Obama the authority to ram TPP through congress and down the throats of people across the world.

Ring the alarm, my friends! It’s time and this time is ours. Stay strong. Keep focused. Stop Fast Track!

In solidarity,

Alisa

P.S. Help spread the word! Share this great new video about the dangers of the TPP and tell everyone you know about www.ExposeTheTPP.org. It’s up to us!

Categorías: Planet Not For Sale

176 Million Workers Call to Stop TPP Negotiations

Eyes on Trade - 14 November, 2014 - 22:48

Opposition to the Trans-Pacific Partnership (TPP), the controversial trade pact being secretly negotiated between 12 Pacific Rim nations, continues to balloon. This week 176 million workers from the world’s largest trade union added their voice to the growing list of organizations and individuals speaking out against the trade pact.

On Tuesday, the International Trade Union Confederation (ITUC) released a statement calling on governments to halt TPP negotiations. The ITUC’s opposition to the TPP is significant not only because of the union's size, but also its breadth of representation: the ITUC has 325 affiliates in 161 countries and territories, including major labor unions in 9 of the 12 TPP countries.

Sharan Burrow, ITUC General Secretary, explained the confederation's declaration of TPP opposition: “This secretive trade deal is good for some multinational corporations, but deeply damaging to ordinary people and the very role of governments. Corporate interests are at the negotiating table, but national parliaments and other democratic actors are being kept in the dark. What we do know, much of it through leaks, is that this proposed deal is not about ensuring better livelihoods for people, but about giving multinational companies a big boost to profits. Governments should shut down the negotiations, and not re-open them unless they get genuine and transparent public mandates at home that put people’s interest in the centre.”

ITUC's concerns are widely shared: the pact is being negotiated in secret, excluding the input of civil society, experts, and lawmakers, while providing significant access to corporate interests. Also addressed in ITUC's statement is the TPP's inclusion of investor-state dispute settlement, a provision which empowers corporations to "sue" national governments before extrajudicial tribunals and demand compensation for "expected future profits" if they feel a country's domestic policies have undermined special rights for foreign firms. The statement also mentions that the TPP would likely increase the cost of life-saving medicines (a worry validated by the recent leak of the Intellectual Property chapter).

Despite these concerns, TPP negotiators are moving ahead quickly to try to finish the beleaguered deal. Earlier this week, TPP country leaders met around the margins of the Asia-Pacific Economic Cooperation (APEC) forum to discuss the TPP. U.S. President Obama urged leaders to work to "break some of the remaining logjams" of the agreement. Those "logjams" include environmental protections, policies ensuring affordable medicine, and safeguards on sovereignty and democracy.

While negotiators continue to miss deadlines to close the deal, opposition continues to grow among labor unions, activists, lawmakers, environmental advocates, consumer organizations, economists, and a wide-array of other individuals and groups. Negotiators and governments should heed ITUC's call, halt the TPP negotiations, and take a moment to reflect on exactly what why there is so much disapproval of the TPP.  

Categorías: Planet Not For Sale

Report Funded by Big Business Explains to Small Businesses What's Best for Them

Eyes on Trade - 14 November, 2014 - 14:32

The Atlantic Council has just released another report cheerleading the Trans-Atlantic Free Trade Agreement (TAFTA), the controversial U.S.-EU deal under negotiation, also known as TTIP.

The report pitches the deal as a gift to small businesses.

It was financed by FedEx, the 64th largest corporation in the United States. 

Why did the Atlantic Council need to call on big business to try to persuade us that TAFTA would be good for small businesses? 

The report itself provides the answer: “Those [small and medium enterprises, or SMEs] that have heard of the negotiations tend to believe that TTIP is designed principally to help large companies…”

That is, small businesses do not see TAFTA as a deal that is intended to further their interests, but those of their outsized competitors.

That view makes sense, given small firms’ experience under past free trade agreements (FTAs), including the deal implemented in 2012 with Korea. The Atlantic Council’s report claims, without citing a source, that SMEs have seen exports grow under the Korea FTA. 

Not according to the U.S. government. U.S. Census Bureau data reveal that both small and large U.S. firms saw their exports to Korea fall in the year the FTA was implemented (the latest year of data availability), compared to the year before implementation. 

In fact, small firms have endured the steepest downfall of exports to Korea under the FTA. U.S. firms with fewer than 100 employees saw exports to Korea drop 12 percent while firms with more than 500 employees saw exports only decline by 1 percent.  As a result, under the Korea FTA, small businesses are capturing an even smaller share of the value of U.S. exports to Korea (just 16 percent), while big businesses are capturing a larger share.

Perhaps anticipating small firms’ “tendency to believe” that another FTA would disadvantage them relative to their large competitors, the Atlantic Council decided to forego a broad-based, statistically-relevant survey of small firms’ views on TAFTA.  Instead, the think tank “interviewed several representatives” of a few hand-picked firms. 

But even this small, anecdotal exercise did not report the small businesses’ aggregate answers to fundamental questions, such as “Have you heard of TAFTA?” or “Based on what you know about TAFTA, are you in favor of such an agreement?” 

Those aren’t hypothetical questions. Indeed, they were part of the Atlantic Council’s survey, which can be found online.  

Why didn’t the Atlantic Council report the aggregate responses to its own survey questions?  Maybe because the results were not what the think tank sought.  A call to the Atlantic Council indicated that small firms who received the survey were largely unresponsive to questions about how TTIP would benefit them. 

The lack of interest from small businesses comes despite the Atlantic Council’s efforts to sell the deal in the text of the survey.  Abandoning any pretense of impartiality, the survey informed businesses that TAFTA was “an ambitious effort to create sustainable economic growth and job creation in the United States and European Union” before asking if they supported the deal. 

Small firms’ non-responsiveness begs the obvious question: shouldn’t the fact that small businesses are not interested in cheerleading another FTA be cause for concern about the FTA?  When an invitation to name the benefits of a prospective deal is met with silence, it should probably prompt one to question the deal’s merits.

It probably should not prompt one to ask FedEx to sponsor a report intent on explaining to small businesses what’s best for them.  

Categorías: Planet Not For Sale