Planet Not For Sale
4pm: Breaking News -- The face-saving deal that WTO members desperately tried to conclude today, meager as it was (see below), has now taken a face-plant. Four Latin American countries have "firmly rejected" the deal's last-minute text as "unbalanced" in favor of developed countries at the expense of developing countries. It's unclear what will happen next. A spokesperson for the WTO Secretariat stated today, "We don't know when the next meetings will be. We don't know when the next press conference will be. I can't tell you anything." WTO members might still scramble to eke out a deal similar to that described below, in which case WTO proponents will have to try to sell a deal that waives WTO rules as a success of the WTO. Or talks may break down entirely, marking another in a long string of WTO negotiations that have collapsed due to the WTO's stubborn adherence to an unpopular agenda.
11am: As Doha Round WTO Expansion Agenda Remains Deadlocked for More than a Decade, Today's “Big Breakthrough” Amounts to: Developing Nations Force Waiver of Existing WTO Ag Rules, Nations Agree to Finish Deal by July to Update Customs Procedures, Previously-Agreed Trade Benefits for Least Developed Nations Adopted
After nearly two decades of futile efforts to expand the authority and scope of the World Trade Organization (WTO), another WTO Ministerial meltdown was averted in Bali today when the United States agreed to a waiver for existing WTO agricultural rules that developing countries had demanded to help ensure food security for their populations.
Countries also are poised to agree to finalize a “trade facilitation” deal by July 2014 that would require countries to update customs procedures, and to formally adopt a package of trade benefits for the poorest nations that was agreed to years ago. The other texts issued from the meeting merely “affirm” past agreements. Notably, agreement could not even be reached to force compliance with a 2005 WTO decision that all countries must eliminate agricultural export subsidies by 2013, which has not occurred.
“Any hype about this outcome ‘saving’ the WTO reveals just how dire its crisis of legitimacy has become, given the actual deliverables were a rollback of existing WTO agricultural rules, a commitment that countries will update their customs procedures and implementation of trade benefits for least developed countries that had been agreed to years ago,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Reviewing the actual text of the agreement, it appears that the biggest ‘breakthrough’ was simply that yet another WTO Ministerial meeting did not melt down altogether.”
Perversely, the Obama administration is trying to push many of the same terms that have been repeatedly rejected at the WTO in regional pacts, such as the Trans-Pacific Partnership and a Trans-Atlantic Free Trade Agreement.
“The fundamental principle of the WTO – that 160 countries should conform their domestic food, financial, health, energy, patent, procurement and other policies to terms favored by the world’s largest corporations – faces growing opposition worldwide,” said Wallach. “It’s not surprising that the ‘Doha Round’ proposals that would have expanded the WTO’s power have been rejected, given the damage WTO has caused so many people around the world, and that developing countries have instead insisted on rolling back of some of the existing WTO rules.”
The WTO’s agricultural rules, which required all nations to open their markets to food imports but did not ban agricultural subsidies, caused many developing countries to become net food importers. As a result, recent spikes in global food prices have led to increased hunger and food riots in scores of nations. Since the WTO’s establishment in 1995, the U.S. trade deficit has from $166 billion in 1994 to last year’s $741 billion deficit. The G-20 has identified such massive global trade imbalances as a major factor of global economic instability.
The “price” extracted at the Bali meeting for developed countries’ agreement to waive existing WTO agricultural rules for developing countries was new “trade facilitation” obligations favored by developed nations. Many developing nations declared that they could not fund new customs systems and other programs to ease trade flows, with limited resources needed for essential health, education and other needs.
The WTO’s remaining function – enforcing the body’s existing rules – is also coming under increasing attack. WTO enforcement tribunals have ruled that domestic policies violated WTO terms in 92 percent of the 186 cases decided since the organization’s 1995 establishment. Of the 54 cases involving public interest, non-trade policies, WTO tribunals have ordered countries to eliminate or alter their policies in 98 percent of cases.
Recently, the WTO has ruled against U.S. lawsthat ban candy-flavored cigarettes to curb smoking among young people and that provide consumers with information about the country of origin of the meat they purchase and whether tuna fish was caught with dolphin-safe methods. The WTO also ruled against U.S. auto fuel efficiency standards, endangered species and clean air rules, and an Internet gambling ban. Nations’ attempts to apply WTO exceptions, ostensibly designed to safeguard health and environmental policies, have failed in 36 of 37 uses.
Background: The WTO was established in 1995 after U.S. and EU officials reached a trade deal to which many other nations objected. The deal replaced the 1948 General Agreement on Tariffs and Trade (GATT), which was limited to cutting tariffs and quotas, and established a powerful new global commerce agency that set rules on many non-trade matters. All signatory nations must make their domestic policies conform to WTO rules; failure to do so is punishable by trade sanctions.
The idea that nations should be required to provide long monopoly patent terms on drugs and seeds, deregulate their financial and other services and provide special privileges for foreign investors was controversial. Additionally, the WTO’s agriculture trade terms only exacerbated ire about being required to adopt this “Washington Consensus” policy package as a condition for enjoying the market access that GATT had long provided. Those terms required countries to eliminate various domestic food security policies and open their markets to agricultural imports, while wealthy countries were allowed to maintain agricultural subsidies. However, the geopolitical power dynamics of the era meant that the United States and European Union could largely dictate terms and the WTO was established.
Almost immediately, a small bloc of wealthy countries tried to further expand the WTO’s powers and scope.
At WTO Ministerial meetings in Singapore (1996), Geneva (1998) and Seattle (1999) this ploy was rejected. At a 2001 Ministerial meeting in Doha weeks after the September 11 attacks, a WTO expansion agenda disfavored by many nations was launched. But at Ministerial meetings in Cancun (2003) and Hong Kong (2005), that agenda came under withering attack. The “Doha Round” agenda was so deadlocked that the WTO did not hold a Ministerial session again until 2009, despite rules requiring biannual meetings of member countries’ trade ministers, who are the WTO’s official governing body.
Even after major portions of the WTO expansion agenda were jettisoned, the Doha Round agenda was so widely disfavored that the 2009 Ministerial was explicitly announced not to be a negotiating meeting. Elements of the Doha Round agenda face such deep opposition from different blocs of countries that the agenda for the Bali Ministerial was limited to only a few item from the overall Doha agenda – an agreement to update customs procedures to facilitate trade, enforcement of a past agreement to eliminate agricultural export subsidies, new flexibilities for developing countries to stockpile food for public feeding programs and adoption of a package of trade benefits for least developing countries that had been agreed to years ago.
On the eve of an attempt by executive branch negotiators to rush the controversial Trans-Pacific Partnership (TPP) to conclusion in negotiations happening in Singapore this weekend, members of Congress, speaking from the floor of the U.S. House of Representatives on Wednesday, declared that an attempt to Fast Track the secretive, sweeping pact through Congress would be dead on arrival. Below is a transcript of excerpts of floor speeches made by Representative Mark Pocan (D-Wisconsin), Representative Rosa DeLauro (D-Connecticut), and Representative Jared Polis (D-Colorado).
See video highlights here:
Rep. Mark Pocan (D-WI)
“…Unfortunately we appear to have a massive, secret and likely very harmful unfair trade deal on our hands, the TransPacific Partnership or the TPP for short. It is a NAFTA-style agreement between the U.S. and 11 other nations that has been largely negotiated in secret and seems to not just repeat, but perhaps worsen the mistakes made in the past.
In fact, this coming week, TPP negotiators are going to meet again in Singapore and they plan to have a deal by the end of the year, in less than a month, meaning that we may be less than 30 days away from having a final TPP deal, a deal that we have no idea what may contain. And while we may not know what’s in the deal, we do know what we have been promised: and so much of the promises that people across the country and in my state of Wisconsin have been told before about these massive trade deals – from NAFTA to CAFTA to the U.S.-Korea free trade agreement. We’ve been told that free trade would lead to increased U.S. jobs, it would reduce our trade deficits, it would boost our exports, and it lead to improved human rights and labor standards around the globe. Unfortunately, almost every single one of those promises have gone unfulfilled. In Wisconsin we have seen the devastating effects of the free trade agreements such as NAFTA to our local manufacturing industries and our jobs…"
Rep. Rosa DeLauro (D-CT)
“...This could have been a new opportunity. It represented an effort to create something that was new, a sustainable model that promoted economic development, with shared prosperity. But as you know, unfortunately, the talks have gone down the same road as previous trade agreements. Export of more jobs, not more goods, unsafe imports, and threats to public health, among other things…
There is no reason to believe that the Trans-Pacific Partnership trade deal will not be the same kind of a raw deal for U.S. workers and more, as the agreement would be unprecedented in scope.
The president himself has commented that the pact would establish rules that extend far traditional trade matters to include, and I quote, “a whole range of new trade issues that are going to be coming up in the future: innovation, regulatory convergence, how we are thinking about the Internet, and intellectual property.”
The agreement will create binding policies on future Congresses in numerous areas to include those that are related to labor, patent and copyright, land use, food, agriculture and product standards, natural resources, the environment, state-owned enterprises, and government procurement policies, as well as financial, health care, energy, telecommunications and other service sector regulations. This is a treaty that goes beyond tariffs. The scope is as I’ve outlined: it is unbelievable. And we also know that the lack of transparency on this treaty is unbelievable.
It’s interesting to know that industry has had great access to the process and what’s going on. Members of Congress on both sides of the aisle have not had that same access to the information in this trade agreement. And it is our constitutional authority, as members of Congress, to approve trade agreements. We cannot be frozen out any longer. We’re not going to tolerate that.We know for example the agreement will likely lead to increases in U.S imports of shrimp and other seafood from Vietnam and Malaysia. In 2012, this is, my colleague I believe my colleague knows this, others need to know this, in 2012: imported seafood products from Vietnam were refused entry 206 times because of contamination concerns, while some exporters in Malaysia have acted as a conduit to trans-ship Chinese shrimp to the United States in order to circumvent both FDA import alerts and anti-dumping duties. When I say they have been stopped: why have they been stopped? Filthy product, contaminated product, antibiotic-laced product. Putting in jeopardy the public health of people in the United States. And yet rather than improving food safety enforcement and regulations in partner nations, the agreement may lead to a drain of resources needed to ensure that food safety at agencies like the FDA, are called into resolve these disputes with other countries. The agreement may even undermine critical U.S. food safety regulations.
We also know from the recently leaked text, that U.S. trade negotiators, and I say ‘recently leaked’ because I repeat: we don’t have access to the information. We’re not able to go, to come in and have people lay it out for us. The leaked text that U.S. trade negotiators are proposing [show] an unbalanced intellectual property provision that are going to hinder our trading partners’ access to safe and more affordable drugs. This is not only going to raise the price of medicines overseas, preventing millions from getting the medical care that they need, but it limits the ability of the United States companies exporting these drugs to grow internationally and to generate more jobs at home.
Incredibly even as the administration is proposing to lower drug costs for consumers here in the United States, by proposing in its budget to modify the length of exclusivity on brand name biologics from 12 to 7 years, our trade negotiators are demanding 12 years of data exclusivity, from our trading partners, denying their people quicker access to more affordable drugs.
How can the U.S. be in this business? It’s morally unacceptable: that life-saving drugs, that people overseas will have less access to. That’s not who we are as a nation. That’s not where our values lie.
These and other critical areas are being negotiated without sufficient congressional consultation even though as I mentioned under the Constitution, the Congress— not the executive – has the exclusive, constitutional authority to “regulate commerce with foreign nations” and write the nation’s laws. Over the last few decades, presidents have increasingly taken over both of those powers through a mechanism known as Fast Track. Simply what it does is that it erodes Congress’s ability to shape the content of the free trade agreements, which today as I said again earlier clearly go well beyond tariff issues. Not only does it, (relate to) the shaping of the trade agreement, but it then becomes, if you provide for Fast Track authority, then that means it comes to this body and my colleague from Wisconsin knows this, he’s served in legislative bodies, that we have no ability to amend. You just come and you rubber stamp it.
No more, no more.
Under the recent iteration of Fast Track, which expired by the way in 2007, U.S. trade negotiations required various stages of congressional consultation before and during the negotiations, but even that minimal level of congressional consultation has not occurred with regard to the Trans-Pacific Partnership treaty. Which is why myself and so many other colleagues, including my colleague from Wisconsin, Mr. Pocan, both sides of the aisle, have made clear that the 20th century Fast Track and its lack of any meaningful input from Congress in the formative stages of an agreement is not appropriate for the 21st century trade agreements like the TransPacific Partnership.
More Fast Track is a nonstarter.
What we need to do is to create a 21st century mechanism to negotiate approved trade agreements that ensure that they benefit more Americans: don’t decrease the wages, don’t decrease the minimum wage, give them a fighting chance to help themselves and their families. We cannot approve a TransPacific Partnership agreement that continues to follow the same failed trade template that has hurt working families for so long, that jeopardize our public health here and abroad, and that creates binding policies on future Congresses that we had no input in creating.
If we are to uphold the trust of our constituents, for them, for this economy, for our country, we need to do better. And the content and the process of the TPP does not allow us to do better by our constituents or the great people of the United States.
This is a treaty that needs to be restarted. Instead of being brought up and finished by the end of the year, we need to restart the effort, have Congressional input, and do something that will help to make a difference in the lives of the people that we serve..."
"...We know that in Vietnam the wage is 28 cents an hour, that’s 4% of our currently, already low minimum wage and to think that somehow we can have fair trade with a country that has 28 cents minimum wage, that has violated, they work in factories that have violated safety requirements 8 out of 10 times that they’ve been inspected, workers routinely fail to get the minimum 4 days per month of rest. This is not a “trade partner” that you can have in a trade agreement that’s going to at least raise the level for American workers; it can only lower the level.
Another concern that I know you and I have had, Rosa DeLauro, has been on procurement and what exactly is in this agreement on procurement. I was an author when I was in the state legislature in Wisconsin of Buy American laws, to make sure that our tax dollars went to goods that supported American workers. The very language that’s been in these trade agreements could take away our ability to have buy local and buy American laws. And we need to change that, so again thank you so much for your efforts on this. We are going to work with many other colleagues on both sides of the aisle, to do what we can to defeat this Fast Track authority...
One of the things that as we’ve talked about, the various provisions, is that there are literally over 20 chapters that involve everything from labor conditions, the environment, procurement, food safety, intellectual property, they go on and on. This is a wide variety of topics that are covered in a trade deal, and the fact that Congress could maybe lose its say through a Fast Track agreement would be completely egregious. Because we’re elected by the people; we have to represent our constituents and make sure that we defend that worker in our district, and if you take away Congress’s voice that’s wrong, whether it’s done by a Democrat or a Republican; we must have our say.
People will say that somehow we are anti-trade. We’re in fact very much pro-trade. We just want it to be fair trade. We want it to be drafted carefully and correctly. And I believe you can do that. But when you have an agreement like we’ve seen with past agreements and what we expect so far to see in the TPP, from some of the leaked texts, it looks again that the interests of global corporations will be ahead of the good of the American worker. There are situations where a foreign-owned business could have more power than our own sovereign courts on issues, and where Buy America policies could be undermined, and where corporations can be incentivized to move their production offshore, and it can engage us in a race to the bottom on worker protections, wages and rights. And the American worker gets left behind. And we simply can’t do that.
We need to make sure that Congress has every possible say in what a trade agreement, especially something as wide as the TransPacific Partnership can include. We need to know what’s in these laws, and if you think about it, we don’t know that.
Representative DeLauro and myself: we’ve been following this issue. We don’t even know exactly what is being negotiated in this agreement. So we have a lot of questions, and we have very few answers. Does the agreement do anything to tackle currency manipulations? We don’t know. Does it include enforceable environmental and labor standards? And how much does it deal with the blatantly nontrade items from food safety to financial regulations to Internet freedom? Once again the answer is, we don’t know. Yet despite all these unanswered questions and despite the fact that most members of Congress have barely gotten a chance to see leaked portions of the agreement and despite the fact that this deal would have lasting repercussions on our economy and our workers, once again, there is word that we’re hearing that they are going to try to fast track this through Congress. And that simply is not acceptable.
Given all the lingering questions that we have out there on the TransPacific Partnership, I firmly believe that rushing this bill through Congress is both dangerous and irresponsible.
Just earlier this year, I led a letter with 35 other freshman Democrats expressing similar concerns about transparency, and making sure that we have a trade deal that’s in the best interests of our constituents, our workers.
Mr. Speaker, our job in Congress is to represent the people who sent us here. It is not our job to represent the interests of foreign corporations or CEOs who want to find the cheapest labor they can to increase their profit margins. And it’s not our job to sit on the sidelines while more bad trade deals get passed through this body. We have a responsibility to the American worker to ensure that they can compete on an even playing field with workers across the world. If we compete on an even playing field, we will always win. We have the work ethic, we have the ability to do that. But unless we’re given that equal opportunity, the American workforce is not being treated in a fair and sustainable way. They can’t compete when their jobs are shipped overseas or their wages get driven down so low that they face almost unlivable conditions. And we can and must do better for our workforce….”
Representative Jared Polis (D-CO)
…One of the issues around [the TPP] has been the secrecy under which it’s been negotiated. I actually, some months ago, to show that these are not just partisan concerns, did a bipartisan letter with Darrell Issa, requesting that there’s more transparency about this process. I’ve had the opportunity on three occasions to review the text in my office; my own staff wasn’t allowed to even be there with me. The American people aren’t able to execute the proper oversight over something that is of great economic importance to our country, because of the secrecy under which it’s being negotiated...
During this week’s 9th World Trade Organization (WTO) Ministerial in Bali, activists, largely led by Indian farmers' groups, have been gathering in the halls, chanting “food sovereignty now!” and carrying signs reading “USA – Hands off our food!” and “Support the right to food.” Farmers, fisherman, and other members of civil society have also been protesting in large numbers against the Ministerial.
These actions are juxtaposed against finger-pointing by the U.S., other developed countries, and the mainstream media, which have been blaming India for the possible collapse of the talks in Bali (see: BBC, Financial Times, Washington Post, for example). Some are going so far as to imply that it is India’s stance that would be responsible for a resulting loss of legitimacy for the WTO and the entire multilateral trading system.
India’s transgression? Wanting to protect an ambitious and innovative law designed to address hunger and poverty in a nation that, according to the UN, is home to 25% of the world’s hungry poor. That law, the National Food Security Act, requires the Indian government to help pull the poorest farmers out of poverty by purchasing staple goods at a fixed price, and to feed the hungriest families by providing food at subsidized, below-market prices.
India's not alone. Latin American and African countries, not wanting to face WTO challenges for their own programs to increase access to food, have indicated support for India's defense of its food security initiative.
The U.S. has labeled such programs as “trade-distorting.” But the hypocrisy of the U.S., which grants some of the highest levels of subsidies to its own farmers, totaling more than $14 billion in 2012 alone, remains an elephant in the room. That elephant has been largely unreported by the media and unmentioned in the speeches of U.S. officials that have criticized India’s refusal to subject food security to WTO rules.
Perhaps the real culprit of the WTO’s failure to produce a deal for nearly 19 years (a track record unlikely to be broken this week) is the WTO itself. The world's most powerful commerce agency continues to push an old model of globalization favored by corporate interests. Despite opposition on a global scale, it has not proven willing to accept innovative approaches to address development concerns. The breakdown of discussions in Bali (and before that in Seattle, Geneva, Cancun, Hong Kong...) is an unsurprising result of the WTO’s obstinate refusal to change –- not the result of a country’s decision to defend food security.
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Los datos que están debajo de esta marquesina son: 1) Repsol sigue siendo socio del Estado argentino, tanto dentro de YPF (Repsol conserva un 6% de acciones de esta emresa) como en otros proyectos dentro del territorio nacional (como es Vaca Muerta, en la provincia de Neuquén). 2) El acuerdo se hizo entre los tres gobiernos de los Estados involucrados directa e indirectamente por el tema Repsol: Argentina (el Estado expropiante), España (el Estado de nacionalidad de la empresa expropiada) y México (Estado dueño a su vez de un 9,49% del capital accionario de la casa matríz de la empresa española a través de la empresa Pemex), ignorando la participación de la mayoría del directorio de la transnacional (y en especial de su presidente, Antonio Brufau), que solamente debío analizar el acuerdo ya cerrado sin poder negociarlo, y que finalmente aceptó con el siguiente comunicado: http://www.repsol.com/imagenes/es_es/Repsol_HR_27112013_tcm7-664972.pdf 3) Los US$ 5.000 millones se pagarán en diez años bonos de deuda soberana, con una tasa de interés de entre el 8,25% y el 8,75% y con un plazo de gracia de dos años. 4) Aunque el gobierno argentino presenta a este "preacuerdo" como una "compensación", se trata de una indemnización por los bienes afectados por la expropiación.
De reclamos y declaraciones
Repsol ya había iniciado diferentes reclamos legales a nivel doméstico e internacional, dentro de jurisdicción argentina, española e internacional, dentro de las cuales la más fuerte y resonante es la demanda que emplazó contra la Argentina en el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (CIADI), organización perteneciente al Grupo del Banco Mundial (BM). El monto de esta demanda es de US$ 10.500 millones, constituyéndose -por lejos- en la demanda más abultada contra el país más demandado en el mundo dentro del CIADI.
Era obvio que, al haber tomado la decisión política en su oportunidad de expropiar las acciones de Repsol, debía indemnizarse a la empresa expropiada. Esto nosotros lo sostuvimos en abril, aún cuando las caras más visibles de ese acto en aquel momento y hoy a cargo de la cartera nacional de Economía, Axel Kicillof, sostuviera que "no se le iba a pagar ni un centavo" (http://www.elmundo.es/america/2012/04/23/argentina/1335193213.html) por la desinversión que efectuara la compañía así como por los pasivos ambientales que podían comprobarse. Hace ruido el evidente cambio de discurso que encontró parangones diametralmente opuestos en el término de 19 meses.
Ya entonces sostuvimos que, aún cuando las cuentas dieran cero, las obligaciones jurídicas en juego eran distintas y con un orígen diferente: una estaba basada en una decisión política de un Estado (Argentina) de realizar un acto expropiatorio en uso de sus facultades soberanas y, por ende, no judicializable. La otra (los pasivos ambientales y la desinversión) provenían de un delito y de un incumplimiento contractual que debían ser probados y sentenciados judicialmente. Decir que podían "compensarse" estas obligaciones era rebajar la decisión política argentina de expropiar a una cuestión que pudiera ser sometida a juicio de un tribunal, además de confundir obligaciones jurídicas diferentes. Si bien las partes en litigio eran las mismas (el Estado argentino y la empresa Repsol), las causas discutibles no lo eran, y las responsabilidades en riesgo tampoco, a menos que la expropiación estuviera motivada en los delitos o en la desinversión empresaria -y no en el interés de utilidad pública, lo cual haría recurrible la medida expropiatoria-. De comprobarse la culabilidad de los delitos ambientales, podrían acarrear a su vez responsabilidades penales en cabeza de los miembros del directorio, lo cual convierte en este acto en algo más agravante que la simple cuestión pecuniaria.
Zanjada esta cuestión y sabiendo que la indemnización -y en esos términos, no con eufemismos tales como "compensación", etc.- era uno de los tres requiscitos legales para cumplir con el instituto jurídico de la expropiación -sanción por ley, declaración de utilidad pública, y pago de una indemnización en montos y tiempos razonables-, caben luego el resto de los análisis respecto de las variables existentes en el caso.
Las características del "(pre)acuerdo"
En principio el preacuerdo es un buen acuerdo. Pero hay también mucho que reluce y que no es oro dentro de la operación. Para empezar, el reclamo de la empresa ante el CIADI, de US$ 10.500 millones, es un monto sobrevaluado puesto que equivale al total de las acciones de Repsol en YPF al momento de la expropiación (el 57% del capital total de la empresa) y no al 51% efectivamente expropiado. Indemnizar en esa cantidad a la empresa sería pagarle por lo que la empresa pretendía del 51% expropiado más el 6% que retuvo. Según los números aportados por la propia empresa en la demanda ante el CIADI, el monto de ese 51% expropiado sería de US$ 9.395 millones, una cifra de todas maneras importante.
El cálculo que debemos hacer debe basarse sobre números razonables y no sobre las pretensiones de Repsol en su intento de ser indemnizada por acciones que conserva en su poder. Ergo, los US$ 5.000 millones acordados a pagar por la Argentina resultan ser poco más de la mitad -y no menos como se dice- del reclamo correspondiente: el 53,22% para ser precisos. De todas maneras el monto sigue significando para Argentina una buena operación.
Otra cuestión tiene que ver con el medio de pago. Es habitual que un Estado pague grandes sumas de dinero con bonos. Esto significa que el Estado se endeuda para poder responder a esa obligación. En este caso Argentina emitirá nuev deuda soberana para cubrir la indemnización que deberá pagar a Repsol por la expropiación, lo cual engrosará la deuda externa sumándose a los US$ 115.000 millones que Argentina debe según datos del BM. Los plazos para el pago de dichos bonos son normales: a 10 años (lo cual equivale a pagar US$ 500 millones por año), por lo que los costos económicos y políticos del pago de esta indemnización pasarán seguramente a la "pesada herencia" de un próximo gobierno, provenga o no del actual oficialismo. Sin embargo, no ha trascendido la jurisdicción aplicable en cuanto a la emisión de esos bonos de deuda nueva, y los ejemplos recientes no son muy alentadores: el actual gobierno fue quien emitió la refinanciación de bonos de su deuda externa con claúsulas de prórroga de jurisdicción en favor de tribunales norteamericanos, lo cual motivó las demandas en proceso de los "fondos buitre", con riesgos de embargo sobre bienes soberanos como la fragata Libertad en Ghana. Desde ya que sería ampliamente recomendable recordar a las autoridades públicas no hacer tales cesiones de soberanía y establecer la jurisdicción de dichos documentos en los tribunales nacionales argentinos.
La tasa de interés a pagar por dichos bonos es algo tomado a la ligera y para nada analizado. Es una tasa alta, inferior a la que pagan los bonos venezolanos o ecuatorianos (del 12%) pero muy superiores a los de países como México (2,7%) y a tasas consideradas "normales" (de menos del 2%), lo cual demuestra una voluntad de adecuar la modalidad de pago a las exigencias de los mercados financieros internacionales: Repsol ya ha hecho público que no desea quedarse con los bonos de deuda argentinos sino que quiere venderlos en el mercado de valores, por lo que la tasa de interés tiene que ser alta para que la empresa pueda tener una buena promesa de rendimiento con la cual hacer atractiva la venta de estos papeles en el mercado. Por último, lo acordado establece un plazo de gracia de entre 2 y 4 años, lo que favorece nuestra tesis de trasladar los costos a la próxima administración.
La prensa vernácula insiste en subrayar que Repsol habla de un "preacuerdo" aún a instancias de haberse aceptado, dado que todavía falta mucho por definir en cuanto a los detalles del pago, incluyendo posibles avales y garantías que la transnacional española pediría para aceptar los bonos, algo en lo que en principio el gobierno argentino no estaría de acuerdo en conceder.
Ahora las piezas danzan en el CIADI
Por lo demás ya comenzaron a moverse las primeras piezas del juego de apoyos y oposiciones: ADEBA, la asociación argentina de bancos privados, ya se manifestó a favor del acuerdo que, al igual que el pago de US$ 677 millones a cinco demandas en el CIADI por parte de Argentina, orientaría a una reinserción del país en los mercados financieros internacionales, aunque las mismas medidas sean vistas por la prensa oficial(ista) como una "batalla ganada" contra esos mismos mercados...
Con el pago de esta indemnización Argentina pretende que Repsol desista de sus reclamos judiciales, incluyendo el presentado ante el tribunal del CIADI, algo que es presentado como un imperativo por la prensa oficialista local. Recordemos que el pago de esta indemnización -en tanto indemnización que es- hace caer argumentos fuertes por parte de la transnacional española de que no fue compensada por la desapoderación de sus bienes y que se trató de una "confiscación". Empero, a Repsol puede seguir restándole el argumento de la no discriminación que contempla el tratado bilateral de protección de inversiones (TBI) entre Argentina y España en su Art. III.1 y que, así como sostuvimos hace más de un año, entendemos que sigue siendo una piedra angular del reclamo privado contra el Estado. El motivo es simple: Repsol fue la única afectada por la medida del Estado nacional, y como empresa extranjera, se vio perjudicada frente a sus demás socios extranjeros y nacionales, lo cual puede significar un acto discriminatorio respecto de ellos. La contraargumentación que desde abril de 2012 sostenemos es que Repsol era la única tenedora de la cantidad suficiente para obtener la voluntad societaria de YPF (el 51% de las acciones) y que con la medida se afectó el mínimo necesario para que el Estado pudiera hacerse del control de la única empresa nacional en un sector estratégico como el de la explotación de hidrocarburos, cumpliendo el mandato legal de utilidad pública y sin afectar la totalidad del patrimonio de la expropiada, quien conservó el 6% del capital restante en YPF.
El problema no está dado en la forma en que se realizó el acto expropiatorio o en la posición política que se tenga sobre la medida en cuanto a una defensa o no de la negociación por pago, sino en el entramado jurídico que significan los TBI y que al parecer se está cada vez más lejos de tocarse. Estos tratados son un cerrojo para las políticas públicas que puedan afectar algún interés de una empresa extranjera. Cualquier regulación pública posterior al TBI puede motivar una demanda millonaria contra el Estado ante una jurisdicción extranjera pero por compromisos que se resuelven localmente. Y leer esto en clave económica es un error ya que afecta derechos a futuro que el Estado no puede establecer debido al enfriamiento regulatorio que provoca este sistema sobre la voluntad estatal para sancionar su legislación, fijar sus reglas, crear derecho. Eso es invaluable ya que sería similar a pretender "cotizar" la soberanía de un país, sus potetades de ejercer su jurisdicción y de establecer sus leyes. ¿¿Cuánto "vale" eso en dólares??
De ganadores y perdedores
Prensa especializada, proveniente del riñón del capitalismo financiero internacional y nada "progresista" como Bloomberg, ubica hoy dentro de los "ganadores" del acuerdo a la empresa YPF y a la presidenta Cristina Fernández de Kirchner a quien califica como una "negociadora dura". YPF se ve beneficiada en tanto hallana un problema judicial pendiente y normaliza su situación para continuar con sus inversiones en curso. La propia Repsol puede verse también como "ganadora" en tanto -según declaraciones oficiales- cierra pleitos evitando prolongarlos todavía más en el tiempo, con las demoras y costos que ello significa, lo cual demuestra que el sistema del CIADI, al contrario de su motivo fundacional, no resulta eficiente para los intereses empresarios de ser una instancia rápida y barata para resolver controversias contra Estados.
Si de inversores ganadores hablamos, es imposible dejar de nombrar a Chevron, dato que a Bloomberg no se le escapa pero que a la prensa nacional -oficialista u opositora- parece desmerecer. Chevron es el nuevo gran socio del gobierno nacional y de la empresa YPF. Sus recursos económicos van a pasar a explotar el yacimiento de Vaca Muerta mediante la polémica metodología de fractura hidráulica (fracking) que lleva prohibiciones en varios países europeos y cuyo debate a nivel mundial no está en peno auge. Repsol tiene también interés en participar de esa inversión y a nadie le gusta tener socios con problemas en el negocio. Por ende, con un problema menos, Chevron puede quedarse tranquilo ante eventuales dificultades en Vaca Muerta...
Si Chevron se halla ausente en las bocas de los medios respecto de la medida, un nombre todavía más silenciado es Carlos Slim. Dueño del 13,3% de las acciones de YPF, vio incrementado el valor de su capital accionario en dicha empresa tras el acuerdo a raíz de la suba en la cotazación en bolsa. Tras el mote de "nacional y popular" dada por la militancia kirchnerista tras la expropiación, la empresa estatal otorga mayor riqueza a quien ya es el hombre más rico del mundo.
Antonio Brufau es claramente un personaje que quedó apartado de la escena y que, de no ser por el respaldo del accionista mayoritario de Repsol (el Caixabank de España con un 12,02% de las acciones), habría quedado por completo desautorizado ante este acuerdo negociado a sus espaldas.
La figura estatal queda también fortalecida en tanto las negociaciones diplomáticas muestran haber dado buenos frutos para las partes sin por ello denostar la posibilidad que tienen como entes soberanos de ejercer actos fuertes como el de la expropiación, reconocido tanto nacional como internacionalmnete. Pero entre ellos, la participación mexicana dentro de Pemex como accionista del 9,34% del capital de Repsol cobró centralidad para mostrar la complejidad y los matices de voluntades tantas veces centradas en un solo rostro o en una sola voz y que, dentro de esta trama de relaciones internacionales, realmente acaban perdiéndose.
Por último, CFK puede, en efecto, mostrar localmente su "fuerte brazo en la pulseada ganada al capitalismo internacional", sobre todo luego de una larga internación que la obligó a licenciarse de sus funciones como máxima mandataria por cuestiones de salud. Pero en realidad la habilidad del gobierno se dio más en haber hallado talones de aquiles en la "interna empresaria" que en una postura dura que podría suponer el hecho de "plantarse" frente al capital transnacional. El haberse sometido al régimen de los TBI fue un grave error (si cabe expresarlo así) cometido en los ´90, pero que por el momento la actual gestión, lejos de pretender revertir, parece convencida en mantener. No hay críticas respecto del régimen de los TBI ni de la pertenencia al CIADI -y si las hay no provienen desde el seno del gobierno sino desde sectores externos que le son simpatizantes-. Amagues como los declarados en diciembre de 2012 -durante la visita del presidente ecuatoriano Rafael Correa en búsqueda de apoyos por el caso Chevron en la Amazonia- han quedado empolvados tras el reciente pago de las cinco demandas que corrobora su dirección contraria. La posibilidad de anular o incluso denunciar los TBI -perfectamente aplicable por un cambio fundamental en las circunstancias (justificación jurídica que se conoce internacionalmente como la cláusula rebus sic stantibus)- pudo haberse utilizado en 2003 con el país aún en crisis política-económica-institucional-social-etc., pero no se hizo. Y a diez años vista la responsabilidad política de no ser testigos de la finalización de los plazos de ultraactividad (que en los TBI argentinos son mayormente de 10 años) de estos tratados es algo que lejos queda de lo que puede entenderse como una "ganancia" en esta década y ya no es algo achacable a "pesadas herencias" de gobiernos pasados. El no auditar -como se está haciendo en el caso de Ecuador- este entramado jurídico de los TBI con nuestra Constitución Nacional, con nuestras obligaciones internacionales en materia de derechos humanos (todas ellas jerarquizadas a rango constitucional por el Art. 75 Inc. 22 de nuestra Carta Magna) e incluso con las obligaciones erga omnes a nivel internacional, son medidas que pueden impulsarse todavía hoy, pero que siguen sin ensayarse. Estas decisiones incluso están a riesgo de pasar de ser temas pedientes para ser parte del programa de gobierno, "límites en la gestión", pero en cualquier caso voluntad política que no se vio oportunamente en los hechos y que, perdido el 54% de los votos del "vamos por todo" de hace dos años sostenido desde el oficialismo, queda condicionado a una correlación de fuerzas enrarecida que algunos ya se aventuran a denominar "transición".
La película todavía no muestra los títulos finales, por lo que no puede decirse que se haya terminado. La política, que como sostiene Raúl Dellatorre en su nota de Página/12 del 28 de noviembre, efectivamente puede ofrecer soluciones alternativas al "caerse del mundo" si alguien se aparte en un milímetro de la voluntad de "los mercados", al parecer esta vez ha dado soluciones no tan osadas como se ostentan. Las corporaciones no son intocables, como se sostiene en dicha nota, es cierto. Pero el hecho de que las alternativas políticas sigan siendo las ofrecidas dentro del sistema dejan dudas sobre qué es lo que condiciona a qué: si la política a la economía o si en realidad no es un nuevo caso en viceversa.
Group sign-on letter to the U.S. Trade Representative on U.S. opposition of G-33 food security proposal
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Farmer, rancher and consumer groups celebrate new “COOL” Thanksgiving as improved food labels take effect this week
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Salt Lake TPP Talks End with Growing Pressure to Announce “Deal” at December TPP Ministerial, but No Resolution of Major Controversies
Update from Lori Wallach, Director of Public Citizen’s Global Trade Watch
A week of intense TPP negotiations, marked with increasingly heavy-handed U.S. tactics, came to an end late Sunday night in Salt Lake City, Utah. Negotiators working on the 12 TPP chapters not yet completed were instructed to narrow disagreements to matters that the chief negotiators or trade ministers will decide. At least three chapters – those covering intellectual property, state owned enterprises and medicine-pricing formularies – did not reach this target. Talks on the controversial intellectual property chapter were extended and will continue for at least two more days. There was no discussion of disciplines to counter currency manipulation despite 230 House and 60 Senate GOP and Democrats demanding such terms.
In Salt Lake City, TPP chief negotiators prepared a long list of final trade-offs and decisions for trade ministers who will meet from December 7-10 in Singapore. Many TPP country governments are billing the Singapore Ministerial as the ‘end game’ of negotiations. The intensity of efforts at Salt Lake City demonstrated that the United States is desperate that its latest end-of-year deadline for TPP’s completion not be missed like three past deadlines.
Claims that a final TPP deal is close seem incredible, given that it appears that the most politically sensitive issues that have arisen in three years of talks remains unresolved. Controversy is growing in many TPP nations about demanded trade-offs relating to medicine prices, Internet freedom, financial regulation and other sensitive non-trade matters. Plus, Congress’s bottom lines - from disciplines against currency cheating and subsidies on state owned enterprises to enforceable labor and environmental standards - remain unachieved.
The tone and intensity of these latest talks was different than previous rounds, however. U.S. officials started to roll back from some long-held positions, perhaps because the administration knows it is in a race against time. Opposition in Congress and in various TPP countries is growing as more details leak about TPP’s terms.
The apparent goal for trade ministers meeting in Singapore is to make broad trade-offs on market access and the most controversial policy issues that have been deadlocked and agree on “landing zones” for what they want in a final deal. By withholding any actual agreement text from the public and press, they hope to announce these arrangements as a “final” deal so that there is wide press coverage that creates a sense of inevitability while negotiations continue.
Inconvenient Questions As Governments Push for a TPP “Deal” in Singapore:
Negotiations on sensitive Market Access issues
- How will the U.S. even negotiate market access terms on autos, agriculture and other sensitive issues with Japan without having sealed its bilateral agreement with Japan that it says is a condition for the country being included in a final TPP?
- A supermajority in the U.S. Congress has said TPP must include currency disciplines, but the issue has apparently not even been raised to date. What is the plan?
- 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. Will the U.S. reverse its insistence that all sectors be liberalized?
- The rules of origin have not been agreed for sensitive sectors such as apparel/textiles, autos and more, so how can final deals be reached on tariff-cutting?
- If the U.S. provides new market access on dairy and sugar, will it be commercially significant or only small tariff-rate quotas designed to be used by demandeur countries as political optics to “show” gains?
Deadlock over enforceability of labor and environment chapter
- Because it is a congressional red line, the U.S. has insisted on labor and environmental standards that are enforceable on equal terms with the pact’s other provisions. Most TPP countries oppose enforceable labor and environmental standards altogether. How will this be resolved?
- Further, additional issues in the environment chapter remain unresolved. Any rollback from past U.S. FTAs could doom TPP in Congress, so what is the status?
Deadlock over the State Owned Enterprises (SOE) text
- There still is not agreed text for this chapter, but did the countries finally agree on a definition of what is a state owned enterprise?
- Given that discussions of actual text have only just begun, how can Ministers make high-level decisions on this chapter in Singapore in 12 days?
- The U.S. demands disciplines on SOEs that forbid the use of government resources to subsidize SOE activities within TPP nations. A sizable bloc of nations opposes this. A bipartisan supermajority in the U.S. Congress has indicated that it will oppose TPP unless it includes the U.S. version of rules, so how will Ministers handle this issue given other TPP countries have numerous SOEs?
IP chapter patent rules and medicine pricing rules both deadlocked
- The U.S. proposal that would deliver on Big Pharma’s demands for extended patents, data exclusivity and other monopoly powers that raise medicine prices continues to face opposition by most other TPP countries. What is the plan to resolve this after four years of deadlock? Is the U.S. giving up on Big Pharma’s demands or did other countries trade away their medicine pricing policies?
- In another chapter, an Annex cynically dubbed “Annex on Transparency and Procedural Fairness for Healthcare Technologies,” would allow drug firms to challenge medicine formulary reimbursement and pricing decisions. Did the U.S. finally give up on this or did other countries agree to allow Big Pharma to challenge the decisions of doctors and pharmacologists who determine what medicines will be included on the formularies of countries’ healthcare systems?
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 deadlocks on key TPP provisions. Are these issues suddenly on a path to resolution? How?
- Also there has been 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, Was this resolved, and, if so, how, given it would require rewrites of most TPP nations domestic laws?
United opposition to the U.S. demand that TPP ban the use of capital controls
- With the IMF now endorsing the us of capital controls as ways 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. How will this be resolved?
Deadlocks over aspects of controversial “investor-state” private corporate enforcement of TPP
- Australia’s new 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. This is long-established Australian policy. Also, 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. The U.S. insists all countries be bound. Now what?
- 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. How will this and a set of other deadlocked issues be suddenly resolved in Singapore after disagreements for the last four years?”
This week's government release of trade data highlights a stunning decline in U.S. exports to Korea, a rise in imports, and a ballooning of the U.S. trade deficit under the Korea Free Trade Agreement (FTA). With such sorry results emerging from the Korea deal, it's little wonder that 178 Democrats and Republicans this week rejected Obama's bid to Fast Track through Congress another FTA -- the sweeping Trans-Pacific Partnership (TPP).
U.S. goods exports to Korea fell 8 percent and imports from Korea grew 8 percent under the first 18 months of the Korea deal, relative to the 18 months before the deal took effect. The shift provoked an incredible 56 percent growth in the U.S. trade deficit with Korea in the FTA’s first year and a half.
The Korea FTA’s abysmal record for U.S. jobs has been consistent: in 18 out of the 18 months since the deal took effect, U.S. exports to Korea have fallen below the average level seen in the year before the deal. And in every single one of the 18 months since the FTA, the U.S. deficit with Korea has exceeded the average monthly deficit before the deal took effect (see graphs below). These losses amount to tens of thousands of lost U.S. jobs.
The disappointing data from the Korea FTA, a template for the TPP, is poised to generate even more congressional opposition to Obama’s request for Fast Track’s extraordinary authority to railroad the TPP through Congress on an expedited timeline with limited debate and no amendments.
38 Million Retirees Join Workers and Consumers to Say No to "Trade" Deal Terms that Would Make Medicine More Expensive
The chorus of critics of the Trans-Pacific Partnership (TPP) – a sweeping U.S. pact under negotiation with 11 Pacific Rim countries – keeps expanding.
Today the largest U.S. nonprofit, nonpartisan group – the American Association of Retired Persons (AARP), representing 38 million members – joined the American Federation of State, County and Municipal Employees (AFSCME), Consumers Union and other U.S. health and consumer advocacy groups in sending a letter to President Obama to express "deep concern" that TPP rules will thwart efforts to control escalating healthcare costs.
The groups outline an array of U.S. policies and proposals to make healthcare more affordable that are jeopardized by TPP provisions "being advanced by the United States Trade Representative." These threatened cost-saving measures include Medicare prescription drug discounts under the Affordable Care Act (Obamacare), an administration proposal slated to save $134 billion by providing rebates to low-income Medicare beneficiaries, and state-level Medicaid policies used to control drug costs.
The groups also state their opposition to Big Pharma's agressive push for U.S. trade officials to grant pharmaceutical corporations special monopoly rights in the TPP for biologic drugs, which are some of the costliest on the market. In another letter late last month, AARP warned that this TPP proposal alone could cost Americans billions in additional health expenditures annually and undermine the Obama administration’s efforts to ensure more affordable healthcare.
Biologic medicines – the latest generation of drugs to combat cancer, rheumatoid arthritis, and multiple sclerosis, among other diseases – are exceptionally expensive, even for those with comprehensive insurance coverage. Derived from living organisms, these treatments cost approximately 22 times more than conventional medicines. According to AARP, patients can face annual treatment costs of $400,000.
While the Obama administration pushes for measures at home to contain rising health care costs, Big Pharma is urging the administration to include measures in the TPP that would increase costs by expanding pharmaceutical monopoly protections. The proposed TPP measure under consideration, a 12-year period of data exclusivity protection, would allow brand-name companies to obtain an automatic monopoly on biologics even in the absence of patent protection.
During this period, access to cheaper versions of the drugs would be restricted, as governmental regulatory bodies would be prohibited from relying upon the brand-name company’s clinical trial data to approve biosimilars – more affordable versions of the high-cost drugs. While exclusivity is in force, biosimilar applicants would have to replicate costly, time-consuming clinical trials despite already-known outcomes. This would prevent many biosimilar groups from even seeking market approval, keeping their more affordable, life-saving drugs off of pharmacy shelves for years as pharmaceutical corporations accrue monopoly profits.
Although U.S. law currently requires 12 years of data exclusivity for biologics, the White House has repeatedly proposed reducing this period to tamp down spiraling costs. According to the White House budget for fiscal year 2014, shortening exclusivity to 7 years could save federal programs such as Medicare and Medicaid more than $3 billion over the next ten years. But if Obama administration trade officials propose 12-year exclusivity for the TPP at the request of Big Pharma, the binding pact could lock into place pharmaceutical firms’ lengthy monopolies here at home, barring the administration’s proposed cost-cutting changes.
That’s right – Obama administration officials are contemplating TPP rules that would effectively scrap the administration’s own proposal to save billions in unnecessary healthcare costs.
Other TPP countries have been rejecting U.S. pressure to include data exclusivity and other pharmaceutical monopoly protections in the deal, given the large humanitarian cost and financial burden of delaying access to more affordable drugs. In fact, no other TPP country allows a special data exclusivity protection period for the high-cost biologic drugs.
However, in addition to data exclusivity protection, U.S. trade officials are urging TPP countries to accept egregious measures that would lengthen and broaden patent rights and drug monopolies, stifle cost-cutting generic competition, and favor pharmaceutical companies in court.
Stronger drug monopolies would force consumers to pay high drug prices for longer and would have devastating humanitarian and financial consequences in developing countries. According to the World Health Organization (WHO), more than 100 million individuals fall into poverty due to catastrophic health payments each year. In developing countries including Vietnam, a TPP country, patients often have to pay 50 to 90 percent of pharmaceutical costs out-of-pocket, making medicines the second-highest household expenditure after food.
But this problem is not only a developing country issue. In the United States, medical expenses account for 60% of bankruptcies. And in three-fourths of those cases, the person even had health insurance. As AARP, AFSCME, the Consumers Union and others make clear in today's letter, we cannot afford to roll back cost-saving policies and lock in unaffordable healthcare costs via a “trade” deal.
As we strive to recover from an economic crisis, reduce the government deficit, and expand access to health care, it is imperative that our “trade” policy not undermine these goals. How can the Obama administration continue pushing abroad a secretive trade pact designed by and for Big Pharma while pushing at home access to affordable medicines?
--Stephanie Rosenberg, Public Citizen's Global Access to Medicines program
Mounting Concerns About Possible Trans-Pacific Partnership Unite Members Across Party Lines Against Abdicating Congressional Authority Over Trade
A letter sent today to President Barack Obama opposing Fast Track authority, signed by 151 House Democrats, signals the end of a controversial Nixon-era procedure used to railroad contentious trade pacts through Congress. Obama has asked Congress to delegate to him its constitutional trade authority via Fast Track for the Trans-Pacific Partnership (TPP) and other pacts.
The signers of the letter show the breadth and depth of Democratic House opposition to Fast Track. Signers include:
- 18 of 21 full committee ranking members and 72 subcommittee ranking members;
- Leadership members including Assistant Democratic Leader Jim Clyburn; Democratic Congressional Campaign Committee Chair Steve Israel; Steering and Policy Committee Co-Chairs Rosa DeLauro and Rob Andrews; and 35 of 48 Democratic Steering and Policy Committee members;
- 19 of the short list of Democrats who voted for the 2011 U.S.-Korea Free Trade Agreement;
- 26 of the 51 members of the New Democrat Coalition, and 8 of the 14 members of the Blue Dog Coalition; and
- 36 of 42 House members of the Congressional Black Caucus, and 13 of 19 House members of the Congressional Hispanic Caucus
On Tuesday, 25 House Republicans members announced their opposition to Fast Track, and most Democratic Ways and Means Committee members joined a letter noting that the old Fast Track process enjoys little support. Even prominent supporters of past trade agreements who did not sign these letters recently have voiced their opposition to Fast Track.
“These letters make clear that Fast Track is history,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “When Nixon cooked up this scheme 40 years ago, trade pacts covered only tariffs. Now, deals like the TPP could rewrite wide swaths of U.S. policy, currently under the control of Congress, from food safety and financial regulation to Buy American procurement to energy policy.”
Fast Track delegated to the executive branch authorities the Constitution explicitly gives Congress. Fast Track let the executive branch unilaterally select trade partners, set agreements’ terms and sign them before Congress even voted. Then the executive branch could write implementing legislation, skirting committee review and amendment. This legislation could be directly submitted for votes, with congressional leaders’ control of House and Senate floor schedules overridden. Votes could be forced within 60 days in the House and an additional 30 days in the Senate. Normal voting rules were waived, with all amendments banned and only 20 hours of debate. Unlike all past trade authorities, which covered only tariffs, Fast Track allowed the executive branch to “diplomatically legislate,” using trade agreements to set policy on non-trade matters.
“Polls show that opposition to more-of-the same trade deals is one of the few issues that uniteAmericans across party lines,” said Wallach. “It’s not really surprising that there is bipartisan congressional opposition to Fast Track.”
Fast Track has been used only 16 times, although hundreds of U.S. trade agreements have been implemented since the mid-1970s. These have included the most controversial pacts such as the North American Free Trade Agreement (NAFTA) and the agreement that created the World Trade Organization (WTO). The U.S. has a large and growing trade deficit with countries involved in past U.S. fast-tracked Free Trade Agreements (FTAs). U.S. export growth is 38 percent higher with countries with which we do not have FTAs relative to those with which we have FTAs.
Also fueling congressional opposition to Fast Track is the abysmal outcome of the Obama administration’s only major trade pact to date, the U.S.-Korea FTA, which is the template for the TPP. In contrast to Obama’s promises that the Korea deal would boost exports, in the agreement’s first year, U.S. exports to Korea fell 10 percent, imports from Korea rose and the U.S. trade deficit with Korea exploded by 37 percent. This equates to a net loss of approximately 40,000 U.S. jobs.
Opposition to Fast Track has been growing in Congress since the time of NAFTA and the WTO. The 1991 Fast Track grant passed in the House by a 27-vote margin. President Bill Clinton never was able to obtain Fast Track again after that grant expired. Clinton had Fast Track authority for only two of his eight years in office, and in 1998, the House explicitly rejected his request, with 171 Democratic and 71 GOP opposing Fast Track. President George W. Bush then spent two years and enormous political capital to pass Fast Track in 2002 by two votes. That delegation of Fast Track expired in 2007, and Congress rebuffed Bush’s request for an extension.
In 2008, candidate Obama promised to replace Fast Track with a more inclusive process. Historically, a new system of trade authority delegation has been created every few decades since 1890. But in recent months, Obama has ramped up his demand that Congress once again cede its constitutional trade authority via Fast Track.
“Fast Track is outdated 1970s technology being applied to 21st century realities, which is causing serious damage,” said Wallach. “It enables agreements that offshore U.S. jobs and expose our consumer and environmental laws to attack and rollback.”
Already a decade ago, one of Congress’ most ardent free traders, the late U.S. Rep. Robert Matsui (D-Calif.), who led the Democratic House effort to pass NAFTA, described why Fast Track was unacceptable:
“Trade is no longer primarily about tariffs and quotas. It’s about changing domestic laws. The constitutional authority to make law is at the heart of our role as a Congress and of our sovereignty as a nation. When international trade negotiators sit down to hammer out agreements, they are talking about harmonizing ‘non-tariff barriers to trade’ that may include everything from antitrust laws to food safety. I believe the President and the USTR should be able to negotiate trade deals as efficiently as possible … But that does not mean that Congress must concede to the Executive Branch its constitutional authority over foreign commerce and domestic law without adequate assurances that Congress will be an active participant in the process. Congress should be a partner, not a mere spectator or occasional consultant to the process. … Think about what may be bargained away at the negotiating table: our own domestic environmental protections ... food safety laws ... competition policies. That’s the air we breathe, the food our children eat, and the way Americans do business… The nature of trade has changed, and Fast Track authority must change with it. I ardently believe in the principles of free trade. But I will not put my constitutional authority over domestic law and my responsibility to my own constituents on a fast track to the executive branch.” (Rep. Robert Matsui (D-Calif.), Congressional Record, 147, 12/6/01, at H9025.
Prior to Fast Track and starting with Franklin Roosevelt’s presidency, Congress gave Tariff Proclamation Authority to presidents. But it covered only tariffs, not the broad subject matter included under Fast Track. The mechanism allowed the executive branch to implement reciprocal tariff cuts only within bounds set by Congress. Prior to that, trade agreements were often approved as treaties by the Senate, with both chambers later also required to pass implementing legislation. Public Citizen’s 2013 book, “The Rise and Fall of Fast Track Trade Authority,” provides an in-depth history of U.S. trade authority.
Leaked Documents Reveal Obama Administration Push for Internet Freedom Limits, Terms That Raise Drug Prices in Closed-Door 'Trade' Talks
U.S. Demands in Trans-Pacific Partnership Agreement Text, Published Today by WikiLeaks, Contradict Obama Policy and Public Opinion at Home and Abroad
Secret documents published today by WikiLeaks and analyzed by Public Citizen reveal that the Obama administration is demanding terms that would limit Internet freedom and access to lifesaving medicines throughout the Asia-Pacific region and bind Americans to the same bad rules, belying the administration’s stated commitments to reduce health care costs and advance free expression online, Public Citizen said today.
WikiLeaks published the complete draft of the Intellectual Property chapter for the Trans-Pacific Partnership (TPP), a proposed international commercial pact between the United States and 11 Asian and Latin American countries. Although talks started in 2008, this is the first access the public and press have had to this text. The text identifies which countries support which terms. The administration has refused to make draft TPP text public, despite announcing intentions to sign the deal by year’s end. Signatory nations’ laws would be required to conform to TPP terms.
The leak shows the United States seeking to impose the most extreme demands of Big Pharma and Hollywood, Public Citizen said, despite the express and frequently universal opposition of U.S. trade partners. Concerns raised by TPP negotiating partners and many civic groups worldwide regarding TPP undermining access to affordable medicines, the Internet and even textbooks have resulted in a deadlock over the TPP Intellectual Property Chapter, leading to an impasse in the TPP talks, Public Citizen said.
“The Obama administration’s proposals are the worst – the most damaging for health – we have seen in a U.S. trade agreement to date. The Obama administration has backtracked from even the modest health considerations adopted under the Bush administration,” said Peter Maybarduk, director of Public Citizen’s global access to medicines program. “The Obama administration’s shameful bullying on behalf of the giant drug companies would lead to preventable suffering and death in Asia-Pacific countries. And soon the administration is expected to propose additional TPP terms that would lock Americans into high prices for cancer drugs for years to come.”
Previously, some elements of U.S. proposals for the Intellectual Property Chapter of the TPP had been leaked in 2011 and 2012. This leak is the first of a complete chapter revealing all countries’ positions. There are more than 100 unresolved issues in the TPP Intellectual Property chapter. Even the wording of many footnotes is in dispute; one footnote negotiators agree on suggests they keep working out their differences over the wording of the other footnotes. The other 28 draft TPP chapters remain shrouded in secrecy.
Last week, the AARP and major consumer groups wrote to the Obama administration to express their “deep concern” that U.S. proposals for the TPP would “limit the ability of states and the federal government to moderate escalating prescription drug, biologic drug and medical device costs in public programs,” and contradict cost-cutting plans for biotech medicines in the White House budget.
Other U.S.-demanded measures for the TPP would empower the tobacco giants to sue governments before foreign tribunals to demand taxpayer compensation for their health regulations and have been widely criticized. “This supposed trade negotiation has devolved into a secretive rulemaking against public health, on behalf of Big Pharma and Big Tobacco,” said Maybarduk.
“It is clear from the text obtained by WikiLeaks that the U.S. government is isolated and has lost this debate,” Maybarduk said. “Our partners don’t want to trade away their people’s health. Americans don’t want these measures either. Nevertheless, the Obama administration – on behalf of Big Pharma and big movie studios – now is trying to accomplish through pressure what it could not through persuasion.”
“The WikiLeaks text also features Hollywood and recording industry-inspired proposals – think about the SOPA debacle – to limit Internet freedom and access to educational materials, to force Internet providers to act as copyright enforcers and to cut off people’s Internet access,” said Burcu Kilic, an intellectual property lawyer with Public Citizen. “These proposals are deeply unpopular worldwide and have led to a negotiation stalemate.”
“Given how much text remains disputed, the negotiation will be very difficult to conclude,” said Maybarduk. “Much more forward-looking proposals have been advanced by the other parties, but unless the U.S drops its out-there-alone demands, there may be no deal at all.”
“We understand that the only consideration the Obama administration plans to propose for access to affordable generic medicines is a very weak form of differential treatment for developing countries,” said Maybarduk.
The text obtained by WikiLeaks is available at wikileaks.org/tpp. Analysis of the leaked text is available at www.citizen.org/access.
More information about the Trans-Pacific Partnership negotiations is available at www.citizen.org/tpp.
Surprise! The second round of negotiations for the massive Trans-Atlantic Free Trade Agreement (TAFTA) won’t be happening in Washington, DC in December as planned. It will be happening in six days. In Belgium.
That was the last-minute announcement in an email sent by the Office of the U.S. Trade Representative (USTR) at 9:40pm last night.
But don’t worry. If you are someone who is concerned about what the deal's proposed deregulatory terms could mean for the safety of your food, the cleanliness of your air, the stability of your economy, or the privacy of your data, you can still air such concerns with TAFTA negotiators.
That is, so long as you can get yourself to Brussels by next week.
USTR’s email yesterday invited “stakeholders” to a “briefing session” next Friday where “non-governmental organizations, consumer groups, trade unions, professional organizations, business and other civil society organizations will have the opportunity to exchange views with U.S. and EU chief negotiators.” It just happens to be taking place on the other side of the Atlantic Ocean.
This may well be the most expensive “stakeholder engagement” opportunity presented by the Obama administration for one of its sweeping “trade” deals. At current prices, the cheapest last-minute flight to “exchange views” with TAFTA negotiators in Brussels would set you back $1977. That may not be a problem for the approximately 600 corporate trade “advisors” who are already deeply involved in helping USTR craft TAFTA negotiating positions. For the rest of us, it’s a bit like getting an email invitation to your friend’s destination wedding in Cancun a week before the ceremony (psst...I don’t really want you to come).
Unfortunately, such barriers to public oversight have become all too common at USTR. In an announcement USTR sent last month to notify press outlets of upcoming events, entitled “Press Week Ahead,” not a single event was actually open to the press. The seven posted events ranged from closed-door Trans-Pacific Partnership (TPP) negotiations that threaten to drive up the cost of medicines, to a corporations-only discussion with USTR about a new pact with China that would empower Chinese firms to challenge U.S. domestic policies, to a private USTR meeting with the CEO of BMW. All seven events were marked “Closed Press.”
What do our trade negotiators have to hide? If USTR actually wants to ensure that sweeping deals like TAFTA reflect the interests of U.S. consumers, why give them a week’s notice to fly to Brussels to express those interests? Or is it possible that the plans being hatched for TAFTA, the TPP, and other pacts actually threaten the public interest, and that hiding this reality requires inaccessible negotiations, secretive texts, and “closed” events?
It’s time to shine the light of public scrutiny on shady “trade” deals that implicate everything from job availability to GMO labels to Internet freedom. The texts must be public. The events must be open. And the opportunities to engage must not require a $2000 plane ticket.
When negotiations on the proposed Trans-Atlantic Free Trade Agreement (TAFTA) took a hiatus during the government shutdown, corporate groups urged the Obama administration to push forward with the sweeping deal. U.S. and EU officials now plan to restart closed-door TAFTA talks in Washington in December.
What will they be talking about? Given that tariffs between the U.S. and the EU are already low, TAFTA proponents readily acknowledge that the agreement is not really about trade, but rather the rewriting of regulatory policies so as to remove “non-tariff barriers” –- a corporate code name for environmental, health, and consumer safeguards on which we all depend.
What particular safeguards could be dismantled via these corporate-advised "trade" negotiations? The European organization Seattle to Brussels Network has released a worrisome report that outlines some of the public priorities that corporations on both sides of the Atlantic have asked to be placed on the TAFTA chopping block:
1. Clean air and water:
The report notes that industry groups on both sides of the Atlantic have been calling for TAFTA to "harmonize" U.S. and EU environmental rules -- that is, replacing existing domestic environmental protections with ones negotiated to be more convenient to business. Corporations have been taking particular aim at the EU's climate stability policies, pushing for a downward "harmonization" with U.S. standards via TAFTA. The report also explains how TAFTA could encourage a surge in the dangerous process of fracking in the U.S. while chilling green jobs programs.
2. Food safety:
So-called “non-tariff barriers” also include food labeling and sanitary standards that keep consumers safe. In Europe, bans on genetically-modified food, hormone-treated beef and pork, and chlorine-sterilized chicken could be weakened. In the U.S., basic dairy standards and restrictions on "mad cow" beef could be threatened.
3. Internet freedom:
If a chapter on "intellectual property rights" is included in the deal, TAFTA could serve as a backdoor way for business groups to quietly push through components of the controversial Stop Online Piracy Act (SOPA) and Anti-Counterfeiting Trade Agreement (ACTA), both of which were defeated due to intense public protest. The report notes that the leaked European Commission mandate for TAFTA, which sets a blueprint for the agreement, indeed proposes the inclusion of "intellectual property" provisions, opening the door to SOPA/ACTA-like rules.
4. Chemical safeguards:
According to the report, there are about 30,000 chemicals associated with cancer, infertility, diabetes, and obesity that have to undergo much stricter testing requirements in the EU than in the U.S. "If the EU caves in under industry pressure," states the report, "a likely casualty of [TAFTA] will be REACH – the EU’s iconic safe chemicals law that many consumer, health and environmental groups in the US have tried to replicate." Such an outcome would not only undermine the EU's stronger chemical safety standards, but make it far more difficult to improve the weaker U.S. standards.
5. Wall Street reform:
As regulators draft rules for big banks to prevent the sort of risk-taking that led to the financial crisis, the banks themselves are pushing for TAFTA to restrict such reregulatory efforts. The report notes that European banks have openly called for TAFTA to be used to roll back key components of U.S. Wall Street reforms. In response, EU TAFTA negotiators have pushed for financial regulation to be included in TAFTA's deregulatory framework, posing a threat to financial stability.
And that’s only a sampling of the issues at stake under TAFTA. To learn more, check out Seattle to Brussels’ full report, “A Brave New Transatlantic Partnership.”
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Should an international tribunal of three private attorneys, sitting outside of any domestic legal system, have the power to overrule domestic courts?
That’s the question addressed in the recent analysis, “Investment Agreements versus the Rule of Law?,” published on UNCTAD’s Investment Policy Hub by Todd Tucker, Gates Scholar at the University of Cambridge’s Centre of Development Studies. The piece highlights the little-known but creeping practice of corporations asking foreign tribunals to second-guess domestic court decisions not in their favor and to order taxpayer payment as compensation.
These tribunals are the product of the “investor-state” system, a little-known creation of “trade” and investment deals that empowers foreign corporations to skirt domestic courts and directly challenge governments before extrajudicial tribunals for policies and decisions that they claim as undermining “future expected profits.” Under this extreme system, foreign corporations have challenged toxics bans, land-use rules, regulatory permits, water and timber policies, medicine patent policies, pollution clean ups, climate and energy laws, and other public interest polices.
As if undermining a government’s public interest laws and regulations was not enough, foreign investors are increasingly using the investor-state system to challenge court judgments, undermining the principles of legal certainty, state sovereignty, and rule of law more generally. While domestic courts often employ safeguards, such as the principle of judicial review, judicial independence and transparency in their decision-making, these safeguards are notably absent in investor-state arbitrations, where lawyers who represent the investors take turns as ostensibly “impartial” arbitrators, interpretations of international law are regularly inconsistent and erroneous, and decisions often cannot be appealed.
In his compelling piece, Mr. Tucker cites examples from three investor-state case decisions issued in the last several years, Mr. Franck Charles Arif v. Republic of Moldova and two iterations of Chevron v. Ecuador, in which the tribunals found Moldova’s and Ecuador’s domestic court decisions to be in violation of these countries’ obligations to foreign investors under Bilateral Investment Treaties (BITs).
In the Moldovan case, Moldovan airport officials gave Franck Arif, a French national, an exclusive concession to operate tax-free shops at an airport. When his competitors challenged this in court, Moldovan courts found that the non-competitive concession was illegal. In response, Franck Arif launched an investor-state case against Moldova under the France-Moldova BIT, arguing that the courts’ ruling violated the “fair and equitable treatment” provision in the BIT – the vague obligation that inventive tribunals have interpreted as corporations’ “right” to a legal framework that conforms to their “expectations.” The tribunal first conceded that the Moldovan courts had “…applied Moldovan law legitimately and in good faith in the proceedings commenced by Claimant’s competitors.” Nevertheless, the tribunal still decided that the Moldovan courts’ rulings conflicted with the airport officials’ granting of the non-competitive concession, and therefore constituted a violation of the vague “fair and equitable treatment” obligation as a “breach” of Mr. Arif’s “expectations.”
In one of the Chevron v. Ecuador cases, a three-person tribunal last year ordered Ecuador’s government to interfere in the operations of its independent court system on behalf of Chevron by suspending enforcement of a historic $18 billion judgment against the oil corporation for mass contamination of the Amazonian rain forest. The ruling against Chevron, rendered by Ecuador’s courts, was the result of 18 years of litigation in both the U.S. and Ecuadorian legal systems. Ecuador had explained to the panel that compliance with any order to suspend enforcement of the ruling would violate the separation of powers enshrined in the country’s Constitution – as in the United States, Ecuador’s executive branch is constitutionally prohibited from interfering with the independent judiciary. Undeterred, the tribunal proceeded to order Ecuador “to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment [against Chevron].”
This dangerous trend of private three-person tribunals assuming the authority to contravene domestic court decisions at the behest of multinational corporations should raise the ire of those who support the independence of courts, the sovereignty of nations, the rule of law, or even the core democratic notion that a system of legal decision-making should be accountable to those who will live with the decisions. Now the Trans-Atlantic Free Trade Agreement (TAFTA) and the Trans-Pacific Partnership (TPP) threaten to expand the investor-state system across two oceans, subjecting domestic court decisions to a new wave of second-guessing by unaccountable tribunals. Now is the time to halt the advance of this extreme system – to restore the authority of our courts and the principles of our democracy.
When most people hear about a political maneuver that empowered corporate-advised executive branch negotiators to skirt Congress and rewrite policies that affect our daily lives, they don’t say, “Well, that sounds like something worth defending.” But that improbable response is exactly the position being taken by corporate defendants of Fast Track who have announced a desperate push to revive the undemocratic maneuver by the end of this year.
Fast Track was a Nixon-crafted ploy, used to railroad through Congress unpopular “trade” deals that have empowered foreign corporations to attack domestic health and environmental policies, enabled pharmaceutical firms to raise medicine prices, and equipped banks with a tool to roll back financial regulation. Under the U.S. Constitution, Congress is supposed to write the laws and set trade policy. For 200 years, these key checks and balances helped ensure that no one branch of government had too much power. But that changed with Fast Track.
Fast Track delegated away Congress’ constitutional authority over trade pacts, empowering the executive branch to negotiate and sign an agreement before Congress approved the contents. Then it allowed the executive branch to write legislation that could not be amended and to force a limited-debate vote on the sealed deal within 90 days.
As unpopular deals like the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) were rammed through Congress under Fast Track, mounting opposition to the maneuver grew strong enough to force Fast Track’s corporate proponents to attempt a rebranding (cynically redubbed as “Trade Promotion Authority”).
It didn’t work. Fast Track remained polemical and Congress finally allowed it to die in 2007.
Now Fast Track’s corporate proponents are trying hard to revive it, because they’d like to shove another unpopular “free trade” agreement (FTA) through Congress. Administration officials have admitted that Fast Track’s democracy-defying procedure will be essential to usher into law the controversial Trans-Pacific Partnership (TPP) – a sweeping U.S. pact under negotiation with 11 Pacific Rim countries that would impose new rules on daily realities ranging from access to medicines and food safety to Internet freedom and Wall Street reform.
One of the most recent attempts to revive Fast Track is a report put out by the Third Way think tank – a glossy 10-pager that undertakes the unenviable task of defending Fast Track. To do so, the think tank employs a series of claims that are as indefensible as Fast Track itself. Here’s a sampling.
Claim: We must revive Fast Track to push through Congress the controversial TPP because the deal will boost U.S. exports (even to non-TPP countries).
- Exports have actually suffered under FTAs, not gained. U.S. goods exports to Korea fell 10 percent, and the U.S. trade deficit with Korea climbed 37 percent, in the first year of the U.S.-Korea FTA, a template for the TPP that took effect in March 2012. Overall, export growth has been lackluster under FTAs. Growth of U.S. exports to countries that are not FTA partners has exceeded U.S. export growth to countries that are FTA partners by 38 percent over the last decade. The tired and counterfactual promise of FTAs leading to export growth does not gain truth via repetition.
- The report hopes for big export gains…to non-TPP countries. The report touts a potential export growth of $600 billion to “Asia-Pacific markets” if the U.S. were to recapture its historical export share in the region. Great. But not relevant to the TPP. The $600 billion projection is based on a hypothetical rise in exports to 12 countries. Seven of them are not in the TPP. Two more are in the TPP but already have FTAs with the United States. That leaves three countries for which the TPP could even plausibly have a bearing on the question of how to increase exports (a question that, per the last point, deserves the answer: “not through another FTA”). Yet, the report is content to use this hypothesized export growth “opportunity” that is 75% patently irrelevant to the TPP as the reason why the TPP should be railroaded through Congress.
- The TPP is not really about trade. Only five of the TPP’s 29 proposed chapters actually pertain to traditional trade matters. The rest would set new rules affecting everything from food safety and financial markets to medicine prices and Internet freedom. The reason for wide-ranging public and congressional opposition to the TPP is because people don’t want more expensive healthcare, unsafe food, a rollback of Wall Street reform, corporate attacks on environmental safeguards, etc. While there is no observed correlation between enacting an FTA and seeing exports rise, there is a correlation between enacting one and seeing public interest safeguards fall.
Claim: Though Fast Track empowered the executive branch to unilaterally negotiate and sign FTAs, Congress could still influence the content of the deals by naming non-binding “negotiating objectives.”
- Congressional “negotiating objectives” have been historically ignored. The 1988 version of Fast Track, used to push NAFTA through Congress, included a negotiating objective that Fast Tracked deals should “promote respect for worker rights.” But NAFTA did not even include a labor chapter, much less enforceable labor standards (after the actual text was signed, President Clinton appended a “side agreement” on labor with lackluster enforceability). By contrast, the last version of Fast Track, passed by three votes in 2002, actually included limits on labor rights obligations. But in an inverse demonstration of the inefficacy of negotiating objectives, congressional Republicans found themselves facing Fast Tracked votes on trade agreements with Peru, Korea, Colombia and Panama that included stronger labor standards than in any past U.S. trade agreement.
- Fast Track gave Congress no opportunity to certify compliance with negotiating objectives. Under Fast Track, Congress had no power to stop the President from signing FTAs that failed to meet their explicitly stated negotiating objectives. If the executive branch believed negotiating objectives had been met but members of Congress disagreed, the President could still sign the deal and send it to Congress for a rushed, up-or-down vote, giving them zero chance to change the objective-defying content of the FTA text.
- A Fast Track replacement is necessary to give teeth to Congress’ negotiating objectives.A new, more democratic, and constitutional trade negotiating system would grant Congress the power to vote on the contents of a trade deal before – not after – the President could seal the deal with a signature. This 21st-century trade authority would grant Congress leverage to ensure that negotiating objectives were met before a pact could be finalized. By contrast, the Third Way advocates for an old way – that congressional negotiating objectives should be unenforceable statements of aspiration, and that Congress’ primary role should be deciding whether to rubber-stamp what the President has already signed.
Claim: Fast Track gave Congress plenty of “authority over trade policy” by allowing members of Congress to vet deals with an ex-post, no-amendments, limited-debate, expedited vote.
- Fast Track denied Congress the authority to shape pacts that implicated wide swaths of congressional policymaking. The Third Way posits that Fast Track’s binding of congressional influence over the content of sweeping “trade” pacts is acceptable because an earlier version of delegated trade authority, the 1934 Reciprocal Trade Agreements Act (RTAA), did not even grant Congress an after-the-fact vote on presidential changes to tariff levels. But while the RTAA was used for narrow pacts concerned simply with cutting tariffs, today’s “trade” deals are 700-page tomes with binding rules on financial regulation, energy policy, immigration, procurement, patent and copyright law, and food and product safety standards. For the first time, Fast Track handed over to the President the power to sign an agreement, without congressional approval, to which such a panoply of non-tariff public interest policies would have to conform. Fast Track’s allowance of a restricted, ex-post congressional vote on such sweeping deals hardly offset its violation of Congress’ constitutional responsibility to shape both trade and non-trade policies.
- Notifying members of Congress that a pact is about to be signed without their consent does not give them “authority over trade policy.” The Third Way report touts Fast Track’s requirement for the President to provide notice to Congress 90 days before unilaterally signing an FTA. But this procedural nicety did nothing to alter the fact that Congress had no means of ensuring that the FTA about to be signed actually met congressional goals. Members of Congress could balk at elements of the deal that were unfair or that would undermine public interests, but the President could (and repeatedly did) go ahead and sign the deal so long as he told Congress he was going to do so.
- Marginal attempts to limit Fast Track’s power grab have failed to do so. The report also claims that a “procedural disapproval resolution” provision in the 2002 Fast Track honored Congress’ trade authority by allowing Congress to deny a request from the President to extend Fast Track. First, this provision did nothing to stop President George W. Bush from signing highly controversial FTAs, such as the Central America Free Trade Agreement (CAFTA), under Fast Track’s extraordinary terms before an extension of Fast Track authority became necessary. Second, when Bush did request an extension of Fast Track in 2005, a congressional attempt to deny the extension through a procedural disapproval resolution soon failed on a Fast Track-imposed hurdle. Proposed by Senator Dorgan (D-NY), the resolution never made it out of the Senate Finance Committee. The failure of such marginal tweaks to Fast Track’s Congress-trumping rules only bolsters the case for replacing Fast Track altogether with a new process for negotiating and implementing trade agreements that restores Congress’ constitutional role.
Claim: Fast Track is necessary to negotiate trade deals.
- Literally hundreds of trade deals have been negotiated without Fast Track. Fast Track was actually only used 16 times in its decades-long history, typically for the pacts that were the most controversial and most expansive in binding non-trade policies (e.g. NAFTA, CAFTA, launch of the WTO). For agreements actually focused on traditional trade matters, numerous countries have in fact allocated resources to negotiating such pacts with the United States without application of Fast Track’s extraordinary procedures. Third Way’s disingenuous assertion to the contrary ignores hundreds of enacted agreements listed by the Office of the U.S. Trade Representative. For example, President Clinton only had Fast Track authority for two of his eight years in office and only used it twice. Yet, his administration boasted the enactment of hundreds of trade and commercial agreements with diverse countries. As former Clinton administration U.S. Trade Representative Charlene Barshefsky said in 2000, “if you look at our record on trade since 1995, I don’t think the lack of Fast Track impeded our ability to achieve our major trade goals.”
Claim: Fast Track has not fostered “secret trade deals made in the dark.”
- The original Fast Track gave a club of official corporate trade “advisors” privileged access to trade texts and negotiators. This trade advisory system, established in Nixon’s initial Fast Track law, remains in effect. Today over 600 official advisors, comprised mostly of corporate representatives, get access to FTA negotiating texts that are denied to the public. Third Way misleadingly states that these privileged advisors “run the gamut from advocacy groups—including the AFL-CIO, the Environmental Defense Fund, Oceana, Consumers Union, and the National Farmers Union—to large U.S. companies like Cargill, General Electric, and Kraft Food.” What they do not state is that “advocacy groups” constitute a tiny portion of the advisors while about nine out of ten advisors explicitly represent industry. In fact, General Electric alone has twice as many representatives in the advisory system as all consumer advocacy groups combined.
- Perfunctory congressional consultations are small consolation for a deal crafted behind closed doors. Third Way touts the fact that Fast Track required the administration to engage in some degree of consultations with Congress. But administration-delivered briefings to Congress on a deal do not constitute congressional guidance of that deal, particularly if congressional negotiating objectives can be summarily ignored in the final text. Third Way also notes that the Obama administration has consulted Congress on the TPP (though the pact is not being negotiated under Fast Track rules). They do not mention that for more than three years of closed-door TPP negotiations, the administration did not even allow members of Congress to see the TPP negotiating text. Even since the administration started allowing members of Congress to get limited peeks at the TPP text (without being allowed to take substantive notes, have technical staff present, or publicly discuss what they read), members have said that congressional consultation on the deal has been insufficient. If Fast Track’s extreme rules were to be applied to the TPP, Congress’ ability to influence the deal would be reduced even further.
Amidst all of the baseless defenses of Fast Track, Third Way does make one less objectionable statement: that negotiations for the TPP and the Trans-Atlantic Free Trade Agreement (TAFTA) “are proceeding under the assumption that [Fast Track] will be in place by the time negotiations finish. If Congress does not renew [Fast Track], it is unlikely that these important negotiations will finish at all.”
There’s little doubt that Fast Track’s underhanded treatment is indeed necessary to push through polemical deals like the TPP and TAFTA that pose sincere threats to consumers, workers, and the environment. As opposition to these deals mounts in Congress and among the general public, Fast Track’s legislative luge run becomes all the more necessary to slide the unpopular pacts through Congress, and the corporate push to revive Fast Track becomes all the more critical to halt.
The New York Times has just reported that European government officials have been taking pains to entertain corporations' deregulatory demands for the Trans-Atlantic Free Trade Agreement (TAFTA). The European Commission appears to have mistakenly released minutes of confidential government meetings held with U.S. and European corporations to see how their priorities could shape the proposed U.S.-EU deal. This may not come as a shock to those in the U.S. who know that the Obama administration has been regularly soliciting private advice on both TAFTA and the Trans-Pacific Partnership (TPP) from about 600 corporate trade "advisors" who are granted privileged access to negotiators and secretive trade texts.
But the just-released minutes of the meetings between EU officials and U.S. and European corporate heads (among other documents unearthed by Corporate Europe Observatory and the New York Times) reveal the incredible extent to which corporations are pushing for TAFTA to rewrite health, environmental, financial and other safeguards to be more convenient to industry interests. Here are a few of the sweeping TAFTA demands explicitly expressed by the corporations of the U.S. Chamber of Commerce and BusinessEurope.
- Corporations should get to write their own regulations: The U.S. Chamber of Commerce and BusinessEurope asked U.S. and EU officials to use TAFTA to establish a process for future policy development in which industry “stakeholders” on both sides of the Atlantic would be “at the table with regulators to essentially co-write regulation.” That is, the rules intended to keep banks from gambling with our money, to keep energy corporations from polluting our air, and to keep the food industry from contaminating our meals...should be written by the corporations themselves.
- Rules that cater to multinational corporations should be considered as an alternative to "domestic-oriented" safeguards: The corporate conglomerates asked the EU and U.S. government officials to establish in TAFTA a new methodology for second-guessing new consumer and environmental safeguards, pausing before enactment of the new protections to ask whether they are sufficiently convenient to trans-Atlantic corporations. In particular, they asked that regulators consider the possible "benefits" of scrapping proposed "domestic-oriented regulation" in favor of a "transatlantic regulatory alternative." Even the European Commission noted that this "would seem problematic, as most regulators will be mandated to achieve certain objectives in view of their domestic market and its citizens." Ditching the core democratic tenet that policies should be made on behalf of the electorate? Yes, that would be problematic.
- Foreign products that do not meet domestic standards should be allowed if foreign regulators mean well: The U.S. Chamber of Commerce has been pushing for TAFTA to include obligations for European products and services that do not meet U.S. standards to be allowed in the U.S. under a process called “equivalence" -- in which EU regulations, though different, would be deemed roughly "equivalent" to U.S. protections (the same would apply for U.S. products in the EU). Now the unearthed minutes of the private meeting between European officials and corporate representatives reveal that the Chamber would like TAFTA to require such automatic U.S. acceptance of European products and services on the mere basis that both sides' vaguely-worded regulatory objectives sound similar. In the private meeting minutes, the European Commission notes, "Chamber pushing strongly for 'top'-down, i.e. ‘if general objectives’ of regulation are the same we shall consider the regulations as equivalent without a thorough assessment." Such a reckless approach to consumer safeguards could threaten everything from the safety of milk to the stability of banks.
These unabashed corporate demands, and the European government's careful consideration of them, reveal what's at stake in TAFTA. The safety standards on which we rely daily for our food, the energy policies needed to avert climate catastrophe, and the Wall Street reforms designed to prevent another financial crisis--these are policies that should be determined in open, democratic venues where we have a say. Not in backroom discussions between government officials and corporate executives. Not under the guise of a "trade" deal.
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