Senate Majority Leader Mitch McConnell has scheduled the voting process for trade promotion authority, commonly known as “fast track,” to begin as early as Tuesday. If passed, fast track prohibits the Congress from amending trade agreements no matter what problems might show up, requires these agreements to be voted on within 90 days, limits the debate Congress is allowed and prohibits filibusters.
Passing fast track will essentially pre-approve the secret Trans-Pacific Partnership (TPP) “trade” agreement before the public gets a chance to know what is in it, as well as future trade deals regardless of who is president or what the rigged, corporate-dominated negotiating process produces.
With a vote coming as soon as Tuesday, presidential candidate Hillary Clinton has not yet spoken out for or against fast track.
President Obama, speaking to the Organizing for America (OFA) Summit Thursday, said that people who have concerns about the Fast Track Trade Promotion Authority process and the still-secret Trans-Pacific Partnership (TPP) “don’t know what they’re talking about,” and compared them to conservatives like Sarah Palin, who claimed that the Obamacare health care reform contained “death panels.”
Then, on a Friday conference call with reporters the President complained about people like Elizabeth Warren and Bernie Sanders saying, “Every single one of the critics who I hear saying, ‘this is a secret deal,’ or send out emails to their fundraising base saying they’re working to prevent this secret deal, can walk over today and read the text of the agreement. There’s nothing secret about it.”
The “fast track” trade promotion authority bill has been introduced in the Senate. Article 1, Section 8 of the Constitution says, “The Congress shall have power to … regulate commerce with foreign nations.” But under fast track, Congress relinquishes that power and agrees to pass trade bills brought to them by the executive branch in a very short time frame with little debate and without making any changes should any problems present themselves.
Though it was announced that this year’s fast track bill was the result of a “deal” between Sens. Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah) the 2015 bill is nearly identical to the 2014 bill that died in Congress without support for a vote. See this side-by-side comparison from Rep. Sander Levin of the House Ways and Means Committee. It is unclear from this comparison why the “negotiations” between Hatch and Wyden took so long, and what Wyden got that enabled him to put his name on it, enabling the bill to be sold as “bipartisan.”
Fast Track Sets Aside Normal Procedure
Congress does not set aside normal procedure, debate, the ability to fix problems that turn up and agree to vote within 90 days except for trade agreements – even though trade agreements have now proven to have such a tremendous and often detrimental effect on our economy, jobs, wages and inequality. Where did the idea to do this come from? According to Public Citizen, this unusual procedure was “initially created by President Richard Nixon to get around public debate and congressional oversight.”
A key section of the secret Trans-Pacific Partnership (TPP) trade agreement has been leaked to the public. The New York Times has a major story on the contents of the leaked chapter and it’s as bad as many of us feared.
Now we know why the corporations and the Obama administration want TPP, a huge “trade” agreement being negotiated between the United States and 11 other countries, kept secret from the public until it’s too late to stop it.
A newly launched public relations campaign in support of trade promotion authority, a.k.a. “fast track,” and the Trans-Pacific Partnership (TPP) calls itself “the Progressive Coalition for American Jobs.” At its foundation is a set of misleading (at best) claims that begin with a four-Pinocchio whopper.
It is unclear who is in the coalition, why they call themselves “progressive” when progressives are opposed to TPP and fast track, and flat-out wrong that the trade agreement is going to produce “American jobs.”
American Jobs? “Four Pinocchios”
The “Progressive Coalition for American Jobs” sent out a press release earlier this week promising that the TPP will “support hundreds of thousands of new jobs in the United States.” This is the same promise that Clinton used to sell NAFTA, the North American Free Trade Agreement, and we know how that turned out. (Hint: lost jobs, lost wages, lost factories, lost industries, devastated regions of the country, increased trade deficits and a few CEOs and Wall Street types made vastly richer.) (See also, Obama’s Trans-Pacific Partnership Promises Echo Clinton’s On NAFTA.)
In December the trade deficit in goods and services made its largest percentage jump in more than five years and the 2014 yearly total is its highest since 2012 – which begs the question: Why is the Obama administration doubling down on the failed trade policies of its predecessors?
The U.S. has run massive trade deficits for decades since the Wall Street-driven “free trade” ideology came to dominate. “Free trade” de-industrialization has cost our country millions of jobs, tens of thousands of factories and entire industries. It has pushed down wages and greatly increased inequality. Now the Obama administration is doubling down, pushing a vast “NAFTA-style” trade agreement and asking Congress to pass a rigged “fast track” process to pre-approve it.
The U.S. Census Bureau reported Thursday that the December trade deficit jumped $6.8 billion (17.1 percent) to $46.6 billion, the largest since November 2012 and the biggest percentage increase since July 2009.
Exports fell $1.5 billion to $194.9 billion (with a chunk of our exports being oil and gas and other raw materials, not manufactured, finished goods). Imports rose $5.3 billion to $241.4 billion.
For all of 2014, the trade deficit increased $28.7 billion (6 percent) to $505 billion. There was a $6.5 billion (2.9 percent) increase in the services trade surplus and a $35.2 billion (5.0 percent) increase in the goods trade deficit. Note that exports increased, but imports increased more. Exports were $2,345.4 billion, up $65.2 billion or 2.9 percent. Imports were $2,850.5 billion, up $93.9 billion or 3.4 percent.
The resulting trade deficit subtracted 1.02 percentage point from last year’s GDP growth and is causing the government to revise growth forecasts downward.
The Economic Policy Institute’s Robert Scott pointed out that “The U.S. trade deficit in manufactured products increased to $524.2 billion in 2014, an increase of $76.8 billion (17.2 percent) from 2013. … Growing trade deficits in manufactured products have been a primary driver in the displacement of U.S. manufacturing jobs since 2000.”
The 2014 trade deficit with China increased by $23.9 billion to $342.6 billion. Exports to China were up $2.3 billion to $124.0 billion while imports from China increased $26.2 billion to $466.7 billion. Again, exports increased but imports increased more, resulting in job loss and a drain on our economy.
Korea and NAFTA
Since the Korea Free Trade Agreement, our trade deficit with Korea has surged more than 80 percent, which equates to the loss of more than 70,000 U.S. jobs. The U.S. goods trade deficit with Korea increased 20 percent in 2014 to more than $25 billion. 2014 exports to Korea were lower than 2011 — which was before entering into the KORUS Korea FTA.
Brad Markell, Executive Director of the AFL-CIO Industrial Union Council, issued a statement that included the following:
These numbers are a consequence of a murderer’s row of bad trade deals. Together, NAFTA, PNTR, CAFTA, and KORUS have gutted the U.S. manufacturing sector. They’re a hall of fame of horribles.
So why is the Obama administration doubling down on the failed policies of its predecessors? Especially when the President and his team have worked hard to encourage American manufacturing by saving the domestic auto industry, establishing a national technology strategy, and enforcing trade-rule violations. Their dogged pursuit of more old-style trade agreements will undermine all of the progress we have made.
Instead, the Obama administration should crack down on foreign government’s currency manipulation to help our manufacturing sector. Prominent economists across the spectrum like Art Laffer, Larry Summers, Jared Bernstein, Dean Baker and Rob Scott all agree this is a significant problem that should be addressed in trade agreements. But President Obama recently acknowledged provisions on currency manipulation are being left off the table.
A major cause of the trade deficits was currency manipulation by other countries. By manipulating the value of their own currency countries can cause American-made goods and services to cost more internationally. China and Japan are two of the worst offenders.
Currency manipulation is not addressed in the Trans-Pacific Partnership agreement now under negotiation.
The Obama administration is pushing the Trans-Pacific Partnership (TPP) by saying that we need this trade deal to keep China from dominating the region. But our problem with China is because of trade deals. We set up conditions when we agreed to bring China into the World Trade Organization (WTO) and we were promised jobs from exports. Instead we got massive imports.
President Obama talks about “boosting exports” but does not mention imports or the enormous, humongous trade deficit. The administration is putting up with these trade deficits and refusing to do anything about currency manipulation by China, Japan and others, while pushing TPP.
The TPP has nothing that fixes this problem. It does not require balance; it does not address currency manipulation. All it does is set up rules that create conditions for the giant multinational corporations to dominate and prevent competition.
We don’t need any more “free trade” agreements. The U.S. has run large and increasing trade deficits since the late 1970s, when the “free trade” ideology took over. The results are obvious. These trade agreements have devastated entire “rust belt” regions of the country. They have kept wages stagnant for decades. They have caused “structurally” high unemployment. They have shifted the middle class down into demeaning, low-wage jobs. They have brought incredible, massive wealth to a very few gazillionaires as they move more factories and jobs out of the country and pocket the wage and environmental-protection differential and these gazillionaires are now controlling our entire political system.
Enough Is Enough
We don’t need more corporate-dominated, rigged trade agreements. Instead we need to fix the agreements we already have. To do this we need to reform the corporate-dominated process that has gotten us where we are today. We need to bring in all of the stakeholders in these agreements and put them at the negotiating table.
Imagine a trade agreement negotiation by representatives of consumer, labor, environmental, health, LGBT, democracy and other citizen “stakeholder” groups instead of solely by and for the giant multinational corporations. Imagine the changes in the way we can all live.
Imagine a trade agreement that prohibits employers from threatening to move a job out of the country to keep someone from getting a raise. Imagine a trade agreement in which the participants agree not to import any goods from countries that allow pollution of the environment. Imagine a trade agreement that outlaws the sale of goods made in conditions that are unsafe for workers. Imagine a trade agreement that sets minimum standards for product reliability and customer support. Imagine a trade agreement that sets a limit on the gap between CEOs and their employees.
Honestly, democratically and transparently negotiated trade agreements could bring about a new direction for the world’s economy and citizens.
U.S. Trade Representative (USTR) Michael Froman appeared before Congress Tuesday to make the corporate argument for “fast track” trade promotion authority. The USTR and President Obama are pushing fast-track pre-approval for the Trans-Pacific Partnership (TPP) and other big “trade” agreements they are working on. The Chamber of Commerce, Business Roundtable and other corporate groups and lobbyists are also pushing hard for Congress to pass fast track.
The promoters of fast track say we need it to push “trade” agreements through Congress to expand trade and increase exports. “What we’re going to do through this trade agreement is open up markets,” Froman told Congress Tuesday, “and then level the playing field so we can protect workers, protect American jobs and then ensure a fair and level playing field by raising labor and environmental standards, raising intellectual property rights, standards and enforcement, making sure that we’re putting disciplines on state-owned enterprises that pose a real threat to workers.”
1) President Obama, trade representative Froman, the Chamber of Commerce and others repeat the talking point, “95 percent of the world’s markets are outside the U.S..” This makes me skeptical of what they are selling because it is a “look over there at that shiny object” argument.
Saying that 95 percent of the world’s markets are outside the U.S. implies that we need TPP and other agreements because we are currently not selling goods to 95 percent of the world. This is patently false. We sell goods and services around the world already. In fact, it contradicts other corporate arguments for these agreements like, “More than 38 million American jobs already depend on trade.”
This argument deceives people about the very nature of these agreements. Most of the objections being voiced over these coming agreements are about non-trade issues. Only five of TPP’s 29 chapters deal with what people understand as “trade.” So an argument that TPP and similar agreements will “expand trade” masks what the bulk of these agreements are really about, which is getting governments off the backs of the giant corporations and protecting their profits from competition and democratic regulation.
Just one example of this is the “investor-state dispute settlements” provision, which I have called “corporate courts.” This part of “NAFTA-style” trade agreements, including TPP, allows corporations to sue governments that pass laws and regulations that interfere with profits. Similar clauses in trade agreements around the world have, for example, enabled tobacco companies to sue governments for trying to protect the health of their citizens. Under TPP these suits will be adjudicated by corporate attorneys, not democratically constituted courts.
Other examples are expanded copyright and patent protection for the giant multinationals, which will increase the cost of pharmaceutical products and potentially restrict the freedom of the Internet.
Obviously the corporate advocates of these agreements want this, so they are using distraction, diversion and shiny promises of increased trade and more jobs to sell the agreements.
2) Froman, testifying before the Senate Tuesday, said that we need these new agreements because our country has low tariffs and other barriers to entry while many countries we trade with have high tariffs and barriers to entry.
Wait, back up, he is saying that other countries have high tariffs and barriers to entry but we let goods from those countries into our country with low tariffs and few barriers? What? Doesn’t this undermine our country? Don’t low import tariffs cost badly needed revenue and enable offshoring of jobs and factories? Isn’t this a recipe for imbalance, job loss and huge trade deficits? (And don’t we have imbalance, job loss and huge trade deficits as a result of that recipe?)
In other words, he is saying that the U.S. has been an absolute and complete patsy on trade. And obviously we have been paying the price. Our government hasn’t enforced trade balance and hasn’t protected American interests, which has cost us wages, jobs, factories and entire industries. We have an enormous, humongous trade deficit and that has lowered our standard of living, and driven inequality. Trade agreements haven’t fixed this — recent trade agreements like NAFTA and South Korea have worsened this problem, with more job loss and even larger trade deficits.
The USTR and the president argue that TPP will reset this problem and will enforce good labor and environmental standards. (Enforcing international labor standards would require our government to boost enforcement and a number of U.S. states to change their laws, by the way.)
The U.S. government has no credibility when it comes to protecting Americans from trade imbalances and the resulting loss of wages, jobs, factories and entire key industries. Yet with this terrible record Froman and the president are asking Congress to pre-approve new trade agreements by passing fast track. They are asking this while the coming agreements – negotiated using the same corporate-dominated process that caused the mess – are still secret. They are asking this even though fast track will prevent Congress from adequately examining and debating agreements and fixing problems. Fast Track also keeps the public from having time to read and comprehend the agreements and rally opposition if opposition is warranted.
Saying that we have been patsies isn’t an argument for setting up a fast-track process to pass more trade agreements; it is an argument for backing up and replacing everyone and everything involved in setting and enforcing our government’s trade policies. Pushing through even more agreements using the same corporate-dominated process that caused the mess is not a way to fix the mess; it is a way to make things even worse.
3) Corporate advocates for fast track argue that we need to increase exports. This is exactly right, but they never, ever, ever, ever, ever mention imports and trade deficits. Why is that? We need balanced trade. If imports increase more than exports this represents a net loss of jobs, technology, manufacturing ecosystem and our living standard. If trade imbalances continue over time it throws the entire world’s economy out of balance. (It does things like enable 80 people to have as much wealth as half of the world’s population, and 1 percent of the world to have more wealth than all of the rest combined.)
Is there a section of these new agreements – the five of 23 chapters that are actually about trade, anyway – that requires that trade be balanced so we can stop losing jobs, wages, factories and industries? TPP is still secret, so we don’t really know. And fast track doesn’t give us time to find out once we do see the agreement, and doesn’t allow us to fix it if it doesn’t require balance.
4) Corporate advocates say “more than 38 million American jobs already depend on trade. This is one in every five jobs across the country.” I’m not sure how this is an argument for new trade agreements when they say we’re already doing so great. In any event, they are not bringing up the jobs we have lost to imports – which is more than the jobs we have gained from exports. They’re again saying “trade is good” to divert us from seeing that only five of the 29 chapters of TPP are even about trade at all. The rest is about getting democratic government off the backs of the giant multinational corporations and protecting them from competition.
5) Another corporate argument is that 97 percent of American companies that export are small businesses. This is another misleading and irrelevant number. They don’t say what percent of our exports come from these small businesses. And trade agreements that reinforce the monopolies held by giant multinational corporations by expanding their copyright and patent dominance certainly do not help smaller businesses. They are instead designed to limit competition.
What is needed is for the the contents of the TPP agreements to be made public now and for stakeholders like labor, environmental, consumer, democracy, health and all other groups to be part of the process right now. Then, when an agreement is concluded, Congress and the public need adequate time to fully analyze and discuss these agreements and their implications. Finally, Congress should be able to fix problems with the agreements to bring them in line with the interests of all Americans.
US Trade Representative (USTR) Michael Froman testified before the Senate Tuesday. He was there to push Congress to pass Fast Track Trade Promotion Authority (TPA), so new trade agreements can get pushed through. Protesters disrupted the hearing. The people are trying to make their voices heard over the corporate push for Fast Track.
Things are heating up as big new corporate “trade” agreements get closer to coming before Congress. These trade agreements have a terrible track record for American workers, because they have driven inequality, devastated entire regions of the country, and hollowed out the middle class. New corporate-centered trade agreements being negotiated will go far beyond previous NAFTA-style deals, by setting up monopoly protections for giant multinationals, elevating corporate rights above the rights of governments, and setting up corporate-run tribunals, that will have the power to override laws and regulations if they interfere with corporate profits.
Monday, the Trans-Pacific Partnership (TPP) negotiations resumed in New York City. Even though the big blizzard was starting, the negotiators were greeted by protests, as hundreds of people representing trade, labor, environmental, health, communities of color, anti-GMO and food justice, anti-fracking, animal rights, and other groups that will be hit hard by TPP and other upcoming agreements.
Capitol Police arrested three sign-carrying, slogan-shouting demonstrators who disrupted a Tuesday morning Senate Finance Committee hearing on the president’s trade policy agenda.
The protesters wore shirts reading “No Fast Track” and greeted U.S. Trade Representative Michael Froman with signs stating, “Froman lies” — a response to his statement to the committee that trade promotion authority “is Congress’s best tool to ensure that there is ample time for public scrutiny and debate on U.S. trade agreements.”
Margaret Flowers, a member of Physicians for a National Healthcare plan and a longstanding TPP critic, burst in carrying a sign reading “Trading away our future,” and shouting “we know the Trans-Pacific Partnership is negotiated in secret!”
As she was being escorted away by security, a pair of male protesters entered from another door. “You’re going to super-size NAFTA!” one yelled, as the other simply repeated “No TPP!” The two unfurled a banner behind Froman, who stared straight ahead with an annoyed look on his face.
Then a third wave hit: Three protestors sitting behind Froman held up other signs, like one reading “Fast track constitutional train wreck.”
Fast Track Limits Congress’ – Democracy’s – Ability To Make Changes
Froman was asking Congress to pass “Fast Track” Trade Promotion Authority (TPA), a process that sets aside Congress’ Constitutional duty to define and review (and fix) trade deals. Under Fast Track, Congress agrees not to amend agreements, to limit the amount of time spend discussing the deals, and to vote on approving the treaty within 90 days of Congress and the public first seeing what is in the agreement.
Rep. Alan Grayson (D-FL), appeared on the Thom Hartmann show to discuss Fast Track process:
The Fast Track legislation prohibits subcommittee debates, subcommittee hearings, subcommittee markups, full committee debates, full committee hearings, full committee markups, and it limits us in the House of Representatives to 88 seconds of debate for each one of us. Eighty-eight seconds to extend to 40 other countries (if we count both trade deals the President is working on), the disaster that’s been visited upon the U.S. economy simply by having a dozen existing countries with these deals in effect. They want to put our $30/hour workers directly in full head-to-head competition with the $0.30/hour workers in Vietnam and Brunei and in other places like that, who have no environmental protection, no labor rights, and in many cases are [relying on] slave labor. That’s what these deals are trying to do. It’s the Fast Track to Hell.
In addition to only 88 seconds per Representative to discuss the treaty, 90 days from first seeing a trade agreement does not give the public time to read and analyze the repercussions of these massive trade deals. It does not give the public time to organize opposition if opposition is warranted.
It is no wonder that citizens are trying to overcome the corporate juggernaut pushing Fast Track. It is a rigged process, designed to push these agreements past Congress and democracy, before the public can do anything about it.
Call your member of Congress, and both of your Senators, and tell them you oppose Fast Track. The coming trade agreements will require sufficient time for the public to read and fully comprehend them. They might have flaws that Congress should be able to fix.
Negotiators working on the Trans-Pacific Partnership (TPP) convened today in New York City. Even the location was kept secret until the last possible minute, but hundreds of trade, labor, environmental, health, communities of color, anti-GMO and food justice, anti-fracking, animal and other activists still showed up in the big blizzard to protest the secret trade agreement and “fast track” trade promotion authority (TPA).
TPP is a huge “trade” agreement, which will set the rules for 40 percent of the world’s economy. It is being negotiated in secret. Corporate representatives are part of the process, stakeholders like environmental, consumer, labor, democracy, health and other groups are excluded from the negotiations. Needless to say the agreement (some of it has leaked) reflects corporate interests at the expense of the rest of us and our governments. Meanwhile President Obama is asking Congress to pass fast-track TPA, which rigs the rules so that Congress essentially pre-approves TPP before Congress and the public even see what is in the agreement, never mind have the time to study it and rally opposition if opposition is warranted.
… The countries negotiating TPP with the US are willing to give in and agree to bad copyright rules as long as they get the other gains they were promised—things like market access and lowered tariffs so they can sell their products to US consumers. But those other countries will not budge without a guarantee that the overwhelming public opposition to the agreement won’t prevent its adoption in the United States. Fast Track offers that guarantee; that’s one reason the White House is now desperate to pass it.
Several public interest groups are organizing a protest outside the luxury Sheraton Hotel this Monday, January 26 at noon. Many of those demonstrating will be there to oppose other provisions in the TPP, but we encourage people to be there to represent all the users around the world who will be impacted by this massive agreement’s draconian policies.
A “Death Pact” Not A Trade Agreement
AIDS activists joined the various groups at the protests. They are objecting to the monopolies TPP would grant to certain large pharmaceutical corporations, which they fear would bring the price of AIDS drugs beyond the reach of many in need of them. Health Global Access Project (Health GAP) released a statement that included the following,
Previously leaked proposals revealed that the US seeks easier-to-get, stronger, and longer patent monopolies on medicines and new monopolies on drug regulatory data that would prevent marketing of more affordable generic equivalents. It also seeks restrictions on price control measures and enhanced investor rights that would allow drug companies to sue governments when their expectations of exorbitant profits are undermined by otherwise lawful government policies and decisions. These are among the most severe intellectual property rules ever demanded in international trade.
“The TPP would create a vicious cycle. The provisions currently proposed will allow for fracking and other practices that fuel environmental degradation and make people sick. Strengthened intellectual property rules will then prevent people from accessing life- saving medicines,”, said Michael Tikili of Health GAP, one of the endorsers of the demonstration. “Thirteen million people living with HIV depend on generic AIDS medicines and another 20-plus million are waiting line for treatment. By protecting Pharma’s bloated profits, the Obama administration is undermining its own global AIDS initiative – this isn’t a trade agreement—it’s a death pact.”
The Sierra Club, the Natural Resources Defense Council, the League of Conservation Voters and 41 other environmental groups sent a letter to Congress this week, asking them to oppose “fast track” trade promotion authority for upcoming trade agreements like the Trans-Pacific Partnership (TPP). They asked Congress to instead set up an open, transparent trade negotiating system that gives stakeholders, other than just corporate representatives, input in the process.
The letter begins, “As leading U.S. environmental and science organizations, we write to express our strong opposition to ‘fast track’ trade promotion authority, and to urge you to oppose any legislation that would limit the ability of Congress to ensure that trade pacts deliver benefits for communities, workers, public health, and the environment.”
Background On Fast Track, TPP
Currently, trade negotiations are conducted in secret. Corporate representatives are part of the process, and the negotiators come from or expect to go into the corporate world. Stakeholders like environmental, consumer, labor, democracy, human rights, and other groups are excluded from the process.
Once these agreements are finalized, a process known as “fast track” is used to push the agreement through. Fast track asks Congress to forgo the usual process of careful deliberation, and vote within 90 days of Congress and the public first seeing the agreement. Congress also agrees in advance not to amend or filibuster the agreement. This sets up a rushed situation, in which massive corporate PR campaigns can pressure Congress to pass the agreement, and not “kill the whole thing” over problems that they might find. The public does not have time to digest the implications of the agreement and rally opposition, if warranted.
The letter from the environmental groups explains”
“Fast track was originally designed in the 1970s, when trade agreements focused on traditional trade issues such as cutting tariffs and lifting quotas. Today’s trade agreements, however, are about much more than tariffs and quotas and have significant implications for our environment, public health, and global climate.”
TPP is a massive agreement between the U.S. and 11 other countries. It has 29 “chapters” – only five of which cover trade issues at all. Other chapters cover things like rules limiting how countries regulate corporations, limiting how countries make laws that might limit corporation profits, and other rules that grant giant multinational corporations special protections from competition.
Instead of this corporate-dominated process, the environmental groups ask for an open, transparent process that delivers benefits for working people, not just for the owners of the largest corporations. From the letter:
“U.S. involvement in trade negotiations should be guided by democracy, transparency, political accountability and must lead to a ‘race to the top’ that provides real protections for communities, workers, and the environment. A new model of trade that delivers benefits for most Americans, promotes broadly shared prosperity, and safeguards the environment and public health is possible.’
Michael Brune, Executive Director of the Sierra Club said, “Trade should be done right — not just fast — to protect our families and neighbors from pollution and climate disruption. Fast-tracking flawed trade pacts is a deal-breaker. With fast track, we would be trading away clean air, clean water, and safe communities.”
Peter Lehner, Executive Director of the Natural Resources Defense Council: “Congress shouldn’t give a fast lane to trade pacts that don’t protect our public health and climate. These trade bills would give foreign corporations and governments the right to challenge our bedrock protections for clean air, safe drinking water, healthy food and proper chemical safeguards. We shouldn’t trade away our sovereignty. We need trade bills that tackle the 21st-century environmental challenges, not take us backwards.”
The President briefly spoke about trade in his State of the Union speech. He admitted that “past trade deals haven’t always lived up to the hype” but then he called for doing more of the same. He called for Trade Promotion Authority (TPA) — “Fast Track” — to pass the Trans-Pacific Partnership (TPP).
Here is what President Obama said about trade (from pre-released transcript):
21st century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.
Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense. But ninety-five percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities. More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.
1) Exports are good for an economy, but exports and imports must be balanced. While our exports are up, our imports are up even more. This is why we have an enormous, humongous trade deficit. When imports are greater than exports it means jobs, factories and if the imbalance continues eventually the necessary pieces of industry ecosystems are lost. Our trade deficit is enormous and our trade has been out of balance since the 1970s.
The immediate problem facing much of the world is inadequate demand and the threat of deflation. Would trade liberalization help on that front? No, not at all. True, to the extent that trade becomes easier, world exports would rise, which is a net plus for demand. But world imports would rise by exactly the same amount, which is a net minus. Or to put it a bit differently, trade liberalization would change the composition of world expenditure, with each country spending more on foreign goods and less on its own, but there’s no reason to think it would raise total spending; so this is not a short-term economic boost.
Krugman also points out that current trade tariffs and protections are low, so a “trade” deal doesn’t really remove imposing barriers. He suspects that groups representing the giant multinationals, like the Chamber of Commerce, are really pushing this deal because it rigs the system in their favor and “will yield them a lot of monopoly rents.” Which leads to Obama’s next argument.
2) This idea that “we” should “write the rules” to “level the playing field” is interesting. Yes, China would like to write rules of trade in its favor. But it doesn’t follow from this that we should allow the giant multinational to write the rules in ways that rig the system against everyone but them. And this is exactly what TPP does. TPP is being negotiated in secret with participation of corporate representatives while representatives of labor, consumer, democracy, human rights, women’s, environmental and other “stakeholder” groups are kept away from the table. Only a small part of TPP is about “trade” at all, while parts of it elevate corporate rights above the rights of citizens in democracies to make their own laws. (For example tobacco companies can sue governments for profit-loss from anti-smoking campaigns. Under similar “trade” agreements this is already happening.)
And speaking of rigging the system …
3) Trade Promotion Authority (TPA) hardly “protects American workers.” Also known as “Fast Track,” TPA essentially pre-approves trade agreements before anyone even sees them. TPA pre-rigs the approval process by forcing an up-or-down vote with no amendments allowed within 90 days of anyone even seeing the agreement for the first time. This means the public doesn’t have time to fully comprehend what is in the agreement and rally opposition if opposition is warranted. Fast Track shifts the public and press focus to “will they kill the whole agreement” rather than on what is actually in the agreement. (This is how they were able to push Wall Street deregulation through the last “Citibank Budget” deal.)
4) There is nothing in past or upcoming trade agreements that will incentivize bringing manufacturing and other jobs back to the US, which the President promised. On the contrary, TPP includes Vietnam which boasts a minimum wage of 30 cents per hour and has a terrible record on labor rights. This tells us what we need to know about the incentives for manufacturers to bring jobs back.
5) One of the biggest factors in American job loss is currency manipulation, but TPP does not address currency manipulation. (TPP is being negotiated in secret but leaks and other indications tell us that there is nothing to address currency manipulation.) Jared Bernstein wrote about this in a January 9 NY Times op-ed, How to Stop Currency Manipulation, saying,
“… there’s one thing the administration can do that will both win over some opponents and address one of the biggest issues in global trade: add a chapter on currency manipulation.
… In a compelling argument for including a chapter in the Trans-Pacific Partnership to restrict currency manipulation, C. Fred Bergsten of the Peterson Institute for International Economics estimated that America’s trade deficit “has averaged $200 billion to $500 billion per year higher as a result of the manipulation” by the rest of the world, resulting in the loss of one million to five million jobs.
The loss of 1-5 million jobs to currency manipulation is a lot of jobs, yet this isn’t even in the agreement!
The President wants to address income inequality. But these trade agreements have been a major driver of income inequality. American worker wages have been frozen for decades as workers were threatened with their jobs being moved out of the country. A few at the top have pocketed this wage differential for themselves. Trade deals that pit American workers and the “costs” — higher wages, environmental protections, etc — of democracy against non-democracies where people don’t get good wages and the environment is not protected work against the President’s stated goals.
At a Wednesday press conference with Rep. Louise Slaughter (D-NY) and other House Democrats, Rep. Slaughter said, “The president said last night that previous trade deals had not lived up to the hype. That may be the understatement of the century. We will fight this tooth and nail, and I believe we are going to win.”
Also at the press conference, Rep. Pete DeFazio (D-OR) said, “Fast track is designed to embed into these so-called free trade agreements a bunch of things that are detrimental to the American public.”
Coalition for a Prosperous America (CPA) “The Coalition for a Prosperous America (CPA) advocates a new direction in trade policy focusing upon balanced trade, a comprehensive US competitiveness strategy, and producing more of what we consume here. We oppose Congress ratifying the past, wrongheaded trade strategy which produces trade deficits, job loss, and incentives to offshore manufacturing for re-import into the US.”
Alliance for American Manufacturing (AAM): “By ignoring the concerns of industry, workers, and majorities of the House and Senate, he’s not only putting the TPP at risk, he’s putting a whole lot of auto jobs in the US at risk, too.”
Communications Workers of America (CWA):
“…[W]e cannot stand with the President in his alliance with Republican Majority Leader Mitch McConnell, House Speaker John Boehner, the U.S. Chamber of Commerce and Business Roundtable to send more U.S. jobs offshore, undermine U.S. communities and weaken U.S. sovereignty under the guise of “free trade.” The Trans-Pacific Partnership (TPP) has much more to do with protecting the investment of multinational corporations and maneuvering around China than lowering trade barriers.
Public opposition to “fast track authority” and the TPP is strong, and growing more vocal everyday. Consumer groups, workers, environmentalists, people of faith, students and more have united to stop this attack on U.S. jobs and communities. Conservatives, who do not believe that nations should relinquish their sovereign power to secret tribunals, also are on board.
Over the past 20 years, millions of U.S. jobs have been lost. The jobs U.S. workers had been promised over those years of course never materialized. In fact, just two trade deals – NAFTA and the Korea Free Trade Agreement — have resulted in the loss of nearly 800,000 jobs. The promoters of the TPP are again promising job gains through growth in U.S. exports. But we can do the math. Any new jobs will be dwarfed by the flood of jobs that go offshore.
PS: This is for real. The next round of “NAFTA-style” trade agreements actually let corporate courts — with corporate attorneys as the judges — stop countries from passing laws that interfere with profits. Treaties like these already let tobacco companies sue countries to block government-sponsored anti-smoking campaigns. This is for real.
So essentially passing Fast Track outsources Congressmembers’ jobs! See for yourself: