Sanders Vows To Kill TPP If Elected. Will Clinton?

As the Trans-Pacific Partnership (TPP) “free-trade” agreement was signed in New Zealand by representatives of the 12 participating countries, Democratic presidential candidate Bernie Sanders strongly voiced his opposition and committed to doing what he can to kill the deal if he is elected president.

Rival Hillary Clinton has also stated opposition to the TPP, but will she also vow to kill it if elected?

Sanders Vows To Kill TPP

Saying that TPP follows in the footsteps of failed trade agreements like NAFTA, CAFTA, and Permanent Normal Trade Relations (PNTR) with China, Sanders promised to “fundamentally rewrite our trade policies to benefit working families, not just the CEOs of large, multinational corporations.”

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What To Watch For Next In The Fight Against The TPP

The Trans-Pacific Partnership (TPP) will likely be back in the news at least for a brief moment next week, when the treaty comes up for a formal signing ceremony involving representatives of the 12 participating countries, including the United States.

The agreement has largely been out of the news since the release of the text in early November. President Obama did mentioned it briefly in his State of the Union address earlier in January. Other than that, there have been no dramatic headlines.

Meanwhile, the public and much of Congress remain solidly opposed to the agreement – as have presidential candidates in both political parties. That, hopefully, means the politics do not line up for a vote on the agreement before the 2016 election. But there’s always the risk that Wall Street will find a way to force a vote sooner. So people should continue pressing Congress to oppose the TPP.

Formal Signing Feb. 4 In New Zealand

The date for the big signing ceremony for TPP was announced last week. It will be Feb. 4 in Auckland, New Zealand. Ministers from participating countries, including U.S. Trade Representative Michael Froman, will participate.

Note that this ceremony does not “trigger” any timeline forcing Congress to vote within a certain number of legislature-in-session days. That clock starts when President Obama submits authorising legislation to Congress.

Report On TPP’s Economic Effect

Next up for the U.S. process is the International Trade Commission’s (ITC) report on TPP’s economic impact. The commission is expected to produce this report by May 18.

The Washington Post PowerPost explained what’s happening with the ITC in “Independent agency holds big sway over TPP trade deal“:

For three consecutive days last week, in eight-minute segments spanning nine hours each day, lobbyists for some of the nation’s biggest corporations, labor unions and trade groups testified before the panel of six appointed bureaucrats.

They included lobbyists for Walmart and Gap Inc., who praised the deal for lowering tariffs on beef, cheese, pencil cases and cotton sweaters. Leaders of the U.S. Chamber of Commerce and National Association of Manufacturers framed the pact as a chance for U.S. companies to sell more goods abroad. Representatives for the AFL-CIO, United Steel Workers and other unions urged the commission to consider the deal’s potential to erode labor conditions and wages.

Corporate lobbyists might frame TPP as “a chance for U.S. companies to sell more goods abroad” because they have to say that in public. What they really mean is that TPP will encourage them to lay off even more U.S. workers, close even more U.S. factories and move even more production to countries with near-slave-labor conditions and no costly protections for the environment. This offshoring lets them pocket the wage and protection differential while enabling them to use havens to dodge U.S. taxes.

Studies by outside groups have determined that whatever TPP’s economic effect is for Wall Street and U.S. multinational corporations, it will not by favorable for U.S. workers or the economy. For example, from December, “Important Report Says TPP ‘Skews Benefits To Economic Elites’“:

The congressionally created Labor Advisory Committee for Trade Negotiations and Trade Policy (LAC) has just released a scathing report that urges President Obama “in the strongest possible terms” to send the Trans-Pacific Partnership “back to the negotiating table” instead of to Congress, saying the treaty “will harm our economy overall.”

… “The TPP is likely to harm U.S. manufacturing interests, cost good jobs, suppress wages, and threaten our democracy and economic security interests,” the report said.

Note that laying off U.S. workers, closing the factory, moving production out of the country, then importing the same goods to sell in the same outlets to the same customers “increases trade” because now those goods cross a border.

Negotiating Implementing Legislation

After the ITC report is released, the administration will formally send Congress an official, final TPP text. Even though TPP’s text has been released to the public, this is a formal action, and will be accompanied by details of how the administration plans to implement TPP.

The administration has begun negotiating with Congress to finalize an implementing legislation bill. The administration is deciding when to submit this formal, final implementing legislation to Congress. That does start a countdown clock as specified in the “fast track” trade legislation passed last year. The White House will do this based on when they think they have the best chance to get TPP passed. Currently, it looks for a number of reasons as if this is likely to be delayed until after the election – but it could come at any time.

Significant Public Opposition

The optimism that a vote on the TPP might not happen until after the election, if ever, is directly related to significant public opposition to the agreement. For example, earlier this month The Washington Post, in “Hundreds of advocacy groups ask Congress to block Obama’s Pacific Rim trade pact,” reported that a “coalition of more than 1,500 interest groups is sending a letter to Congress on Thursday demanding that lawmakers block the Trans-Pacific Partnership (TPP), the 12-nation Pacific Rim trade pact championed by the Obama administration.”

Labor unions, environmental groups, consumer advocates and faith groups are among the 1,525 organizations that signed onto the document, which was organized by the Citizens Trade Campaign. Hundreds of local labor union affiliates have signed on.

Presidential candidates Bernie Sanders and Donald Trump are actively and vocally campaigning against TPP, with Sanders also continuing to attend rallies and lobby other members of Congress to oppose it. Candidates Hillary Clinton and Ted Cruz have gone on record as opposing it because of the public opposition.

Republicans Demanding More Corporate-Favoring Language

Another barrier potentially in the way of a near-term vote is Republican opposition based on TPP not being favorable enough for corporations. For example, Republicans leaders are demanding changes that favor big corporations like tobacco. TPP has a “tobacco carve-out” that can keep countries from being sued when they try to protect public health by helping citizens stop smoking or keep children from starting. This interferes with corporate profits, which under the investor-state dispute settlement “corporate court” provisions countries cannot do.

Non-tobacco companies say that allowing any such “tobacco carve-out” is a bad precedent, opening up a slippery slope of allowing countries to protect citizens from other products that harm or defraud their citizens. They are joining with tobacco companies to demand side letters from participating countries saying they will allow these suits even as TPP’s formal text gives them a choice of opting out of them.

Republicans are also demanding even longer patent monopoly terms for pharmaceutical companies.

Election Issue Risk – Or Lame-Duck Risk?

Usually public opposition does not matter in Congress if Wall Street is in favor of something, as it is with TPP. But in an election year there is a risk of something as overwhelmingly unpopular as TPP becoming an election issue. For example, Sacramento-area Representative Ami Bera is facing opposition after he voted in favor of “fast track” trade legislation. Local Democratic clubs are refusing to endorse him, and there will be a full floor fight over endorsing him at the February statewide Democratic convention. With the election coming up, other “corporate Democrats” are taking note of this.

However, the big corporate lobbying organizations, the Business Roundtable, the Chamber of Commerce and National Association of Manufacturers (NAM) are pushing the administration to move the TPP toward passage as soon as possible. Under the fast-track trade legislation passed last year, the timing of a vote is in the administration’s hands, not those of congressional leaders. If there is a reason to think Congress will pass TPP, the administration will move very fast to get a vote.

But it currently looks like Wall Street, the big corporations, the Obama administration and the Republican Party are lining for a TPP vote in the “lame duck” session after the election. In a lame-duck session members who have retired or been kicked out of office are still allowed to vote – but there is no way for the public to hold them accountable. So for them a TPP vote would be like an audition for a lucrative corporate lobbying position. Also members who have been elected or re-elected with Wall Street financing will be asked to repay their contributors, with two whole years before the public can do anything about it.

Rep. Brad Sherman (D-Calif.) explained on a press call earlier this month why a TPP vote might come in the “lame duck” session. “Wall Street has the money that our current campaign finance system requires,” he said. “Members can take the money for their campaigns, get elected in November, then deliver the votes in December to reward those contributors after the election.”

Either way – whether the vote is orchestrated to come before or after the elections – everything that people can do to push Congress to line up on the side of the public will could prevent a vote from happening at all, or ensure a vote defeating the TPP. Contact Congress today to let your representative know you want that person to come out publicly in opposition to the TPP.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Does Clinton Really Oppose TPP? There Is A Test For That

Many people have come to believe politicians say what they need to say to win, and then turn on them. If Hillary Clinton wants to win the Democratic nomination and inspire people to vote for her in the general election, she must find ways to overcome this voter skepticism.

There is one test that, if she passes it, could convince voters that Clinton is on their side. It involves what Clinton does over the next few months to prove that she meant it when she came out in opposition to the Trans-Pacific Partnership trade deal a few weeks ago.

Politics In 2016 Will Be Different

Politics is different this time. Voters feel betrayed by the politicians they have supported in the past. Just look at what is happening on the right. The conventional candidates like “Jeb!” Bush are polling at 3 percent or so – or just dropping out of the race. The candidates who have never held office and do not exhibit any qualifications whatsoever for governing – Donald Trump and Ben Carson – are way ahead.

On the Democratic side the problem is, as always, voter turnout. Working people – wages stagnant or falling and employers putting the squeeze on in hundreds of imaginative ways – have figured out that they’ve been sold out by “establishment” politicians who have helped “rig the game” against them. And they are fed up.

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Will the TPP Increase Trade? That’s the Wrong Question

One of the selling points for the Trans-Pacific Partnership (TPP) agreement is that it will “increase trade.”

Here’s the thing. If you close a factory in the U.S., lay off all of the workers, devastate the surrounding community, and move the production to a low-wage country like Vietnam, bring the same goods back to the U.S. and sell them in the same stores, you have just “increased trade” because now those goods cross a border.

Plus you have the added bonus that executives and shareholders can pocket the wage difference (or park the money in the Cayman Islands). Hopefully they can also pocket the difference in environmental protection costs, workers safety costs, etc., because in places like Vietnam, good luck with ever getting those things.

Economists will tell you that moving the factory to Vietnam is an efficient allocation of resources. The workers and factory here in the U.S. can now be used for something that “we do better here in the U.S,” they might say, and the workers will be rehired at a better wage. The repurposed factory will sell higher-value things to the world that more than make up for the loss of exports of what the factory had been making.

Look around you. Is that what is happening as a result of our trade policies? No; we instead have a massive trade deficit. Entire regions of the country are shifting to third-world status, downtowns boarded up, foreclosed houses falling down, people feeling hopeless… and a few people get more and more wealthy at the expense of the rest of the world.

Regular Americans see their standard of living falling as a direct result of trade policies designed to break unions and increase the wealth and power of a few at the top. Many workers in other countries have few rights, the environment is not protected, government and self-determination are undermined…

If our trade policies were combined with policies that share the benefits from lower production costs, etc. with all of us on all sides of trade borders, then increased trade would be a good thing. That is not what is happening. The trade policies are designed to break worker power and to break governmental power.

So, yes, TPP will “increase trade.” Which means more and more jobs and production moving out of the U.S.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Another Secret Trade Deal – Are We Citizens Or Subjects?

In addition to the notorious Trans-Pacific Partnership, the U.S. Trade Representative (USTR) is negotiating another secret trade deal. This one is a trade, investment, and governance agreement with the European Union (EU) called the Trans-Atlantic Trade and Investment Partnership (TTIP). Once again, everything is secret – at least on the U.S. side.

Last week, representatives from more than 75 U.S.-based organizations involved in “good governance and transparency,” as well as members of Congress, sent a letter calling on the trade representative to open up TTIP negotiations to at least some transparency so the public can have some idea what is being negotiated in their name. The letter says the secrecy “demeans the role of citizens—in many ways treating us more like subjects than the source of legitimate governmental power that we are.”

Marc Perrone, President of the United Food and Commercial Workers Union (UFCW) said of the letter,

“The U.S. must show its commitment to creating better trade deals and better lives by immediately releasing their TTIP proposals. Trade agreements negotiated in secret have had a devastating impact upon our families, our jobs, and this nation. Hard-working men and women simply cannot afford anything less than complete transparency when it comes to global trade.”

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What You Should Know About That Completed TPP “Trade” Deal

Countries negotiating the Trans-Pacific Partnership (TPP) say they have reached a deal. So here it comes.

Monday morning it was announced that a “Trans-Pacific Partnership Trade Deal Is Reached,” presented as much as a foreign policy success as a “trade” deal.

“The United States, Japan and 10 other Pacific basin nations on Monday agreed after years of negotiations to the largest regional trade accord in history, an economic pact envisioned as a bulwark against China’s power and a standard-setter for global commerce, worker rights and environmental protection.

… The trade initiative, dating to the start of his administration, is a centerpiece of Mr. Obama’s economic program to expand exports. It also stands as a capstone for his foreign policy “pivot” toward closer relations with fast-growing eastern Asia, after years of American preoccupation with the Middle East and North Africa.

The effect the deal will have on actual “trade” is unclear, since the U.S. already has trade agreements with many of the participating countries. Also much of the deal appears to be about things people would not usually consider “trade”, like investor rights and limits on the ability of countries to regulate.

Though the deal remains secret, here is some of what is known about the agreement deal.

● Currency manipulation is not addressed in TPP, even though Congress’ “fast track” legislation said it must be. To get around this, a “side agreement” supposedly sets up a “forum” on currency. Past side agreements have proven unenforceable. For this reason Ford Motor Company has already publicly announced opposition to TPP.

● A “tobacco carve-out” is in the deal, in some form. This was added because the agreement contains investor-state dispute settlement (ISDS) provisions that will allow corporations to sue governments that use laws or regulations to try to restrict what the companies do. These provisions restrict the ability of governments to protect their citizens so thoroughly that tobacco companies have used ISDS provisions in similar agreements to sue governments that try to help smokers quit or prevent children from starting smoking. TPP proponents felt that this carve-out will help TPP to pass, while the ability to limit other laws and regulations remains.

● President Obama has said TPP includes the “strongest labor provisions of any free trade agreement in history.” Previous “trade” agreements do not even stop labor organizers from being murdered, so even if TPP has “stronger” labor provisions, that is an extremely low bar.

● TPP reduces or eliminates many tariffs, further encouraging companies to move factories out of the U.S. to low-wage countries like Vietnam. An example of the effect TPP will have on U.S. manufacturing is Nike vs. New Balance. Nike already outsources its manufacturing to take advantage of low wages, while New Balance is trying to continue to manufacture in the U.S. When tariffs on imported shoes are eliminated Nike will gain an even greater advantage over New Balance. New Balance has said that the tariff reductions in TPP will force it to stop manufacturing inside the US.

● The reduction and elimination of tariffs reduces revenues for the governments involved.

What Next?

Here is a brief rundown on what to expect as TPP begins to make its way toward a Congressional vote:

● The TPP is still secret and according to the terms in this year’s fast-track legislation it will remain secret for 30 days after the president formally notifies Congress that he will sign it. That could be a while still, as the agreement’s details need to be “ironed out.” After that 30-day wait the full text has to be public for 60 days before Congress can vote. The full timeline is yet to unfold and will be reported here as it does.

● Expect a massive and massively funded corporate PR push. The biggest corporations very much want TPP. It massively benefits the interests of giant corporations and the “investor” class, even as it incentivizes moving jobs and production out of the U.S.

● While only a small portion of TPP is about what people would normally consider to be “trade,” TPP will be heavily pushed as a “trade” deal. Many people believe that “expanding trade” increases jobs. Note that closing a U.S. factory and importing the same goods “expands trade” because those goods cross a border.

Also see the American Prospect, “What’s Next for the TPP: Clyde Prestowitz in Conversation with David Dayen.”

Questions To Ask About TPP

When the still-secret TPP becomes public, these are some of the questions the public will want answered:

● What do regular, non-wealthy people in the U.S. get from TPP? Will it increase American wages? Will it have provisions that force wage increases in countries that currently pay very little, thereby helping those workers (and helping them buy American-made products, too) and reducing downward pressure on American wages? Or will there be NAFTA-style provisions encouraging outsourcing to low-wage countries like Vietnam, creating further downward pressure on wages and increasing inequality?

● What do people in the U.S. lose? For example, the Los Angeles Times explains, “U.S. industries such as auto, textiles and dairy, however, could experience some losses as they are likely to face greater competitive pressures from Vietnam, Japan and New Zealand.”

● Does the TPP contain badly needed provisions to require member countries to jointly fight global climate change?

● Will provisions on state-owned enterprises force further privatization of publicly owned and publicly operated infrastructure like the U.S. Postal Service, highways, water systems and other public utilities – even services like municipal parking operations?

● Will TPP enable the U.S. to continue using tax dollars to help American companies, like our “Buy America” procurement policies?

● Will TPP expand imports from countries where food is often found to contain banned toxic chemicals? If so, will TPP require increases in food and product safety standards and inspections?

● Does the TPP increase oversight of financial companies like banks, insurance companies and hedge funds?

TPP Pits Obama, Republicans, Wall Street And Big Corporations Against Democrats, Labor, Progressives

While still secret, the agreement is likely to have many of the same proponents and opponents as the fast-track trade promotion authority battle had. As the Los Angeles Times words it today, it “pits the White House, many Republicans and supporters of free trade against organized labor, civic groups and many lawmakers from Obama’s own party, who fear the deal will hurt workers and the environment.”

In a Monday morning call Representative Rosa DeLauro (D-Conn.) said the TPP text Congress is allowed to see has not been updated for some time, so even they don’t know what is in it. Saying Congress has had to rely on leaks and hasn’t seen the supposed “side agreements” at all, DeLauro asked the administration to “have the courage” to show Congress and the public the text now.

DeLauro complained that leaked drafts show U.S. negotiators negotiating hard for pharmaceutical companies, but not for the interests of American workers. “The administration has put big corporations first, workers last.”

She said rules-of-origin requirements allow less than half to be made in U.S. and TPP countries, the rest can come from countries like China. “None of us can think of a clearer mechanism for taking American jobs”

Rep. Paul Tonko (D-N.Y.) said, “we’ve seen the nightmare NAFTA brought to our manufacturing sector and hard-working American families; this deal is NAFTA on steroids” because this is much broader. Multinational corporations will benefit from increased drug prices and access to cheaper labor.

Rep. Dan “Rock Star” Kildee (D-Mich.) said “what’s not there is there is a lack of any enforceable currency provision. This ties American manufacturer’s hands behind their back as they try to compete. Worse, new rules of origin allow the Chinese to provide more than half the content of a car and it will be treated as domestic. Combined with no currency rules, this will have a devastating effect.”

He added, “I would ask members who voted for fast track to look at the details. When they see specific details and impact on their businesses I think they will vote no.”

Rep. Debbie Dingell (D-Mich.) said, “I’m a car girl … we are only operating on early reports but already Ford and Chrysler are opposed, joining the UAW, and those companies have strongly supported previous deals.”

Rep. Brad Sherman (D-Calif.) called TPP a “huge win for China because of currency, rules of origin; we get zero access to the Chinese market.”

On the ability to ensure even these ow rules of origin, Sherman said, “What about de facto rules? How does anyone police it? Are Chinese going to report companies that are mislabeling?”

Petitions

The Teamsters are asking people to sign this petition:” Tell Congress: Show Me the Text on Reported TPP Deal.”

Democratic presidential candidate Bernie Sanders has released this petition and is asking people for signatures: “Sign my petition to join our fight against the disastrous Trans Pacific Partnership trade deal. We cannot afford to let this trade deal hurt consumers and cost America jobs.”

The U.S. Trade Representative office has released this summary

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Can Biden Run For President With TPP Around His Neck?

Vice President Joe Biden is considering a run for president. But Biden is currently working behind the scenes to push the Trans-Pacific Partnership (TPP), which most (if not all) core Democratic-aligned groups will likely oppose. Can Biden run for president as a Democrat after pushing TPP on us?

While TPP is being negotiated in secret, some parts of it have leaked. This limited information indicates that TPP is another “NAFTA-style” corporate-dominated agreement, designed to elevate corporations above government, limit the ability of citizens to make laws and regulations that protect them from corporate harms and scams, and to force wages down so a few executives and “investors” can pocket the wage differential.

Autos And Parts, For Example

One (only one) example of the “NAFTA-style” damage that TPP might do is a provision that actually weakens the limited protections NAFTA granted to auto and parts manufacturers.

Under NAFTA, auto companies and parts suppliers in countries in the agreement were given a level of tariff-free status through “content requirements.” But, according to leaks, in TPP the U.S. is actually pushing for lowered content requirements for cars and auto parts. (I explained the details in “TPP Terms Are Even Worse For U.S. Than NAFTA?“) This means China can get that business through Japan, which will force layoffs of workers and closures of factories. This is just one example of how TPP is actually even worse for American (and Canadian and Mexican) workers than NAFTA was.

Celeste Drake of the AFL-CIO explains further, in “Do U.S. Workers Really Have to Rely on Canadian and Mexican Negotiators to Look Out for Our Jobs?“:

Last month, Canadian and Mexican officials did the math and said no deal! They objected to these low standards, with Mexico’s Minister of the Economy explaining, “What you can accuse me of” is advocating for “the interests of my country.”

Why aren’t the United States’ own negotiators doing the same? If the reported deal is accurate, it would wipe out jobs throughout the U.S. supply chain. Even with a far higher regional value content rule, U.S. jobs are still at risk to other TPP countries, including Japan, Malaysia and Vietnam. But the lower the regional value content required by the TPP, the more auto sector jobs U.S. workers stand to lose.

Another example (one of many) of TPP’s probable damage is Nike vs New Balance. Nike pioneered outsourcing, now making its shoes in ultra-low-wage countries like Vietnam. Meanwhile New Balance is still trying to make some of its shoes in the U.S. TPP will lower the tariff on shoes brought in from Vietnam, rewarding Nike for outsourcing, and killing off New Balance’s ability to make shoes in the U.S., forcing layoffs and factory closures.

Biden Active In Pushing TPP

Biden does not just happen to be in an administration that is pushing TPP; he is working hard to push TPP himself.

For example, Biden met with Japan’s Prime Minister Shinzo Abe in New York Tuesday to encourage him to help wrap up TPP this week. Japan Times has the story, in “Abe, Biden agree to work together to conclude TPP talks possibly this week“:

Prime Minister Shinzo Abe and U.S. Vice President Joe Biden agreed Tuesday that the two countries will cooperate to conclude talks on a Pacific free trade initiative this week, both governments said.

Biden and Abe agreed that their negotiating teams for the Trans-Pacific Partnership would work closely together “with the goal of resolving the limited number of outstanding issues at the upcoming ministers meeting in Atlanta,” according to the White House.

… A Japanese official who attended the meeting quoted Biden as saying that the 12 countries engaged in TPP talks should strike a deal on this opportunity.

Biden Lining Up With Republicans, Wall Street And Corporate America Against Democrats, Labor And Progressives

TPP is still secret, and until the agreement is public the opposition is unable to organize — which is the point of the secrecy. But we know from leaks that TPP is likely to draw at least the same opposition as Fast Track did. This is a summary of which groups were on which side of Fast Track:

Some of the groups that lined up in favor of Fast Track and are almost certain to support TPP: (This is the side Joe Biden is standing on.)

● Republicans in the House and Senate.
● Wall Street.
● Giant multinational corporations.
● Billionaires and CEOs.
● The Chamber of Commerce, Business Roundtable and other corporate lobbying organizations representing giant corporations against the rest of us.
● Right-wing “free market” outfits like Cato Institute (formerly named the Koch Foundation).

There was a large coalition organized against Fast Track and likely to oppose TPP (and Biden):
● Most Democrats in the House and Senate.
● All of organized labor — every labor union in the US opposed Fast Track and are likely to oppose TPP – and Biden.
● Almost every identifiable progressive-aligned organization, including:
● Human rights groups, and anti-slavery/trafficking activists,
● Environmental groups,
● LGBT groups,
● Faith groups,
● Consumer groups,
● Food-safety groups, and many, many others aligned with causes progressives, labor and public-interest groups feel are important.

All of these groups will actively oppose Biden if he runs for President with TPP around his neck.

Can Biden Run As A Democrat After Pushing TPP?

There are some things that a candidate in the Democratic primaries just can’t do. A Democrat can’t be for cutting Social Security or Medicare when “the base” wants candidates who are in favor of expanding it. A Democrat can’t be in favor of cutting taxes for the billionaires and corporations.

A Democrat can’t be in favor of doing things that hurt the environment and increase the threat of climate change, such as building the Keystone Pipeline.

Those are some of the third rails for the kind of Democrats who are active, informed and vote in primaries. But in the next year – assuming TPP is even half as bad for 99 percent of us that leaks have indicated it is – TPP will be the third rail of all third rails. The one thing certain to kill the chances of being nominated as the Democratic presidential candidate is not being out there on the front lines fighting tooth and nail to stop TPP. Because of this, Joe Biden is not a Democrat who can run for president in 2016 and win the nomination.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Final (?) TPP Talks Underway Now In Atlanta

A new round of negotiations is underway in Atlanta this week between the United States and 11 Pacific Rim countries. They are trying to finalize the Trans-Pacific Partnership (TPP).

Some groups are asking people to come to Atlanta to protest. There are also calls for presidential candidate Hillary Clinton to make her views known on TPP.

A major reason for the push to get TPP completed now is the upcoming presidential election. The negotiators want Congress to vote before TPP becomes an issue in the campaign, which would mean the public will begin learning of the pact’s provisions and hearing arguments against them.

Negotiators are pushing TPP because it helps get government out of the way of big corporations. A provision in TPP called investor-state dispute settlement (ISDS) lets corporations bring cases against governments in corporate-arbitrated courts that are outside of national legal system, if those government pass laws or regulations that interfere with corporate profits. For example, tobacco corporations will be able to sue governments for engaging in efforts to help citizens stop – or prevent children from – smoking. (See “Tobacco ‘Smoking Gun’ Shows Real TPP Agenda” and “Tobacco “Carve-Out” Dispute Tells Us What We Need To Know About TPP.”)

TPP will also help defund governments by reducing revenue from tariffs. The U.S. Trade Representative (USTR) Michael Froman recently boasted in Politico that TPP will lower government revenues, saying, “TPP will deliver billions of dollars of tax cuts every year going forward” in the form of cuts in tariffs that U.S. manufacturers and farmers face in the TPP countries.

While the agreement – the largest “trade” agreement in history – supposedly is a broad agreement defining the rules of doing business in the 21st century, the negotiations are actually about horse-trading immediate concerns and deals and markets between different corporations. Following is a summary of a few of the remaining issues in the way of completing the agreement: currency manipulation, autos and auto parts, and Donald Trump.

Currency Manipulation

Some countries manipulate their currencies, which makes goods made there cost less in world markets. Meanwhile the U.S. currency is “strong,” which means American manufacturers lose business and are forced to shed workers. Many in Congress want TPP to contain clauses regulating this manipulation.

Last week 158 members of Congress sent a letter to the White House, which, according to the Detroit Free Press, urged “that strong, enforceable provisions against currency manipulation be made part of a Pacific Rim trade deal.”

From the Free Press report,

Legislators from industrial states, including Michigan, have argued that strong, enforceable currency standards must be part of any trade deal with Pacific Rim nations to ensure the U.S. is not put at a disadvantage to countries which may manipulate their currency to help their own industries.

“In just the last month, three of our trading partners — China, Korea, and Vietnam — have each taken steps that have caused their currencies to weaken, disadvantaging American businesses,” the letter said. “These steps have raised significant concerns and highlighted the importance of enacting strong, enforceable protections.”

“U.S. workers and businesses are the best in the world, and it is critical to our country’s economic future that they are able to compete in a fair global marketplace,” the letter continued. “For that reason, it is critical the TPP include strong, enforceable protections against currency manipulation.”

Autos And Auto Parts

Canada and Mexico are opposing a Japanese proposal to lower the requirement for how much of a car and auto parts have to be made in TPP countries to avoid tariffs. U.S. auto companies and parts manufactures, of course, side with Canada and Mexico, but Japan wants to be able to have cars and parts made in China, yet still avoid tariffs.

Unbelievably, our own country’s trade negotiators – desperately wanting this deal to conclude this week – appear to be siding with Japan and China against American, Canadian and Mexican manufacturers. For details, see: “Under Pressure To Finish TPP, Are They Giving Away More Jobs?” and “TPP Terms Are Even Worse For U.S. Than NAFTA?

Trump

Part of Donald Trump’s popularity comes from his opposition to the way that previous trade agreements like NAFTA have hurt American workers and industries. For example, Trump has stated that he will end that NAFTA trade agreement that cost so many jobs and moved so many factories out of the U.S. The Hill reports, in “Trump threatens to ‘break’ trade pact with Mexico, Canada“:

Donald Trump is calling the North American Free Trade Agreement (NAFTA) a “disaster” and vowing to renegotiate or break the deal if elected president.

“It’s a disaster,” Trump told CBS’s Scott Pelley in an interview airing Sunday on “60 Minutes.” “We will either renegotiate it or we will break it because you know every agreement has an end.

“Every agreement has to be fair. Every agreement has a defraud claim. We’re being defrauded by all these countries,” Trump continued.
Pressed on whether he supports free trade, Trump responded, “We need fair trade, not free trade. We need fair trade it’s got to be fair.”

Trump has blasted trade policies, accusing leaders of allowing China and Mexico to steal U.S. jobs and hurt American workers.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

When The Real World Confronts Trade Theories, The Real World Wins

I had a conversation over the weekend about the Trans-Pacific Partnership (TPP). She’s for it, because “more trade is always good.”

TPP covers a whole lot more than what we would think of as “trade.” Regardless, let’s look here at the idea that expanding trade is always good.

Trade Is Good

Trade is good. We all at the very least trade our time for our pay. We might make or grow or draw or write something that we sell (trade) for money. Trade is basic.

But how we trade always makes a difference. If we trade our time and get paid too little, is that a good thing because it was a “trade”? Obviously the way trade gets done – the rules/policies that are in place – makes all the difference. So the question to consider is whether our current international trade policies as applied under our current economic order a good thing or a bad thing for We the People of the United States.

Cross-Border Trade

“Increasing cross-border trade” sounds like a worthy goal. But if you close a factory in the U.S., move the machines and jobs to a low-wage country, then bring the goods back here to sell in the same stores, you have just “increased cross-border trade.” How should we look at this?

The people now making the goods are paid much less, the investors who own the factory are pocketing much more. Sounds bad, unless you’re one of those owners.

Economists will tell you this is good because fewer of the resources of your economy are being expended to obtain whatever that factory was producing. Those resources can now be applied elsewhere by the investors, toward more productive investment. Sounds good.

Theoretically those American workers will now be freed up to do more productive work, potentially at a better pay rate. Sounds good.

But the way our current economic order works, those resources (the difference between what the American workers were paid and the lower costs of making the stuff somewhere else) are more often applied to the offshore tax-haven accounts of the elite investors than toward “more productive” investments. Sounds bad.

And the way our current system is working, without this new investment those workers remain unemployed, competing with the rest of the people in the workforce, which drives down everyone’s wages except for a few at the top. The reality is that if people laid off due to trade find new jobs, it is at a lower rate of pay. Sounds bad.

Economic theory confronts the reality of America’s current economic order and falls short. The elites use rigged “trade” deals to knock down labor costs. Instead of applying the gains toward investment in our economic future and higher wages for America’s workforce, they apply it to their bank accounts.

Comparative Advantage

The idea of comparative advantage says that countries (regions, etc.) should do what they are good at and trade with others for the things the others do better. Some countries are good at growing bananas and they can trade them for things they can’t grow or make.

But what counts as a comparative advantage?

A few years ago The New York Times took a look at the shift of manufacturing (and associated jobs) from the U.S. to China, in the report “How the U.S. Lost Out on iPhone Work.” The report is known for the Steve Jobs quote, talking to President Obama, saying, “Those jobs aren’t coming back.”

The reason Jobs said those jobs are not coming back was that in China the workers sleep in dormitories, 12 to a room, and can be rousted out of bed at any hour to complete “rush” jobs. They can be made to stand all day, work with dangerous chemicals, are paid very little, cannot organize unions, cannot even vote for a government that would make their lives better.

In other words, China offers a “comparative advantage.” That advantage is that they are not a democracy, workers have no rights and no voice. China is very “business-friendly.” So why would a company like Apple use American workers when they can use workers kept in these conditions?

Our democracy is a comparative disadvantage in world trade. Sounds bad.

Again economic theory confronts the reality of America’s current economic order and falls short. America had factories, China offered low-wage workers and the opportunity to freely pollute. Elites moved the factories to China. Elites use “trade” to attack democracy, turning government of, by and for We the People into a comparative disadvantage in world markets.

Click to see a video of Ian Fletcher talking at, of all places, the Heritage Foundation about his book, “Free Trade Doesn’t Work.” At 21:06 to 25:47 minutes he takes a very good look at the idea of comparative advantage in the real world. In sum:
1) Absence of externalities is not a competitive advantage. The pollution is still there, the workers are still exploited.
2) Capital mobility means you are allocating your capital outside of your own economy.
3) Comparative statistics look at a snapshot, a fixed point in time. If China doesn’t already have a factory making X it is not comparative advantage to go open one there. It is not the best move today if the other country is not already producing the thing for less.

Economies Of Scale

When trade is “opened up” across a border it doesn’t mean that new customers suddenly appear, anxious to buy goods and services produced by America’s small businesses. It’s not like there were no producers and suppliers on the other side of that trade border. The goods and services of an economy were likely already being supplied by someone.

Acme Widget, based in the American town of Plainville, is not suddenly going to get orders from small towns all across the new trading partner Tradonia. Tradonia already has suppliers of widgets. Those suppliers will just as easily come sell their widgets in Plainville.

Economists will say that “opening up” trade across a border increases competition, which benefits consumers. But this is not how it actually works. What has really opened up is a larger playing field with more opportunities for big companies on both sides of trade borders to dominate a larger market than the one they had been dominating, with a resulting decrease in aggregate employment.

In our current economic order big companies have advantages because of their size, and unfortunately rules are made based on which companies are ready to shell out the cash to influence how the rules for competition and domination of industries are made. Larger companies dominate and remove smaller competitors. One or two of these companies will get most of the business in both countries and become very large; the others will be gone. Due to economies of scale the overall widget manufacturing employment will decrease. The new monopolies and near-monopolies will then have the ability to charge what they want.

Once again economic theory confronts the reality of America’s current economic order and falls short. Opening up trade borders is more likely to bring further consolidation of giant companies, not more competition.

Reality Wins

These are just a few examples of the problems of academic trade and economic theory confronted with the realities of what actually happens in actual countries.

Another economic theory says that trade will balance as a result of currency adjustments. Supposedly when a country is running a surplus its currency rate will increase and things made in those countries will cost more, so purchases will shift back to the country that had a deficit. But in the real world, the United State competes with real countries that don’t play this way. Our country has an enormous, humongous trade deficit and has run continual trade deficits every single year since the late 1970s when “free markets” and “free trade” ideology came to dominate. This is because we follow an economic theory ideology, and other countries look at reality and adjust. So they win.

Reality trumps economic theories and ideologies – Every. Single. Time.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Tobacco “Carve-Out” Dispute Tells Us What We Need To Know About TPP

Administration officials are desperately trying to wrap-up Trans-Pacific Partnership (TPP) negotiations in the next few days or so. If they can get it done right now, it enables a timeline for pushing it through Congress by the end of the year — before the public can rally opposition, and before the Presidential campaign season could bring heightened attention to the deal.

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Right-Wing Shutdown of Ex-Im Bank Already Threatening to Kill Jobs

Conservatives deride using government to help American companies export their goods as “picking winners and losers,” even when the winners are American exporters and workers.

So Republicans have closed the Export-Import (Ex-Im) Bank, hopefully temporarily. The Ex-Im Bank provides financing guarantees to customers of American exporters if they cannot obtain financing elsewhere. This helps American companies make the sale.

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Did Obama Administration Downplay Malaysia Slavery To Grease Trade Deal?

“Pope Francis says when the economy controls politics both lose … When economics takes over we tolerate anything for the sake of the dollar.”
– Sister Simone Campbell

Cheap labor is the whole point of our corporate-rigged, NAFTA-style trade agreements. Companies get to move jobs, factories, even entire industries out of the U.S. to countries where people are exploited, the environment is not protected and “costs” like human safety are kept low.

But even so … tolerating slavery? Flat-out slavery? Really? Unfortunately, it looks like that’s what is happening with fast-track trade promotion authority, The Trans-Pacific Partnership (TPP) and the Obama administration.

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