The Trans-Pacific Partnership Could Be the Worst Thing Obama Ever Does
By Most discussions of politics in the next two years focus on gridlock, with no appointees being confirmed, no bills being signed, effective rule by temporary executive order. But there is one significant area where Obama and the Republicans agree and that is on the Trans-Pacific Partnership. The TPP is a free trade deal that would straddle the Pacific Rim, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam. It would create the world’s largest free trade zone. If you liked NAFTA sending millions of jobs out of the United States with no labor or environmental protections for the nations receiving these jobs, you will love the TPP.
So far the TPP has gone nowhere because of Harry Reid and Democrats in the Senate. This law is anathema to senators like Elizabeth Warren and Sherrod Brown and should be for any of us who value American jobs and the dignity of the working class. The Obama Administration last year sought fast-track authority for the TPP from the Senate. Democrats refused. Republicans won’t, even with the fireeating caucus who wouldn’t vote to declare war on Japan on December 7, 1941 if a Democrat was president. Obama has said that the TPP will actually improve labor conditions but this is simply not true. Whatever limited agreements are in the agreement that would technically require higher labor standards would not come with any punishment for American corporations using Vietnamese factories and without those legal restrictions, you are looking at the expansion of the post-NAFTA world where Mexico became a home for companies seeking to avoid environmental regulations and labor standards. The limited and non-binding parts of NAFTA to guarantee labor and environmental standards have been almost entirely ignored while Mexican laborers get exploited and the American working class goes into a deep decline.
These trade deals are constantly touted by their promoters as something that will ultimately help the working and middle class in the U.S., if we are willing to sacrifice a bit up front. These are lies. Harold Meyerson on the impact:
By now, even the most ossified right-wing economists concede that globalization has played a major role in the loss of American manufacturing jobs and, more broadly, the stagnation of U.S. wages and incomes. Former Federal Reserve vice chairman Alan Blinder has calculated that 22 percent to 29 percent of all U.S. jobs could potentially be offshored. That’s a lot of jobs: 25 percent would translate to 36 million workers whose wages are in competition with those in largely lower-income nations. Of the 11 nations with which the United States is negotiating the TPP, nine have wage levels significantly lower than ours.
Meanwhile, the promoters of the TPP just blithely ignore where NAFTA has failed, focusing instead on what they see as its good points (i.e., making a lot of money for corporate leaders and shareholders). Meyerson again:
But perhaps the most devastating argument against the kind of trade accords the United States has entered into over the past quarter-century has been that inadvertently made by those defenders of such agreements who have used the 20th anniversary of the North American Free Trade Agreement — it went into effect on Jan. 1, 1994 — to celebrate its achievements. I’ve read many commemorative editorials, columns and speeches in praise of NAFTA, and not one of them has so much as mentioned the agreement’s effect on U.S. employment, wages or trade balance. In October, former World Bank president Robert Zoellick, who was one of NAFTA’s architects in the administration of George H.W. Bush, delivered a lengthy, glowing assessment of NAFTA’s achievements that managed to avoid any of those topics. The champion of avoidance seems to be Commerce Secretary Penny Pritzker. At a San Diego conference in October, a public radio reporter asked her, “And where has NAFTA not lived up to some of the hopes and promises?” Pritzker replied: “I don’t think about where NAFTA hasn’t lived up.”
And really, why should the Obama Administration think about how NAFTA hasn’t lived up to its promises. It’s only trying to recreate it over the entire Pacific Rim after all.
The International Brotherhood of Boilermakers has said of the TPP, “Let’s not exacerbate the pollution problems of the world and perpetuate human exploitation by including nations like Malaysia and Vietnam in a free trade pact, as the TPP would do.” Now, you can say the IBB has its own interests in mind–which it should. But regardless of how you feel about unions, free trade without legal restrictions on the behavior of international corporations has led to the widespread exploitation of both people and the planet without any ability for the citizens of those nations to win protections for themselves on the job or so their water and air don’t become cesspools of filth. Vietnam has a minimum wage of 28 cents an hour, assuming it is even enforced.
Based on those drafts, we also know that the draft agreement includes a provision for what’s called “investor-state dispute settlement.”
This little-known mechanism was initially created to protect corporate investments in countries where the rule of law is immature or at risk. In reality, it often empowers corporations to sue sovereign nations over any policies that conflict with their supposed right to the profits of free trade – including health and environmental policies designed to serve the democratically determined public interest.
If that sounds far-fetched, one need look no further than the Lone Pine Resources Inc v The Government of Canada lawsuit, filed in 2013, which arose out of Quebec’s moratorium on hydraulic fracking. Lone Pine claims that the moratorium is “in violation of Canada’s obligations under Chapter 11 of the Nafta”. The case is under arbitration.
Or consider Phillip Morris’s multibillion-dollar lawsuit against the Australian government over cigarette-packaging regulation, which uses an investor-state-dispute-settlement clause established in a 1993 free-trade agreement between Australia and Hong Kong.
These corporate-friendly provisions in trade agreements can and have been used on far-ranging issues, from minimum wage laws in Egypt to environmental remediation in developing countries. The troubling, explosive growth of such cases point to a litigious future where corporate interests increasingly appear to trump national sovereignty with billions of dollars at stake.
Is giving American companies even more incentive to move American jobs abroad what we want from a Democratic president? No. Is giving corporations the ability to defeat national attempts to hold them accountable what we want from a Democratic president? No. Is outsourcing pollution to the world’s poor what we want from a Democratic president? No. Fighting the TPP needs to be central to the political agenda of progressives over the next two years.