Corporations Press for Power Grab in Pacific Trade Pact

You weren't supposed to know about the Trans-Pacific Partnership (TPP). Behind closed doors the United States and eleven Pacific rim nations have been negotiating a trade pact designed to hand multinational corporations powers greater than their own governments’. It is referred to as "NAFTA on steroids" by those opposed, expected to hand still more jobs to other countries. Yet President Obama has lobbied the Senate for "fast track" treatment to ram it through — an up-or-down show of hands with no debate and no amendments. Awakened to the fast one the president is trying to pull, Democratic Senate chieftain Harry Reid has refused.

Stealth has been essential to keep the public from knowing not just about risks to American jobs that the most wide-reaching trade pact in history would cause, but about the new powers it confers on corporations, which we take up below. We can only suspect that the media have obliged with silence so as not to anger their corporate advertisers. How else to explain what Media Matters has reported. It's a watchdog group with a progressive slant but we'll assume its statistics are agnostic. They reviewed six months of network news (ABC, CBS, NBC) and found not a word of mention of the trade agreement. TPP was mentioned on PBS' "Newshour", but only by a guest in a sentence about relations with Pacific countries. That's it.

Set in motion by George W. Bush in 2008, and now embraced by President Obama, the Trans-Pacific Partnership goes well beyond trade; only 5 of its 29 covenants are concerned with typical trade rules such as tariffs and quotas. The rest, a couple of chapters of which have been exposed by Wikileaks, reveal why negotiations have been conducted all these years at a level of such secrecy that participating nations are pledged not to reveal their contents until four years after the final deal is struck or talks are abandoned.

But 600 representatives of corporations are privy to those contents. Asked to act as U.S. trade advisers, they have access to a secure online site where they may review the documents whenever they choose. They make up 84% of the advisory conclave. Unions, whose workers stand to be greatly affected, have a less than 5% representation. Which explains how some astonishing provisions have found their way into the other 24 covenants, reportedly going well beyond the accommodations to corporations of the last big trade deal, the North American Free Trade Agreement (NAFTA).

Protections for Relocating Corporations: Signatory nations would give special privileges to companies setting up in their country. By making American corporations more comfortable when they move abroad, these protections encourage still greater offshoring of America jobs. And reciprocally, these privileges are what our government will be guaranteeing to any foreign multinational that sets up shop here — for example, compensation for the cost of a regulation enacted after they arrive — competitive advantages not available to U.S. companies.

Regulation Relief: To enforce provisions of the treaty, corporations will be able to sue governments directly, sidestepping a nation’s court system and its laws by bringing cases before special World Bank and United Nations tribunals, with the host nation bound by the compact to compensate the corporation in the event of adverse rulings. Companies can be expected to challenge a country when its laws conflict with the trade agreement. Under what are called “investor state” rights, they can even claim compensation for the alleged loss of “expected future profit”. Multinational companies will finally have found the grail: power greater than that of the sovereign states in which they do business.

Foreign companies could sue for exemption from a country's laws. They could complain that a nation’s food inspection laws exceed those of their home country, for example. Or that product safety regulations go beyond the trade pact and that import of their goods should not be blocked. One need only think of the range of problems the U.S. has had with Chinese imports — toys with lead paint, toothpaste with diethylene glycol, wallboard that has made people ill.

Low wage foreign companies would be free to undermine our minimum wage laws. They would be exempt from any environmental regulations that exceed whatever is universally agreed to by the member countries — which is sure to set a very low bar. A foreign mining company could probably blow past regulations that ban our companies from mining in an area with risks to the water supply.

Bye-bye to Buy American: All government contracts would be open for bidding by foreign companies. Job creation policies that require a contractor to use American labor and manufactures would be outlawed. We would see the American tax dollars that pay for such contracts go to foreign corporations.

Financial License: The TPP’s financial rules seem unmindful of the financial collapse of 2008-2009. They ban restrictions on the very derivatives and credit default swaps that contributed so greatly to a calamitous recession whose effects are still being felt. The banking corporations advising the TPP have kept the casino open internationally, and we will see foreign banks in the U.S. challenging the already heavily eroded financial reform law known as Dodd-Frank.

The trade pact would allow the the TPP organization to step in and throttle lending in a country with an overheated economy. And its protocols even ban a nation’s right to clamp down on the flow of money in and out of a country, a key weapon to control inflation from an excess influx of money and, in the other direction, an excess outflow triggered by a run on banks — a small scale augury of which recently beset Cyprus.

Internet Controls: The Stop Online Privacy Act (SOPA) has found new life in the TPP. The furor aroused by that legislation in the U.S. — where the government attempted to control the Internet — caused it to be scuttled, but now this gathering of countries has decided that they have jurisdiction over the Internet. This reflects U.S. media companies exerting their demands at TPP sessions to protect copyright, and that section of the trade deal — exposed by Wikileaks — shows severe fines for even minor copying.

Keeping Medicine Costly: Those same intellectual property rules have been advanced by the big pharmaceutical companies sitting at the TPP table, who want the power to challenge government healthcare drug pricing and to block low cost generics by extending patents to 20 years. Keeping drug costs high would deliver a serious blow to fighting malaria, HIV/AIDS and other diseases in poor countries.

Open door: The TPP offers open admission. So it is not just a trade association for emerging economies such as Vietnam or Malaysia. Any country on the Pacific rim — there are 38 with Pacific shorelines — may join the talks, as have Mexico and Canada and, just announced, Japan. Or join in the future, which could mean Russia and China. We could thus someday see Chinese companies decamping to the U.S. and suing for the special advantages the U.S. has granted them by signing the TPP.

Lori Wallach at Public Citizen asks what would the U.S. gain from the trade deal. To begin with, we already have agreements with six of the countries comprising 90% of the total GDP of all the partners, so what is the agreement needed? She points out:

“The remaining four countries — Malaysia, New Zealand, Vietnam and Brunei — offer comparably little in new markets for U.S. exports. In Vietnam, annual income per person is just $1,374. New Zealand has a population of only about 4.4 million people — smaller than the metro area of Washington, D.C. Brunei has just 425,000 people — smaller than Huntsville, Ala. Taken together, the four TPP countries with which the United States does not yet have a trade agreement have a combined GDP equivalent to Pennsylvania.”.

And she cites NAFTA’s effect, the pact sold to America by Bill Clinton as a job creator that bound Mexico, the United States, and Canada in a trade compact.

“The year before NAFTA took effect, the U.S. trade deficit with Canada stood at $28.5 billion, while the U.S. enjoyed a $2.4 billion surplus with Mexico. By 2011, the U.S. had a combined NAFTA deficit of $185.4 billion”.

That’s a swing that would have to mean massive job loss. The Economic Policy Institute estimates that NAFTA cost the United States a million jobs.

Congress has been shut out of the proceedings altogether in violation of its constitutional power “To regulate Commerce with foreign Nations”. When Ron Wyden sought access to the texts of the draft agreement, he was denied by the Obama administration, even though Wyden is chairman of the Senate committee that has jurisdiction over trade negotiations. Only when he threatened with legislation to force access to the text by all Congress members were Wyden and his subcommittee staff allowed to view the documents, but only at the United States Trade Representative’s office with no copies taken away.

So how to fathom Obama’s support for TPP, support that is known but barely spoken for fear of sparking a public outcry? It is part of his shift to Asia, but should that be at all costs? Is it just ego — wanting to have another big achievement to his name without regard for the consequences. Labor is of course against it, which would make for a betrayal of the voters who supported both his elections. They remember NAFTA.

Obama has asked Congress for Trade Promotion Authority — known as “fast-track” — which requires an up or down vote with no filibuster and no amendments, knowing that the pact would never survive debate and that other nations would refuse changes. Congress has resisted — 130 House members signed a letter last year objecting to being shut out of the process and in mid-November of this year the New York Times reported that nearly half of House members signed letters or indicated their objection to fast-track. Pressure by the Obama administration and business leaders such as the Business Roundtable for Congress to vote acceptance this year narrowly missed. The pact contains provisions of foreign sway over U.S. laws and practices that Republicans abhor and still further loss of jobs that infuriates Democrats. But whether the delay will translate into enough time for Congress to wake up to how much is unacceptable in the trade deal is the question.

Editorial pages are all for it. With mild misgivings, a Times editorial says it could “help all of our economies and strengthen relations between the United States and several important Asian allies”. The Wall Street Journal is of course for it, faulting Obama for not having “reached out to Republicans who will have to provide most of the free-trade votes”. How Bloomberg/BusinessWeek thinks “the TPP would create tens of thousands of jobs in the U.S." by expanding trade with a passel of subsistence wage countries is baffling. All extol the trade pact for eliminating tariffs and spurring global economic growth. They seem willfully unaware of all those chapters that are not about trade. And will this be another hugely important policy that Congress passes without reading?