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Congress Close to Fast-Tracking Giant Pacific Trade Deal

House Halts Trade Bill: May 25: House Democrats went counter to norms by voting against assistance to those who would lose jobs from trade bill imports, a tactic to guarantee that Democrats would vote against the trade bill itself for lacking this this provision. For the President, who allied with Republicans against unions in a reversal of form — anything to get his trade bill passed — it halts fast-tracking the trade bill in its tracks.
            

      It is the biggest trade deal since the North American Free Trade Agreement (NAFTA), signed by Bill Clinton over twenty years ago. That one linked the U.S. with Canada and Mexico. This time it is twelve nations bordering the Pacific, a pact that will will create jobs and expand our exports, insists President Obama. Not so, say Democrats and unions. It will export the jobs themselves to low wage countries, witness the damage of past trade deals. They can point to March's 43% jump in the trade gap to $51.4 billion, the highest since October 2008. That the pact has been negotiated in secret serves to heighten their anger.

Just as the Affordable Care Act was the "signature achievement" of his first term, Obama badly wants the Trans-Pacific Partnership (TPP) to adorn his second term. He is lobbying hard to make it happen. Essential is that Congress "fast track" the deal — agree to simply an up or down, yea or nay, vote, with no amendments, no debate and no filibustering. The other countries in the group, especially Japan, won't have it any other way. They won't sign off on final conditions only to have the American Congress step in and scramble the terms.

For that to happen, both houses of Congress must agree to special rules for passing trade bills, rules set forth in a prerequisite bill called Trade
Promotion Authority. The TPA would govern not just the Trans-Pacific bill but would "grease the skids", as Sen. Elizabeth Warren (D-MA) puts it, for every trade bill that comes before Congress in the next six years. "The next president and, potentially, the one after that, will have the same ability to ram through trade deals, and so when President Obama says that he refuses to work on a trade deal that would weaken financial regulations", as would the pending European trade agreement of 28 nations and the United States, "he can't bind the next president".

status

The Senate has passed the TPA bill 65-33 and it is now for the House to decide, where not all Republican votes are assured. Factions bridle at terms that allow foreign corporations to sue to challenge our laws, so the administration is pressuring Democrats to go against their normal backing of labor and jobs to make up the difference.

Even if this fast-track procedural bill sails through, passage of the trade deal itself could derail. Committee members have come up with "objectives" that they expect to see met once the secret terms are revealed. They cover intellectual property protection, removal of barriers blocking our agricultural exports, worker safety, environmental standards, human rights — the list is 150 items long. If the United States trade representative fails to meet the objectives, a 60-vote majority can switch off “fast-track” and open the deal to amendments.

why so secret?

Almost entirely absent from current media coverage or politicians' comments is any mention of provisions of the draft pact that go far beyond just trade. As this page covered in an exposé titled "Corporations Press for Power Grab in Pacific Trade Pact" over a year ago, a time when mention of the TPP was missing altogether from the media, 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 had been exposed by Wikileaks, revealed why negotiations have been conducted all these years at a level of such secrecy (a title page is marked "classified" by the U.S. government) that participating nations are pledged not to reveal their contents until four years after the final deal is struck or talks are abandoned.

That collides with what Congress demands. Another provision of its fast-track bill calls for laying the agreement bare in a 60-day period for public review and comment before Obama can sign. That's far removed from today's rules. Now, only members of Congress can view the document, only in a basement room of the Capitol Visitor Center, only one section at a time, no copies, no notes even, and no discussing what they've read. “It’s like being in kindergarten,” said House member Rosa DeLauro (D-Ct), who leads the opposition to Obama’s trade agenda. “You give back the toys at the end.”

This much is known from the leaks, and makes clear why the administration and negotiators want to keep the pact secret:

Some 600 corporations have had special reviewing access during the long negotiations, and have let their desires be known. They make up 84% of the advisory conclave. Unions, whose workers stand to be greatly affected, have a less than 5% representation.

All government contracts would be open to bidding by foreign corporations. Buy American would be outlawed.

Corporations will not be constrained by a country's laws. They will be able to sue governments when disputes arise, their cases decided not in that country's judicial system, but by World Bank and United Nations tribunals.

Corporations setting up shop in a member country would be given special privileges. If a law is subsequently passed that affects their profits negatively, they will be compensated. Native companies will not enjoy that benefit.

Provisions proposed by the U.S. carve out protections for pharmaceutical companies, allowing "evergreening" patent extensions to delay cheaper generics from entering the market so that drug prices can remain high.

There are questions about food safety, about restrictions against inspecting food entering the U.S. from countries that have minimal or minimally-enforced food regulations. There are allegations that environmental requirements have been weakened to accommodate certain countries as "when Peru walked back from environmental regulations", complained Ms DeLauro to the The New York Times. She says she was ignored when such concerns were raised with Michael Froman, the trade representative in charge of negotiating for the U.S. and keeper of the tight lid on the contents of the agreement.

labor under assault again

International trade pacts of the past make make it a certainty that still more jobs will be lost. A 2013 study attributes competition from Chinese imports as the cause for one quarter of the decline in U.S. manufacturing employment between 1990 and 2007 and foreign competition depressed the
wages of those jobs that remained. A study from the University of California at San Diego reckons that the flood of cheap Chinese imports cost the U.S. 2 million to 2.4 million manufacturing jobs between 1999 and 2011.

As imports flowed in, our deficit with Canada and Mexico went from $26.1 billion to $185.4 billion by 2011. NAFTA cost the United States a million jobs, according to the Economic Policy Institute. Sen. Orrin Hatch (R-UT), co-sponsor of the fast-track legislation, lacks the scruples to admit that. On the NewsHour he looked right at the camera and said, the impression of job loss "is false. There were some jobs lost under NAFTA...but there were a lot of jobs that were created under NAFTA, too, and anyone who says otherwise is just not telling the truth".

Two 2014 papers concluded that the globalization between 1983 and 2002 that forced American workers out of manufacturing and into lower-paying jobs in other sectors led to real wage losses of 12% to 17%. In short, whether from formal trade agreements or free trade globalization, American workers took a beating.

Obama only acknowledges that "there was some erosion of our manufacturing base at the time".

this time it's different

Proponents of the trade deal say that manufacturing jobs are already gone, so what's to lose? “TPP isn’t about manufacturing. Globalization in that sector is a fait accompli,” says Gordon Hanson, one of the authors of the UCal San Diego study. This agreement won't have much of an effect on U.S. jobs, says that argument.

Instead, it will force open doors where U.S. firms, especially services such as finance and insurance, are denied entry or where intellectual property is charged onerous tariffs. There are rules to combat hidden protection such as subsidies that fund state-owned enterprises or businesses that countries view as strategic.

Instead of losers there will be winners, especially American agriculture, technology, insurance and pharmaceutical companies and large manufacturers.

“Ninety-five percent of the world’s customers are outside of the United States,” said Obama in a late-April radio address. “The fastest-growing markets in the world are in Asia. Jobs at businesses that export are good, middle-class jobs. On average they pay more than other jobs.”

Obama is pitching the deal as "the most progressive trade bill in history. It will have the kinds of labor and environmental and human rights protections that have been absent in previous agreements".

the bigger agenda

That's for public consumption. For Obama, the larger dimension of the Trans-Pacific Partnership is as a blocking move to retain American control of the Pacific with a ring of allied countries. It is a counterweight against China's aggressive moves. He is probably less concerned about trade per se. The test of that should become apparent in the final terms with Japan, which has always played the United States for a willing fool, blocking a long list of our goods that still includes automobiles and agriculture. With the Japanese Prime Minister Shinzo Abe at his side during a recent visit to the U.S., Obama said, "There are many Japanese cars in America; I want to see more American cars in Japan as well". That puts it mildly. The ratio verges on the infinite.

Abe's willingness to join TPP is motivated by the threat of China. Japan watchers think he believed that by joining the U.S. in its move to block China, Japan would be spared from making real concessions. We will undoubtedly see Japan continue to limit our autos from his country, continue to protect inefficient Japanese farms from rice imports, continue to limit imports of beef and pork. Yet incredibly, Abe wants us to do away with our 2.5% tariff on Japanese cars. Obama is so anxious for the trade deal to go through that, much like one after another concession to Iran in the nuclear negotiations, we will probably see him go along with continued Japanese protectionism. Except we may never get to see what concessions are made to Japan. They will likely be buried in secret side deals sequestered from the view of the other trading partners who, if they knew, would demand the same.

In other words, as a trade deal meant to level playing fields, the TPP is something of a sham. More to the point, as Obama said in this year's State of the Union address, “China wants to write the rules for the world’s fastest-growing region.Why would we let that happen? We should write those rules”. Just recently Obama countered critics with:

“China, the 800-pound gorilla in Asia will create its own set of rules,” and is busy forming trade relationships across Asia “that advantage Chinese companies and Chinese workers and ... reduce our access ... in the fastest-growing, most dynamic economic part of the world.” But if we close on the TPP, “China is going to have to adapt to this set of trade rules that we’ve established.” If instead we fail, 20 years from now we will “look back and regret it”.

Defense Secretary Ashton Carter put it more succinctly. The trade deal is “as important to me as another aircraft carrier.”

1 Comment for “Congress Close to Fast-Tracking Giant Pacific Trade Deal”

  1. J. Thomas

    Why would any sane person be opposed to a free trade agreement? NAFTA effectively destroyed the American middle class, so lets get on with it! The sooner we can establish a one world police state with no middle class we can perfect Communism and have heaven on earth. No inequality! Let’s have everyone starve to death equally worldwide!

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