The New York Times continued its too-frequent habit of stenography for the White House. This bad habit was on full display in NYT editorial board's paean to the Trans-Pacific Partnership.
The NYT editorial board was really excited about the prospect of this managed trade deal:
Officials from the United States and 11 other countries bordering the Pacific are trying to complete a trade agreement by the end of the year that could help all of our economies and strengthen relations between the United States and several important Asian allies. But hard bargaining lies ahead.As CEPR economist Dean Baker has frequently pointed out, formal trade barriers like tariffs and quotas just aren't very large anymore. (And I think we all know that the U.S. is not going to change the quotas of its appalling agricultural policy.)
The Obama administration said it wants a “next-generation” agreement that, in addition to lowering tariffs, lowers investment restrictions, improves labor rights, encourages environmental protection and reduces government favoritism of state-owned businesses. That is an ambitious agenda considering that more than 150 countries are struggling to complete a much simpler deal at the World Trade Organization.
Baker has also regularly noted how the TPP approach to prescription drugs belies any claims to "free trade":
The gap between free trade and the agenda of the TPP is clearest in the case of prescription drugs. The U.S. drug companies have a major seat at the negotiating table. They will be trying to craft rules that increase the strength of patent and related protections. The explicit purpose is to raise (as in not lower) the price of drugs in the countries signing the TPP.Public Citizen has consistently been the best resource for information about the TPP as the negotiations have continued under the shroud of secrecy. Public Citizen has gained most of its information through leaks because the administration has been even less transparent than the Bush administration in its negotiations. The administration has prohibited Congressional staffers from reviewing the full text and from discussing its specific terms with trade experts and reporters. The corporations that would benefit from the TPP have been, of course, embraced with open arms into the negotiations, and labor and civil society groups have been allowed into talks only if they promise to keep all negotiations confidential and not publicly speak out against them.
Note that this goal is the opposite of what we would expect in an agreement designed to promote free trade. Instead of having drug companies at the table, we might envision that we would have representatives of consumer groups who would try to negotiate rules that could ensure safe drugs at lower prices. Instead of using a “trade” agreement to try to push drug prices in other countries up, we could actually use trade to bring the price of drugs in the United States down to the levels seen elsewhere.
On the point of transparency, I refer you to Senator Elizabeth Warren who voted against US Trade Representative Michael Froman because of such lack of transparency:
I have heard the argument that transparency would undermine the Trade Representative’s policy to complete the trade agreement because public opposition would be significant. In other words, if people knew what was going on, they would stop it. This argument is exactly backwards. If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the United States.One might wonder why the administration has been so secretive, but when you find out about the details of the TPP from the leaks so far, it's easy to see why they don't want the public to know.
I believe in transparency and democracy, and I think the U.S. Trade Representative should too.
Considering that the New York Times praised the president's purported emphasis on labor and environmental protections in trade deals, let's address that point because it's where the TPP is perhaps most destructive.
The main reason why so many corporations have been championing the TPP is its enshrinement of corporate power and privilege as against national and popular sovereignty in the TPP:
Under the Trans-Pacific Partnership (TPP) "free trade" agreement, foreign firms would gain an array of privileges:(Emphasis added)
• Rights to acquire land, natural resources, factories without government review
• Risks and costs of offshoring to low wage countries eliminated
• Special guaranteed “minimum standard of treatment” for relocating firms
• Compensation for loss of “expected future profits” from health, labor environmental, laws (indirect or “regulatory” takings compensation)
• Right to move capital without limits
• New rights cover vast definition of investment: intellectual property, permits, derivatives
• Ban performance requirements, domestic content rules. Absolute ban, not only when applied to investors from signatory countries
A major goal of U.S. multinational corporations for the TPP is to impose on more countries a set of extreme foreign investor privileges and rights and their private enforcement through the notorious “investor-state” system. This system elevates individual corporations and investors to equal standing with each TPP signatory country's government- and above all of us citizens.
Under this regime, foreign investors can skirt domestic courts and laws, and sue governments directly before tribunals of three private sector lawyers operating under World Bank and UN rules to demand taxpayer compensation for any domestic law that investors believe will diminish their "expected future profits." Over $3 billion has been paid to foreign investors under U.S. trade and investment pacts, while over $14 billion in claims are pending under such deals, primarily targeting environmental, energy, and public health policies.
Who needs democracy when you have "private individuals...entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament"?
The Sierra Club has been particularly critical of the TPP because of its undermining of domestic environmental regulations. Big polluters have used the investor-state process to weaken or void democratically passed legislation. Corporations such as Exxon Mobil and Dow Chemical have launched more than 450 cases against 89 governments, with 70% of the money paid out going to oil, gas, and mining industries.
The Sierra Club has also pointed out how the TPP would increase the use of fracking:
One of the dirtiest secrets of the TPP is its potential to pave the way for dramatically increasing fracking across the United States.The TPP could also potentially outlaw GMO labeling.
How the TPP could increase fracking
In order for the United States to export natural gas to another country, the Department of Energy (DOE) must first conduct a thorough public analysis to determine whether those exports are consistent with the public interest. This analysis is critical to understanding the environmental and economic impacts associated with natural gas exports and to building a deliberate energy policy that protects the interests of the American public.
Unfortunately, the DOE loses its authority to regulate exports of natural gas to countries with which the United States has a free trade agreement that includes so-called “national treatment for trade in gas.”
The TPP, therefore, could mean automatic approval of liquid natural gas (LNG) export permits—without any review or consideration—to TPP countries. And many TPP countries would likely be quite interested in importing LNG from the United States. This is particularly true of Japan—the word’s single largest LNG importer—which has formally announced its intention to join the talks.
Already, the DOE is considering applications to export approximately 45% of the total U.S. domestic gas production. Exporting this volume of US LNG would in turn mean increased fracking, the dirty and violent process that dislodges gas deposits from shale rock formations. It would also likely cause an increase in natural gas and electricity prices—up to three times their current price by some estimates—impacting consumers, manufacturers, and workers, while increasing the use of dirty coal power.
On the labor front, the TPP would also prohibit the "Buy America" laws that some states and municipalities have passed recently:
The TPP’s procurement chapter would require that all firms operating in any signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold. To implement this “national treatment” requirement, the U.S. would agree to waive Buy America procurement policies for all of the firms operating in the TPP countries.I'd also refer you to last week's episode of Moyers & Company, in which Bill Moyers interviewed Naked Capitalism's Yves Smith and CEPR's Dean Baker on the TPP.
Some corporate TPP proponents argue that this is good for America because these rules would apply to all signatory countries, so U.S. firms would be able to bid on procurements contracts in other countries on a national treatment basis. The notion that new access for some U.S. companies to bid on contracts in the TPP countries is a good trade-off for waiving Buy America preferences on U.S. procurement is ridiculous: Taking even the most favorable cut on other countries’ markets, the total U.S. procurement market is more than seven times the size of the combined procurement market of the current TPP negotiating parties: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.