I’d be surprised if a single voter cast their ballot on Tuesday so multinational corporations could exempt themselves from national laws. I don’t remember one TV ad framing the election as a chance to raise prescription drug prices in poor countries, or to stop the government from buying American-made goods. Maybe I missed the cable news chatter about muting the legislative branch’s power to define regulatory boundaries.
However, those could be the biggest results of this week’s GOP takeover of the Senate. Every election post-mortem looking for areas of potential cooperation between the Republican Congress and President Obama starts with “free trade.” Because the Washington elite’s hearts go a-flutter whenever they hear the term “free trade,” they see the deals as just the kind of bipartisan solution they think the country has yearned for. But the deals being readied by the Obama Administration actually don’t have much to do with trade at all; they’re about corporate power.
For years, the White House has been quietly negotiating two pacts with countries in Europe and Asia that comprise the vast majority of the world’s economy. It’s hard to give a comprehensive update on these talks because we know so little about the details. Talks on the first, the Trans-Pacific Partnership, have been conducted behind closed doors, with few if any updates. We do know the countries involved: the U.S., Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, South Korea, and Vietnam.
One striking feature here is that we already have formal trade agreements in place with most of these countries. Everyone knows NAFTA, the trade deal with Canada and Mexico. The South Korea Free Trade Agreement was negotiated by George W. Bush and signed by President Obama in 2011. We have binding free-trade deals with Australia, Chile, Peru, Singapore, and Vietnam, and it’s not like there are insurmountable barriers with the rest. As Paul Krugman points out, high trade tariffs are almost non-existent these days. With globalization firmly in place, claims that more “free trade” will increase exports or create jobs are extremely dubious.
In fact, TPP has a lot of protectionism in it; only this time, the goal is to protect corporate profits, rather than workers or citizens. Supporters argue that TPP would merely “harmonize” regulations, to smooth commerce across countries. In this telling, it’s just too hard for corporations to adhere to so many different national standards, so just having one benchmark, preferably set extremely low, would spur some sort of trade revolution.
In reality — at least as far as we know from leaked texts — TPP would limit government policies on everything from financial services to the environment to food safety. Initiatives like “buy American” laws, which mandate government purchases with domestic producers, would be tossed out under TPP, to name just one example.
To enforce TPP, as economist Dean Baker points out, the deal sets up an alternate judicial system for large corporations, known as “investor-state dispute settlement councils.” Countries would have to adjudicate disagreements with corporations with these foreign tribunals instead of their own courts. Additionally, private corporations would have the right to sue countries through the settlement council process, by seeking monetary sanctions on any country that they claim breaks the agreement and constrains their “expected future profits,” a direct quote from one of the texts.
In particular, the TPP aggressively defends intellectual property rights, patents and copyrights on things like entertainment and prescription drugs. Critics contend this will stunt innovations in digital media, erode privacy laws, and kill many generic prescription drugs while disabling countries’ efforts to negotiate lower drug prices, ensuring a healthy market for Big Pharma around the world. This directly contradicts foreign policy initiatives like the president’s AIDS relief program, by increasing the cost and reducing access to life-saving medication.
The other “trade” agreement, the Transatlantic Trade and Investment Partnership, follows the same basic formula, only between the U.S. and the 28 member states of the European Union. Again, the TTIP would “streamline” regulations, setting ceilings for the signatories on health and safety standards for their citizens across a wide range of issues. And both are considered “launching agreements,” which any country can subsequently join. So the potential exists with these deals for a global rollback of regulatory burdens.
Why does the Republican Senate takeover provide a path for these deals? Because in January, Harry Reid decided to deny President Obama the critical tool of “fast-track” trade authority. This allows the chief executive to put trade agreements through an expedited process, where Congress would be able only to vote up or down, with limited debate and no amendments. The purpose is to limit re-negotiation of trade deals after Congressional passage, but fast-track limits democratic accountability and transfers to the executive power granted to the legislative branch in the Constitution. Mitch McConnell, the likely new Senate Majority Leader, has suggested support for fast-track, a priority of business lobbying groups like the U.S. Chamber of Commerce.
Many Democrats oppose the TPP, citing concern with excessive secrecy, the potential for undermining regulations, and the theory that any gains from the deal would go to the corporate elite at the expense of the public. Among Republicans, there’s a split between their establishment and Tea Party grassroots wings. But pro-corporate politicians of both parties could constitute enough of a majority to push fast-track through, especially now that Reid cannot block it from a Senate vote.
The biggest chance to stop the TPP and other deals comes from foot-dragging from the negotiating countries, some of whom oppose the deal’s restrictions on state-owned enterprises, patent protections and other issues. However, signatory nations have mostly blamed TPP’s impasses on the lack of fast-track authority for President Obama. If that goes through, other countries would feel better about returning to the bargaining table. While the TTIP deal with Europe looks dead with or without fast-track, Congress handing over authority to Obama could easily revive the TPP. Coincidentally, the president will meet with leaders of TPP negotiating partners at the APEC Summit in Beijing next week.
The media generally depicts trade deals as a universal good, and in this case, a long-sought opportunity for bipartisan compromise, heralded as the new dawn for an era of good feeling, sweetness, and light. In reality, TPP represents a bid by the business community to cash in their election chits, to reap the fruits of their campaign contributions. Beltway insiders, eager to set up their next job or reward their next donor, like the idea of more trade deals. The public has little say in the matter.
Public Citizen’s Global Trade Watch, which has been working on trade issues almost single-handedly for years, believes that a trans-partisan coalition of House liberals and conservatives could defeat fast-track and sideline TPP. That contrasts much of the chatter coming out of Washington. But with sufficient grassroots pressure, perhaps this exercise in corporate hegemony masquerading as trade policy can get spiked.
At any rate, people should educate themselves about the TPP, because it’s not like the politicians will clue them in. It’s a serious problem for democracy when the results of elections have nothing to do with campaigns waged.
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