[CTC] Trans-Pacific Partnership Will Undermine Democracy, Empower Transnational Corporations

[Arthur Stamoulis]

TransPacific Partnership Will Undermine Democracy, Empower  
Transnational Corporations

  Wednesday, 27 March 2013

By Margaret Flowers and Kevin Zeese
  Truthout | News Analysis

Our country's democratic values could be under threat if President  
Obama fast tracks the Trans-Pacific Partnership.
On critical issues, the massive Trans-Pacific Partnership (TPP) being  
negotiated in secret by the Obama administration will undermine  
democracy in the United States and around the world and further  
empower transnational corporations. It will circumvent protections for  
health care, wages, labor rights, consumers' rights and the  
environment, and decrease regulation of big finance and risky  
investment practices.

The only way this treaty, which will be very unpopular with the  
American people once they are aware of it, can be approved is if the  
Obama administration avoids the democratic process by using an  
authority known as "Fast Track," which limits the constitutional  
checks and balances of Congress.

If the TPP is approved, the sovereignty of the United States and other  
member nations will be dissipated by trade tribunals that favor  
corporate power and force national laws to be subservient to corporate  
interests.

Circumventing the Checks and Balances of US Democracy

President Nixon first developed the idea of "Fast Track" in 1973 as a  
way to secure Congressional approval of trade agreements, and it has  
been a key to passing many unpopular agreements such as the World  
Trade Organization (WTO) and NAFTA. As people have caught on to the  
offshoring of jobs and other detrimental consequences of these  
agreements, civil society now understands how important it is to not  
allow a president to circumvent the democratic role of Congress. Fast  
Track expired in 2007, so President Obama must have it re-instated in  
order to pass the TPP. His administration is moving to have Fast Track  
approved and hopes it will happen by this summer.

Under Fast Track, the president was allowed to negotiate and sign  
trade agreements with whatever countries the executive branch selected  
- all before Congress voted on the agreement. Fast Track meant that  
the Congressional committee processes were circumvented and the  
executive branch was empowered to write lengthy implementing  
legislation for each trade pact without Congress. These executive-only  
authored bills required US law to conform to the trade agreement. For  
example, Glass-Steagall had to be repealed under President Clinton to  
conform to the WTO. And, Fast Track empowered the president to submit  
the executive-branch written bill for a mandatory vote within a set  
number of days, with all amendments forbidden, normal Senate rules  
waived, and debate limited in both chambers of Congress. Fast Track  
clearly undermined democracy.

Indeed, Fast Track turned the US Constitution on its head. Under  
Article I Section 8, Congress has exclusive authority "to regulate  
commerce with foreign nations" and to "lay and collect taxes [and]  
duties." Under the Constitution, the president is empowered to  
negotiate treaties, but Congress must vote to approve them. Thus, Fast  
Track took constitutional power from Congress and prevented the checks  
and balances needed to prevent an imperial presidency.

For most of the history of the United States, treaties and trade  
agreements went through the normal congressional process described in  
the Constitution. Fast Track is a relatively new concept that  
coincides with an era of increasing presidential power, which includes  
the power to declare war and to murder US citizens without warning or  
judicial oversight. If Congress had reviewed agreements such as the  
WTO and NAFTA beforehand and civil society had been able to  
participate in a democratic process, would the United States have made  
the mistake of passing these laws that have so injured our economy and  
others?

Fast Track is very unpopular, so now President Obama and others who  
advocate for it do not use the term. Instead they call it by the  
euphemism "Trade Promotion Authority." But changing the name does not  
change what it is - a method of ceding the constitutional power of  
Congress and undermining the checks and balances built into the  
constitutional framework.

Congress needs to consider what agreements such as the TPP will do to  
jobs, trade balances and the environment. Since Nixon, Fast Track has  
been used by presidents to go way beyond trade and tariffs. These  
agreements have been used to change US law by establishing "rules  
related to domestic environmental, health, safety and essential- 
service regulations, including deregulation of financial services;  
establishment of immigration policies; creation of limits on local  
development and land-use policy; extension of domestic patent terms;  
establishment of new rights and greater protections for foreign  
investors operating within the United States that extend beyond US  
law; and even limitation of how domestic procurement dollars may be  
spent." Thus, not only has the constitutional power of Congress to  
regulate commerce with foreign nations been undermined, but a whole  
host of domestic laws have been rewritten to satisfy international  
trade.

The TPP Undermines US Law, Prevents Progressive Policy Around the World

The TPP is much broader than the usual trade agreement and will impact  
many aspects of society from the Internet to health care to regulation  
of risky bank speculation. For this reason alone, it is especially  
important to have a transparent, public debate on the agreement. The  
TPP contains 26 chapters, but only five of them concern traditional  
trade issues. The TPP has been negotiated in secret except for over  
600 corporate representatives who have been advising the US trade  
representative on its language. In Washington, DC K Street lobby firms  
have been getting involved in the process, including pushing for Fast  
Track. Many of those corporations that have failed to get what they  
want from Congress are now getting their way through the secret back  
door of the TPP.

Though the TPP negotiations are being conducted in secrecy, portions  
of the text have been leaked. Here is what is known about some of the  
key issues that the TPP will affect:

Prevent Buy America Manufacturing Preferences: The TPP's procurement  
chapter ends 'Buy America' preferences by requiring that all firms  
operating in any signatory country are provided equal access to US  
government procurement contracts over a certain dollar threshold, the  
same access that domestic firms have. To implement this, the United  
States would agree to waive "Buy America" procurement policies.

Undermine Environmental Laws and Regulations: Similarly, governments  
who are seeking to encourage localization and green manufacturing  
through procurement preferences will be stopped. A recent example  
involved Ontario, Canada, which has employed a renewable energy  
program that requires energy generators to source solar cells and wind  
turbines from local businesses so as to cultivate a robust supply of  
green goods, services and jobs. The program has earned acclaim for its  
early success in generating 4,600 megawatts of renewable energy and  
20,000 green jobs. But, the WTO ruled that this violated WTO rules. In  
another case, a US company Lone Pine Resources is suing the Canadian  
government under NAFTA for more than $250 million due to lost profits  
from Quebec's moratorium on fracking, which prevents Lone Pine from  
fracking under the St. Lawrence River. This is not an isolated incident:

. . . corporations such as Chevron, Exxon Mobil, Dow Chemical, and  
Cargill have launched 450 investor-state cases against 89 governments,  
including the United States. Over $700 million has been paid to  
corporations under US free trade agreements and bilateral investment  
treaties, about 70 percent of which are from challenges to natural  
resource and environment policies. Corporations have launched attacks  
on a range of public interest and environmental regulations, including  
bans or phase-outs of toxic chemicals, timber regulations, permitting  
rules for mines, green jobs and renewable energy programs, and more.

Undermine Internet Freedom: The Electronic Freedom Foundation (EFF)  
argues that the intellectual property chapter (see the February 2011  
draft US TPP IP Rights Chapter [PDF]) would have extensive negative  
ramifications for users' freedom of speech, right to privacy and due  
process, and hinder peoples' abilities to innovate. Its provision on  
copyrights will adversely affect the creator's ability to create  
content, the ability of technology companies to make innovative  
products, and the ability of users to use content in new ways. EFF  
summarizes the attack on Internet freedom by the TPP, writing:

In short, countries would have to abandon any efforts to learn from  
the mistakes of the US and its experience with the DMCA over the last  
12 years, and adopt many of the most controversial aspects of US  
copyright law in their entirety. At the same time, the US IP chapter  
does not export the limitations and exceptions in the US copyright  
regime like fair use, which have enabled freedom of expression and  
technological innovation to flourish in the US. It includes only a  
placeholder for exceptions and limitations. This raises serious  
concerns about other countries' sovereignty and the ability of  
national governments to set laws and policies to meet their domestic  
priorities.

Destroy Food and Agriculture: Agriculture trade rules have both  
undermined US producers' ability to earn a fair price for their crops  
at home and in the global marketplace. Multinational grain-trading and  
food-processing firms have made enormous profits, while farmers on  
both ends have been hurt. The results are that hunger is projected to  
increase, along with illicit drug cultivation, and undocumented  
migration. Dairy farmers fear the TPP could decimate the US dairy  
industry and have urged Congress to refuse to Fast Track it. Failure  
to establish new agriculture terms would intensify the race to the  
bottom in commodity prices, pitting farmer against farmer and nation  
against nation to see who can produce food the cheapest, regardless of  
labor, environment or food-safety standards. Regarding food safety,  
current trade agreements contain language requiring the United States  
to accept imported food that does not meet our domestic safety  
standards and limiting inspection of imported foods and products. The  
TPP is expected to continue these practices.

Prevent Health, Safety, Environment, Consumer and Labor Laws:  
According to leaked documents, the TPP contains provisions with  
special rights for corporations. The provisions protect investors by  
providing them with compensation for loss of "expected future profits"  
from health, labor, environmental and other laws. The negative effect  
is that nations will not pass laws that threaten corporate profits in  
order to avoid lawsuits and heavy fines. Court cases in which  
corporations are suing governments over laws and regulations that  
cause loss of expected profit will be tried before a trade tribunal of  
three judges. These judges can include corporate lawyers on temporary  
leave from their corporate job while they serve as judges. Global  
Trade Watch reports that under previous trade agreements "Over $3  
billion has been paid to foreign investors under US trade and  
investment pacts, while over $14 billion in claims are pending under  
such deals, primarily targeting environmental, energy, and public  
health policies." The right to sue governments will create a hurdle  
for governments considering actions to protect workers, consumers,  
health and the environment.

Privatize Health Care and Make it Unaffordable: Leaked documents show  
that the US Trade Representative is pressuring TPP member countries to  
expand pharmaceutical monopoly protections, which essentially trade  
away access to medicines. In a recent letter, Doctors Without Borders  
wrote that the TPP will be "the most harmful trade deal ever for  
access to medicines in developing countries." The TPP does this damage  
by inflating pharmaceutical prices through lengthy patent protections,  
as Doctors Without Borders writes:

One proposed TPP provision would require governments to grant new 20- 
year patents for modifications of existing medicines, such as a new  
forms, uses or methods, even without improvement of therapeutic  
efficacy for patients. Another provision would make it more expensive  
and cumbersome to challenge undeserved or invalid patents; and yet  
another would add additional years to a patent term to compensate for  
administrative processes. Taken together, these and other provisions  
will add up to more years of high-priced medicines at the expense of  
people needing treatment waiting longer for access to affordable  
generics.

There is also concern that the TPP will force public health systems to  
open up their medication programs to pharmaceutical corporations  
giving them greater access and greater control over the price of  
medications, effectively destroying the ability of the public health  
system to negotiate for a low price. The same may occur with public  
health systems in the US such as Medicare, Medicaid, Tricare and the  
Veterans Health Administration, making medications more expensive and  
potentially out of reach for their patient populations.

In addition, countries that provide health care through a national  
public health program, rather than a market-based system dominated by  
for-profit insurance, are threatened by provisions that oppose state- 
owned enterprises. Corporations view state provision of services as  
unfair competition and therefore a violation of free trade. This will  
make it more difficult for the United States to adopt a single-payer  
health system, and it will make it more difficult for countries with  
such systems to protect them from privatization and health insurance  
domination.

Prevent Public Banks and Banking Regulation: These same provisions  
about state-owned enterprises will affect public banking too. North  
Dakota is the only state in the US to have a public state bank,  
although over a dozen states and cities are considering them. Public  
banks are used to hold taxes that are collected, administer payroll  
for public employees and provide loans for public projects. The  
advantage is that all public dollars are managed in a public  
institution rather than having to pay fees and interest to a private  
bank. But the TPP would consider public banks to have unfair  
advantages and therefore violate free trade.

And trade agreements protect big finance by (1) preventing regulation  
of the finance industry by locking in a model of extreme financial  
service deregulation; and (2) allowing capital to move in and out of  
countries without restrictions. This prevents countries from  
controlling the flow of capital, which has many negative consequences.  
Over 100 economists wrote trade representatives urging them to ensure  
that the TPP, unlike other trade agreements, will allow governments to  
control and regulate capital without the threat of investor lawsuits,  
writing:

Authoritative research published by the National Bureau of Economic  
Research, the International Monetary Fund, and other institutions has  
found that limits on short-term capital flows can stem the development  
of dangerous asset bubbles and currency appreciations, grant nations  
more autonomy in monetary policy-making, and protect nations from the  
dangers of abrupt capital flight.

See 102 Economists Issue Statement on Capital Controls and TPP

Thus, the TPP and other corporate trade agreements will undermine the  
ability of governments to regulate health, safety, labor, environment  
and finance. The 600 corporate advisers to the TPP see this as an  
opportunity to do an end-run around laws and policies that they have  
been unable to put into effect through the normal democratic process.  
This is why the TPP is being called a global corporate coup that makes  
corporations more powerful than governments.

Corporate Trade Agreements Hurt the US Economy

The evidence is stark that so-called 'free' trade agreements, really  
corporate trade agreements, are bad for the US economy.

Newly-released government trade data for 2012 show job-eroding US  
trade deficits have ballooned in countries with which the US has a  
corporate trade agreement and have declined in the rest of the world.  
The numbers are stark. In countries where the US has a trade  
agreement, the trade deficit has grown by more than 440 percent, while  
in countries where there is no agreement, the deficit has declined by  
7 percent. In fact, the aggregate US trade deficit with trade- 
agreement partners is more than five times higher than it was before  
the deals went into effect, while the aggregate deficit with non-trade- 
agreement countries has actually fallen slightly.

And, this means a tremendous loss of jobs. Using the Obama  
administration's net exports-to-jobs ratio, the FTA trade deficit  
surge means the loss of nearly one million American jobs.

We should have learned this lesson from NAFTA because what we are  
seeing with corporate trade agreements since NAFTA is more of the  
same. Under NAFTA, the US deficit with Canada ballooned and the small  
US surplus with Mexico turned into a $100 billion-plus deficit. As a  
result of NAFTA, the United States lost 692,000 jobs according to the  
Economic Policy Institute.

But, instead of learning from NAFTA, President Obama pushed a trade  
agreement with South Korea, promising it would result in economic  
benefits for the United States. One year has now passed since the  
Korean trade agreement was put into effect and the US ended up with  
the same result as it experienced with NAFTA. Eyes on Trade reports:

US goods exports to Korea have dropped 9 percent (a $3.2 billion  
decrease) since the Korea FTA took effect, in comparison to the same  
months in the year before FTA implementation. US imports from Korea  
have climbed 2 percent (an $800 million increase). The US trade  
deficit with Korea has swelled 30 percent (a $4 billion increase). The  
January data from the US International Trade Commission show that the  
US trade deficit with Korea skyrocketed 81 percent above December's  
level, topping $2.4 billion – the largest monthly US trade deficit  
with Korea on record. The ballooning trade deficit indicates the loss  
of tens of thousands of US jobs."

Exports are not as robust as advocates of trade agreements would like  
to believe. Between 2002 and 2012, US exports to trade-agreement  
partner countries grew annually at a rate of only 4.8 percent, while  
exports to non-trade-agreement countries grew at 6.6 percent per year  
on average. This has only worsened with the passage of the Central  
America Free Trade Agreement (CAFTA) in 2005, which nearly doubled the  
number of trade-agreement countries. Since then, average US export  
growth to non-trade-agreement countries has topped average export  
growth to trade-agreement partners by 46 percent.

Advocates for corporate trade agreements manipulate statistics in  
order to make a false claim of economic benefit from the agreements.  
They create obvious falsehoods by not counting many major trade  
agreements put in place before 2003. This would exclude big agreements  
like NAFTA, count "re-exports" - goods made elsewhere that are shipped  
through the United States en route to a final destination, omit  
imports in their calculations so people do not see the trade  
imbalance, and not correct for inflation in order to exaggerate exports.

Sadly, rather than being honest about the failure of corporate trade,  
the Obama administration works overtime to mislead the public. The  
recently released 2012 annual trade report leaves out critical details  
from the very beginning. Eyes on Trade analyzes the Obama report:

Take the first sentence: 'Trade is helping to drive the success of  
President Obama's strategy to grow the US economy and support jobs for  
more Americans.' Almost makes you forget that last year's non-oil  
trade deficit rose to a five-year high, implying the loss of millions  
of jobs, doesn't it? How about the second sentence: 'The Obama  
Administration's trade policy helps US exporters gain access to  
billions of customers beyond our borders to support economic growth in  
the United States and in markets worldwide.' That's an interesting way  
to frame a year whose sluggish two percent export growth rate put us  
18 years behind schedule in achieving Obama's export-doubling goal."

Time for a Democratic Revolt Against the TPP

A unique feature of the TPP is that it contains a "docking agreement."  
This means that other countries can sign onto the agreement after it  
has been negotiated as long as they are willing to accept the  
previously negotiated terms. The US started the negotiations with  
allies such as Australia and New Zealand and a number of small  
countries such as Vietnam, Brunei, Malaysia, Chile and Peru. Larger  
countries are able to force smaller, more desperate countries to  
accept terms that are detrimental to them. As more countries sign on,  
the TPP could become an agreement that defines global trade.

The TPP has gone through 16 rounds of negotiations in almost total  
secrecy. Some portions of the text have been leaked, but most remain  
secret. Throughout the process more than 600 corporate advisers have  
been working with the US Trade Representative in shaping the proposals  
and specific language of the text. Civil society has only been  
marginally involved, not provided drafts and ushered into stakeholder  
meetings where they can ask questions but only receive vague answers.

Despite this effort at secrecy, civil society groups have been getting  
organized to oppose the TPP, stop Fast Track and prevent the global  
corporate coup. More than 400 organizations, including our own  
organization, It's Our Economy, representing a diverse range of issues  
including labor, environment, public health, famers, Internet freedom,  
banking regulation, human rights, faith, Native American and much  
more, have signed on to a letter to Congress emphasizing how the TPP  
negotiations have been "inconsistent with democratic principles,"  
opposing Fast Track and outlining expectations of how key issues  
should be addressed in 21st century trade agreements.

Citizens Trade Campaign summarizes writing: "The letter includes eight  
broad categories that the TPP, a Trans-Atlantic Free Trade Agreement  
and any other US trade pact must address in order to improve quality  
of life for Americans and people throughout the world: (1)  
prioritization of human and labor rights; (2) respect for local  
development goals and the procurement policies that deliver on them;  
(3) no elevation of corporations to equal terms with governments; (4)  
protection of food sovereignty; (5) maintaining access to affordable  
medication; (6) safeguards against currency manipulation; (7) space  
for robust financial regulations and public services; and (8) improved  
consumer and environmental standards."

On February 27, the AFL-CIO released an executive council statement  
questioning the TPP saying "The United States cannot afford another  
trade agreement that hollows out our industrial base and adds to our  
substantial trade deficit." The executive council of the AFL-CIO went  
on to say, "We do not need another trade deal that simply boosts  
corporate profits by encouraging offshoring good jobs while  
undermining wages, benefits and worker rights. We must do better."  
Americans have clearly learned the lessons of previous trade  
agreements - they only work for the transnational corporations and  
oligarchs around the world, they undermine workers, and spur lower  
wages and environmental destruction.

Arthur Stamoulis of Citizens Trade Campaign summarizes the  
antidemocratic actions of the Obama administration with regard to the  
TPP saying, "This is a rollback in transparency, and an extremely  
undemocratic way to craft policy that is likely to influence jobs,  
health care costs, financial regulations, consumer safety, the  
environment and more for decades to come. The only way to prevent the  
public from being saddled with a bad agreement is for Congress to  
exert its authority."

The TPP is the battleground for defining democracy in the 21st century  
and setting up the rules for international commerce in the era of  
transnational corporate power. No matter what issues you are concerned  
about, if the TPP becomes law, it will undermine national sovereignty  
and hopes for progressive policies that put the people's needs before  
corporate profits. The time is now to get active, work to oppose the  
antidemocratic Fast Track approach in Congress and say "no" to the  
democracy-undermining Trans-Pacific Partnership. This is a trade  
agreement that will be opposed by most Americans and a battle on which  
the people can prevail, but only if they know it exists.

For more information and to get involved, visit:

The Citizens Trade Campaign

Public Citizen's Global Trade Watch

Eyes on Trade

Flush The TPP

You can listen to our interview with Arthur Stamoulis of Citizens  
Trade Campaign and Ben Beachy of Eyes on Trade on the TransPacific  
Partnership versus Democracy on Clearing the FOG.

Copyright, Truthout. May not be reprinted without permission

Margaret Flowers and Kevin Zeese

Kevin Zeese JD and Margaret Flowers MD co-host ClearingtheFOGRadio.org  
on We Act Radio 1480 AM Washington, DC and on Economic Democracy  
Media, co-direct It's Our Economy and are organizers of the Occupation  
of Washington, DC. Their twitters are @KBZeese and @MFlowers8.

__________________________
  
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