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

Fri Mar 29 08:56:28 PDT 2013

"The free-trade lobby," Dolan says, "uses these trade deals to enact a
kind of domestic regulatory agenda that they can't get otherwise."

Congressional Quarterly  WEEKLY 

March 18, 2013 - Page 490

>From Negotiation to Policy: The Power of a Trade Pact 

By Kate Ackley, CQ Staff

In a luxury hotel half a world away from Washington, lobbyists for U.S.
corporations and trade groups spent the past two weeks hosting elegant
receptions and wonky policy discussions while they staked out
closed-door talks on a trans-Pacific free-trade agreement involving 11
nations.

The hubbub at Singapore's Grand Copthorne Waterfront Hotel could, at
times, have passed for a scene on K Street. In fact, the involvement of
business interests was driven not only by discussions of tariffs and of
opening far-flung global markets but also of U.S. domestic issues.

Although the policies contained in a trade agreement typically don't
override federal law, experts in the field say that any inconsistencies
could result in a trade dispute subjecting the noncompliant country to
possible arbitration and sanctions. When faced with similar challenges,
the United States has revised the offending regulations and, in some
cases, is still considering how to bring them into compliance

In one case, Mexico successfully challenged U.S. regulations for keeping
track of whether imported shrimp had been caught in turtle-safe nets.
Another challenge from Mexico resulted in changes to "dolphin-safe" tuna
labeling.

Just last week, the Agriculture Department proposed changing a rule on
country-of-origin food labeling after an appeals panel of the World
Trade Organization decided that the rule had had a detrimental effect on
livestock imports from Mexico and Canada. Such a change could result in
a tougher labeling rule or, as some industry advocates want, a decision
to throw out the requirement.

"There certainly have been cases in which the United States has had laws
related to consumer protection, food safety and consumer information
that have been challenged at the World Trade Organization, and in some
of those cases the U.S. has had to make modifications to its regulations
in order to come into compliance," says Elizabeth Drake, a partner with
Stewart & Stewart, which represented the National Farmer's Union and
other domestic interests in the labeling case.

Fear of Lowering Standards

TPP disputes might follow a similar path and serve as an alternative to
revamping domestic laws and regulations to change their effect.

"An agreement like the TPP becomes a mechanism for a broad array of
industry interests to re-litigate policies that they lost when the
debate occurred in the sunshine of public scrutiny and the open
congressional process," says Lori Wallach, director of Public Citizen's
Global Trade Watch, who kept an eye on the negotiations unfolding in
Singapore and whose group opposes the free-trade pact. "It can become a
backdoor strategy for changing domestic policy."

That prospect isn't lost on Congress. Rep. Rosa DeLauro says she is
worried that food and agriculture interests will weaken the 2010 food
safety law, which she helped write, while the Obama administration
continues to implement its provisions.

"It's my fear," the Connecticut Democrat says, that "it would mean we
would have to lower our standards."

Vessels for Grievances

Congress typically takes up trade agreements under presidential
fast-track authority, which forces lawmakers to vote up or down on the
whole deal without being able to amend it. (The president's fast-track
authority has expired, but the administration is expected to seek its
renewal.)

The Obama administration rejects the notion that the trans-Pacific talks
could gut portions of statutes such as the Dodd-Frank financial
overhaul, the 2010 health care law or DeLauro's measure.

"Only Congress changes U.S. law, period," Carol Guthrie, spokeswoman for
the U.S. Trade Representative, wrote in an email, "and only
administrations, in consultation with Congress, change U.S. policies and
regulations."

Lobbyists and representatives of several corporations deny that the
trade talks could be an opportunity for U.S. policy do-overs.

One longtime lobbyist and expert in trade pacts calls the
legislating-via-trade-deal route an "unusual strategy." He says that
companies and other groups weighing in on negotiations are more likely
to use their muscle to raise other countries' standards so that they are
in harmony with those of the United States.

But the complex nature of the TPP negotiations coupled with the reach of
those countries involved with the United States - Australia, Brunei,
Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam
and, perhaps in the future, Japan - fuel speculation about the deal's
eventual impact on the policies of individual countries.

David Thomas, the Business Roundtable's vice president for trade, says
the TPP agreement "creates an opportunity to sort of knit together a
regional free-trade area that can allow companies to more efficiently do
business across those countries as well as within those countries."

There is precedent for trade-driven changes to U.S. laws. When Congress
two decades ago passed the Uruguay Round Agreement Acts, transforming
the General Agreement on Tariffs and Trade into the World Trade
Organization, lawmakers approved a change in patent law that extended
market exclusivity for U.S. products from 17 years to about 20 years.
Trade and patent law experts say the change harmonized U.S. and
international patent laws and benefited, in particular, big companies
that file patents in multiple countries.

The North American Free Trade Agreement that Congress approved in 1993,
"downwardly harmonized" federal rules for interstate trucking, says Mike
Dolan, the legislative representative who handles trade policy for the
International Brotherhood of Teamsters, which complained about NAFTA
provisions giving Mexican trucks access to U.S. highways.

"The free-trade lobby," Dolan says, "uses these trade deals to enact a
kind of domestic regulatory agenda that they can't get otherwise."

Inside Track

With the TPP talks, an immediate concern for Dolan is the "Buy American"
policies that give preferential treatment to U.S. goods in federal
procurement contracts. Negotiators could give that same preferred status
to goods made in the 10 other countries.

Several senators late last year spelled out their Buy American concerns
in a letter to President Barack Obama. Ohio Democrat Sherrod Brown, who
signed the letter, has been a critic of pacts such as the Central
American Free Trade Agreement and says he wants to use his position on
the Finance Committee, which has jurisdiction over international trade
matters, to illuminate the otherwise secretive process of trade
negotiations such as the TPP.

"Corporate CEOs often have better access to information on trade
negotiations than Congress does," Brown says. "These trade agreements
are often good for large corporations and not so good for American
workers."

Rep. Zoe Lofgren, a California Democrat and free-trade supporter who
backs the TPP generally, is especially concerned about what might be in
the copyright provisions of a deal.

Lofgren opposed legislation aimed at curbing online piracy - known by
its acronym, SOPA - which was backed by the movie industry and other
sectors that rely on copyright protections, because it would, she said,
hamper Internet freedom. Technology giants such as Google Inc. led a
lobbying and grass-roots effort in 2012 that derailed the legislation.
Movie executives and other content providers, she says, have looked to
trade pacts such as the Anti-Counterfeiting Trade Agreement as a back
channel to resurrect some of SOPA.

"In the past, there have been efforts by Big Content to get in a trade
agreement what they could not get through the Congress," Lofgren says,
noting that ACTA had stalled.

Lofgren says she warned U.S. Trade Representative Ron Kirk, "Look at
what happened to ACTA. ACTA went down because of a perception that it
was delivering SOPA-like rules to the Internet. If there's overreach in
the TPP, the entire trade agreement could go down just as ACTA went
down." (Kirk stepped down March 15.)

A spokesman for the Motion Picture Association of America declined to
comment, referring questions to the USTR and the U.S. Chamber of
Commerce, which led a delegation to Singapore.

Richard Bates, senior vice president of government relations for Walt
Disney Co., says movie studios would like to see in the TPP the same
level of protections for intellectual-property rights as are included in
a congressionally approved free-trade agreement with South Korea.

One entertainment industry executive, who declined to speak on the
record because of the sensitivity of the talks, says allegations that
content providers are trying to get SOPA policies into the TPP deal are
"scare tactics."

On the flip side of this debate, some content providers and
entertainment industry lobbyists say that technology companies are eying
TPP as a way to weaken existing intellectual-property laws. Not
surprisingly, both camps are watching the unfolding negotiations with
immense interest. "Generally," says one lobbyist familiar with the
issue, "the approach in the United States to these trade agreements has
been to get other countries to adopt stronger intellectual-property
rights so our movies, our products, aren't ripped off around the world."

Lawmakers gave corporate interests a say in trade talks in the Trade Act
of 1974, which created industry trade-advisory committees that give
feedback on relevant issues to trade negotiators. AFL-CIO President
Richard Trumka has the same privilege.

"The purpose of a trade agreement is to help the U.S. economy," says one
entertainment industry official, who was not authorized to discuss the
talks. "The U.S. exporters have an important role to play in
understanding what the barriers are."

This lobbyist added, though, that openness in negotiations often falls
victim to the "horse trading" that goes on behind closed doors to arrive
at a final deal.

Potential Complications

The secrecy of the deal-making may well provide lobbyists with an
opportunity, but it can just as easily get in their way.

Because the draft text of any agreement is secret, lobbyists with the
best access to officials on the inside must be careful to not reveal too
much in public while also figuring out how to press their cases.

In Singapore, for example, the USTR hosted a "stakeholder engagement
event" on March 6, at which business and other interests had "the
opportunity to raise questions and share views directly with negotiators
and other stakeholders," according to the USTR website.

Such out-in-the-open discussion is not the only way to try to influence
the deal, however. The American Chamber of Commerce in Singapore hosted
a March 8 reception for diplomats and outside interests in the grand
ballroom of the hotel where negotiations were being held.

Corporate representatives also book suites where they can huddle with
their counterparts and with government officials. Even public interest
groups get in on the lobbying: Wallach of Public Citizen said that
during a previous TPP round in New Zealand she took to standing outside,
in the rain, trying to persuade negotiators to chat about her concerns.

Catherine Mellor, a trade policy expert with the U.S. Chamber of
Commerce, says the group regularly keeps in touch with the USTR's
office, administration officials and members of Congress. But the
negotiations offer a potentially one-stop opportunity for face time with
foreign officials too.

"We do meet with the foreign negotiators," explains Mellor, whose subtle
accent in a reminder of her Australian roots. "A lot of these companies
have real-market examples of why these policies are needed."

Banking-industry insiders say privately that the talks may be an
opportunity to clarify "international, cross-border applications" of the
"Volcker rule" in the Dodd-Frank law, which restricts banks from making
speculative investments and is much maligned by the industry, one
banking source says.

High stakes ensure that business will be engaged in future deal-making
on trade, even when negotiators rebuff their input. "They might publicly
say they don't want this, but they might give in if they need something
else," says Mark Grayson of the Pharmaceutical Research and
Manufacturers of America. Industry groups hang around so "they know
you're there, in case they have some questions."

FOR FURTHER READING: Changing dynamics on congressional trade policy,
2008 Almanac, p. 6-18; World Trade Organization approval (PL 103-465),
1994 Almanac, p. 123; NAFTA approval (PL 103-182), 1993 Almanac, p. 171;
Uruguay Round approval, 1993 Almanac, p. 171.

Source: CQ Weekly

The definitive source for news about Congress.

Michael F. Dolan, J.D.

Legislative Representative

International Brotherhood of Teamsters

Desk  202.624.6891

Fax    202.624.8973

Cell    202.437.2254

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