---------- Forwarded message ----------
From: Mark Weisbrot, CEPR <[email protected]>
Date: Fri, May 22, 2015 at 2:29 PM
Subject: TPP Runs into Trouble, Thanks to Public Interest
To: [email protected]
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<http://org.salsalabs.com/dia/track.jsp?v=2&c=V0CtsABKXcj%2B39YPQK71kVdKKV3v%2FK4h>
TPP Runs into Trouble, Thanks to Public Interest
<http://org.salsalabs.com/dia/track.jsp?v=2&c=IwJzouHoXSvb2aHHLVXtbVdKKV3v%2FK4h>
By Mark Weisbrot
------------------------------
This article was published by Al Jazeera America
<http://org.salsalabs.com/dia/track.jsp?v=2&c=RRsw3pn1f652ZEhc7Q03YFdKKV3v%2FK4h>on
May 22, 2015.
------------------------------
The public debate over the proposed Trans-Pacific Partnership (TPP) has
been a lot more robust and educational than the one that preceded the
passage of the North American Free Trade Agreement (NAFTA) over two decades
ago. During that fight, then *Washington Post *editorial page editor Meg
Greenfield didn’t see a problem
<http://org.salsalabs.com/dia/track.jsp?v=2&c=o4540ygPmKbJqJo6cCQvK%2FiL9%2BSyLZoE>with
a six-to-one ratio of space for pro- versus anti-NAFTA editorials” “On
this rare occasion when columnists of the left, right, and middle are all
in agreement ... I don't believe it is right to create an artificial
balance where none exists.”
Today there are more economists in the news debunking the arguments put
forth to promote the TPP, and this has contributed to the collapse of some
of these talking points.
This week, economists Dean Baker and Paul Krugman warn
<http://org.salsalabs.com/dia/track.jsp?v=2&c=i%2B%2FcCS9n9GYtdamYm0eIbFdKKV3v%2FK4h>
that people should be suspicious of any agreement that leads its proponents
to lie and distort so much in order to sell it. They called attention
<http://org.salsalabs.com/dia/track.jsp?v=2&c=%2B6KI8oVNzAi%2FjnOZMOhPoFdKKV3v%2FK4h>to
President Barack Obama’s former Chief of Staff William M. Daley, who made
the ridiculous claim in a *New York Times* op-ed that it is “because our
products face very high barriers to entry overseas in the form of tariffs,
quotas and outright discrimination” that the U.S. ranks 39th of the 40
largest economies in exports as a share of GDP. As Baker and Krugman
pointed out, it is actually because the U.S. is a very large economy, and
therefore the domestic market is sufficient for many U.S. companies.
This is just one of the many arguments in TPP’s favor that cannot pass the
smell test. Take the Investor-State Dispute Settlement (ISDS) mechanism,
which enables businesses to sue governments and can force them to overrule
their laws, even the decisions of their highest courts, or pay hefty fines.
Proponents’ alleged rationale for including this provision is to protect
foreign investors in countries where the rule of law is weak. Joseph
Stiglitz, like Krugman a Nobel laureate economist, pointedly asks
<http://org.salsalabs.com/dia/track.jsp?v=2&c=ChgPggVqLhaluUneZ8cdwldKKV3v%2FK4h>:
Why is it included in the proposed trade agreement with Europe (the
Transatlantic Trade and Investment Partnership)? Let me offer you a hint:
It’s not because Germany and France are likely to expropriate factories
owned by foreign investors, or that their judicial systems are weak on
investors’ rights.
Public interest groups who care about the little things in life — you know,
the environment, public health and safety, financial regulation — have
railed against this corporate power grab. Not to worry, says
<http://org.salsalabs.com/dia/track.jsp?v=2&c=5EC01HHwgEDK01yo6GFaZVdKKV3v%2FK4h>
the White House: The U.S. is party to dozens of agreements that contain
ISDS, and there have been only 13 judgements against the U.S. over the past
three decades.
Now comes economist Jeffrey Sachs, who has long been a supporter of
expanding international trade, with some inconvenient facts
<http://org.salsalabs.com/dia/track.jsp?v=2&c=vnwDgFDvoaxxJ1UEhjVZi1dKKV3v%2FK4h>:
“In 1995, only a handful of ISDS cases had been filed; as of the end of
2014, there had been more than 600 known claims (since most arbitration can
be conducted in secrecy, there may have been many more claims).” So, the
past is no guide to the future damage that these pro-corporate tribunals
may bring. Another TPP defense flunks the smell test.
Economists have helped at least the more open-minded among journalists to
discover a few things that in prior years got lost in all the ideology and
hand-waving about “free trade.” For example, that the TPP is not mostly
about trade
<http://org.salsalabs.com/dia/track.jsp?v=2&c=r9YeOAoZq9z4HJ0HGEiy%2FVdKKV3v%2FK4h>
[PDF], and even less about free trade, but about establishing a set of
rules that benefit large corporations: Consumer losses to powerful
protectionists buoyed by TPP such as big pharmaceutical companies can
easily wipe out
<http://org.salsalabs.com/dia/track.jsp?v=2&c=U38uxkTCOzVoWC%2Bl1db0t1dKKV3v%2FK4h>the
miniscule gains from trade — and yes, they are miniscule. The impact of
trade liberalization on wage inequality can also negate any gains from
trade for most employees.
On the defensive much more than Bill Clinton was, President Obama attacked
Sen. Elizabeth Warren for suggesting that the TPP could be used to undercut
financial regulatory measures approved in the wake of the Great Recession.
Just four days later, Canada’s Minister of Finance Joe Oliver said
<http://org.salsalabs.com/dia/track.jsp?v=2&c=N0g%2FzAZyrux1iWJF9%2FXnIldKKV3v%2FK4h>
at a securities conference in New York that the Volcker rule, a key
provision of the Dodd-Frank financial reform law, violates NAFTA.
Having lost all the economic and public interest arguments, TPP proponents
have resorted to one last-ditch argument. “If we don’t write the rules,
China will write the rules,” President Obama warns
<http://org.salsalabs.com/dia/track.jsp?v=2&c=uAFUG6VZaSeYHuEmudbNHFdKKV3v%2FK4h>,
only to be parroted by numerous “patriotic” pundits and politicians.
The key word here, of course, is “we.” Does “we” refer to the corporate and
industry association representatives that are 90 percent of the official “trade
advisors
<http://org.salsalabs.com/dia/track.jsp?v=2&c=Z18SFOlgD4FagWCe1LrN2FdKKV3v%2FK4h>”
with access to the negotiated text of the TPP? If so, it’s not so clear
that we the people should be so worried about China. Should we the people
care if China expands its influence in Asia, which is pretty much
inevitable since its economy is already bigger than that of the U.S., is
growing several times faster, and happens to be located in that part of the
world? Are we the people going to be worse off if Chinese companies
increase their access to cheap labor in Vietnam or Bangladesh faster than
U.S. corporations do?
Another smell test: why is it that the Obama administration is expected to
give up on the TPP if it can’t get what it needs from Congress before the
presidential race heats up? Because many and perhaps most Americans have
probably never heard of the TPP, but many will if it becomes an issue in
the presidential race. This admission that public awareness is deadly to
the TPP is not very flattering to the proposed agreement — which, by the
way, we aren’t even allowed to see.
Unfortunately there is one thing that hasn’t gotten better since Bill
Clinton’s fight for NAFTA 20 years ago: vote-buying in Congress. In 1993
this took the form of not only campaign contributions but also billions of
federal dollars the Clinton administration steered to the districts of
members of Congress whose votes they needed to buy. Today, the Senate has
already been bought
<http://org.salsalabs.com/dia/track.jsp?v=2&c=iu423r7ILZwH%2FO0j26m6kZtsnLg7rJ78>;
now we will see whether the grassroots lobbying of public interest groups
and ordinary citizens can win in the Congress what it has won in the public
debate.
Mark Weisbrot
<http://org.salsalabs.com/dia/track.jsp?v=2&c=LUfKaVKLHhzwcfjBsXOPAVdKKV3v%2FK4h>
is co-director of the Center for Economic and Policy Research, in
Washington, D.C. and president of Just Foreign Policy
<http://org.salsalabs.com/dia/track.jsp?v=2&c=tDLz99PAB957Ez2nQ1M80ldKKV3v%2FK4h>.
He is also the author of the forthcoming book *Failed: What the "Experts"
Got Wrong About the Global Economy* (Oxford University Press, 2015).
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