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  • Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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November 15, 2016

TPP RIP

 Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch on the Demise of the Trans-Pacific Partnership in the Lame-Duck Session of Congress

The news that the White House and Republican congressional leaders have given up on passing the Trans-Pacific Partnership (TPP) is welcome. That the TPP would be defeated by Congress if brought to a vote signals that Trojan-horse “trade” agreements that expand corporate power and shrink Americans’ wages are simply no longer politically viable. People power beat the united forces of a U.S. president, the Republican congressional leaders and the entire corporate lobby.

The unremitting push by the Obama administration for the TPP right through this election helped to elect Donald Trump, but Trump has not derailed the TPP – people power united across borders did that. Six years of relentless, strategic campaigning by an international movement of people from the TPP countries united across borders to fight against corporate power is why the TPP is all but dead.  

Thanks to years of campaigning by people across this country, since its February 2016 signing, the TPP could not garner a majority of support in the U.S. House of Representatives. And it was clear that the TPP was in trouble in 2015, when Fast Track authority for the TPP barely squeaked through Congress.

The TPP’s signing was delayed for years by vibrant civil society movements in other TPP nations that pushed their governments to reject TPP terms expanding investor rights, monopolies for pharmaceutical firms, financial deregulation and other threats. That meant time to organize, organize, organize. Over those years, millions of Americans helped to educate and organize their friends, families, and colleagues to demand their representatives opposed the TPP.

That the TPP pushed by the most powerful forces in the world is not being implemented represents the American public’s resounding rejection of  trade policies that not only failed to live up to its proponents’ promises over the past 20 years, but caused real damage to working people and the environment.

The only way forward is to create new rules of the road for globalization that put people and the planet first while harvesting the benefits of expanded trade. And we must roll back the existing “trade” deals and extreme investor-state dispute settlement regime that have caused people and the planet so much damage. The coalition that stopped the TPP is powerful and united and will fight forward to deliver that change. And, we will be ready to take on any attempt to revive the TPP or advance other corporate-friendly trade pacts based on the same failed and outdated model of trade.

For a review of the six-year international campaign against the TPP, please read https://medium.com/@citizenstrade/no-trump-didnt-kill-the-tpp-progressives-did-884b534542d#.175otqc1j

November 10, 2016

Latest TPP Peril: President Donald Trump

The election of President Donald Trump, and the slew of exit polls showing Americans’ ire over our failed trade policies that fueled that outcome, should dissuade Republican congressional leaders from pushing the Trans-Pacific Partnership (TPP) in the lame-duck session of Congress that starts next week. We will know by Thanksgiving if that is the case.

But even if the TPP never goes into effect, its damage will be felt worldwide - in the form of the election of President Donald Trump.

Yes, many factors contributed to this outcome. But it was not all racists and other haters who elected Trump. It was also a lot of working class voters who supported President Barack Obama twice. Hillary Clinton suffered her biggest losses in the places where Obama was strongest among white voters.

Did we have to get to this to end the era of smug Democratic and Republican political elites scoffing at the notion that trade is a salient political issue - and relentlessly pushing more of the same policies to the detriment of a voting bloc otherwise known as a majority of our fellow Americans?

Michael Moore proved to be spot on when he warned that Trump would win - and why. Do not underestimate the fury and desperation of tens of millions of Americans whose lives and communities have been devastated by bipartisan complicity in an agenda of corporate empowerment, job-killing trade agreements and Wall Street ravages, he wrote in an essay well worth a read.

Do not assume that these voters will focus on the messenger being a multinational corporation masquerading as a racist, misogynistic, narcissistic man (my description, not Moore’s) when they finally hear the message they have long awaited: yes, you have been screwed by Washington; yes I know your economic future was crushed by bad trade deals and Apple and Ford will pay if they move more jobs offshore; yes, the political establishment needs Molotov-cocktail accountability and I am that guy.

Do not imagine, Moore cautioned, that the millennials’ passion for Bernie Sander, a very different but also improbably successful (from the political establishments’ perspective), anti-establishment messenger of economic populism will translate into enthusiasm for the ultimate Democratic establishment nominee.

That Hillary Clinton, an impressive, capable and intelligent woman, proved a perfect foil as The Establishment was not all her doing. Bill Clinton sowed the wind with NAFTA, his China trade deal and Wall Street deregulation that reaped the whirlwind for Hilary Clinton.

This is a reality with which the Democratic Party must reckon. Through the lens of a Trump victory delivered by traditional Democratic base working class voters in Wisconsin, Pennsylvania, Michigan and Ohio, the shift in polling over the past several years showing Democrats more favorable than GOP voters to the TPP and past trade deals require careful study.

Have “Democratic voters” opinions about the same old trade policies that deliver more corporate power and fewer good American jobs really gotten rosier? Or, does that polling data reflect changes in the composition of who now considers themselves to be a Democrat?

Given polling shows that Independents’ views on trade closely mimic those of GOP voters, perhaps that bloc of working class voters that is a necessary component of a winning presidential coalition has maintained a steady view on trade. But witnessing President Obama enthusiastically push a slew of the same sort of trade deals they hate akin to those President Clinton enacted in the 1990s signaled that the Democratic Party no longer had a place for them and they accordingly no longer consider themselves Democrats.

This is worth considering in the context of the TPP effect on this election. The TPP did not elect Trump per se.

But with no small thanks to President Obama’s relentless, high-profile campaign throughout the primaries and general election to pass the pact, the TPP pact readily served as a potent symbol of business-as-usual in Washington and its facilitation of growing corporate power over every facet of our lives.

The TPP seems like something from an overwritten dystopian novel: It covers 40 percent of the global economy, yet it was negotiated in secret with hundreds of corporate advisors while the public was locked out. The TPP’s key provision grants new rights to thousands of multinational corporations to sue the U.S. government before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by America’s taxpayers, including for the loss of expected future profits, and their decisions are not subject to appeal. The corporations need only convince the lawyers that a U.S. environmental law, financial regulation or pro-consumer court ruling violates the new rights that the TPP would grant them.

No doubt that Trump’s sweep of midwestern and southern states was accompanied by exit polls showing the power of his attack on our failed trade policy. Or that the Reuters/Ipsos election day poll found 72 percent agree “the American economy is rigged to advantage the rich and powerful,” while 68 percent agree that “traditional parties and politicians don’t care about people like me,” and 75 percent agree that “America needs a strong leader to take the country back from the rich and powerful.”

Consider the poll released last week by Greenberg, Quinlan and Rosner showing fully 68 percent of GOP voters (34 percent with intensity), and 60 percent of all voters would punish a member of Congress supporting the TPP in the lame-duck session. While this sentiment was strongest among Republicans, it spanned the political spectrum and included majorities of all segments of the “rising electorate,” millennials, minorities and unmarried women.

What happens next? At least as far as the TPP is considered, it’s the call of House Speaker Paul Ryan. In the coming days he must decide whether to bring the TPP to a vote in the lame-duck Congress.

Would Paul Ryan risk jeopardizing his hold on power in the House and remain a credible future presidential candidate if he pushes something overwhelmingly opposed by his party’s base voters? And more practically, with 16 GOP House members that voted to give President Obama Fast Track authority for the TPP in 2015 having mid-election conversions to TPP opposition and others who weathered the wrath of trade voters in this cycle worrying about the 2018 primaries, could he muster the votes? (House Democrats who opposed Fast Track have remained consistent in opposing the TPP, so passing the TPP would rely on the Republicans.)

Undoubtedly House GOP will note the electoral success of improbable GOP down-ticket converts to TPP opposition, such as former U.S. Trade Representative and now U.S. Sen. Rob Portman (R-Ohio), Sen. Pat Toomey (R-Pa.), and Sen. Richard Burr (R-N.C.) in contrast to the defeat of Rep. Joe Heck (R-Nev.) who supported Fast Track and refused to reveal his position on TPP (read: support) as his opponent, now the Senator-election, campaigned against it. (Also noteworthy: in this wave election, the only congressional Democrat who may lose is Rep. Brad Ashford (D-NE), one of few Democrats to vote in favor of fast tracking TPP approval.)

On the other hand, the Chamber of Commerce and the GOP donor class are clamoring for a TPP vote.

Stay tuned...

September 13, 2016

U.S. Agricultural Exports Lag under Past Trade Deals

Proponents of the Trans-Pacific Partnership – or TPP – have spent decades promising U.S. farmers and ranchers that free trade agreements are good for agriculture. Time and again, these promises have been broken. Since becoming the researcher at Public Citizen’s Global Trade Watch, I have been digging through the agriculture trade data. The case is quote compelling:  our past trade agreements have had a negative impact on U.S. agriculture. That is worth considering, because the TPP would double down on the past model.

Since 2008, U.S. food exports to free-trade partners have lagged behind U.S. food exports to the rest of the world. In fact, the volume of U.S. food exports to non-FTA countries rebounded quickly after the 2009 drop in global trade following the financial crisis. But U.S. food exports to FTA partners remained below the 2008 level until 2014. Even then, U.S. food exports to FTA partners were just 1 percent higher than in 2008, while U.S. food exports to the rest of the world stood 4 percent above the 2008 level.

Agpic Now let’s consider what to make of the recycled promises that the TPP will be a boon for U.S. farmers. The TPP itself was modeled on the U.S.-Korea free trade agreement that entered into force in April 2012. Before its passage, U.S. Agriculture Secretary Tom Vilsack declared: “we believe a ratified U.S. Free Trade Agreement [with Korea] will expand agricultural exports by what we believe to be $1.8 billion.”

In reality, exports to Korea of all U.S. agricultural products fell $1.4 billion, or 19 percent, from the year before the FTA took effect to its recently-completed fourth year of implementation. During that same period, total U.S. agricultural exports to the world only declined by 9 percent.

And there are many products that have experienced declining exports since the U.S. – Korea FTA.

  • Apples:S. apple exports to Korea have fallen 8 percent in the first four years of the Korea FTA.
  • Corn:S. corn exports to Korea have plummeted 57 percent during the Korea FTA’s first four years – a loss of more than 3.6 million metric tons of corn exports each year.
  • Poultry: S. poultry exports to Korea have dropped 35 percent during the first four years of the Korea FTA – a loss of more than 25,300 metric tons of poultry exports each year.
  • Wine: While FTA proponents have claimed wine as a winner under the Korea FTA, U.S. exports to Korea of wine have declined 6 percent under the Korea FTA’s first four years – a loss of nearly 239 metric kiloliters of wine exports each year.

Those hardest hit by rising agricultural imports and declining trade balances are the smaller-scale U.S. family farms. Since 1993, the year before NAFTA took effect, one out of every ten small U.S. farms has disappeared. By 2015, nearly 198,000 small U.S. farms had been lost.

In addition to this report, the Department of Agriculture’s conducted its own study and found that the TPP would increase U.S. growth by 0.00 percent if all tariffs on all products were eliminated, which did not occur. The U.S. International Trade Commission’s study found that nearly half of all U.S. agricultural sectors would experience worsening trade deficits under the TPP. And this study was conducted under many false assumptions, including the assumption that countries won’t manipulate their currency to gain a competitive edge in exports.

Government data undermine the claim that farmers and ranchers benefit under free trade agreements. To read more of our findings on what trade agreements have meant for U.S. agriculture, please click here.

 

September 08, 2016

New Interactive Map Shows TPP Would Expand Multinational Corporations’ Power to Attack U.S. Laws Using System That Hundreds of Law Professors, VP Candidate Kaine Cite as Reason to Oppose Pact

TPP Would Double Number of Corporations Empowered to Demand U.S. Taxpayer Compensation After Years of the U.S. Government Dodging Investor-State Challenges Because Current U.S. Treaties Cover Few Major Foreign Investors Here

A new Public Citizen interactive map shows how enactment of the Trans-Pacific Partnership (TPP) would dramatically expand U.S. exposure to multinational corporate demands for taxpayer compensation using the controversial “investor state dispute settlement” (ISDS) system.

Under existing treaties, relatively few foreign investors are empowered to use the ISDS regime against the United States, which is why the U.S. has come close to losing cases, but to date has not been ordered to pay compensation. Implementation of the TPP would double the U.S. exposure, an unprecedented increase in U.S. investor-state liability that recent Colombia Law School analyses will make it highly probable that the U.S. will lose future cases.

As the White House escalates its push for a vote on the TPP in the lame-duck session, an explosive four-part investigative exposé by Pulitzer Prize-winning journalist Chris Hamby revealed how Justice Department, State Department and other government lawyers, and even some of the inside players in the ISDS system, view it as a threat to the U.S. justice system. Earlier this week, hundreds of prominent pro-free trade law and economics professors called on Congress to oppose the TPP because it would greatly expand the extra-judicial tribunal system.

The ISDS system at the heart of the TPP would grant new rights to thousands of foreign corporations to sue the U.S. government before a secret panel of three corporate lawyers. These lawyers would be able to award the corporations unlimited sums to be paid by America’s taxpayers, including for the loss of expected future profits. These foreign corporations need only convince the lawyers that a U.S. law or safety regulation violates their TPP rights. Their decisions would not be subject to appeal, and the amount awarded would have no limit.

The interactive map, released today, shows additional multinational corporations located in every U.S. state that would be able to launch ISDS attacks against the United States if the TPP were implemented as well as if the Transatlantic Trade and Investment Partnership (TTIP) (now being negotiated with European countries) were completed with ISDS included. If one counts all corporations in all countries covered by all 50 existing U.S. investor-state pacts, 9,829 U.S. subsidiaries owned by 4,100 foreign corporations from those 50 nations can currently launch investor-state cases against the U.S. government. The TPP alone would double U.S. ISDS exposure, with the additional 10,085 U.S. subsidiaries owned by 3,682 additional corporations in TPP countries not now covered by U.S. ISDS pacts newly able to launch investor-state cases against the U.S. government. The TTIP would newly empower the more than 26,900 U.S. subsidiaries of more than 12,100 European Union parent corporations invested here. .

Under existing U.S. pacts, nearly $3 billion in taxpayer money has been paid to corporations by other countries for toxics bans, land-use rules, regulatory permits, and water and timber policies, among others. More than $70 billion is pending under U.S. treaties in corporate claims against medicine patent policies, pollution cleanup requirements, climate and energy laws, and other public interest polices.

While the Obama administration is pushing for the TPP and TTIP pacts, other countries have begun to withdraw from the system after facing billions in claims, including South Africa, India, Indonesia and other nations. After Germany was hit with two major ISDS claims against its decision to phase out nuclear power and its new coal-fired electric plants regulations, the government notified the EU that it could not accept a TTIP pact that expanded the existing ISDS regime.

As White House Spotlights Conflict With Democratic Presidential and Congressional Candidates by Escalating Toward TPP Lame-Duck Vote, Sen. Warren and Hundreds of Academics Urge Rejection

Audio recording and transcription of press call with Senator Warren and prominent academics can be found here.

Economic and Legal Scholars Cite Multinational Corporate Rights to Unlimited Taxpayer Funds Via ISDS Tribunal System Named by VP Candidate Kaine as Basis for His Opposition

The investor-state dispute settlement (ISDS) regime at the heart of the Trans-Pacific Partnership (TPP) that would newly empower thousands of multinational corporations to challenge U.S. policies before panels of three private lawyers to demand taxpayer compensation is the target of a letter sent to Congress today by leading pro-free trade U.S. economics and law professors calling on Congress to reject the TPP.

The White House has escalated its efforts to pass the TPP in the lame-duck session, with Cabinet secretaries who are promoting the TPP crossing paths with Democratic presidential and congressional candidates campaigning against the TPP.  

Last year, several dozen legal scholars joined congressional Democrats in raising concerns about the ISDS regime and demanding that a final TPP deal exclude the parallel legal system for multinational corporations. President Barack Obama scorned the critics, declaring they were  “making this stuff up.” Today’s letter, signed by more than 200 prominent academics, including Obama’s Harvard Law School mentor Professor Larry Tribe, warns that the ISDS regime threatens the rule of law and undermines our nation’s democratic institutions. The academics call on Congress to reject the pact because the final deal would greatly expand the ISDS regime.

U.S. Sen. Elizabeth Warren (D-Mass.) praised the letter: “Today’s letter from top legal experts makes clear: ISDS undermines the American judicial system and tilts the playing field further in favor of big multinational corporations,” Warren said. “This provision empowers companies to challenge laws and regulations they don’t like, with friendly corporate lawyers instead of judges deciding their disputes. Congress should not approve a TPP agreement that includes ISDS.”

Tribe, Nobel laureate Joseph Stiglitz, former California Supreme Court Justice Cruz Reynoso, and Columbia University Professor and UN Senior Adviser Jeffrey Sachs are among the signers, many of whom have supported past U.S. trade agreements. The letter spotlights the danger of the ISDS provisions, which was the same reason Democratic vice presidential nominee Tim Kaine cited for opposing the final TPP deal.

The U.S. has dodged ISDS liability to date because past treaties have covered only a limited number of foreign investors operating here. Research conducted by Public Citizen shows that the TPP, which includes Japan, Australia and other nations with more than 9,000 corporate subsidiaries in the United States, would double U.S. ISDS exposure. Nearly $3 billion in ISDS awards has been paid to corporations under U.S. treaties alone and claims worth more than $70 billion are pending.

Recent investigative reports by a Pulitzer-Prize-winning journalist and a new Columbia Global Reports book reveal how critics have understated the threats posed by the ISDS regime, which – if the TPP is approved – would empower thousands more multinational corporations to challenge U.S. federal, state and local laws, court decisions and government actions before panels of three private lawyers. Under ISDS, the panel of lawyers can award the companies unlimited taxpayer money, including for loss of expected future profits. The decisions cannot be appealed.

“In recent years, corporations have challenged a wide range of environmental, health and safety regulations, fiscal policies, bans on toxins, denials of permits including for toxic waste dumps, moratoria on extraction of natural resources, measures taken in response to financial crises, court decisions on issues ranging from the scope of intellectual property rights to the resolution of bankruptcy claims, policy decisions on privatizations of prisons and health care, and efforts to combat tax evasion, among others,” the letter notes.

The experts lament that despite the Obama administration’s claims to have addressed growing concerns about the ISDS system, “the final TPP text simply replicates nearly word-for-word many of the problematic provisions from past agreements, and indeed would vastly expand the U.S. government’s potential liability under the ISDS system.” They fear that the expansion of ISDS in the TPP and in ongoing negotiations with Europe “threatens to dilute constitutional protections, weaken the judicial branch and outsource our domestic legal system to a system of private arbitration that is isolated from essential checks and balances.”

This letter adds to a rising chorus of opposition to ISDS from prominent members of Congress such as Warren; the National Conference of State Legislatures; pro-free trade think tanks such as the Cato Institute; and hundreds of labor, environmental, consumer and faith organizations.

View the letter and list of signers.

What the signers are saying:

Jeffrey Sachs, professor of economics, Columbia University:

“We need trade agreements that protect worker rights and the environment. ISDS gravely threatens environmental protection and worker rights, and the rule of law more generally, as evidenced by the current lawsuit by TransCanada suing the U.S. government for $15 billion over the cancellation of the climate-wrecking Keystone XL Pipeline.” 

Jeffrey Sachs: lsachs1@law.columbia.edu


Cruz Reynoso, former California Supreme Court Justice and professor of law emeritus, University of California, Davis:

 “The right of foreign corporations and investors to challenge U.S. policies which allegedly violate investor rights is a frontal attack on our judicial system.”

Cruz Reynoso: creynoso@ucdavis.edu

 

Alan Morrison, associate dean, George Washington Law School:

“The United States Constitution simply does not allow Congress to assign the duty to assess the legality under the TPP of federal and state laws to the unreviewable discretion of three private individuals, instead of to our federal court system with full-time and unconflicted judges.”

Alan Morrison: abmorrison@law.gwu.edu

 

Lisa Sachs, professor of law, director of Columbia Center on Sustainable Investment:

“A multilateral agreement presents an opportunity to promote the rule of law, strengthen domestic judicial systems and ensure the rights of all, including the most vulnerable, are equally advanced. ISDS in its current form undermines each of those objectives. The whole system needs a rethink to better balance all stakeholders' interests and rights.”

Lisa Sachs: lsachs1@law.columbia.edu

 

Kevin Gallagher, professor of economics, Boston University:

“ISDS accentuates the regulatory risks that characterize the latest trade and investment pacts by granting foreign investors far greater rights over national democratic decision-making. Putting governments and their citizens back in charge of settling disputes is the first step toward the comprehensive reform that is needed.”   

September 02, 2016

TPP Is Not Dead, Unfortunately

The reports of the Trans-Pacific Partnership’s death have been greatly exaggerated, unfortunately.

It would great news if the pact, which would mean more power for corporations over our lives and government, and fewer good jobs for Americans, were ready to be boxed and buried.

But more urgently, if last week’s news stories convince the growing transpartisan movement fighting the TPP to stand down, the prospects that the pact’s powerful proponents can succeed in their plan to pass it after the election will increase.

Last week Senate Majority Leader Mitch McConnell (R-KY) said at the Kentucky Farm Bureau: "The current agreement…which has some serious flaws, will not be acted upon this year." This generated a wave of press coverage declaring that there would be no lame duck vote on the TPP.

Except, McConnell has said pretty much the same thing since the final TPP text was released, as have other Republican leaders.

Note that McConnell said the “current agreement” would not get a vote. A few weeks ago House Speaker Paul Ryan (R-WI) said: "I see no point in bringing up an agreement only to defeat it...it is not ready, the president has to renegotiate some critical components of it." Immediately after McConnell’s speech, a Ryan spokesman said: "As we have said for months, timing will be determined by progress on the substance – and the administration has a lot of work to do there."

Those statements need to be understood for what they are: negotiating for changes to obtain even more corporate goodies – longer monopoly protections for pharmaceutical firms’ high medicine prices, elimination of an exception protecting some tobacco regulations from TPP attack, and more. So far the corporate “we-want-more-or-else” tactic has pushed the White House into caving on Wall Street firms’ demands to “fix” TPP rules allowing governments to limit movement of financial data across borders. Since the administration has made no parallel moves to address criticisms coming from its own party, a very bad deal is getting even worse. 

At the same time, many senators and representatives who voted for Fast Track are using these statements to try and duck accountability by pretending that the TPP is a moot issue. If these members then turn around after the election and support the TPP, that will be a huge insult to the democratic process and the millions of voters who are loudly urging Congress to support fair trade deals that support workers, consumers and the environment, rather than corporate giveaways like the TPP.

The GOP leaders are not only trying to pressure the White House to meet their demands, but are trying to scare the other TPP countries off of their current positions that no changes are possible.

If the GOP leaders get what they want, they will be pushing hard to pass an even more damaging TPP in the lame duck session, despite their insincere political posturing over the unpopular agreement leading up to the elections.

It’s also possible congressional Republicans will jump into gear to pass the deal in the lame duck session even if they do not achieve that last one percent of corporate goodies for the one percent.

Thanks to Fast Track, President Obama gets to decide if the TPP vote clock is started – not the Republican leadership. It is risky, but Obama could call the GOP leaders’ negotiating bluff.

Fast Track is a one use tool. Failure to pass the TPP once a president starts the clock means that Fast Track for the TPP is “used up.” Knowing that corporations that fund the Republicans want the TPP, Obama could gamble that the GOP leaders would fold on their demands and start pressuring their members to vote “yes” if he submits the implementing legislation.

And make no mistake, the massive corporate coalition pushing for the TPP is aggressively lobbying to pass the pact in the lame duck session—that unique moment of minimum political accountability when the retired and fired in Congress get to come back and vote one more time knowing they will not be facing their voters again. These interests are rolling out big-money AstroTurf “field” operations to generate paid telephone calls for the TPP, wrangle corporate retirees to write their Representatives and carpet cyberspace with paid social media.

That is not the behavior one would expect from interests with close personal relationships to McConnell and Ryan if in fact the Republican leaders intended to block a lame duck TPP vote, something the GOP could do even if Obama started the clock.

Because there would not be the required 90 congressional session days to force floor votes under Fast Track, the Republican congressional leaders would have to bring the TPP to a vote quickly or run out of time. (That is why Sen. Bernie Sander’s statement last week, praising McConnell for announcing he would “block” the TPP was so very sly, because of course McConnell said no such thing.)

It is also worth noting that the administration is working relentlessly to line up the votes to pass the TPP in the lame duck. So far there have been 30 events featuring cabinet secretaries and other Obama officials in key districts during the congressional recess.


For those who want to ensure a real TPP funeral, the only path to ensure TPP RIP is by locking down the votes district by district. That is entirely doable.

Already a dozen House GOP that supported Fast Track last year have announced opposition to the TPP.  And, many of the 28 House Democrats that supported Fast Track have not announced support for TPP.

Perhaps they, like Vice Presidential nominee, Senator Tim Kaine, who announced opposition to the TPP after supporting Fast Track, have concerns about the gap between what they were told the final deal would include and what is in the actual final text on critical issues—such as the undemocratic investor-state corporate empowerment system

The current political context, with the presidential nominees of both parties against the TPP coupled with rising public anger across partisan lines about the influence corporations have over governments and the decisions that shape our daily lives means the TPP can be stopped.

The TPP exemplifies how the rules get rigged by the very few against the interests of the many: the deal was hatched with 500 official U.S. trade advisors representing corporate interests involved in years of closed-door negotiations while the public, press and Congress were locked out. The resulting core TPP provision grants thousands of corporations new rights to sue the U.S. government before a panel of three corporate lawyers that can award unlimited sums, including for loss of future expected profits, to be paid by American taxpayers when the corporations claim U.S. policies violate the new entitlements the TPP would provide them.

But, the only way that the TPP will be stopped is if local constituents make every member of Congress publicly state his or her position on the TPP before the election when being in favor of such an outrage will have a political price.

July 28, 2016

Six Things to Know About the TPP

  1. The TPP is not mainly about trade at all: Only six of its 30 chapters cover trade matters while most provide specific new rights and powers for corporations.  The pact has become so controversial because – at a time when poll after poll shows that Republicans, Democrats and Independents are furious about growing corporate power over their lives and governments – the TPP provides a concrete example of how the rules get rigged against most Americans’ interests. As this New Yorker piece describes, 24 of the 30 chapters require limits on food, financial and other regulations and provide drug firms new monopoly rights. The TPP was negotiated in secret with hundreds of corporate advisors (see the Washington Post infographic of 500 corporate advisors), while the public and press were shut out – as was Congress until year six of seven of the closed-door talks. Recent opinion research shows that the more the American public hears about the TPP and its actual terms, the more they oppose it.
  1. There are few remaining tariffs left between TPP nations to cut, which is why pro-free trade economists say there are very limited economic gains to be had from the TPP. From Paul Krugman to Joseph Stiglitz to Robert Reich to Jeffrey Sachs to Simon Johnson and beyond, prominent economists who supported the North American Free Trade Agreement (NAFTA) and other past pacts say there would be few economic upsides from the TPP. Many are working to stop the TPP because they consider it as threatening to the U.S. economy and most Americans’ interests. The TPP includes protections that make it easier for corporations to send jobs overseas, removing the risks and costs that make corporations think twice about offshoring jobs to low-wage countries. The pro-free-trade Cato Institute calls these terms a subsidy on offshoring.
  1. The TPP’s key provision grants new rights to thousands of multinational corporations to sue the U.S. government before a panel of three corporate lawyers that would be empowered to award the corporations unlimited sums to be paid by America’s taxpayers, including for the loss of expected future profits. Were the TPP enacted, multinational corporations need only convince the tribunal of private sector lawyers that a U.S. law or safety regulation violates their TPP rights. The tribunals’ decisions are not subject to appeal and the amount awarded has no limit. To date, the United States has avoided losing such “investor-state dispute settlement” cases because past pacts did not include major capital-exporting nations except Canada. But the TPP would newly empower the U.S. subsidiaries of more than 9,500 Japanese and other TPP-nation firms to attack U.S. federal, state and local policies and government actions, as TransCanada recently did using similar terms in NAFTA.
  1. Even the official U.S. government assessment of the TPP, the U.S. International Trade Commission (ITC) report released on May 18, projected few economic gains but estimated that 36 of 55 U.S. economic sectors would suffer declining trade balances under the TPP. The ITC projected that the TPP would increase the U.S. global trade deficit by $21.7 billion by 2032 and even worsen our services trade balance. The ITC projected a $24 billion dollar jump in the manufacturing trade deficit and job loss and manufacturing losses five times larger than gains for winning agricultural sectors, with corn and wheat losing. The projected upside: tiny economic growth gains (15/100 of one percent) by 2032 – meaning the United States would be as wealthy on January 1, 2032 with the TPP as it would be on February 15, 2032 without. A recent study finds that the TPP would spell a pay cut for all but the richest 10 percent of U.S. workers by exacerbating U.S. income inequality, just as past trade deals have done.
  1. The “TPP covers 40 percent of the global economy” line is a misdirect: The six TPP nations with existing U.S. free trade pacts account for more than 80 percent of the trade counted in the 40 percent. Tariffs on U.S. goods going to Australia, Canada, Chile, Mexico, Peru and Singapore already do not exist or are being eliminated. So while TPP countries may account for 40 percent of world trade, the TPP would cut tariffs on only 20 percent of that 40 percent share. Japan comprises fully 88 percent of the combined gross domestic product of the five TPP countries without an existing U.S. free trade agreement, but Japan’s average applied tariff weighted by product import shares is now only 1.2 percent. Indeed, tariff levels in the remaining five TPP countries are generally low.
  1. Environmental, consumer, faith, senior, family farm, LGBTQ, Internet freedom, small business, human rights, online activism, and other organizations have made stopping the TPP a major priority because it would undermine decades of their policy achievements and foreclose future progress by requiring signatory countries to conform domestic laws to hundreds of pages of non-trade rules promoted by the corporate interests involved in negotiations. Doctors Without Borders calls the TPP the worst trade agreement for access to medicines. The online groups that derailed the Stop Online Piracy Act (SOPA) in Congress are fighting TPP terms that undermine Internet freedom and consumer privacy. Consumer groups are engaged because the TPP would require us to accept food imports that do not meet U.S. safety standards and limit commonsense financial regulation needed to avoid future crises. Climate and youth organizations are fighting the TPP because it would forbid many of the policies we need to combat climate change. Just one recent letter to Congress was signed by 1,500 organizations from NRDC and Sierra Club and 350.org to MoveOn and CREDO to the National Farmers Union and Public Citizen and Food & Water Watch to Common Cause and Action Aid to the AFL-CIO and SEIU to score of national unions to the Presbyterian, Unitarian and other faith groups with tens of millions of members combined.

For more info: Lori Wallach, Public Citizen’s Global Trade Watch at lwallach@citizen.org 

July 12, 2016

Public Health Takes a Hit Even as Uruguay Prevails in Infamous Philip Morris Investor-State Attack

Thankfully, a years-long campaign to shame Philip Morris and the investor-state dispute settlement (ISDS) system for the tobacco giant’s infamous ISDS attack on Uruguay ultimately prevailed, but not without leaving deep and damaging scars to global tobacco-control efforts. An ISDS tribunal ruled that Uruguay did not have to compensate Philip Morris after the firm attacked Uruguay’s public health law requiring that 80 percent of tobacco product packages feature graphic medical warning labels.  

But what happens when a government “wins” an ISDS attack should be a cautionary tale for the threats posed by the Trans-Pacific Partnerships (TPP). If enacted, the TPP would double U.S. ISDS liability overnight.

Uruguay only managed to dodge this bullet because billionaire Michael Bloomberg stepped in to cover its millions of dollars in costly legal defense during six years of litigation. When Philip Morris initiated the ISDS case in 2010, the Uruguayan government reportedly was prepared to immediately cave and change their anti-tobacco law, since defending the case was financially impossible for the tiny country. 

Late last year, another ISDS tribunal ruled that it did not have jurisdiction in the Philip Morris case against Australia for similar tobacco-control policies, but Australians saw more than $50 million of their tax dollars go to legal costs to defend against the attack, according to World Health Organization Director General Margaret Chan. This includes having to pay the three corporate lawyers who served as “judges” during the four-year ordeal. They bill at least $375 per hour and, in a manner that would be unethical for real judges, often rotate between suing governments for corporations and “judging” cases.

And, just by launching these cases, Philip Morris managed to chill other nations from enacting similar legislation for years to avoid being the next target. One example: New Zealand held off on its own plain packaging proposal to see what happened with Australia. Canada’s efforts to enact plain-packaging legislation died after R.J. Reynolds sent a memorandum to the House of Commons arguing the policy would constitute an illegal expropriation under the North American Free Trade Agreement’s ISDS regime, exposing Canada to millions in liability.  

With six million people dying from tobacco-related deaths each year globally, it is not hyperbole to say that the years of litigation of these ISDS cases contributed to needless loss of life.

The Obama administration touts that the TPP will exclude tobacco companies from using ISDS to challenge public health policies. But as Senator Elizabeth Warren put it, the ISDS tobacco exclusion is “pretty much an admission that ISDS can be used to weaken other public health laws.”

And, the favorable ruling in the Uruguay case unfortunately does not assure governments of their policy space. Among the fatal flaws baked into the very structure of the ISDS system is how capricious and subjective ISDS tribunals are. When a particularly egregious case gets massive negative attention and becomes highly politicized, it is in the interest of the tribunal to “make it go away” in order to preserve the ISDS system as a whole. 

When Canadian companies Methanex and Glamis Gold launched some of the few ISDS cases against the United States — against California regulations of toxic substances and mining respectively — the public outrage by members of Congress and others likely affected the outcomes, and the United States dodged the ISDS bullet. Other, less high-profile cases with very similar fact patterns and based on the same claims ended with the taxpayers of other countries having to pay multi-million dollar awards to corporations. 

For now, we breathe a sigh of relief that these cases against Uruguay and Australia did not result in millions in taxpayer compensation to the tobacco giant and congratulate all the public health advocates that helped to spotlight the travesty of Philip Morris’ ISDS attack against the countries. 

But, at the same time, we must redouble our efforts to stop the TPP, which would dramatically expand this dangerous and capricious ISDS regime.

July 05, 2016

New ITC Report Finds Disturbing Trends in U.S. Economy After Implementation of Free Trade Agreements

 

On June 29, the U.S. International Trade Commission (ITC) released a study on the economic impacts of trade agreements on the United States economy. This study was among those required by the 2015 Fast Track legislation. The report:

  • Estimates that U.S. trade agreements have increased the wage gap in America between higher- and lower-skilled workers (page 122).
  • Tried to cover up the reality that the United States has a large and growing trade deficit with its Free Trade Agreement (FTA) partners. The aggregate U.S. trade deficit with FTA partners has increased by about $141 billion, or 418 percent, since the FTAs were implemented while the aggregate trade deficit with all non-FTA countries has decreased by about $46 billion, or 6 percent, since 2005 (the year before the median entry date of existing FTAs). To avoid discussing this reality, the study’s representation of FTA trade flows focuses on percentage figures versus nominal figures, which would reveal the deficit. The report notes that U.S. exports to FTA countries represented 47 percent of total U.S. exports while imports from FTA countries only claimed 34 percent of total U.S. imports (page 29). A more honest portrayal of the relationship shows that U.S. exports to FTA partners were less than $593 billion in 2015, yet U.S. imports from FTA partners were more than $767 billion, a 2015 trade deficit of $175 billion.
  • Estimates all the U.S. bilateral and regional FTAs combined have led to an increase in real GDP and aggregate U.S. employment by less than 1 percent (page 122). In other words, the average U.S. monthly employment growth over the past year (i.e. 200,000 jobs) is larger than the ITC’s estimates for the increase in total employment that all U.S. FTAs have delivered since 1985 (i.e. 159,300 jobs) (page 17). But even this tiny estimated increase in employment is an odd conclusion given that the increase in the U.S. trade deficit under U.S. FTAs of $141.3 billion, if plugged into the Obama administration’s trade-to-jobs ratio, implies the loss of more than 745,000 U.S. jobs counting both imports and exports.
  • Fails to discuss or review the 2.9 million jobs certified by Trade Adjustment Assistance (TAA) as trade job losses since the passage of the North American Free Trade Agreement (NAFTA) – and it is known that TAA numbers significantly undercount trade-related job loss because until recently the program only covered a subset of manufacturing jobs lost to trade and only counts job losses that are voluntarily reported to the agency. Nor does the study explicitly discuss the nearly 5 million manufacturing jobs lost since NAFTA and the FTAs that followed, including many job losses resulting from multinational corporations moving their operations overseas to take advantage of cheap labor and undervalued currencies. Also missing from the report, is any coverage of the loss of nearly 200,000 U.S. small farms in America, which has devastated the traditional family farm in favor of large farm conglomerates. The ITC does admit that trade agreements have led to transitory unemployment and labor relocation – a reality it failed to account for in its study on the TPP’s impact on the U.S. economy (page 122).
  • Finds that certain trade agreements have lowered employment levels in many industries including autos as well as textiles and apparel. The report highlights that the tariff reductions the U.S. undertook as a result of the Uruguay Round and NAFTA led to U.S. steel imports increasing by 14.7 percent, or $1.2 billion in 2000 (page 149). The report also states that NAFTA and the Central American Free Trade Agreement (CAFTA) led to lower U.S. employment and production levels in the auto (page 173) and textile and apparel sectors (page 150).
  • Finds that all the U.S. FTAs since 1985 have increased real GDP by a minuscule 0.21 percent (page 127).

The ITC has traditionally overstated the benefits that FTAs have had on the U.S. economy by incorporating deceptive and downright false assumptions in its models. The aggregate U.S. trade deficit with FTA partners has increased by $141 billion, or 418 percent, since the FTAs were implemented. In contrast, the aggregate trade deficit with all non-FTA countries has decreased by about $46 billion, or 6 percent, since 2005 (the year before the median entry date of existing FTAs). Using the Obama administration’s trade-to-jobs ratio, counting both exports and imports, the FTA trade deficit surge implies the loss of over 745,000 U.S. jobs.

Capture

While the ITC report implies that more recent FTAs include higher standards on labor and environmental provisions and thus may yield trade balance improvements (Page 94), there is no correlation between an FTA’s inclusion of the higher standards of the May 10, 2007 deal and its trade balance. The Korea FTA included the “May 10” standards, and yet the U.S. trade deficit with Korea has grown over 80 percent in the four years since the deal’s passage. Meanwhile, most post-NAFTA FTAs that have resulted in (small) trade balance improvements did not contain the “May 10” standards. Reducing the massive U.S. trade deficit will require a more fundamental rethink of the core status quo trade pact model extending from NAFTA through the Korea FTA, not more of the same.

June 22, 2016

Rock Against the TPP

The corporate forces behind the Trans-Pacific Partnership (TPP) kept the deal as secret as possible for as long as possible. And they would love for that silence to continue as Big Business lobbyists push Congress to vote on this terrible “trade” deal.

But We the People will not stay silent. We the People are going to get LOUD.

RockAgainstTheTPP

The Rock Against the TPP roadshow — which has already generated buzz in Rolling Stone and Billboard — is a nationwide concert series going on throughout the summer.

Audiences at the free shows will be treated to performances by Tom Morello, activist and guitarist of Rage Against the Machine, Audioslave and Prophets of Rage; Evangeline Lilly, advocate and actress best known for Lost and The Hobbit; the infamous political punk rock group, Anti-Flag, and many more.

In addition to musicians and celebs, expert speakers from major organizations will explain how the TPP would threaten U.S. jobs, food safety, access to medicines and other aspects of our daily lives.

The first show is July 23 in Denver, Colorado. Other locations after that will be announced — check www.RockAgainstTheTPP.org regularly to see if a city near you is added to the list.

Fight for the Future is hosting the concert series, along with help from a diverse coalition of groups including Public Citizen, Sierra Club, the Communications Workers of America, the Citizens Trade Campaign and others.

See the full line-up and tour dates at www.RockAgainstTheTPP.org!

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