Robert Reich: The Largest, Most Disastrous Trade Deal You've Never Heard Of
Lobbyists
from America's biggest corporations and Wall Street's biggest banks
have been involved in pushing the Trans-Pacific Partnership but not the
American public.
ByRobert Reich / AlterNet
January 6, 2015
Republicans who now run Congress say they want to cooperate with
President Obama, and point to the administration's Trans-Pacific
Partnership, or TPP, as the model. The only problem is the TPP
would be a disaster.
If you haven't heard much about the TPP, that's part of the problem
right there. It would be the largest trade deal in history – involving
countries stretching from Chile to Japan, representing 792 million
people and accounting for 40 percent of the world economy -- yet it's
been devised in secret.
Lobbyists
from America's biggest corporations and Wall Street's biggest banks
have been involved but not the American public. That's a recipe for
fatter profits and bigger paychecks at the top, but not a good deal for
most of us, or even for most of the rest of the world.
First
some background. We used to think about trade policy as a choice
between "free trade" and "protectionism." Free trade meant opening our
borders to products made elsewhere. Protectionism meant putting up
tariffs and quotas to keep them out.
In
the decades after World War II, America chose free trade. The idea was
that each country would specialize in goods it produced best and at
least cost. That way, living standards would rise here and abroad. New
jobs would be created to take the place of jobs that were lost. And
communism would be contained.
For three decades, free trade worked. It was a win-win-win.
But in more recent decades the choice has become far more complicated and the payoff from trade agreements more skewed to those at the top.
Tariffs
are already low. Negotiations now involve such things as intellectual
property, financial regulations, labor laws, and rules for health,
safety, and the environment.
It's no longer free trade versus protectionism. Big corporations and Wall Street want some of both.
They
want more international protection when it comes to their intellectual
property and other assets. So they've been seeking trade rules that
secure and extend their patents, trademarks, and copyrights abroad, and
protect their global franchise agreements, securities, and loans.
But they want less protection of consumers, workers, small investors, and the environment, because these interfere with their profits. So they've been seeking trade rules that allow them to override these protections.
Not
surprisingly for a deal that's been drafted mostly by corporate and
Wall Street lobbyists, the TPP provides exactly this mix.
What's been leaked about it so far reveals, for example, that the pharmaceutical industry gets stronger patent protections, delaying cheaper generic versions of drugs.
That will be a good deal for Big Pharma but not necessarily for the
inhabitants of developing nations who won't get certain life-saving
drugs at a cost they can afford.
The TPP also gives global corporations an international tribunal of private attorneys, outside any nation's legal system, who can order compensation for any "unjust expropriation" of foreign assets.
Even
better for global companies, the tribunal can order compensation for
any lost profits found to result from a nation's regulations. Philip
Morris is using a similar provision against Uruguay (the provision
appears in a bilateral trade treaty between Uruguay and Switzerland),
claiming that Uruguay's strong anti-smoking regulations unfairly
diminish the company's profits.
Anyone
believing the TPP is good for Americans take note: The foreign
subsidiaries of U.S.-based corporations could just as easily challenge
any U.S. government regulation they claim unfairly diminishes their
profits -- say, a regulation protecting American consumers from unsafe
products or unhealthy foods, investors from fraudulent securities or
predatory lending, workers from unsafe working conditions, taxpayers
from another bailout of Wall Street, or the environment from toxic
emissions.
The
administration says the trade deal will boost U.S. exports in the
fast-growing Pacific basin where the United States faces growing
economic competition from China. The TPP is part of Obama's strategy to
contain China's economic and strategic prowess.
Fine. But the deal will also allow American corporations to outsource even more jobs abroad.
In other words, the TPP is a Trojan horse in a global race to the bottom, giving big corporations and Wall Street banks a way to eliminate any and all laws and regulations that get in the way of their profits.
At
a time when corporate profits are at record highs and the real median
wage is lower than it's been in four decades, most Americans need
protection -- not from international trade but from the political power
of large corporations and Wall Street.
The Trans Pacific Partnership is the wrong remedy to the wrong problem. Any way you look at it, it's just plain wrong.
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