Farmers from Miyagi prefecture raise their fists along with other farmers from across Japan during a rally against Japan participating in rule-making negotiations for the US-led Trans-Pacific Partnership (TPP) in Tokyo, October 26, 2011. (Reuters/Yuriko Nakao)
One thing members of Congress probably aren’t hearing about from their constituents during the August recess is the Trans-Pacific Partnership (TPP), the most significant international trade agreement underway in decades. The nineteenth round of talks began yesterday in Brunei, with negotiations reportedly in the “end game.”
Congress itself hasn’t heard much about the TPP; the negotiating process has been characterized by extreme secrecy and the Obama administration has denied repeated calls from legislators to make the process more transparent, while pressing to finalize the agreement this year. Dubbed “NAFTA on steroids,” the TPP is a free-trade pact currently comprised of twelve participants, including Mexico, Canada, Japan, Vietnam, Singapore, Malaysia, Brunei, Australia, New Zealand, Peru and Chile.
Lawmakers do have one critical decision to make regarding the TPP when they return to Washington this fall: whether to grant fast-track authority to President Obama. Fast-tracking (formally called Trade Promotion Authority) would allow Obama to sign the agreement prior to congressional approval, before legislators even read the final text. Congress would have to vote within ninety days to approve the deal retroactively, but debate would be limited and no amendments would be allowed.
Fast-track authorization would limit Congress’s ability to address three major concerns with the TPP: the potentially harmful economic impacts of the deal, the very real prospect of the agreement superseding domestic policy in areas ranging from internet privacy to environmental and financial regulations and an unbalanced negotiating process and its likely outcome, both tipped towards corporate rather than public interest.
First, the economy. After promising to reform NAFTA-type models during his campaign, Obama has now made them a central part of his economic strategy. “I’m asking Congress for the authority to negotiate the best trade deals possible for our workers,” he declared on July 30 in Chattanooga, Tennessee, in a tacit reference to his fast-track aims for TPP and another massive deal with the European Union.
As the story goes, access to new overseas markets will boost exports, decreasing our trade deficit and reviving the US manufacturing sector. But freer trade isn’t a jobs policy. “Those who say these deals are going to create thousands of jobs and increase exports, they don’t talk about imports—which are just as important, if not more so,” said Robert Scott of the Economic Policy Institute. According to his analysis, in the year after Obama’s recent agreement with South Korea was finalized, US exports fell, South Korean imports rose and the US trade deficit to South Korea increased by nearly 40 percent, costing some 40,000 jobs. The TPP could worsen income inequality, too.
Significant as its economic impact could be, the TPP is only marginally about trade. Just five of the twenty-nine draft chapters cover traditional trade matters, according to Ben Beachy, the research director for Public Citizen’s Global Trade Watch. The rest of the deal, he said, “could rewrite broad swaths of domestic policy that affects our daily lives, from Internet browsing to what we eat for dinner.”
“For corporations, the TPP is a convenient back-door means of undermining public interest policies that they oppose but are not able to undermine through domestic legislation,” Beachy said. If enacted, all existing and future US law would have to comply with the treaty, or the US could face trade sanctions. Environmental, health, food safety, human rights and Internet freedom protections could all be limited by the TPP. The deal could derail attempts to rein in Wall Street, making it impossible to regulate risky financial products, implement a “Robin Hood” tax on financial transactions or enforce size limits on big banks and capital controls.
Corporations, meanwhile, would gain vastly expanded privileges over federal, state and local government. A draft chapter leaked last year detailed the inclusion of a legal structure, called an investor-state dispute settlement mechanism, that would essentially allow multinationals to sue a government if they believe a policy infringes on their rights. A tribunal unaccountable to any electorate would decide the case and the damages owed, with no option for appeal. Similar investor-state rules have been included in a number of other free-trade deals, including NAFTA, and cases are surging, as are the damages awarded. Last year corporations won 70 percent of disputes.
With the exception of leaked information, it’s difficult to weigh the substance of the TPP because the drafts have been kept secret not only from the public, but also from Congress. Meanwhile, a panel of 600 advisers, made up largely of the same business leaders who stand to benefit from the dispute resolution mechanism, have some access to the text under negotiation. After Representative Alan Grayson was granted an exception in June and was allowed to view a draft section, he called the deal “a gross abrogation of American sovereignty.”
Calls for greater transparency have come throughout the negotiating process, which began under George W. Bush in 2008. It’s standard for trade negotiations to take place out of the public eye, but there is precedent for greater openness, particularly with members of key congressional committees. The Bush administration published a draft of the Free Trade Area of the Americas Agreement in 2001, and the WTO often publishes drafts under negotiation online.
The administration argues that secrecy is essential to the negotiating process. Expect a similar argument this fall in support of granting fast-track authority—that the pact will fail unless the United States’s negotiating partners are assured that Congress won’t meddle.
As a senator, Obama said he would “not support the extension of the existing fast track process.” Created in 1974 when trade deals were far less complex than the TPP, fast track was last authorized in 2002 by a slim margin and expired in 2007. Obama is likely to push for a rewritten fast-track authorization that includes “negotiating objectives” to address domestic labor and environmental concerns, but they won’t solve the underlying transparency issues that fast track exacerbates.
“Fast track is essentially an undemocratic process. Congress, when it offers Trade Promotion Authority, is promising to tie its hands,” said Scott. “Once these deals are finished they assume a life of their own, so blocking fast track is critical.”
The US Chamber of Commerce and other business interests are promoting fast track aggressively, while labor and environmental activists, along with lawmakers from both sides of the aisle, oppose reauthorization. Politico reported yesterday that Democratic Representative Rosa DeLauro and Republicans Michele Bachmann and Walter Jones are gathering signatures on letters urging their colleagues to reassert congressional authority over trade policy by denying fast-track legislation. The letters are similar to one released in June by thirty-six freshman Democrats.
In the wake of revelations about the National Security Agency’s overreach, Congress has shown a willingness to demand transparency in a surprisingly bipartisan manner. Refusing to reauthorize fast track would put a check on the administration’s push to ram the TPP through Congress before it can be thoroughly evaluated with the national interest in mind. It would also send a strong signal that Obama’s arguments for secret power have lost full credibility.
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