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Some time this year, President Obama will ask Congress to approve a new trade agreement, called the Trans-Pacific Partnership, or TPP.
Everyone I know is in favor of trade. We take pride when Washington state produces and exports airplanes, apples, soft white wheat and software.
It should be obvious, however, that we can have good trade policy or bad trade policy.
We should understand that the TPP has been negotiated in secrecy. More than 600 corporate lobbyists have had direct access to the negotiating texts. They serve as formal advisers in the negotiations and have constant communication with U.S. negotiators. Meanwhile, Congress and the public are unable to get or discuss copies of the deal.
As the negotiations conclude, we can assume that corporate lobbyists achieved the terms and provisions they want in the final texts. This process is designed to favor the interests of global corporations, while sweeping aside public interests.
The trade provisions in TPP are not controversial. Since tariffs are already low, Washington state producers would have the same access to foreign markets with or without TPP.
Economists project that the net increase in economic activity from TPP will be a fraction of 1 percent.
The remaining provisions are very controversial. We know from news leaks and public statements that TPP would grant global corporations new legal rights, expand monopoly protections for pharmaceuticals and relax Wall Street regulations. These would happen while weakening our worker and environmental protections, limiting policy options in public health
and restricting Internet freedom. TPP is really about power relationships, granting more power and influence to global corporations — who already have plenty of both.
Since the passage of NAFTA, the North American Free Trade Agreement, our cumulative trade deficit has grown by almost $10 trillion nationally. It has cost Washington state 10,800 manufacturing jobs, as of 2010. Under the recent U.S.-Korea trade deal, our trade deficit with Korea ballooned, costing thousands more U.S. jobs.
The public should also know about “investor-state provisions,” which prioritize corporate profits over public interest and allow foreign corporations to seek sanctions and damages from national governments. These suits are heard in private trade tribunals, where corporations challenge laws they believe reduce their profits, including worker protections, public-health programs and policies that reduce the use of fossil fuels.
Similar provisions in other NAFTA-style trade deals have already allowed global corporations to launch nearly 600 challenges against almost 100 governments. These tribunals decide cases based on language in the trade deals. They are not bound by our legal tradition or the U.S. Constitution.
Gov. Jay Inslee’s recent letter to the U.S. trade representative called attention to this so-called investor-state dispute settlement mechanism: “This mechanism provides foreign investors with both greater procedural and substantive rights than domestic companies by providing foreign companies access to extrajudicial panels and by giving them the opportunity to be awarded compensation for government measures that ... would not be considered a violation of property rights protections under U.S. law. ... It certainly appears that we are susceptible to losing a case if the legal reasoning used in favor of U.S. investors under certain cases in the past were to be applied against our country’s policies in the future. In its current form, the liabilities of investor-state provisions outweigh their potential value.”
NAFTA-style trade deals like TPP would thwart generations of U.S. legal tradition, and restrict our policy options for dealing with climate change, wage stagnation and income inequality. A European diplomat, Ambassador João Vale de Almeida, speaking in Seattle at the World Affairs Council meeting in October 2013, said global businesses would welcome this outcome. He concluded, “These agreements will determine how life is organized in 2050.”
We have learned two things about NAFTA-style free trade agreements: They are not free and they are not trade. Having experienced 20 years of deindustrialization, job loss, and
concentration of wealth and influence from NAFTA and similar trade deals, we can add: They don’t work and their distortions of power relationships weaken democracy.
Stan Sorscher is on staff at Society for Professional Engineering Employees in Aerospace (SPEEA), a labor union representing aerospace engineers, scientists and technical workers, and is President of the Washington Fair Trade Coalition. He is active in trade, economic development, and other public policy issues. Follow Stan on Twitter: www.twitter.com/sorscher