Posts Tagged ‘free trade agreement’

U.S. has free trade pact with tax-haven Panama

April 5, 2016

Revised and updated.

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In the light of the Panama Papers leaks of a Panama law firm’s files on tax havens, it is interesting to note that the United States signed a free trade agreement with Panama in 2012.

According to Senator Bernie Sanders, the agreement restricted the right of the United States to crack down on abusive tax havens.

Sanders voted against the agreement.  Senator Hillary Clinton voted for it.  Ted Cruz wasn’t yet a member of the Senate at the time.

Tax havens were a serious concern even before the trade agreement was signed, and the concern went far beyond Panama.  Still, the agreement with Panama didn’t help.

As the chart above shows, the Panamanian law firm Mossack Fonseca registered most of its shell companies in countries other than Panama.  Keep in mind that Mossack Fonseca is not the only law firm that registers shell companies in tax havens.  It is not even the largest such firm in Panama.

Here is what Sanders said about the free trade agreement.

Panama’s entire annual economic output is only $26.7 billion a year, or about two-tenths of one percent of the U.S. economy.  No-one can legitimately make the claim that approving this free trade agreement will significantly increase American jobs.

Then, why would we be considering a stand-alone free trade agreement with this country?

Well, it turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in off-shore tax havens.   And, the Panama Free Trade Agreement would make this bad situation much worse.

Each and every year, the wealthy and large corporations evade $100 billion in U.S. taxes through abusive and illegal offshore tax havens in Panama and other countries.

According to Citizens for Tax Justice, “A tax haven . . . has one of three characteristics: It has no income tax or a very low-rate income tax; it has bank secrecy laws; and it has a history of non-cooperation with other countries on exchanging information about tax matters.  Panama has all three of those. … They’re probably the worst.”

Mr. President, the trade agreement with Panama would effectively bar the U.S. from cracking down on illegal and abusive offshore tax havens in Panama.  In fact, combating tax haven abuse in Panama would be a violation of this free trade agreement, exposing the U.S. to fines from international authorities.

In 2008, the Government Accountability Office said that 17 of the 100 largest American companies were operating a total of 42 subsidiaries in Panama.  This free trade agreement would make it easier for the wealthy and large corporations to avoid paying U.S. taxes and it must be defeated.  At a time when we have a record-breaking $14.7 trillion national debt and an unsustainable federal deficit, the last thing that we should be doing is making it easier for the wealthiest people and most profitable corporations in this country to avoid paying their fair share in taxes by setting-up offshore tax havens in Panama.

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Who said Obama isn’t a strong leader?

June 11, 2015

Anybody who said that Barack Obama is a weak leader must eat their words in the light of the way he is pushing the Trans Pacific Partnership agreement through Congress.

Likewise those who said he is incapable of working with the Republican leaders in Congress.

Barack ObamaI think people mistook his character because they mistook his priorities.  The President is a tough fighter for things that matter to him.

It is just that issues such as closing Guantanamo Bay or defending Social Security were not among his top priorities.  The TPP and the Trade Promotion Authority, aka Fast Track, are.

The TPP is supposedly a trade agreement, but based on what’s been leaked out about it so far, that’s not what it is.

It creates new international law that limits the power of sovereign governments to enact laws and regulations to protect public health, the environment and the well-being of their citizens/

And it sets up a mechanism by which corporations can have governments penalized if a tribunal rules that laws and regulations deny them their just profits.

Corporate executives say they will invest more confidently in countries if they have assurance that they won’t be subject to onerous laws and regulations and if they can have recourse to a special tribunal if national governments impose laws and regulations they think are unfair.  No doubt!

That doesn’t mean that no investment will take place if they don’t get all these special protections.

My idea of a free trade agreement is an agreement among nations to lower tariffs and import quotas so that people within those countries can freely exchange goods and services.  Most such barriers were eliminated years ago.  That’s why almost everything you pick up in an American department store is labeled “Made in Vietnam” or “Made in Korea” or “Made in Bangladesh”.

Eliminating restrictions on currency manipulation, or demanding privatization of public services, is very different.   This is a way of shifting governance from national governments to international corporations.

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Debating the TPP: links to the pros and cons

May 2, 2015

I’m strongly against the proposed Trans Pacific Partnership agreement and the fast track proposal for approving it, based on what I know of both.

I write this even though I admit I don’t know what will be in the TPP when it is finally submitted to Congress.  I could be wrong in everything I say.   I don’t think I will be, in fact I’m pretty sure I won’t be, but in this post, I link to arguments in favor as well as those opposed so you can judge both sides of the question.

I link.  You decide.

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