The people’s victory over the TPP

The defeat of the odious Trans-Pacific Partnership agreement shows that the people can win against entrenched corporate and political power.  The way the TPP was defeated shows how the people can win against entrenched power.

A couple of years ago, the passage of the odious Trans-Pacific Partnership agreement seemed inevitable.

Barack Obama, Hillary Clinton and Republican leaders in Congress, the U.S. Chamber of Commerce and most big newspapers and broadcasters were in favor of it.  The public knew little about it because it was literally classified as secret.   Congress passed fast-track authority, so that it could be pushed through without time for discussion.

Today it is a dead letter.  President Obama has given up his plan to join with Republicans and push it through a lame-duck session of Congress.   Leaders of both parties say there is no chance of getting it through the new Congress.

If you don’t know what the TPP is or why a lot of people think it is odious, don’t feel bad.  If you depend for your information on the largest-circulation daily newspapers or the largest broadcasting networks, you have no way of knowing.

It is in theory a free-trade agreement among the United States, Canada, Mexico, Australia, Japan and seven other countries.   It is actually a corporate wish list in the form of international law, giving corporations new privileges in the form of patent and copyright protection and new powers to challenge environmental, health and labor laws and regulations.

The world scene: Links & comments 7/8/14

Rigged Rules: A Rogue Corporation in the World Bank’s Rogue Tribunal by Robin Broad and John Cavanaugh for Triple Crisis.  (via Naked Capitalism)

The government of El Salvador has denied a license to an Australian-Canadian company, Pacific Rim, to mine for gold because their operations would discharge arsenic and cyanide into streams from which half the population gets its drinking water.

Pacific Rim has sued El Salvador for $300 million under the “investor-state” provisions of the Central American Free Trade Agreement, and the case will be decided by the World Bank’s International Center for Settlement of Investment Disputes in Washington, D.C.

Similar provisions to override national sovereignty are part of the 12-nation Trans Pacific Partnership Agreement and 28-nation Tranatlantic Trade and Investment Partnership (aka TAFTA) now being negotiated by the United States.

Losing Credibility: The IMF’s New Cold War Loan to Ukraine by Michael Hudson for Naked Capitalism.

The International Monetary Fund violates its own rules by lending the Ukrainian government more money than it has any reason to think can be paid back, in order to finance the Ukrainian governments war with eastern Ukrainian separatists.

Economist Michael Hudson says the IMF’s real objective is to force Ukraine to sell off its agricultural land and to open itself up to fracking for natural gas.

‘Why Not Kill Them All?’ by Keith Gessen for the London Review of Books.

Keith Gessen, reporting from Donetsk, described the Ukrainian war as a conflict between fascistic Russian-backed separatists and a fascistic Ukrainian government, with sincere democratic reformers and ordinary people left without any options.

Three Reasons Why Putin Laughs At Impotent America by Eamonn Fingleton for Forbes.

Once the United States was the world’s leading manufacturing nation, the world’s leading creditor nation and the world’s leading trading nation.   We Americans have thrown away all these advantages.

Now American companies have off-shored production to foreign countries, which means that the USA is losing our old American know-how.  The USA as a whole, not just our government, is in debt, which means foreigners are buying up national assets.  And we open our market to foreign companies unconditionally, rather than using this as a lever to gain advantage.

The world still must reckon with our huge military forces and our dominance of international financial institutions, but these are the afterglow of our past power.

It’s not President Obama as an individual who is weak.  It is the USA as a whole.

Only Cool Heads Can Defeat ISIS by Patrick J. Buchanan for The American Conservative.

The tide is turning against the bloodthirsty so-called Islamic State, which has suffered defeats by the Iraqi army and the Kurdish peshmerga militia.  ISIS is vastly outnumbered by the armies of Iraq, Syria and Turkey.

If ISIS is U.S. Enemy No. One, then it doesn’t make sense to be trying to destroy the enemies of ISIS—Syria, Iran, Hezbollah, the Kurdish PKK fighters in Turkey and Vladimir Putin’s Russia.

ISIS would like the U.S. government to unilaterally send troops into another Middle East quagmire war.   President Obama is wise to not play into their hands.

How Obama’s Non-Strategy ISIS Strategy Works by Leon Hadar for The American Conservative.

President Obama is wise to hold back and allow Turkey, Saudi Arabia and other Middle East countries to take the lead in attacking ISIS.  The flaw in Obama’s policy is the idea that the U.S. can wage a proxy war against the Syrian government and the ISIS forces in Syria at the same time.

Services trade pact locks out democracy

The Obama administration is engaged in secret negotiations of new trade agreements that would limit the power of national governments to control international corporations.

The proposed Trans-Pacific Trade Agreement (TPP) is one; the proposed Trans-Atlantic Free Trade Agreement (TAFTA) is another.   Less well-known is the proposed Trade In Services Agreement (TISA), which is being negotiated among 50 countries, including the United States.

If the President were trying to negotiate agreements for control of global climate change, or nuclear disarmament, or standards for protecting labor and the environment, I would support him.  Even in these cases, though, I would not favor “fast track” procedures which force an up or down vote without full debate.

But, thanks to disclosures by Wikileaks of the financial services portion of the proposed agreement, we know that TISA would limit the powers of government concerning:

• limits on the size of financial institutions too big to fail;
• restrictions on activities, e.g., deposit taking banks that also trade on their own account;
• requiring foreign investment through subsidiaries regulated by the host rather than branches regulated from their parent state;
• requiring that financial data is held onshore;
• limits on funds transfers for cross-border transactions e-finance; authorisation of cross-border providers;
• state monopolies on pension funds or disaster insurance;
• disclosure requirements on offshore operations in tax havens;
• certain transactions must be conducted through public exchanges, rather than invisible over-the counter operations;
• approval for sale of ‘innovative’ potentially toxic financial products;
• regulation of credit rating agencies or financial advisers;
• controls on hot money inflows and outflows of capital;
• requirements that a majority of directors are locally domiciled;
• authorization and regulation of hedge funds; etc.

via Jane Kelsey, University of Auckland.

In other words, TISA would handcuff governments in doing precisely those things that are needed to prevent the next financial crash.

And that’s just the financial services part.  Among the other topics of negotiation are telecommunications and e-commerce, domestic regulation and transparency, professional services, maritime services and international movement of people, and this may not be a complete list.

Does Earth have a trade deficit with Mars?

Cumulative trade surpluses or deficits, 1980-2008, in billions of dollars. Source: Wikipedia. Double click to enlarge.

Among the world’s rich countries, the United States has a continuing trade deficit, Germany and Japan have continuing trade deficits and the other rich countries move up and down, slightly above and slightly below the break-even point.  But the French economist Thomas Piketty, in his new book, Capital in the Twenty-First Century, pointed out that, if you add them all up, the rich countries as a group have a trade deficit.

Are the rich countries in debt to the poor countries?  No, said Piketty.   If you lump all the poor countries together, they, too, have a combined trade deficit.

In other words, the whole Earth has a trade deficit.  But according to basic economic theory, any nation’s deficit is a surplus for some other nation or group of nations.   Could this mean that Earth has an unfavorable trade balance with Mars?

No, Piketty said.  The problem is that not all the world’s trade is accounted for — in particular, the trade that winds up in hidden accounts in the world’s tax havens.  If it was known how much it is, and who owns it, we probably would realize that the world’s super-rich hold an even higher percentage of the world’s wealth than we think.

One of the benefits of a global tax on capital would be to bring this hidden wealth to light, he said.  Even if you don’t accept the idea of a tax on capital, there is a need for international cooperation on financial reporting and prevention of tax evasion.  World trade treaties, instead of protecting international corporations from national governments, should provide for sharing information on wealth, and for boycotting jurisdictions that don’t meet international standards for reporting.

New trade pact would lock in privatization

The proposed new 50-nation Trade in Services Agreement now being negotiated is the latest in a series of proposals in create international structures to lock in corporate agendas and neutralize government regulation.   It would, among other things, prevent municipal governments that privatized public services from taking them back if privatization didn’t work out.

I learned about TISA through a report published by two Canadian academics, Scott Sinclair of the Canadian Centre for Policy Alternatives, and Hadrian Mertini-Kirkward of the Institute for Political Economy of Carleton University, and commissioned by Public Services International, an international federation of public sector trade unions.  What follows is based on their report.

Formal TISA negotiations began early in 2013, and negotiators hope they can finish up by the end of 2014.   There’s a round of negotiations now going on in Geneva.   The Chinese government reportedly wants to join, but the U.S. representatives aren’t sure the Chinese are committed to the goal of the agreement.

The basic idea of TISA is that foreign companies should be able to compete to provide services on the same basis as domestic companies.  Hence there “standstill” and “rachet” clauses to make current and future privatizations of public services a one-way street, so that foreign companies don’t lose their right to bid on them.

There are provisions for governments to carve out exceptions in the agreement, but if there is something they fail to think of, they are out of luck.  Even if you think privatization is a good idea in general, you might admit that municipal governments should have the power to make decisions based on individual circumstances.

The agreement would forbid governments to restrict movement of corporate employees, such as construction workers or nurses.  Corporations would be allowed to bring in their own workers, without having to check on whether local workers were available to do the work.

However, there is no provision to give these employees resident or immigrant status.  When and if they lose their jobs, they’d be kicked out of the country immediately, so that they would not be in a position to complain or join unions.

Another provision would restrict governments’ authority to set rules for licensing clinics and medical laboratories, water and sewerage plants, power plants, for broadcast licenses and for accreditation of schools and universities.

There seems to be no end to these agreements.  First there was NAFTA, the North American Free Trade Agreement, which I was foolish enough to support, but which never delivered on its promises.

Then came the proposed Trans Pacific Partnership Agreement, which in the name of international trade would restrict governments from regulating corporations, and create an unelected tribunal to which corporations could appeal decisions that unfairly deprive them of “expected profits.”

I’d written and published a good many posts about the TPP when I learned there was another international agreement in the works that was just as bad, the Trans-Atlantic Trade and Investment Partnership.

Now this.  I wonder what else is being cooked up that we the people don’t know about.

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Click on Secret trade negotiations undermine public services: study for the press release by the Canadian Centre for Policy Alternatives.

Click on The Trade in Services Agreement and the corporate agenda for the complete report.

Corporate rule being masked as free trade

The World Trade Organization, International Monetary Fund and World Bank act in many respects like a quasi world government, imposing corporate views of economic policy on weak nations.  Now a series of international treaties are being proposed that would give pro-corporate policies the force of international law.

The net result of all these treaties would be to weave the whole developed world except for China into a network in which international tribunals would have authority to override national law in favor of corporate interests.

The links below give details.

These treaties empower corporations, not people

The video tells how “free trade” agreements set up international tribunals to which corporations can appeal to override national laws, regulations and court decisions that protect workers, consumers and the environment.  It tells of how Chevron polluted a large area of Ecuador, how the local people after a long struggle won an award for damages or how Chevron overturned those damages.

Similar international tribunals would be set up under the proposed Trans-Pacific Partnership Agreement and under a new agreement the Obama administration is negotiating with the European Union.  Huffington Post reporters say the proposed US-EU agreement calls for mechanisms of “investor-state dispute resolution,” which would allow a company to appeal a regulation or law to an international tribunal.   The tribunal would be given authority to impose economic sanctions against the United States or any other country that refused to repeal the objectionable law or regulation.

Let’s assume for the sake of argument that this international tribunal would be impartial, and not stacked in favor of corporations.  It still would be a bad idea because it would be one-sided.   The proposed agreement creates now corporate rights, but it does nothing to protect the rights of workers, consumers and citizens.

International trade agreements are not inherently bad.  They could be used to raise rather than lower international standards.  I can imagine a treaty to sanction nations that export products that are hazardous to human health and safety, or that gain a competitive advantage by violating agreed-upon labor and environmental standards.  But under the proposed US-EU treaty and Trans-Pacific Partnership Agreement, the reverse would be true.  Sanctions would be applied against nations for protecting consumers, workers and the environment.

Trans-Pacific Partnership: NAFTA on steroids

This map shows how the TPP would link other trade blocs

During the 2008 Presidential campaign, candidates Barack Obama and Hillary Clinton pledged to renegotiate the North American Free Trade Agreement so as to remove provisions that limited the ability of national governments to legislate for protection of workers, consumers and the environment.

Not only have Obama and Clinton not done this, they have signed on to negotiations begun in the last days of the George W. Bush administration to create a new agreement, the Trans-Pacific Partnership, with all the objectionable features of NAFTA raised to a new order of magnitude.  The talks being being conducted in secret, with doors closed to Congress but 600 corporate representatives taking part as advisers.  Fortunately some information has been leaked.  Lori Wallach wrote a good summary of what’s at stake for the Nation magazine back in July.

Think of the TPP as a stealthy delivery mechanism for policies that could not survive public scrutiny.  Indeed, only two of the twenty-six chapters of this corporate Trojan horse cover traditional trade matters.  The rest embody the most florid dreams of the 1 percent—grandiose new rights and privileges for corporations and permanent constraints on government regulation.  They include new investor safeguards to ease job offshoring and assert control over natural resources, and severely limit the regulation of financial services, land use, food safety, natural resources, energy, tobacco, healthcare and more.

The stakes are extremely high, because the TPP may well be the last “trade” agreement Washington negotiates.  This is because if it’s completed, the TPP would remain open for any other country to join.  In May US Trade Representative Ron Kirk said he “would love nothing more” than to have China join.  In June Mexico and Canada entered the process, creating a NAFTA on steroids, with most of Asia to boot.

Countries would be obliged to conform all their domestic laws and regulations to the TPP’s rules—in effect, a corporate coup d’état.  The proposed pact would limit even how governments can spend their tax dollars.  Buy America and other Buy Local procurement preferences that invest in the US economy would be banned, and “sweat-free,” human rights or environmental conditions on government contracts could be challenged.  If the TPP comes to fruition, its retrograde rules could be altered only if all countries agreed, regardless of domestic election outcomes or changes in public opinion.  And unlike much domestic legislation, the TPP would have no expiration date.

Failure to conform domestic laws to the rules would subject countries to lawsuits before TPP tribunals empowered to authorize trade sanctions against member countries.  The leaked investment chapter also shows that the TPP would expand the parallel legal system included in NAFTA.  Called Investor-State Dispute Resolution, it empowers corporations to sue governments—outside their domestic court systems—over any action the corporations believe undermines their expected future profits or rights under the pact.  Three-person international tribunals of attorneys from the private sector would hear these cases.  The lawyers rotate between serving as “judges”—empowered to order governments to pay corporations unlimited amounts in fines—and representing the corporations that use this system to raid government treasuries.  The NAFTA version of this scheme has forced governments to pay more than $350 million to corporations after suits against toxic bans, land-use policies, forestry rules and more.

TPP negotiators representing the United States, Australia, New Zealand, Chile, Peru, Singapore, Malaysia, Vietnam and Brunei are now meeting in Leesburg, Va., through Sunday (tomorrow).  Representatives of Canada and Mexico will join the talks when they resume in December.

Negotiations for the Trans-Pacific Partnership began in 2005 among New Zealand, Vietnam and Chile, and Brunei joined in a few months later.  It seems odd that these four particular countries would find common cause.  I think it is likely that the Trans Pacific Partnership represents a corporate plan being pushed in many countries, and these four were the first to sign on.

President George W. Bush brought the United States into the TPP negotiations in mid-2008, and the other negotiating partners joined soon after.  My main objection to the TPP is not to the specifics of what is being discussed.  Reasonable people can differ as to how far copyright and drug patents should extend.  My objection is that these issues would be removed from the democratic process and given over to a body representing corporations with a vested interest.

Trade representative Ron Kirk said the reason for keeping secret the texts of the negotiating positions and the draft agreements is that revealing such information led to the defeat of the Free Trade Agreement of the Americas.  From the democratic perspective, that is precisely the information ought to be revealed.  As Lori Wallach said:

The goal was to complete the TPP this year. Thankfully, opposition by some countries to the most extreme corporate demands has slowed negotiations.  Australia has announced it will not submit to the parallel corporate court system, and it and New Zealand have rejected a US proposal to allow pharmaceutical companies to challenge their government medicine formularies’ pricing decisions, which have managed to keep their drug costs much lower than in the United States. Every country has rejected the US proposal to extend drug patent monopolies.  This text was leaked, allowing government health officials and activists in all the countries to fight back.  Many countries have also rejected a US proposal that would forbid countries from using capital controls, taxes or other macro-prudential measures to limit the destructive power of financial speculators.

However, we face a race against time—much of the TPP text has been agreed on. Will the banksters, Big Pharma, Big Oil, agribusiness, tobacco multinationals and the other usual suspects get away with this massive assault on democracy?  Will the public wake up to this threat and fight back, demanding either a fair deal or no deal?  The Doha Round of WTO expansion, the FTAA and other corporate attacks via “trade” agreements were successfully derailed when citizens around the world took action to hold their governments accountable. Certainly in an election year, we are well poised to turn around the TPP as well.

And, no, I don’t think Mitt Romney would be any better on the Trans-Pacific Partnership than Barack Obama is.  We Americans must look for redress to Congress and our constitutional system of checks and balances.

Click on NAFTA on Steroids for Lori Wallach’s complete article.

Click on Public Citizen Press Room for a report on the leaked provisions of the Trans-Pacific Partnership agreement.