We Need Fair Trade, Not “Free Trade”

Most of us are caught up in the daily struggle to survive and don’t feel we have much say in huge international issues. However, we must sound the alarm about this new “free trade” deal that will subvert democracy while contributing to the ever-increasing pattern of income inequality being experienced world wide. The Trans Pacific Partnership (TPP) is a trade deal being negotiated among Pacific Rim nations since 2009. Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States are currently participating in the negotiations. Many people have not heard of this new “free trade” deal because the details of the pact have been kept secret from all but a few congressmen. Thanks to a few leaks, we know enough to be concerned. The reason for the secrecy is clear. TPP will make it even easier to roll back regulations that protect workers, communities and the environment.

Senator Elizabeth Warren expressed her concern around the secret nature of these proceedings in a letter written on June 13th, 2013 to US Trade Representative Michael Froman. She states:

“It is no surprise that citizens are deeply interested in tracking the trajectory of trade negotiations and the language under consideration. But, if members of the public do not have reasonable access to the terms of the agreements under negotiation, then they are unable to offer real input into the process. Without transparency, the benefit from robust democratic participation — an open marketplace of ideas — is considerably reduced.

President Obama made transparency and inclusion a centerpiece of his election, and in many areas, he has opened the doors of government to ensure that the product of governing can withstand public scrutiny and is not the product of back-room deal making.”1

The effects of this trade deal are anticipated to be similar to NAFTA, but on a much larger scale, due to the large number of countries signing on. According to the Council on Foreign Relations, income inequality has risen in recent years because of NAFTA, in part due to pressures on the U.S. manufacturing base to compete with lower wages in Mexico.2 Bureau of Labor Statistics shows a loss of over 3 million manufacturing jobs from 1993 to 2007, after the passage of NAFTA.3 Often, main stream media outlets report a loss of just under 700 thousand jobs as a result of NAFTA, as reported by the Economic Policy Institute. But this figure is an estimate based on the number of jobs that would be supported by the loss of trade, not actual job figures.4

Another set of NAFTA-like provisions in the TPP are its “investor protection” provisions, which give corporations the ability to sue nations, states and municipalities through the WTO in Brussels for potential profits lost due to regulations which, in their view, limit their market share. Stuart Trew of the Council of Canadians, an organization advocating for social justice, reports a recent example of this; Eli Lilly has sued the Canadian government for $5 million, for patents lost due to regulatory requirements that the pharmaceutical giant did not meet.5 If Eli Lilly succeeds, taxpayers of Canada will be forced to pay a huge settlement to Eli Lilly, which reported $4 billion in profits in 2012.6 Other lawsuits based on past “free trade” agreements can be viewed at Public Citizen’s “Global Trade Watch” website. For example: Philip Morris sued Australia for millions of dollars over cigarette labeling requirements, and Cargill successfully sued Mexico for $35 million against their ban on high-fructose corn syrup.

The Trans Pacific Partnership is being written by 600 multi-national corporations to maximize their profits at the expense of human rights and the environment. According to the Citizens Trade Campaign,7 only five of the twenty-nine chapters of the pact have anything to do with trade, and the TPP will grant corporations powers to attack environmental protections; extend monopoly drug patents; promote further financial deregulation; put caps on food safety protections; concentrate the control of the global food supply in the hands of huge agribusiness giants (Monsanto, Con-Agra); and dismantle “Buy Local” policies. For example:

Keep Wages Low

This agreement would grant corporations easier access to labor markets in countries such as Vietnam, where the average minimum wage is 1/3 that of the Chinese. Even the threat of moving there can be used to suppress employee compensation elsewhere. Many of these nations have a terrible track record for worker rights, and Trade unions are illegal in Vietnam and Brunei.

Special Powers to Attack Environmental and Health Regulations

A range of transnational corporations, especially extractive industries, have pushed for investment provisions that enable them to challenge virtually any law, regulation or court decision that adversely affects their expected profits as an “indirect expropriation” through an international tribunal. Similar provisions under past trade pacts have been used to weaken portions of the Clean Air Act, the Endangered Species Act and the Marine Mammal Protection Act, in the U.S. and other nations.

Longer Drug Patents

The leaked U.S. proposal for an intellectual property chapter will have the effect of extending monopoly drug patents for top pharmaceutical companies, making it harder for countries to produce or procure low-cost generics. Doctors Without Borders, in an open letter to President Obama on July 15th, 2013, expressed their concerns about the TPP for this reason.

Further Financial Deregulation

Wall Street banks, insurance companies and hedge funds want the financial services provisions to handcuff government regulation of “too big to fail” organizations; prevent erection of a “firewall” between banking and investment activities; and give them the ability to control the flow of short-term capital into and out of economies.

Caps on Food Safety Protections

“Life sciences” corporations (Monsanto, Con-Agra, Dow Chemical, DuPont) that produce pesticides, food additives and genetically modified organisms (GMO), use trade pacts to erect barriers against countries trying to adopt and maintain strong food safety regulations based on the precautionary principle. Again, the investor protection provisions of the TPP could enable Monsanto to sue the state of Washington for lost profits if it deems that GMO-labeling will cut into its bottom line.

Concentration of Global Food Supplies

Because the TPP forces countries to remove tariffs and quotas on agricultural imports, subsidized US crops (like corn, wheat, soy) get dumped into other countries' markets, forcing local farmers (who don't get those subsidies) out of business. Other (non-subsidized) food crop production tends to be increasingly located to massive farms in whatever country has the cheapest labor, cheapest land, cheapest water, and fewest environmental regulations. The result is far fewer family farms; communities that are less able to feed themselves internally; more mono-cropping, and food supplies that are increasingly controlled by middlemen like ADM and Cargill. This type of policy enforces the trends that go directly against the ideas of sustainable farming and buy local programs.

Dismantling of “buy local” Preferences

A range of corporations want the TPP’s public procurement provisions to prevent governments from instituting public purchasing preferences designed to keep taxpayer dollars circulating in local economies. For example, it could prohibit future stipulation to “buy American.”

Lower Corporate Taxes

Corporations that have already off-shored their production to countries throughout the Pacific Rim are also looking to avoid tariffs on merchandise they’ve been importing back to the U.S.

On an October 16th, 2013 conference call with The Citizens Trade Campaign, Richard Eidlin, co-founder and policy director of the American Sustainable Business Council (ASBC), called for greater transparency in trade policymaking, especially regarding the TPP. It is the position of the ASBC that the TPP negotiations are currently dominated by well-connected “incumbent industries” and “incumbent technologies,” to the exclusion of small businesses and innovative industries. This imbalance will lead to the reduction of incentives for small business innovations in fields like the renewable energy sector, health care innovation and sustainable farming. Said Eidlin: “This trade agreement augers a race to the bottom which drives nations to provide the lowest cost and least regulated market environments, largely on behalf of multinational companies. We don’t think that is a smart approach or an approach that will foster innovation.”

To make matters worse, both the US Trade representative and President Obama have called for reinstatement of “Fast Track Authority” (FTA) for approval of the TPP, which limits congressional input to an up or down vote within 90 days. This is a very short window for a trade deal that took years to negotiate. In addition, under FTA there is no opportunity for debate or amendments. This is particularly alarming since the US Constitution (Article 1, Section 8) gives Congress, and not the President, the duty to negotiate trade deals.

In August of this year, Representative Rosa DeLauro, D. Connecticut, drafted a letter of commitment to vote no on Fast Track authority. From Washington, Jim McDermott is among over 30 congressmen and women to sign. In her letter, Delauro states:

“Such opportunity for input from Congress is critical as the TPP FTA will include binding obligations that touch upon a wide swath of policy matters under the authority of Congress. Beyond traditional tariff issues, these include policies related to labor, patent and copyright, land use, food, agriculture and product standards, natural resources, the environment, professional licensing, competition, state-owned enterprises and government procurement policies, as well as financial, health care, energy, e-commerce, telecommunications and other service sector regulations.”8

As an alternative to “free trade,” many organizations are working to promote “fair trade,” which values equitable economic development and the greater public good. According to Washington Fair Trade Coalition, a consortium of over 60 organizations (including Occupy Bellingham and Community to Community) working to promote fair trade practices, components of a fair trade agreement would include enforceable environmental, labor, health and human rights standards; investment rules that uphold the public interest; responsible maintenance of public goods and services, agriculture and food security; a balanced approach to patent interests; and the commitment to sustainable development, democratic participation and state sovereignty. What fair trade does not promote is off-shoring or outsourcing.9

People on all ends of the political spectrum are rallying around this issue; Whatcom Democrats, the State Democratic Party, and Whatcom Green Party have passed resolutions against the TPP. The Tri-National Unity Agreement, authored by labor, environmental and faith groups in Canada, Mexico, and the U.S., has over 400 organizational signatures. In addition, Senator Sherrod Brown of Ohio has introduced the 21st Century Trade and Market Access Act (S. 3347). This bill, currently in committee, gives the President authority to negotiate trade deals while protecting congressional and public oversight.10 The legislation establishes a series of requirements regarding labor rights, the environment, food safety and other trade provisions. It also sets up provisions for reporting and compliance, and the streamlining of trade and export promotion activities in order to maximize the job-creation potential of U.S. trade agreements. Patty Murray and Maria Cantwell should be encouraged to support Senate Bill 3347.

We need to keep up the pressure on congress. Call today and tell them “No” on Fast Track Authority and “No” on Trans Pacific Partnership.