On a fast track to the bottom

The Trans-Pacific Partnership (TPP) is a massive new trade pact that is being pushed by the Obama Administration at the behest of multi-national corporations. The TPP is fundamentally undemocratic and horrible for most Americans where it counts–in their pocketbook. Contrary to the hope and change rhetoric of the Obama candidacy, the TPP offers neither change or hope. It’s just more neoliberalism.

President Obama’s push for fast track authority to pass the TPP belies his recent progressive head fake and demonstrates beyond a shadow of a doubt that he is a corporate Democrat through and through. That the TPP is part of Obama’s pivot to Asia–China containment policy–just makes it more odious.

Trade pacts, like war authorization, expose partisanship in Washington for what it is–Kabuki theatre. Obama will find that Republicans, while professing to despise him, will still find the wherewithal to vote as their corporate sponsors insist, and support the passage of the TPP.

We’ve been discussing corporate power vis-a-vis democracy, examining who benefits from recent neoliberal economic policies. Trade pacts have been a huge part of neoliberalism, as neoliberals have insisted that new technologies of communication and transportation make free trade inevitable and desirable. However, it’s pretty clear who free trade has benefitted. Trade policies have given multi-national corporations the ability to move their operations to Mexico or China, where they can pay pennies on the dollar in labor costs, then export their products as if American made. Corporations can then pit city against city, worker against worker, with the power to go elsewhere if their demands are not met.

Examining the history of trade pacts bears this out. Trade pacts have been horrendous for American workers, whose pay has stagnated since the 1970’s, even as productivity has soared. Trade pacts have enabled American corporations to move offshore to take advantage of super low cost labor. This has led to a staggering loss of jobs and a lowering of the wages paid to surviving American workers. Millions of middle-class manufacturing and service industry jobs have been taken away from Americans and given to workers in Mexico and Asia, all to benefit American corporations. In this way, trade pacts have contributed to the soaring inequality so visible in the US today.

Trade pacts, like the TPP, come with secretive free trade courts that make a mockery of democracy and sovereignty. In fact, these free trade agreements basically enable corporate predation. For example, if a country attempts to ban smoking or mandate clean air a corporation can sue them for damages. These free trade courts are the corporate weapon of choice when faced with a democratically decided outcome that goes against their ability to plunder.

Most of what we know about the TPP has been leaked because the transcripts of the pact have not been made available, not even to our erstwhile Congressional representatives. Of course, the lobbyists, representing the most powerful corporations in the world, have not been so inconvenienced.

Luckily, there are groups that have made some of the secret negotiating details available. The Citizens Trade Campaign has identified what exactly corporations want from the TPP, and why they’re so desperate to keep the details secret.

  • Cheaper Labor Costs. Many corporations are looking for ways reduce labor costs and undercut worker power in the United States, China and throughout the world. The TPP would grant corporations easier access to labor markets in countries such as Vietnam where workers are paid even less than Chinese sweatshop workers. Whether or not corporations decide to move their production to these lower-paid countries, the threat of moving there (or of being undercut by competitors who have already done so) can be used suppress employee compensation virtually anywhere in the world.
  • New Tools for Dismantling Environmental Laws. A wide range of transnational corporations, including those in extractive industries, have pushed for investment provisions in the TPP that would enable them to challenge virtually any new law, regulation or even court decision that adversely affects their expected profits as a “regulatory taking” through international tribunals that circumvent domestic judicial systems. Similar provisions under past trade pacts have already been used to weaken portions of theClean Air Act, Endangered Species Act and Marine Mammal Protection Act in the United States, as well as the environmental and consumer safety protections of developing countries throughout the world.
  • Longer Drug Patents. The leaked U.S. proposal for an intellectual property chapter within the TPP would have the effect of extending drug patents for big pharmaceutical companies, making it harder for countries to produce or procure low-cost generic medications for people with HIV, tuberculosis and other life- threatening diseases.
  • Further Financial Deregulation. Wall Street banks, insurance companies and hedge funds want the financial services provisions of the Trans-Pacific Partnership to handcuff the steps governments can take to: protect against “too big to fail,” regulate trade in toxic assets, erect firewalls between different financial service firms and control the flow of short-term capital into and out of economies.
  • Caps on Food Safety Protections. So- called “life sciences” corporations that produce pesticides, food additives and genetically-modified organisms use trade pacts to erect barriers making it harder for countries to adopt and maintain strong food safety regulations based on the precautionary principle.
  • Concentration of Global Food Supplies. Big agribusiness middlemen want the TPP to enable them to “buy low” and “sell high” throughout the Pacific Rim, a practice that increasingly concentrates global food supplies in their hands, undercutting family farmers and often leading to wild fluctuations in food prices for consumers.
  • Greater Access to Government Contracts. 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. They also want to prevent government contracts from being used to advance a variety of other environmental, social and human rights goals.
  • Lower Taxes. Corporations that have already offshored their production to countries throughout the Pacific Rim are also looking to avoid tariffs on merchandise they’ve been importing back to the United States.

In The Great Transformation, Karl Polanyi, offers a forceful argument against a neoliberal market economy with free trade pacts and ruthless capitalism. He argues that creating a neoliberal market economy mandates that humans and the environment be transformed into commodities, which will lead to the destruction of society and the environment.

“Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness.”

Looking around, it’s apparent what Polanyi was warning against. Our neoliberal leaders seem determined to destroy our society and our environment with schemes like the TPP. Polanyi does offer hope, saying that, historically, when the consequences of unrestrained markets becomes apparent, people revolt and insist that the market is not simply a means to itself, but that the market needs to be subordinated to democracy.

It’s time to revolt. Call President Obama and your representatives and senators and give them hell!

It’s your choice. We can have representative democracy and national sovereignty or we can have a corporate race to the bottom.

Update: Be creative and use their propaganda against them. We can do the divide and conquer thing too. Also, it doesn’t have to be entirely accurate, but the rage is important. Here what I said when I called my right-wing congressional representative. (I know. Is there any other kind?)

Dear Congressman Stewart;

Please oppose Fast Track authority for the Trans-Pacific Partnership trade pact. President Obama seems hell bent on passing this horrible piece of legislation. He obviously hates America! This trade pact takes away from American sovereignty and gives it to some pointy-headed corporate bureaucrat at the UN. We elected you to go to Washington and oppose everything Obama proposes. Get with it.

 

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