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Trade Is Trump’s Biggest Broken Promise

Monday, April 3rd, 2017

Say anything – literally anything – to sway working-class voters. Get elected, then loot the country. Hey, it worked for this guy.

If there was a singular issue Trump campaigned on, it was trade. Everywhere he went, Trump swore the North American Free Trade Agreement (NAFTA) was “the worst trade deal maybe ever signed anywhere” and “a rape of our country” – and whatever else he needed to say to sway working-class voters who felt betrayed by our economy and our trade deals.

Like other candidates before him, Trump wanted to win votes in places like Ohio, Pennsylvania, Michigan, Wisconsin and other states devastated by the loss of manufacturing jobs to “trade.”

In his speeches he complained that candidate Hillary Clinton had aligned herself with a”financial elite” to “betray” working people.

“Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache.

[. . .] Hillary Clinton and her friends in global finance want to scare America into thinking small – and they want to scare the American people out of voting for a better future.

My campaign has the opposite message.

Later, he outlined specific complaints about the content of trade agreements, referring to Trans-Pacific Partnership (TPP) signed by President Obama, but clearly he meant multilateral trade deals in general. He said these trade deals had left decision-making to “an international commission” and that they do nothing about “currency cheaters.”

The “international commission” he refers to is a provision in trade agreements knowns as Investor-State Dispute Settlement (ISDS), more commonly known as “Corporate Courts.”

It would give up all of our economic leverage to an international commission that would put the interests of foreign countries above our own.

It would further open our markets to aggressive currency cheaters.

Specifically about ISDS provisions,

The TPP creates a new international commission that makes decisions the American people can’t veto.

These commissions are great Hillary Clinton’s Wall Street funders who can spend vast amounts of money to influence the outcomes.

Of course, that was then.

Never Mind

Trump, who campaigned promising to “drain the swamp” in Washington, has filled his administration with the very swamp creatures his voters hated. Billionaires, Goldman Sachs executives, lobbyists, and so on.

Now the very “financial elite” he railed about during the campaign appears to be having its way with him on trade. If the details in a draft letter circulated to members of Congress this week are true, Trump is not scrapping NAFTA after all.

In fact, he’s not even addressing what he had said were his biggest concerns in the trade agreement. A NY Times report explains,

Rather than scrap NAFTA’s arbitration tribunals, regarded by some free-trade critics as secretive bodies that give private corporations unbridled power to challenge foreign governments outside the court system, the letter proposed to “maintain and seek to improve procedures” for settling disputes.

It made no mention of currency policy, an issue many trade experts had thought might be on the table.

Trump wants minor tweaks to the agreement. ISDS still there. Nothing about currency. Too bad. Sad!

“The Same Corporate Wish List”

There were a number of reactions to Trump’s NAFTA reversal.

“Mostly what I see here is the same corporate wish list and a set of international rules that work quite well for global corporations,”  said the AFL-CIO’s trade policy specialist, Celeste Drake, to Politico.

AFL-CIO President Richard Trumka weighed in as well:

This draft leaves standing the worst and most oppressive parts of NAFTA. It leaves in place the right of foreign investors to sue the U.S. in private tribunals in order to skirt health, safety and environmental laws. On other important issues, including rules of origin for automobiles, labor and environmental standards, currency misalignment and procurement, the draft plan is either silent or so vague that it could be describing the now defunct Trans-Pacific Partnership – an agreement working people wholeheartedly opposed.

Rewriting the rules of our economy, and specifically changing the way we do trade, was one of the most important issues that voters went to the polls on. If the president wants to keep his promises, he needs to bring that same tough stance he had on the campaign trail to renegotiating America’s trade deals.

Politico’s Morning Trade carried reactions from Democrats in Congress:

Rep. Bill Pascrell, the ranking member of the House Ways and Means Trade Subcommittee, called it “baffling” that the draft left out currency manipulation, which Trump had made a signature campaign issue – “let alone call for strong and enforceable commitments.” “And I do not get the sense that the administration yet understands the importance of ensuring full implementation of international labor standards in Mexico to ensure the competitiveness of U.S. workers in the North American market,” the New Jersey lawmaker added in a statement.

So there it is. The guy who set up Trump University has now set up the Trump administration. It is staffed by family members, Breitbart editors, kooks, and, of course, the upper crust of the very “financial elite” he supposedly ran against.

After scarcely two months in office, the new administration is under investigation for violations ranging from breaking ethics rules to corruption and espionage. Trump has spent roughly a third of his time as president vacationing at his Mar-a-Lago golf resort in Florida and other Trump properties, with the government paying a huge tab – to him – for Secret Service, staffers and others who are along for the ride.

He said what he had to say to win. Now we’re stuck.

This post originally appeared on ourfuture.org on March 31, 2017. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

 

Trading Rules for Workers

Wednesday, March 1st, 2017

President Donald Trump met with a bunch of CEOs at the White House last week, prompting the same old, tired and untrue round of assertions that America lost millions of manufacturing jobs because of automation, regulation, illegal immigration and lack of education.

The real culprit is globalization – fostered by a series of bad trade deals. That’s not what the CEOs talked about, though, mainly because a huge portion of them already have moved factories from America to low-wage, high-pollution countries.

Bad trade is, however, what President Trump talked about constantly on the campaign trail. He repeatedly assured cheering crowds he would stop corporations from offshoring factories. A new report from the Information Technology & Innovation Foundation proves his diagnosis was right – bad trade caused the vast majority of the job losses. He was right when he said the proposed Trans-Pacific Partnership (TPP) trade deal and NAFTA had to go. Offshoring CEOs are trying to bamboozle the administration about the cause of job loss to prevent President Trump from keeping his promises to industrial workers.

And those CEOs are wrong about automation. Robots didn’t do it. They didn’t kill 5.7 million manufacturing jobs between 2000 and 2010. That’s the bottom line in research published this month by Adams Nager, an economic policy analyst for the Information Technology & Innovation Foundation and in another report by economists Lawrence Mishel and Heidi Shierholz of the Economic Policy Institute.

If robots were responsible, then manufacturing productivity would have grown substantially during that period, as fewer people would have been needed to perform the same work. But that didn’t happen. Manufacturing productivity actually declined. It was 25.8 percent in the 1990s and dropped slightly to 22.7 percent between 2000 and 2010.

During that decade of lower productivity, manufacturing job losses were 10 times greater than during the 1990s. Those massive losses could be attributed to robots only if productivity had risen dramatically.

Mishel and Shierholz put it this way in their report: “We need to give the robot scare a rest. Robots are not leading to mass joblessness and are not the cause of wage stagnation or growing wage inequality.”

Undocumented immigrants didn’t take those lost manufacturing jobs either. Those jobs disappeared from the United States. No one in America has them, documented or undocumented. In addition, the vast majority of undocumented aliens work in low-paid agricultural, cleaning and food service jobs, and their share of the work force has declined since 2007, according to the Pew Research Center.

Regulation-kills-jobs is another trope CEOs cite incessantly. They brought it up again in their meeting Thursday with President Trump. They want to neglect their duty to protect air and water from toxic industrial pollutants. They want to disregard the health and safety protections established to prevent workers from dying on the job or from job-induced illnesses. And they certainly want to ignore the safeguards that enable workers to organize and collectively bargain for better wages, benefits and working conditions.

The government, they contend for example, has no right to oversee corporate use of toxic chemicals that can kill workers and neighboring community members because those protections cut into profitability. To CEOs, it’s always profits before people.

In addition, CEOs say American workers are just too stupid to work in manufacturing. Some CEOs told Trump there are hundreds of factory job openings, but not enough qualified workers to fill them.

One CEO complained, for example, that most high school graduates lack the math and English skills necessary for his company’s apprenticeship.

These CEOs didn’t offer to provide the remedial skills. They didn’t step forward to pay for the training they say workers don’t have. They want the government – that is taxpayers – to foot the bill. That is the same taxpayers who CEOs say should not get government protection from toxic manufacturing chemicals.

If CEOs would raise the pay for manufacturing work, more workers might be willing to invest in training themselves. Most of those high school graduates who the CEOs derided possess sufficient math skills to perform the cost-benefit analysis on self-training. They have figured out that paying $25,000 to $100,000 in tuition to a technical school to get a low-pay, no-benefits job that a corporation may ship offshore at any time does not add up.

Still, the CEOs called American workers stupid.

These workers, unlike the CEOs, know the truth. They know what killed their jobs. It was bad trade deals and violations by exporting countries like China. They saw the likes of Carrier, Caterpillar and Dana, whose CEOs attended Trump’s manufacturing meeting Thursday, close American factories and open them in other countries. They know that many countries, but particularly China, disregard international trade regulations then dump artificially underpriced products on the American market, killing U.S. manufacturing jobs.

The Information Technology & Innovation Foundation study provides the statistics to back up workers’ experience. “It is important to recognize how global competition contributed to upwards to two-thirds of the manufacturing jobs lost from 2000 to 2010,” the author Adam Nager, wrote. During that time, he said, “China ramped up its mercantilist policies – from currency manipulation to forced intellectual property transfers and government subsidies – all of which hurt U.S. manufacturing employment.” All of which also violate trade rules.

The day after his meeting with CEOs, President Trump repeated the promise he made many times on the campaign trail: “the forgotten men and women of America will be forgotten no more.” This was compelling to manufacturing workers who had lost their jobs and felt their plight was ignored.

But these workers know from bitter experience that CEOs don’t have their best interests in mind. They know the problem with the TPP and NAFTA is that they were drafted by CEOs for the benefit of CEOs and 1 percenter shareholders. Workers never got an equal seat at the negotiating tables.

They know that Donald Trump listened to 24 CEOs on Thursday but not one manufacturing worker.

Just like with TPP and NAFTA, it matters who is giving advice. Just like with bogus trickle-down economics, the advice given by CEOs doesn’t trickle down to benefit workers on the line. It only bubbles up to line executives’ pockets.

Workers need a seat at the table when the new rules for trade and restoring American manufacturing are written.

This post originally appeared on ourfuture.org on February 28, 2017. Reprinted with Permission.

Leo Gerard is the president of the United Steelworkers International union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco’s nickel smelter in Sudbury, Ontario at age 18. For more information about Gerard, visit usw.org.

Is TPP Really Dead?

Tuesday, November 15th, 2016

dave.johnsonIs the Trans-Pacific Partnership (TPP) dead or not? The President-elect says he is against TPP. TPP may be the thing that cost Clinton the election. The voters obviously were against it. The head of the Senate says he won’t bring it up for a vote. But House Speaker Paul Ryan hasn’t said a thing. And, of course, Wall Street and the giant multinational corporations want TPP and they want it bad.

 

Trump, Senate Leaders, Voters Opposed To TPP

Donald Trump campaigned and won on opposition to past trade agreements and the upcoming TPP. Because of this the leaders of the Senate are saying there won’t be a TPP vote in Senate during the “lame duck” session of Congress. This week Senate Majority Leader Mitch McConnell (R-Obstruction) said that there will be no Senate vote on TPP before next year. Sen. Chuck Schumer (D-Wall Street), who is expected to be the next Senate Minority Leader, told the AFL-CIO executive council the same.

Further confirming the importance of trade in the election, some are saying that TPP may have cost Clinton the presidency. Friday’s Politico Morning Trade quotes Rep. Rosa DeLauro (D-CT),

DELAURO: TPP PUSH MAY HAVE COST CLINTON THE ELECTION: The White House’s push for approval of the TPP may have cost Hillary Clinton the election, even though both she and Donald Trump opposed the pact, Rep. Rosa DeLauro said.

“In those states, where we lost by a point or two, it was all about trade,” the Connecticut Democrat said in an interview, arguing that the possibility of Congress voting on the agreement in the lame duck may have motivated a higher turnout in industrial swing states — to the benefit of Trump.

Clinton’s refusal to say she would push hard to get democrats to oppose TPP certainly didn’t help her with voters concerned about the effect of trade policies on their jobs and communities.

So Is TPP Dead Or Not?

With all of that opposition it would seem that TPP is dead. But TPP is at the very top of the “corporate agenda” because it moves those pesky governments and voters and their interference with corporate goals out of the picture. Wall Street and the giant multinational corporations want TPP and Wall Street and the giant multinational corporations get what they want.

Morning Trade explains how this can still happen,

“I’m not so sure TPP is in the dustbin,” Susan Ariel Aaronson, a research professor of international affairs at George Washington University, told Morning Trade. The argument – which she stressed was “not likely, but a possibility” – is that Republican leaders in Congress could feel pressured to move by two important constituencies: multinational businesses that have value chains in Asia, and the military.

“If Congress is willing to move quickly … there’s a lot of pressure on Republicans from those two sources,” she said. “And I do think that it’s possible that all this pressure to move quickly on trade will lead to some sort of collaboration between internationalist-minded Republicans who will have NAM, the Chamber of Commerce, Business Roundtable, the tech sector, who really want TPP to happen. Plus the military.”

Remember, Republican opposition was based on trying to keep President Obama from getting things he was asking for. Now Obama is out of that equation, while the true owners of the Republican Party — Wall Street and the giant multinational corporations — want TPP and want it bad.

House Speaker Paul Ryan is the key. Ryan has not yet said that there will not be a vote on TPP in the coming “lame duck” session of Congress.

But wait, there’s more. Trump said what he needed to say to get elected. Not he’s elected and he doesn’t need to keep saying it. It’s not like he isn’t himself a huge supporter of the agenda of Wall Street and the giant multinational corporations. His tax plan cuts their taxes dramatically and lets them off the hook for taxes already owed on profits stashed in tax havens. He wants to gut the Dodd-Frank legislation that reined in Wall Street a tiny bit. He will also help gut the Consumer Financial Protection Bureau (CFPB). And, of course, he says he will gut government regulation of corporations. So next year it’s quite possible that Trump could endorse a (possibly renamed) TPP agreement that has been modified a bit, saying it’s fixed. Because that is what Wall Street and the giant multinational corporations want.

So until the lame duck session is over we are still in wait-and-see mode. A TPP vote could still happen before next year.

This post originally appeared on ourfuture.org on November 11, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

AFL-CIO Report Warns TPP Will Force Another Mass-Migration Into US

Friday, October 28th, 2016

dave.johnsonTrade agreements can be used to boost prosperity on all sides of trade borders by increasing business opportunities, raising wages and increasing choices. Or they can be used to concentrate corporate power, cutting wages and choices.

Guess which model our country’s corporate-written trade agreements have followed? (Hint: look around you: we have ever-increasing concentration of corporate power and concentration of wealth, limited competition, falling wages and limited opportunities to start new businesses.)

One way our corporate-written trade agreements have hurt most of us has been through forcing working people to compete in a race to the bottom. The effects on most of us are just devastating. For example:

“The Men Have Gone To The United States”

The North American Free Trade Agreement (NAFTA) forced many small Mexican farmers out of business. Many of these small farmers were forced to migrate north in search of a way to make a living.

A McClatchy Newspapers report from February, 2011, “Free trade: As U.S. corn flows south, Mexicans stop farming,” examined the dynamic:

Look around the rain-fed corn farms in Oaxaca state, and in vast areas of Mexico, and one sees few young men, just elderly people and single mothers.

“The men have gone to the United States,” explained Abel Santiago Duran, a 56-year-old municipal agent, as he surveyed this empty village in Oaxaca state.

… A flood of U.S. corn imports, combined with subsidies that favor agribusiness, are blamed for the loss of 2 million farm jobs in Mexico. The trade pact worsened illegal migration, some experts say, particularly in areas where small farmers barely eke out a living.

The Communications Workers of America (CWA) gathered migration facts in, “How U.S. Trade Policy Has Contributed to Mass-Migration to America.” Some of the numbers:

In total, nearly 5 million Mexican farmers were displaced while seasonal labor in agro-export industries increased by about 3 million – for a net loss of 1.9 million jobs.iii

The annual number of immigrants from Mexico more than doubled from 370,000 in 1993 (the year before NAFTA went into effect) to 770,000 in 2000 – a 108% increase.

That Was Then, This Is TPP

Now another corporate-written “trade” agreement called the Trans-Pacific Partnership (TPP) is probably coming before Congress in the “lame duck” session following the election. Like NAFTA, this agreement is likely to cause another forced migration northward from Mexico, Central and South American countries as jobs move from those countries to even lower-wage countries like Vietnam.

A report from the AFL-CIO titled “Trading Away Migrant Rights: How the TPP Would Fuel Displacement and Fail Migrant Workers” warns:

The TPP categorically fails to protect workers in the Pacific Rim. As currently drafted, the TPP would increase corporate profits and power while exposing working people to real and predictable harm, including lost jobs and lower wages. Migrant workers already are subject to extreme rights violations in some TPP countries, and this new trade deal would make it even harder for many families to find decent work at home.

The TPP is a recipe for destabilizing communities, perpetuating low wages and stifling labor rights—all of which are factors driving migration.

On a Monday press call discussing the report Celeste Drake, Trade and Globalization Specialist with AFL-CIO, explained how the report shows that TPP is likely to make working families in TPP countries less secure.

The agreement fails workers by offering no transition assistance or safety net for workers who lose their jobs. Mass displacements are not easily remedied which can spur mass migration. Then as economic factors increase migration TPP provides displaced workers with no protections, no labor rights and does not set up a task force to address trafficking and abusive practices by labor recruiters.

Shannon Lederer, AFL-CIO’s Director of Immigration, explained that migration should be a choice not a necessity for survival. Trade should lift all boats, not facilitate a race to the bottom. But TPP would not help to advance these goals. It would in fact make efforts to achieve them harder. She also noted that TPP has a complete lack of protections for migrant workers. Migrant workers face exploitation and trafficking.

The AFL-CIO report explains how TPP will kill jobs in Mexico , Central and South America, forcing people to migrate:

The TPP is poised to disrupt North and Central American supply chains by granting substantial trade benefits, including eventual duty-free access for all TPP countries to the U.S., Mexican and Canadian markets. This will set CAFTA and NAFTA countries up against even lower wage countries in the TPP like Vietnam and Malaysia.

… The inclusion of Vietnam in the TPP is a major concern to apparel workers due to the size of Vietnam’s apparel industry and extensive government subsidies and ownership of large apparel manufacturing facilities. Vietnam is already the second-largest textile and apparel exporter to the United States, shipping more than $11 billion in product to the United States in 2014. This level could surge under the TPP, which would put enormous pressure on Central American manufacturers and workers. Much Central American production could transfer to Vietnam, with its lower wages and authoritarian regime, further degrading Central America’s jobs base and uprooting those dependent on textile jobs.

Likewise, Malaysia’s electronics industry is rife with forced labor, according to the U.S. government’s own reports; yet the TPP would force workers in Mexico’s maquila sector to compete with Malaysian production standards. Loose rules of origin requirements mean that competition not only will come from Vietnam and Malaysia, but also China. Workers in the Americas displaced by these factors may have few options but to emigrate in search of better opportunities in the United States and elsewhere.

Meanwhile, changing economic opportunities associated with increased production and growth in countries like Brunei, Malaysia, Peru and Vietnam could amplify job churn and both “push” and “pull” workers into countries with poor labor rights records.

TPP offers nothing to protect these workers or protect the rest of us from the resulting race to the bottom. But maybe that’s the point.

This post originally appeared on ourfuture.org on October 26, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

How Can We Do ‘Trade’ Right?

Thursday, October 20th, 2016

dave.johnsonPeople have figured out that our country’s “trade” deals haven’t been working our so well for “our country.” A visit to Flint, Detroit or almost any town, city, state or region that was built around manufacturing make it clear what we have done. Shifting jobs and factories to places where people are paid squat and are forced to work long hours with few protections while the environment is sacrificed might have put a lot of money into the pockets of already-wealthy executives and Wall Street “investors” but it hurt almost everyone and almost everywhere else in the country.

With the Trans-Pacific Partnership (TPP) coming up for a vote in the “lame duck” session of Congress following the election, and a new President coming in January, many are looking for a different way to do “trade.”

“Trade”

The way word “trade” is used in current discussions is misleading. “Trade” used to be about “trading” banana for cars. Bananas can only be grown in certain regions, and cars werealready being made in other regions. “Trade” meant the people who made cars could get bananas and the people grew bananas could get cars. Everyone benefited.

But “trade” has instead come to mean one and only one thing: moving jobs and production to low-paying areas that don’t spend to protect the environment, so executives and “investors” can pocket the savings. The regions production was relocated to did not have existing regional expertise in “making cars” (as in the “bananas example. Making smart phones is a better example.) The factories were not already located in these regions. The ecosystem of expertise, supply chains, etc. was not yet in existence. The only pre-existing regional specialty, or “comparative advantage” of the low-wage regions was governments that to one degree or another kept the wages low, kept the unions (and resulting worker protections) out and let the factories pollute freely. China, for example.

The result, of course, was devastating to American workers and their communities. Mike Konczal at The Nation, “Here’s the Trade Policy That Progressives Should Get Behind,” writes about the impact of opening up “trade” with China had on US workers:

Manufacturing was hit hard, and so were workers outside manufacturing—especially those without a college degree—as these areas lost their economic vitality. Contrary to the optimistic forecasts offered by many economists, workers didn’t magically get jobs in new places and new industries; instead, they faced worse employment prospects and lower wages—if they found jobs at all.

Corporate Influence

The biggest problem with our country’s trade policies is that the process of negotiating the deals has been “captured” by interests representing giant multinational corporations. As a result “trade” is not about “trade” at all, and “trade deals” are really about limiting the power of governments to make decisions that corporation don’t like.

Lori Wallach op-ed in the Washington Post, “Free Our Trade Deals from Corporate Interests,” describes the result of this capture:

Consider the Trans-Pacific Partnership: A 2014 Post infographic reveals that more than 500 official U.S. trade advisers representing corporate interests had special access to TPP negotiators and texts while the public, press and Congress were shut out.

Wallach says one result of this corporate-dominated process is “trade” agreements loaded up with “goodies” for corporations, and the deals “have been used as a backdoor delivery mechanism for the corporate-favored-versions of non-trade policies.” These “goodies” include moving multinational corporations — but not domestic corporations — outside of our own legal system:

Only nine of the TPP’s 30 chapters cover trade matters like cutting tariffs. Much of the rest is a smorgasbord of corporate goodies, such as the requirement that signatory countries protect pharmaceutical companies from having to compete with generic medicines, thereby raising consumer prices.

Another key provision grants new rights to thousands of multinational corporations to sue the U.S. government before a panel of three corporate lawyers. These corporations need only convince the lawyers that a U.S. law, regulation or court ruling violates the new privileges TPP grants them, and the lawyers can award the corporations unlimited sums to be paid by America’s taxpayers — including for the loss of expected future profits. The decisions are not subject to appeal.

Jared Bernstein writes about this in, “The New Rules of the Road: A Progressive Approach to Globalization,”:

Unfortunately, both the trade debate and trade negotiations have long been co-opted by multinational corporate interests at the expense of workers and consumers both here and abroad. Fortunately, this election season has finally elevated that reality. The days when elites, both here and elsewhere, could ignore those who perceive themselves as hurt (on net) by globalization are hopefully gone, if not for good, than for a number of years.

Dean Baker, writing in “It Was As Inevitable that Doctors and Lawyers Would Lose Jobs to Foreign Competition as Factory Workers,” notes that it isn’t just giant corporations that benefit from this, but an entire “class” of professionals:

There are millions of very bright people in Mexico, India, China and other developing countries who would be happy to train to U.S. standards and work as doctors and lawyers in the United States. However, because these groups have far more political power than manufacturing workers, we have maintained walls that largely prevent foreign professionals from competing with our own doctors and lawyers.

The result is that these professionals have seen substantial increases in real wages over the last four decades and the rest of us pay hundreds of billions of dollars more each year for health care, legal services, and other items. The cost to the economy from this protectionism is almost certainly an order of magnitude greater than any potential gains from a trade deal like the Trans-Pacific Partnership. In spite of the enormous economic costs, the power of these professions largely prevents economists or the media from even discussing the protectionism enjoyed by professionals.

So What Can Be Done?

How can we negotiate trade agreements that are actually about trade and actually benefit people and the environment on all sides of trade borders?

Konczal starts with a suggestion about corporations, one that won’t happen if we have a corporate-dominated process. He writes:

So what can be done? First, we need a progressive vision of what trade deals should look like in the future. Here’s one: At this point in globalization’s spread, these deals are less about direct trading between countries and far more about the regulations that govern multinational corporations as they expand across the globe. We should be sure that trade deals don’t interfere with any country’s ability to regulate corporate behavior.

Wallach writes:

To get our trade policy redirected back onto trade — that is, to get rid of the protectionist baggage and develop trade terms that benefit U.S. workers and consumers — a new president will need to eliminate the special interest advisory system and greatly increase transparency. We need a new trade pact negotiation and approval process to replace the Nixon-era “Fast Track” regime that sets criteria for appropriate trade partner countries and what must and must not be in agreements. And, unlike our current system, Congress must approve agreements’ contents before they can be signed, making negotiators more accountable to congressional directives.

Bernstein and Wallach write at The American Prospect (same title, different content):

The new rules must prioritize the economic needs of low- and middle-income families while preserving the democratic, accountable policymaking processes that are essential to creating and maintaining the environmental, consumer, labor, and human-rights policies on which we all rely.
[. . .] A more transparent process with opportunities for meaningful engagement, accountability, and oversight by the public and Congress—rather than the current regime that privileges the commercial interests that have long captured these negotiations—is needed.

Wallach wants trade agreements that benefit not just giant corporate interests but also “U.S. workers and consumers.” Konczal wants agreements that limit corporations rather than unleash them. Bernetein and Wallach ask for transparency; and a democratic, accountable policymaking processes. They write,

U.S. positions on trade deals can be formulated the way other U.S. federal regulations are: through the on-the-record public process established under the Administrative Procedure Act to formulate positions, obtain comments on draft texts throughout negotiations, and seek comments on proposed final texts.

So “trade” shouldn’t just be about the interests of giant corporations. All of us have a stake in how we conduct trade. Trade deals should be negotiated openly with all of the stakeholders on all sides of trade borders involved and finalized in an open and democratic process.

We have the opportunity to accomplish this with a new administration, beginning in January.

This post originally appeared on ourfuture.org on October 20, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Postal Workers To Rally Against TPP Tuesday

Wednesday, August 24th, 2016

The 200,000-member American Postal Workers Union (APWU) is holding its biennial convention in Orlando this week. As part of that convention, there will be a rally to publicize opposition to the Trans-Pacific Partnership (TPP). The rally will take place Tuesday, August 23 at 3:30 pm beginning in the Hemisphere Ballroom of Orlando’s Dolphin Hotel.

APWU President Mark Dimondstein made the following statement when announcing the rally:

“Postal workers are a proud part of a global grass-roots movement in opposing this devious, corporate-backed deal which would hurt workers and the environment in 12 different countries — if allowed to go forward. Like NAFTA and other hard-sold multinational deals, the TPP was negotiated in secret and has very little to do with trade between nations. It’s about increasing the power of multinational corporations to dictate our future, and it’s about taking away the rights of citizens and workers to advocate for a better quality of life.”

“The TPP is an attack on working people – including U.S. postal workers. We’re rallying in Orlando to make sure politicians from both parties hear us loud and clear and we’re going to head back to every zip code from Orlando with a message that the TPP needs to be blocked. Republicans and Democrats must listen to grass-roots activists across the political spectrum, vote down the TPP and get to work on an economic and environmental agenda that is fair to workers in all countries.”

Background

TPP is an agreement between 12 Pacific-region nations, but other nations like China will be able to join later. TPP is called a “trade” agreement, even though most of the sections of the agreement are about things like allowing investors to sue governments for laws and regulations that infringe on their profits, granting monopolies to giant pharmaceutical companies, and “intellectual property” rights.

The agreement was negotiated and written in secrecy, largely by past, present and future representatives of corporations. It places corporate “rights” above governments, as well as above the “rights” of working people and the environment. For example, corporate investors can sue governments for what they consider to be violations of the agreement that hurt their profits, and the suits are judged by corporate attorneys. There is no appeal and the sovereign, established court systems of the counties in the agreement are prohibited from interfering.But labor, environmental, consumer or any other “stakeholder” group have no such recourse if they feel their rights are being violated.

OurFuture’s June 2015 post, “Will TPP Kill The Post Office?”, noted that then then-secret TPP could be a problem for the US Postal Service in particular. From that post:

As if we needed yet another reason for the public to see the text of TPP before Congress preapproves it with fast track, here is a question: Does the TPP contain provisions that corporations can use to force us to privatize “public” things like our Post Office, public schools, public roads etc., so they can replace them with profit-making enterprises that provide a return only to the wealthy few?

We need to see the provisions of TPP that are designed to regulate “state-owned enterprises” (SOEs) and see them now.

Now We Know

TPP is no longer secret. Now the peasants are at last begrudgingly allowed to know what is in the “agreement.” Now we know that TPP has rules preventing governments (We the People) from “competing” with private corporations. This means that private corporations receive the return from the economy, while We the People are prohibited from just doing things for ourselves.

While continuation of the US Postal Service as presently constituted is written into TPP, the “trade” agreement could prohibit We the People from deciding we want it to do things like postal banking,  and other things we might want to do to benefit ourselves.

As the June, 2015 post noted:

Today corporations and investors consider our highways to be “commercial activity” and are competing to turn such roads into private business. There is a corporate movement battling to privatize our public schools and turn those into corporate profit centers. Private companies are trying to get (and many have gotten) the right to deliver our water instead of publicly owned municipal systems. Many municipalities have already turned over garbage collection to private companies, thereby impoverishing the workforce. Would it be a surprise to find that the corporations have inserted provisions into TPP demanding privatization of the Postal Service, schools, roads and anything else the public currently runs?

Ask any conservative and they will likely tell you that anything a government does to make people’s lives better only interferes with “the market.” They will tell you our public, “government” schools should be privatized. They will tell you that the Post Office needs to go away. They hate Amtrak, public broadcasting, the Export-Import Bank and, public transit. They certainly hate public health care. Many will even say that we shouldn’t have public parks like Yosemite and Yellowstone. They have even privatized prisons.

TPP Coming Up For A Rigged Vote Unless We Stop It

Back when We the People were still not allowed to know what was in TPP, a provision called “fast track” Trade Promotion Authority (TPA) was passed by Congress. Fast track TPA rigged the rules of Congress to grease the skids for TPP when it comes up for a vote, which looks like it will be in the “lame duck” session of Congress after the November elections and before the new Congress is sworn in.

It is possible to stop TPP if we can convince enough members of the House of Representatives to go on record now as opposing it. To help with this, see last week’s post,“These Are Your 28 TPP House Democrat Targets”:

President Obama is trying to get a vote on the Trans-Pacific Partnership (TPP) during the “lame duck” session of Congress that will take place after the election. We can help stop this by getting enough Democrats on the record as opposing the TPP.

In particular, we need to get the 28 Democrats who – in spite of opposition from most Democrats and hundreds of labor, consumer, LGBT, health, human rights, faith, democracy and other civil organizations – voted for the “fast-track” trade promotion authority (TPA) bill that “greased the skids” for the TPP by setting up rigged rules that will help TPP pass.

Now, along with all of those voters and organizations, Democratic presidential candidate Hillary Clinton and the rest of us need to start working on getting those 28 Democrats to oppose a vote after the election.

Call your Representative and say, “No to TPP!”

This post originally appeared on ourfuture.org on August 22, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

TPP Opposition: Make Them Do It And Hold Them To It

Thursday, July 28th, 2016

Dave JohnsonElites take “globalization” as a given because “trade” deals have pushed sovereignty off the table and locked governments out of decision-making over things like stopping offshoring of jobs and protecting domestic industries. They smirk knowingly and wink and nod when politicians respond to citizen complaints about the disastrous effect this is having on populations, regions and economies. They assume the politicians are just saying what they need to say to get votes and will rejoin them after they get that pesky election out of the way.

But times are changing. The public has caught on. “Brexit,” the rise of Donald Trump and other reactions to globalization are forcing politicians to come down on the side of the people instead of the corporations.

For example, it turns out that the latest deal to push national governments aside so corporations can do what they want to do, the Trans-Pacific Partnership (TPP), is a very big deal at the Democratic convention, with the entire convention chanting “No TPP, No TPP.” And it has become a very big deal in national politics, too, with Donald Trump and Bernie Sanders having made it a centerpiece of their presidential campaigns in the Republican and Democratic parties.

Clinton Opposed To TPP

Hillary Clinton has responded to the pressure, saying repeatedly that she is opposed to TPP and opposed to a vote on TPP in the “lame duck” session after the election.

Appearing on stage with Bernie Sanders as he endorsed her for president, Clinton restated her opposition to TPP, saying, “[W]e’re going to say no to attacks on working families and no to bad trade deals and unfair trade practices, including the Trans-Pacific Partnership.”

McAuliffe Says Clinton Will Shift “Once The Election’s Over”

Virginia governor, long-time Clinton friend and insider Terry McAuliffe, said in public that he thinks Hillary Clinton will shift to being a globalist once the election is out of the way.

Politico’s Morning Trade has the story.

“Once the election’s over, and we sit down on trade, people understand a couple things we want to fix on it but going forward we got to build a global economy.”

Pressed on whether Clinton would turn around and support the trade deal she opposed during the heat of the primary fight against Bernie Sanders, McAuliffe said: “Yes. Listen, she was in support of it. There were specific things in it she wants fixed.”

Trump Jumps On It

Donald Trump immediately jumped on McAuliffe’s comments, saying it shows that Clinton will “betray” TPP opponents. The odious Washington Times covers this story, in “Donald Trump: ‘Just like I have warned,’ Hillary Clinton will ‘betray you’ on TPP“:

Donald Trump seized on Virginia Gov. Terry McAuliffe’s comments that Hillary Clinton will flip and support the Trans-Pacific Partnership almost as quickly as Mrs. Clinton’s team disavowed them, pointing out that he’s warned in the past of her looming betrayal on the issue.

“As I have been saying, Crooked Hillary will approve the job killing TPP after the election, despite her statements to the contrary: top adv.,” Mr. Trump tweeted Wednesday.

Mr. Trump had also shared a Politico story — in which Mr. McAuliffe predicted Mrs. Clinton would support some version of the trade deal after the election — in a tweet Tuesday night: “Just like I have warned from the beginning, Crooked Hillary Clinton will betray you on the TPP.”

Podesta: It’s Not Going to Happen

Clinton campaign chair John Podesta immediately tweeted in response to Trump’s comments that Clinton opposes TPP and opposes a vote after the election in the “lame duck” session.

Speaking to the Wall Street Journal, Podesta went further. WSJ reports in “Hillary Clinton Committed to ‘New Approach’ on Trade Deal, Not Tweaks, Aide Podesta Says,” that Podesta responded that this is not what will happen.

John Podesta said that Mrs. Clinton and her newly minted running mate, Sen. Tim Kaine of Virginia, have been clear about the Trans-Pacific Partnership, or TPP.

“They’re against it before the election and against it after the election,” he said at a lunch sponsored by The Wall Street Journal. He said he met with House Democrats, who overwhelmingly oppose the pact, on Monday and reiterated that position. “So they know, they well know what our position is.”

Asked if Mrs. Clinton would seek to renegotiate particular aspects of the agreement but keep the overall structure, he said no.

“We need a new approach to trade,” he said. “We’re not about renegotiation. We’re not kind of interested in that. We’re interested in a new approach.”

But Podesta hedged on whether Clinton will actively oppose a “lame duck” vote on TPP after the election.

Asked whether Mrs. Clinton would seek to block a lame-duck vote, Mr. Podesta, a former Obama adviser, said: “What the president chooses to do, whether he thinks that that’s an effective strategy, is up to him, but that is not our strategy.”

Kaine Opposed Now

Bowing to political reality Clinton’s vice presidential pick Tim Kaine changed from support for TPP to opposition. Politico reported:

Kaine spokeswoman Amy Dudley said Saturday that the Virginia Democrat shared his negative views on the trade deal with Clinton this week, confirming a report by The Washington Post. “He agreed with her judgment that it fell short” when it came to protecting wages and national security, a Clinton aide reportedly told the newspaper.

Pelosi Opposed As Well

House Minority Leader Nancy Pelosi came out clearly in opposition to TPP. The Huffington Post has the story, in “Nancy Pelosi Declares Opposition To Obama’s Trade Deal“:

House Minority Leader Nancy Pelosi has come out in opposition to the massive Trans Pacific Partnership trade deal as it’s currently written, putting her on the same page as newly minted vice presidential candidate Tim Kaine.

Pelosi (D-Calif.) made the declaration in a letter late last week to several groups that protested outside her offices in San Francisco and delivered her more than 200,000 petition signatures opposing the TPP.

“Please be assured that I will oppose the TPP as it is currently written or any deal that attempts to separate commerce from the environment and will work to ensure our nation’s trade policies include increased transparency, more consultation, and stronger protections to create jobs, strengthen human rights and protect the environment,” Pelosi wrote in messages sent to the Citizens Trade Campaign, the Electronic Frontier Foundation and others involved in the campaign.

Elites Have Been Forced To Change And Mean It

Clinton, Kaine, Pelosi, the Democratic Party platform, the entire convention. Pretty much all of the Democratic party now opposes TPP.

One more example: Gene Sperling, a longtime Clinton economic advisor as well as a top aide to President Obama, said at a convention event that TPP is “in the rearview mirror” now. The Los Angeles Times has the story, headlined “Advisors scramble to stop speculation that Hillary Clinton might go back on her word on TPP“:

The TPP, as the massive trade pact is known, is “in the rearview mirror, now,” said Gene Sperling, the longtime Clinton economic advisor who also served as a top aide to Obama.

“There’s no evidence” that “any version” of the TPP would meet the test that Clinton has set during the campaign — whether it would clearly improve the jobs picture in the U.S., Sperling said at a briefing sponsored by the Atlantic magazine.

Here’s the thing. It doesn’t matter whether Clinton, Kaine and others oppose TPP and globalization in their hearts. What matters is what they will do. They are more and more on the record, even it if is only that they want to win. This puts more and more pressure on them not to support TPP vote after the election.

What matters is that we keep the pressure on and don’t let up. We have to force Obama and Congress away from voting on TPP in the unaccountable “lame duck” session of Congress. It’s up to us to make them do it and hold them to it. That is how politics and democracy are supposed to work. We must continue to make it clear to every politician in both parties that support for TPP is toxic, and that a betrayal on it would be devastatingly costly. Because that’s how it’s done.

This post originally appeared on ourfuture.org on July 28, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

ANOTHER Corporation Suing Our Government Thanks To Trade Agreements

Thursday, June 30th, 2016

Dave JohnsonA Canadian corporation is suing the us because we wouldn’t let them build a pipeline across our country (seizing people’s property along the way) so they could sell oil to China.

They can do this because we signed a trade agreement that places corporate rights above our democracy. The Trans-Pacific Partnership (TPP) would increase by an order of magnitude the companies that can sue us for hurting their profits by protecting the environment, consumers, public health and small businesses.

Because They Can

TransCanada Corporation is suing the U.S. government (us) for $15 billion in damages under North American Free Trade Agreement (NAFTA) rules. The company wanted to build the Keystone pipeline all the way from Canada to the Gulf of Mexico so they could ship oil to China. They also wanted to use “eminent domain” to seize land from ranchers, farmers and other property owners along the way to enable this.

Why can they do this? In 1993, President Bill Clinton signed NAFTA and on January 1, 1994, the United States officially became a party to the agreement. Chapter 11 of the agreement “protects investors” by allowing them to sue governments that pass regulations or laws that hurt their profits. They can bypass the legal systems of these governments and take the issue to “corporate courts” in which corporate attorneys decide if the corporation or the government will prevail.

Bloomberg has the story, in “TransCanada Files $15B NAFTA Claim on Keystone XL Rejection“:

TransCanada Corp. is seeking to recoup $15 billion for the Obama administration’s rejection of the Keystone XL oil pipeline, in a legal claim that highlights how foreign companies can use trade deals to challenge U.S. policy.

The Calgary-based pipeline operator filed papers late Friday seeking arbitration under the North American Free Trade Agreement, arguing that TransCanada had every reason to believe it would win approval to build Keystone XL. Instead, President Barack Obama last November determined that the pipeline, which would have carried Canadian oil sands crude to the U.S. Gulf coast, wasn’t in the national interest. In response, TransCanada in January vowed to use arbitration provisions in Chapter 11 of NAFTA to recover costs and damages.

The President of the United States decided that this project is not in the national interest. But “investor protection” provisions of trade agreements override our national interest. So we have to pay a company for not letting them seize public and private land to build a pipeline across our entire country so they can sell oil to China.

Countries Lose The Right To Protect Citizens

The investor-state dispute settlement provision of the TPP was among the main targets at Tuesday’s “Trading Up’ symposium on trade at the AFL-CIO headquarters in Washington.”

Both AFL-CIO President Richard Trumka and Sen. Sherrod Brown (D-Ohio) singled out the ISDS, which Brown said “allows corporations to sue governments to pad their own profits,” as a key reason to oppose the TPP and replace it with a new trade regime that respects the interests of the people who governments are supposed to represent.

Thomas Palley, economist at the New American Foundation, said at the symposium that of provisions like the ISDS that do not really have anything directly to do with trade, agreements like the TPP “are not free trade agreements; they are global governance agreements.”

Calling them “global governance agreements,” he went on to say, would call attention to the enormity of the effect these clauses would have and would underscore the undemocratic way they are being imposed on populations around the world as well as the U.S.

Under NAFTA, we recently lost the right to, for example, tell consumers which country their meat comes from or whether tuna is dolphin-safe. Canada has been sued over their environmental laws. One company was even able to win $15 million and block Canada from stopping them from polluting the air with neurotoxins.

Under other trade agreements with similar provisions counties are being sued by tobacco companies for trying to help people stop smoking, and prevent kids from starting.

Climate vs. Profit

These “investor protection” provisions prevent governments from protecting the environment and the climate. For example, TransCanada claims that the U.S. choice to protect the climate cost them money, so we have to pay up. As economist Joseph Stiglitz said by video at the Trading Up symposium, instead of the “polluter pays” principle in U.S. law, “we pay the polluter for not polluting.” Or, worse, we pay the polluter for the right to keep polluting.

From the Bloomberg report:

The company said the U.S. spent seven years delaying a final decision on the project with multiple rounds of “arbitrary and contrived” analyses and justifications.

“None of that technical analysis or legal wrangling was material to the administration’s final decision,” TransCanada said in Friday’s filing. “Instead, the rejection was symbolic and based merely on the desire to make the U.S. appear strong on climate change, even though the State Department had itself concluded that denial would have no significant impact on the environment.”

If TPP Passes, More Like This

NAFTA covers just three countries, Mexico, Canada and the United States. The TPP starts with 12 countries, but it is a “docking agreement,” which means more and more countries can sign on as corporate power grows and is able to force them to do so. This means the number of corporations that can sue governments for hurting profits by protecting citizens and the environment grows exponentially.

Again, from Bloomberg:

Foreign companies could exploit the investor-state dispute settlement provisions in the Trans-Pacific Partnership to weaken U.S. environmental policy and labor protections. TransCanada’s NAFTA claim highlights the risk, said Sierra Club Executive Director Michael Brune.

“TransCanada’s attempt to make American taxpayers hand over more than $15 billion because the company’s dirty Keystone XL pipeline was rejected shows exactly why NAFTA was wrong and why the even more dangerous and far-reaching Trans-Pacific Partnership must be stopped,” Brune said in an emailed statement.

“The TPP would empower thousands of new firms operating in the U.S., including major polluters, to follow in TransCanada’s footsteps and undermine our critical climate safeguards in private trade tribunals,” Brune said.

The lesson here is that we must do everything we can to fight the TPP, and demand our government renegotiate the rest of the “trade” agreements the corporations got us into. But this time the agreements must be negotiated with labor, environmental, consumer, human rights and all other “stakeholder” groups at the table.

This post originally appeared on ourfuture.org on June 15, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Another Foreign Corporation To Sue U.S. Thanks To Trade Agreement

Wednesday, June 22nd, 2016

Dave JohnsonThere is a clause in many “free-trade” agreements allowing corporations to sue governments in corporate courts for passing laws, regulating and other things that might limit their profits. Never mind if the people of a country want to do something to make their own lives better; these agreements say that their governments have to pay corporations if they do.

These “investor protection” provisions even let tobacco companies sue governments that try to help people quit smoking – even for discouraging children from starting!

Recent cases like this include a Canadian oil company suing the U.S. government for not letting it build a pipeline across our country so they can sell oil to China. They include Mexican and Canadian meat packaging corporations suing to force the U.S. to stop country-of-origin labeling (COOL) of meats. They include big Mexican seafood corporations suing to force a halt to “dolphin-safe” labels on tuna cans.

Corporation Threatens Suit Over Blocking Huge Open-Pit Mine In Pristine Wilderness

Now this: Northern Dynasty Minerals is threatening a lawsuit against the U.S. government for not approving a permit allowing them to dig one of the world’s largest open-pit gold and copper mines in Alaska’s Bristol Bay wilderness.

The Pebble Mine would have produced as much as 10 billion tons of contaminated waste (3,000 pounds for every person on Earth.) The mine threatened one of the world’s most valuable salmon habitats and the corresponding fishing industry. The Bristol Bay wilderness is home to grizzly bears, wolves, caribou, wolverines, foxes, otters, moose, and many more species, making it a major tourist area. These animals also depend on clean water.

Northern Dynasty is threatening to sue for a massive payout unless the government changes course. The infamous North American Free Trade Agreement (NAFTA) enables them to do this.

The Huffington Post has the story, in “Pebble Mine: Canadian Mining Company Threatens to Stick U.S. Taxpayers with Costs of “Potentially Catastrophic” Mining Scheme“:

According to the company’s lawyers, Northern Dynasty is prepared to file a claim for “arbitration” under NAFTA, seeking compensation for the failure of the Pebble Mine project to move forward to federal permitting. The basis? That the U.S. Environmental Protection Agency (“EPA”) has acted in a “grossly abusive, arbitrary, and deliberately opaque manner,” in breach of due process, U.S. statutes, and “Northern Dynasty’s legitimate expectations . . . .”

In the ensuing 42 pages, the letter lays out the basis for Northern Dynasty’s astonishing claim that NAFTA entitles it to a bailout based on EPA’s alleged efforts to prevent it from pursuing its scheme to develop a copper and gold mega-mine in the headwaters of the greatest wild salmon fishery on Earth.

A huge, dirty, polluting open-pit mine in one of the last pristine wildernesses on Earth? The waste from the mine threatens an entire fishing industry. But a big corporation is able to sue our government for not issuing a permit for this outrageous and dangerous scheme.

That is what these “free trade” deals are about – placing corporate profits for a few already-wealthy investors (“Wall Street”) over sovereign governments, their people and the planet’s environment.

The Trans-Pacific Partnership (TPP) is another huge “free-trade” deal with similar provisions placing corporate profits above the sovereignty of governments. There is a drumbeat being engineered by corporations, Wall Street and the Obama administration to force a vote on the TPP during the “lame duck” session of Congress after the election. Holding this vote at that time would mean there is very little accountability to the public, but a lot of opportunity for passing around corporate largesse. Call your member of Congress and your senators to let them know how you feel about this idea.

This post originally appeared on ourfuture.org on June 15, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Best-Case Projections For TPP Show Few Benefits, Worse Trade Deficit

Thursday, May 19th, 2016

Dave JohnsonThe U.S. International Trade Commission (ITC) has released a report predicting the effect the Trans-Pacific Partnership (TPP) will have on the U.S. economy. In the past these reports have been skewed to promote trade agreements, with numbers that turned out to be much better than what actually happened.

Even with this history of exaggerated promises of benefits from trade agreements, the ITC says that TPP won’t do all that much for our economy, and will make the trade deficit worse. The ITC report says TPP will increase the U.S. trade deficit by over $21 billion per year and will harm employment in key industries.

ITC Reports Have History Of Rosy Projections

In the past the ITC reports have made flowery promises about what will happen when we sign trade agreements. The actual results varied considerably and were much worse for the U.S. than projected.

A study released last week by Public Citizen looked at past ITC projections of what would happen if we entered into trade agreements. The study looked at the ITC’s promises about NAFTA (the North Atlantic Free Trade Agreement), China’s entry into the World Trade Organization and the Korea-U.S. agreement. It found that the ITC predictions on each pact was inaccurate, always projecting a much better outcome than actually occurred.

According to a Public Citizen news release accompanying the study:

The USITC predicted improved trade balances, gains for specific sectors and more benefits from the 1993 North American Free Trade Agreement (NAFTA) and 2007 U.S.-Korea Free Trade Agreement (FTA) in reports on those pacts. The agency projected only a small deficit increase from China’s 1999 World Trade Organization (WTO) entry deal and the granting to China of permanent normal trade relations status.

Instead, the U.S. trade deficits with the trade partners increased dramatically and, as detailed in the text of the new study, manufacturing industries from autos to steel and farm sectors such as beef that were projected to “win” saw major losses. A government program to help Americans who lose jobs to trade certified 845,000 NAFTA jobs losses alone and econometric studies concluded that millions of jobs were lost from the China deal, in contrast to gains projected by the USITC reports.

This is a summary of the results:

NAFTA: Before NAFTA, the U.S. trade had a $2.6 billion goods trade surplus (services data was not available). The ITC predicted NAFTA would create a $10.6 billion goods and services surplus. Instead in 2015 we had a $57 billion goods and services deficit.

China: Before opening WTO trade with China, we had a $113 billion trade deficit.The ITC predicted this would grow to $120 billion. Instead in 2014 we had a #340 billion trade deficit with China.

South Korea: We had a $5.8 billion deficit. ITC predicted the agreement would cut that to a $2.5 billion deficit. But instead we had a $16.8 billion deficit.

The ITC Projections For TPP

The ITC has released its TPP report: “Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors.” It projects extremely modest gains, and these only after 15 years.

Among the projections:

Main Findings

… The model estimated that TPP would have positive effects, albeit small as a percentage of the overall size of the U.S. economy. By year 15 ([032), U.S. annual real income would be $57.3 billion (0.23 percent) higher than the baseline projections, real GDP would be $42.7 billion (0.15 percent) higher, and employment would be 0.07 percent higher (128,000 full-time equivalents). U.S. exports and U.S. imports would be $27.2 billion (1.0 percent) and $48.9 billion (1.1 percent) higher, respectively, relative to baseline projections. U.S. exports to new FTA partners would grow by $34.6 billion (18.7 percent); U.S. imports from those countries would grow by $23.4 billion (10.4 percent).

And later in the summary, get this: “… agriculture and food would see the greatest percentage gain relative to the baseline projections; output would be $10.0 billion, or 0.5 percent, higher by year 15.”

Got that? The greatest gain our country would see from TPP is one half of one percent in the agriculture and food sectors, but only after 15 years.

The ITC report estimates U.S. economic growth gains would be $42.7 billion or 0.15 percent and income gains of $57.3 billion or 0.23 percent by 2032. Public Citizen explains how modest this is: “In other words, the ITC projects that the United States would be as wealthy on January 1, 2032 with TPP as it would be on February 15, 2032 without the TPP.”

It estimates a decline in output for U.S. manufacturing/natural resources/energy of $10.8 billion as exports would increase by $15.2 billion and imports would increase by $39.2 billion by 2032. This translates to a loss of even more U.S. jobs in these key sectors.

Keep in mind that this ITC report assumes that there will be a “level playing field” on which other TPP countries will not manipulate currency, suppress labor or other things that hurt American jobs. It also assumes that the countries will buy from us (trade) instead of following national economic strategies to enhance key national strategic industries by selling to us but not buying from us. Of course, this is not what happens in the real world, other countries protect themselves as countries with key national economic interests; we do not.

These are only the economic projections from TPP. They do not take into account that most of TPP is not about the economic results from “trade”; it is about enhancing the power of corporations over governments. Even if TPP dramatically increased economic activity (which all goes to a few at the top now anyway) it would not be worth handing over our democracy and sovereignty to the billionaires behind the giant corporations.

Statements

A statement from House Ways and Means Committee Ranking Member Sander Levin (D-MI) begins:

My initial review of the ITC report only confirms my position that I cannot support TPP as negotiated.

“It is deeply troubling to read that overall U.S. manufacturing employment is expected to decline as a result of the agreement, and that the overall U.S. trade deficit is expected to worsen too, including in the auto and auto parts industry. And the ITC appears to confirm my concern that the weak automotive rules of origin in the agreement will result in lost auto parts jobs in the United States.

The AFL-CIO released a statement titled, “ITC Report Shows TPP Is Disastrous for Working Families”:

This ITC report is so damaging that any reasonable observer would have to wonder why the Administration or Congress would spend even one more day trying to turn this disastrous proposal into a reality. Even though it’s based on unrealistic assumptions, the report could not even produce a positive result for U.S. manufacturing and U.S. workers. One of many shockers is just how meager the purported benefits of the TPP are. A mere .15% of GDP growth over 15 years is laughably small—especially in comparison to what we’re being asked to give up in exchange for locking in a bonanza of rights and privileges for global corporations. Even though the report fails to account for currency manipulation, wage suppression and the negative impacts of uninspected food imports and higher drug costs, the study still projects the TPP will cost manufacturing jobs and exacerbate our trade deficit.

United Steelworkers (USW) International President Leo W. Gerard:

“This report validates that the Trans-Pacific Partnership (TPP) is not worth passing. In the past, similar reports have proven to widely underestimate the negative impact of trade agreements on American workers and the economy. This report as mandated by law indicates the TPP will produce, almost no benefits, but inflict real harm on so many workers.

“Because of this history, average Americans know that economic projections based on rosy scenarios always end up the same. They pay the price with lost jobs, stagnating or declining wages and rising income inequality as Wall Street profits.

“As the report was being finalized for publication, TPP proponents were touting other biased and optimistic studies in an attempt to blunt the impact of this official study. It is time that we jettison theory and deal with reality: Our nation’s trade policies are in dramatic need of reform.

… “The ITC should be commended for its thorough evaluation of the proposed TPP and the open process that it pursued. It is clear that they listened to the array of voices that asked to be heard.

“But in the end, this may be the most damning government report ever submitted for a trade agreement. It is clear that the TPP will be DOA if Congress ever decides to bring it up.”

Statement from Michael Stumo, CEO of the Coalition for a Prosperous America:

The report found that US trade performance will worsen under the TPP overall and for the majority of sectors analyzed, including services.

The Commission’s report should be viewed as the most optimistic result possible from the TPP if everything goes right. It is worth remembering that the economic projections in the Commission’s prior reports on Permanent Normalized Trade Relations status with China and the Korea-US Free Trade Agreement were vastly more optimistic than the actual results.

Statement from Richard Fiesta, Executive Director of the Alliance for Retired Americans:

“Most troubling to older Americans, the report fails to take into account the high drug costs that are expected to result from the TPP. Prescription drug costs are increasing much faster than inflation, and the TPP will only make the situation worse. The TPP agreement would enable drug companies to fight the cost-control measures already used by Medicare and Medicaid and may prevent Congress from enacting additional cost-control measures in the future.”

Sierra Club Statement:

“Today’s U.S. International Trade Commission report offers further evidence that the Trans-Pacific Partnership would be a disaster for working families, communities, and our climate. ITC reports have a record of projecting economic benefits of trade agreements that have failed to materialize, so it is noteworthy that even the overly-positive ITC acknowledges that the TPP would have real costs and estimates economic benefits that are slim.

“One of the costs of the TPP indicated by today’s report is that, by shifting U.S. manufacturing to countries with carbon-intensive production, the deal not only would cost U.S. manufacturing jobs, but also would spur increased climate-disrupting emissions.

“Today’s report is right to note the broad controversy over TPP rules that would empower major polluters to sue the U.S. government in private tribunals over climate and environmental protections. The report gives members of Congress further reason to reject the polluter-friendly TPP so that we can build a new model of trade that protects communities and the climate.”

Statement from International President Robert Martinez, Jr., of the International Association of Machinists and Aerospace Workers (IAM):

“The ITC, which historically has overestimated the benefits of trade agreements, predicts that the TPP will increase our nation’s trade deficit in manufacturing. This means that the corporate driven, secretly negotiated TPP will lead to the export of good paying manufacturing jobs to countries like Vietnam that lack basic human rights. For ordinary Americans struggling to get by this will result in more unemployment and continued downward pressure on wages and benefits.

“That a trade agreement created to boost corporate profits and CEO bonuses at the expense of working families would be so flawed is no surprise. We now have confirmation from the ITC that weak rules of origin for autos and other manufactured goods will only continue the deterioration of U.S. manufacturing. …

This post originally appeared on ourfuture.org on May 19, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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