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Obama’s friends call free-trade plan ‘NAFTA on steroids’

By   /   August 13, 2013  /   1 Comment

By Ryan Ekvall | Wisconsin Reporter

MADISON — President Obama has long relied on the seemingly unshakable support of organized labor.

But the fissures in that constituency are starting to show, perhaps no more clearly than in Obama’s peddling of the Trans Pacific Partnership, a so-called free-trade agreement the union movement calls “NAFTA on steroids.”

More than 100 demonstrators, mostly from organized labor, rallied Saturday on the steps of the statehouse in Madison to protest the TPP, in negotiation between representatives from the United States and 11 other countries, mainly in Southeast Asia.

Labor asserts the partnership will further damage the United States’ working class by shipping more jobs overseas. Beyond the usual complaints with such “free-trade” agreements, critics contend the TPP isn’t free and has surprisingly little to do with trade.

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TRADE DEMONSTRATION: Protesters march in Madison last week in opposition to the Obama administration-led Trans Pacific Partnership, a free trade agreement that critics say isn’t free and has surprisingly little to do with knocking down trade barriers.

The countries it would cover make up 40 percent of the world’s gross domestic product and about 800 million people in Japan, Malaysia, Vietnam, Singapore, Chile, Mexico, Brunei, Australia, New Zealand, Peru, Canada and the United States.

“The TPP affects everything we care about: food, health care, Internet privacy, finance, regulations, worker’s rights, the environment, the list goes on,” said Margaret Flowers of FlushtheTPP.org, which shows support from the Occupy movement and various labor groups.

She calls the agreement-in-progress a “global corporate coup” and cites the more than 600 corporate special interests with access to the trade negotiations — the AFL-CIO does, too — while the public remains in the dark.

Congressional members from Rep. Mark Pocan, a Madison liberal, to Rep. Darrell Issa, a libertarian-leaning California conservative, oppose at least parts of the trade agreement.

The Obama administration has a different take on the TPP. Here’s a snippet from a July news release by the Office of the U.S. Trade Representative, which is housed in the executive office:

“Through the TPP, the United States is seeking to advance a 21st-century trade and investment framework that will boost competitiveness, expand trade and investment with the robust economies of the Asia Pacific, and support the creation and retention of U.S. jobs, while promoting core U.S. principles on labor rights, environmental protection, and transparency.”

The good …

The Trans Pacific Partnership looks to remove barriers to trade, such as tariffs and quotas on certain goods and products. That’s good news for American consumers of imported goods, and likewise makes American exports more affordable for the foreign consumer.

A 2011 Congressional Research Service paper found, “If enacted the TPP would eliminate 11,000 tariff lines among the parties.”

The specifics of which tariffs are targeted for removal and which will be protected are not yet available.

“What I often see as a problem, in talking about trade, is the mercantilist emphasis that only exports are good. This really looks to completely eliminate tariffs,” said Frances Smith, adjunct fellow of trade at the Competitive Enterprise Institute, a Washington, D.C.-based free enterprise think tank. “That’s not the case in most trade agreements. We have some high tariffs on certain goods and services, as do many of the other 11 countries.”

Smith, who also serves on a U.S. Trade Representatives advisory committee, said lower tariffs mean lower prices for consumers and manufacturers who use imported goods in production.

It also opens the door for U.S. interests in the growing Asian market, she said.

“What could be very exciting is we’re not a big player in the Asia-Pacific region. That’s a rapidly developing, rapidly growing area of the world economically,” she said. “(TPP) presents a new opportunity for opening up Japanese markets (for exporters) and imports as well.”

The TPP also looks to streamline regulations that slow or prevent international trade.

“They’ve (TPP negotiators) made a big deal of wanting to tackle regulatory barriers, government policies that make it harder to sell goods in other countries,” said Sallie James, a trade policy analyst at the libertarian Cato Institute.

James said that includes things such as predictable customs standards that make it easier for TPP firms to tap into regional production and supply chains.

 … the bad and the ugly

A free-trade agreement by definition contains restrictions, or there would be no need for an agreement. But it sounds so much better than what it is: a special interest-approved, multi-governmental managed trade agreement.

As economist Murray Rothbard put it, “The folks who have brought us NAFTA and presume to call it ‘free trade’ are the same people who call government spending ‘investment,’ taxes ‘contributions,’ and raising taxes ‘deficit reduction.’

James said Congress could act to reduce barriers to the U.S. market without the pretense of an international trade agreement.

“If there is a problem getting goods into your own market, you should be able to tackle that on your own. Too much emphasis is on (trade negotiations) and not enough recognition in domestic politics that Congress can handle.”

For example, Congress could cut tariffs on sugar and cut subsidies for sugar producers in the south – a move that would save U.S. consumers and taxpayers billions of dollars a year.

It’s the behind-the-scenes, powerful special interests that could potentially derail the benefits of the TPP, according to James. What’s the point if each special interest – agriculture, textiles, automotive – in each country is able to carve out its own protections?

TPP detractors on the left and right decry the lack of transparency in the negotiations. Last year, Issa published a previously leaked chapter of the TPP on Intellectual Property.

U.S. Sen. Ron Wyden, D-Oregon, last year said, “The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations — like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America — are being consulted and made privy to details of the agreement.”

The demonstration in Madison took aim at stopping Trade Promotion Authority or fast -rack status, in which Congress could only vote up or down on the TPP without opportunity for amendments.

James contends there’s “nothing sinister” about the process and it’s just the way trade agreements have been negotiated for the past decade or so.

“Congress has the ultimate autonomy over this; they’ll make the final decision” she said.

But what is new is the breach into issues that have nothing to do with economic barriers to trade. The trend started with including labor and environmental regulations in NAFTA, something Smith said CEI opposed.

“It’s another form of protectionism,” Smith said. “We want other small countries to have the EPA like ours, whereas they might not have the resources. They may be trying to build water purification plants instead of air pollution equipment. Each country has to look at what their individual needs are.”

The same principle extends to copyright laws, intellectual property – including delaying the production of generic drugs, and Internet freedom.

The Electronic Frontier Foundation, a nonprofit that defends digital user’s rights, contends the TPP “will require signatory counties to adopt heightened copyright protection that advances the agenda of the U.S. entertainment and pharmaceutical industries agendas, but omits the flexibilities and exceptions that protect Internet users and technology innovators.”

Critics contend the TPP erodes the sovereignty of the member nations, especially the smaller, less-developed countries involved.

“We saw that in CAFTA negotiations. We essentially made Colombia change its constitution and change its labor practices. They had to do it according to a set format in the agreement. We essentially took a lot of their sovereignty away,” Smith said.

Detractors say that due to lack of congressional involvement, sovereignty is taken from American citizens as well.

“Battles in which in many cases we have won in the United States, through the back door corporations are going to essentially reverse to consolidate their profits and power,” said David Newby, president of the Wisconsin Fair Trade Coalition, at the Madison demonstration.

Newby, former state AFL-CIO president, cited the potential rollback of the Dodd-Frank banking regulations and a back-door effort to implement the Stop Online Piracy Act in the TPP negotiations.

“There are 29 chapters of these agreements that that these countries are negotiating, only four have to do with customs, duties and essentially eliminating barrier to trade across borders,” Newby told Wisconsin Reporter after the event. “What they hope to do essentially is to write the constitution for the global economy. That constitution, I suspect, will start out saying, ‘We the corporations of the planet Earth – and then you fill in the blanks.’”

Contact Ryan Ekvall at rekvall@wisconsinreporter.com

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Ryan Ekvall uncovers government waste, fraud and abuse for Wisconsin Reporter. His work has appeared at Reason, Fox News and Human Events.

  • jacklohman

    Indeed, campaign bribes work! Good politicians we have.

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