Bill Moyers: The Corporate Plot That Obama and Corporate Lobbyists Don't Want You to Know About
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And some groups in Japan have started objecting. And the government's saying, "Well, if we don't participate, you know, everybody else will be in and we'll be out." So that's the leverage that America is apparently using to try to get people on board
DEAN BAKER: But this is really important to point out it isn’t free trade. You know, if you look at the actual trade barriers that exist between the United States and these other countries, at this point, they're almost all very small. You know, if you have a tariff of one percent or two percent, you know, the things like that, it really doesn't matter whether it's there or at zero.
So what this is really about is, you know, these sorts of, in many cases, provisions increasing barriers or restricting the ability to have environmental regulations, health and safety regulations. That's what it's really about, trade’s really peripheral.
YVES SMITH: That's how this works in combination with the secrecy provision. It's free trade because nobody knows otherwise.
BILL MOYERS: What is your greatest concern about this?
YVES SMITH: I think the drugs one is my biggest one. And the second one, frankly, is financial services. Because this would also basically make a lot of financial services regulation that we now have pretty much impossible. It would force--
BILL MOYERS: How so?
YVES SMITH: It would force everything-- well, apparently financial services is one of the chapters. And so again, it would lead to a race to the bottom, that any country, that any signatory to the pact could say, "Gee, you know, X, Y, Z country has weaker regulations. You know, you're hurting us by making us adhere to this higher standard." And in particular, and another sort of interesting conflict is that one of the things that it rules out is capital controls.
Now, historically, people used to say that, you know, again, the sort of simpleminded idea that capital controls weren't such a good thing.
And now the IMF has come around and has said that capital controls, you know, certain types, are actually desirable. Chile and Malaysia had them both going into the crisis, and they did better than a lot of other countries as a result of having them. But that in fact may be one of the things that makes a steel founder, that some of the countries that have them and like them, are objecting to the faculties that are included in the pact.
BILL MOYERS: Is it conceivable to you that this could affect the enforcement of Dodd-Frank, which was ostensibly passed to prevent another great crash like 2008? Could this affect the enforcement of Dodd-Frank?
YVES SMITH: Yeah. No, I mean, certainly the derivatives regulation, and I would expect the capital levels. There's no--
BILL MOYERS: How? How would that work?
YVES SMITH: The first language in both these deals goes something along the lines with, "All signatories are required to make their laws and regulations conform to the standards of this agreement." They are literally required to make their nation-based laws subordinate to the terms of these agreements. And again, we don't know exactly what's in them. But the whole notion is that they are to permit very liberalized capital flows and minimal restrictions. So like, Dodd-Frank basically is inconsistent with that.
BILL MOYERS: So foreign trade partners would conceivably be allowed to challenge American laws?
YVES SMITH: Yeah. You know, one of the things it extends is a concept that exists in NAFTA, but it's-- which is that you have special panels that companies can go to get matters adjudicated if they believe that regulations have led them to lose profit. And it's not even necessarily that they've currently lost profit. It's that they have potentially lost profit.