Global Corporations Are Scheming to Take Control of Our Economy - We Can Put a Stop to It
The broad movement for fair trade has stalled the Trans-Pacific Partnership (TPP). When fast track trade promotion authority was introduced by former Senator Baucus, the Chairman of the Finance Committee, it was announced dead by Harry Reid and many of the members of the Finance Committee. A similar bill in the House also died quickly, not even proceeding to mark-up in the Ways and Means Committee, despite being introduced by its Chairman, David Camp (R-MI).
Congressional leadership including Democratic Leader Nancy Pelosi (D-CA), Democratic Whip Steny Hoyer (D-MD) and Majority Leader Harry Reid (D-NV) all announced that they opposed the Baucus-Camp version of fast track. Vice President Biden acknowledged that trade promotion authority was unlikely this year. This happened because a movement of movements engaged in protests across the country, the issue was raised at town hall meetings and hundreds of thousands of phone calls and emails went to Capitol Hill saying “no” to fast track for the TPP.
But, we knew that efforts to rig global trade in the favor of trans-national corporations would not stop there. The movement of movements that stopped the first version of fast track has been preparing for the next stage.
The new chairman of the Finance Committee, Senator Ron Wyden (D-OR), made a speech this week announcing that he was working to introduce a new version of trade promotion authority that he is propagandistically calling “smart-track,” but which sounds more like fast track in sheep’s clothing. Wyden was vague on the details, but this far into the process any fast track bill being pushed will still rig trade in favor of transnational corporations.
For people who care about worker’s rights, the environment, Internet freedom, health care for all, regulation of banks and big finance, healthy food, access to water and other issues, the fundamental question is: will trade put the necessities of the people and environment before the profits of transnational corporations and the already wealthy? From what we’ve seen, the TPP does not and that is why we must continue to organize not only to stop it but also to redefine how trade is negotiated from the first step and to correct the failures of past trade agreements.
What is Wyden Saying?
Senator Wyden has not announced the details of his proposal for fast track and seems to still be in the process of developing it. On April 9, Wyden made a speech to the American Apparel & Footwear Association Conference that described a ‘21st Century trade policy.’
Wyden’s statement came just as President Obama is preparing to travel to Asia at the end of April to meet with leaders of Japan, South Korea, Malaysia and the Philippines. The meetings will focus on the TPP and other economic and trade issues. No doubt the Wyden speech will give President Obama something he can say about getting the TPP through Congress since the dead-on-arrival Baucus-Camp trade bill weakened the President’s negotiating position in Asia.
The TPP is the economic part of the Asian pivot that will encircle China militarily, as well as economically. In fact, in his speech Senator Wyden took a swipe at China, something that is a popular thing to do in the United States these days. Wyden criticized their restrictions on the export of rare earth minerals and their state-owned enterprises. The usual – “China has to play by the rules” – applause line was included in the speech.
China may actually have a better economic plan than the US, judging by the last decade of economic performance. Maybe the US should reconsider its neoliberal approach of corporate welfare for big business and treating social services as profit centers for Wall Street. For example, there is no question that turning health care into a commodity, with massive subsidies to the insurance industry and for pharmaceutical research, is the most expensive and least efficient approach to providing health care. There is no doubt that simply improving and expanding Medicare to everyone would have provided better quality health care to all Americans. But that would difficult to achieve under an agreement such as the TPP.
What if China is right that some state owned enterprises, especially for public services, is the better approach? The evidence supports that approach for health care. Why should Wyden be pushing a trade agreement that will destroy excellent “state owned” health care systems as in Japan, Australia and New Zealand and force the failed model of corporate healthcare on nations?
It is evident that Senator Wyden is concerned about his political base in labor, information technology and the environmental movement. His speech mentioned all three of these areas urging trade that “protects and produces good paying jobs in the U.S.”; “promote[s] environmental protections” adding “strong enforcement is a prerequisite for a TPP” and with regard to the web saying: “The Internet – the shipping lane of the 21st century – must be free and open.”
Of course, these are some of the goals we agree on. Rhetoric is not enough past trade negotiations made promises but did not produce the promises made. Is there any way that fast tracking the TPP through Congress can ensure these goals will be achieved after four years of secret negotiations that have involved hundreds of corporate advisers and have excluded Congress and the public? With the limited information we have so far, the answer has to be ‘no.’
The Foundation of Trade Agreements Should Be Complete Transparency
Trade should begin with transparency. If members of Congress and the American people know what the US’ proposals are for trade as well as what has been agreed to in the negotiations, then concerned citizens and elected officials can weigh in and make the proposals better. The crowd-sourcing of trade will really help to create trade for the 21st Century. Balanced trade negotiations that are open and democratic, that truly involve the views and needs of the people who will be affected by them, will produce agreements that are good for everyone and protect the planet.
Wyden recognizes this is what people want but then proposes an approach that falls short of creating transparency. If you do not get transparency right, then the entire process will fail to protect workers and the environment. And without meaningful participation, the best ideas of the country will not be included in the process.
On transparency, Wyden backs away from what is needed, saying: “to get better trade agreements, there must be more transparency in negotiations.” [Emphasis added.] Why didn’t the chairman say there “must be transparency.” The standard of ‘more’ transparency could mean that we are told the non-controversial things but the key details that rig trade for the wealthiest and undermine people and planet will remain hidden. Another phrase Wyden uses is: “shedding more light on trade negotiations.” Again, corporate trade riggers could shed more light but still keep key issues in the dark.
As Senator Wyden moves toward putting forward a new fast track trade promotion authority he needs to begin with complete transparency. For the American people to have an appropriate role in helping to define our own future – and global trade impacts every aspect of our lives – we need to know what is being negotiated.
For the Congress to fulfill its Constitutional duty under the Commerce Clause, “To regulate Commerce with foreign nations,” it must know what is in a trade agreement. Neither Congress nor the people can play their appropriate role in a constitutional democracy if the law is negotiated in secret and the contents are kept secret from us.
Fulfilling the Constitutional Role of Congress
Under the Constitution, the role of Congress is very clear – it is responsible for regulating trade between the United States and foreign nations. This constitutional responsibility should not be circumscribed by fast track which would hand that power to the President. The drafters of the Constitution knew that one person should not determine these far-reaching issues.
Senator Wyden began to define the role of Congress in his speech on 21st Century trade. He says he wants to “hold trade negotiators more accountable to Congress and the American people;” and put in place “procedures that enable Congress to right the ship if trade negotiators get off course.” Unfortunately, that is where he stops. No doubt, he is still talking to Senators about what types of procedures would make sense. We hope he will also talk to citizen groups about what they want to see because it is our future he is defining.
Our suggestions include laying out the goals of trade before negotiations begin. The framework of trade agreements should be that trade should not be used merely for the pursuit of profit by the few, but must as its top priorities seek to improve people’s lives and protect, even rebuild, the ecology of the planet, or more simply, ‘put people and planet before profits.’
Trade should not be used as a tool to force neoliberal economic ideology on the world. The evidence is that neoliberalism, that empowers corporations, shrinks government and minimizes social services, is resulting in unfair and weak economies. While some economies see growth in GDP, they also see growth in the wealth divide, shrinking of wages, destruction of family farms, increased poverty and an overall unfair economy. Therefore, neoliberalism and demanding an end to state owned enterprises should not be part of trade negotiations. Indeed, it is hypocritical for the US, which provides hundreds of billions annually in corporate welfare (not counting trillions in bank bailouts), to demand countries that are successfully managing their economy through state owned enterprises follow the US model. These are issues that should be independent of trade and left to the decisions of nation-states.
One goal Congress should require is to improve labor standards; the foundational issue is that all workers around the world should receive a living wage. International labor standards should be the floor of meeting this goal. Improving labor standards also includes a global minimum wage as a foundation for wages. How would a global minimum wage work?
“…economist Thomas Palley recommends 50 percent – of each country’s median wage, so it would be tailored to local economic conditions, costs of living, and purchasing power. As wages increase across the spectrum, the floor would move up automatically, so we wouldn’t have to constantly pressure politicians to raise the minimum to keep up with inflation. All countries would be treated equally, and countries that presently enjoy a comparative advantage through cheap labour would retain that advantage.
“Of course, in some countries wages are so low across the spectrum that 50 percent of the median would still leave workers in poverty. So the global minimum would need a second safeguard: wages in each country must be above the national poverty line.”
A second foundational issue when it comes to workers is collective bargaining; countries should remove barriers to workers forming unions so that workers can bargain with capital. This is the only way that issues like retirement and health benefits as well as worker safety can be assured.
By the way, it is important to note that the United States does not meet either of these foundational issues. Workers do not receive a living wage and there are multiple laws that prevent unions from organizing.
The second major goal should be enhancing and protecting the environment. This requires enforceable environmental standards. Senator Wyden says he agrees with this, unfortunately this presents a major problem for the TPP. A leaked environmental chapter published by Wikileaks shows that the current draft does not provide any enforcement of environmental protections. This alone should be enough to ensure the TPP is not approved by the Congress unless there is a major renegotiation of the agreement.
The failure of the environmental negotiation shows a problem with how Wyden’s fast track will be applied to the TPP. The TPP has been negotiated for four years in secret and without any congressional guidelines or involvement – how does the Congress get this very off track negotiation on track? Renegotiation of all of the chapters – after they have been made public and the American people and Congress get involved in the process – is an essential step in the process.
Congress should limit the areas where trade agreements change the rules and make clear: trade agreements are not a back door for corporate legislating on issues they have been unable to get through Congress.
Multiple sections that are included in the TPP should not be there. The corporations seem to be using the TPP as an alternative to passing legislation through Congress. This is particularly evident in putting controls on the Internet, patent and copyright protections as well as on the regulation of banking and finance. In these areas, the transnational corporations will be getting rules that enhance their power to control our laws even down to the local level. When a trade agreement is passed, laws must be put in place or changed so they are consistent with the trade agreement. This is one of the reasons Glass-Steagall was repealed. It was inconsistent with the World Trade Organization agreement.
The final point we will make on the laying out of goals by Congress, concerns the extreme rights given to investors (i.e. banks and financiers who invest in business ventures in foreign countries) while no rights are given to those who seek to protect workers, people and planet. Special trade courts that operate outside of traditional judicial systems and are unaccountable are not acceptable for enforcement of trade agreements. Standing to sue must be given to people who are adversely affected by international trade, including people impacted by environmental destruction. Access to legal protection should not be limited to government and business.
The make-up of the trade tribunals must be changed. We cannot have corporate lawyers on leave from their corporate job serving as judges in a system that has no conflict-of-interest or ethics requirements for members of trade tribunals. The Europeans have called for not including these trade tribunals in the Atlantic trade agreement. We think that until enforcement is thought through by more than people beyond transnational corporations and the trade representative, these tribunals should be removed from all trade agreements including the TPP.
Regarding the process, Congress must remain involved throughout the process of trade negotiation. The administration should be required to come before the committee responsible for specific areas being negotiated and publicly share their negotiating goals. There should be hearings where a wide variety of views are heard, not only the business community but civil society advocates; and Congress should then recommend changes and ensure the administration’s goals are consistent with Congress and the people.
The same should occur as sections are negotiated, the agreements should come before the committee responsible for oversight in the area that has been negotiated; the text should be made public and hearings should be held where a wide range of views are presented. Amendments should be suggested for negotiation with the countries involved.
Finally, this process does not replace the final approval process. It is important for the full Congress to have an opportunity to debate and amend this agreement. Individual committees are useful but that limits the number of elected officials involved to congressional leadership. The full Congress needs adequate time to review agreements that are often thousands of pages long, to debate them and amend them. After congressional review, the US Trade Representative should return to the bargaining table and negotiate the amendments suggested by Congress. Congress would then get an opportunity for final approval.
The trade process already skirts congressional requirements by not classifying trade agreements as treaties between nations. Trade agreements are classified as “congressional-executive agreements” and therefore the 2/3 vote by the Senate is not required for them. The legality of this process has not been ruled on by the courts and may not be constitutional, but whatever a 21st trade process looks like, it should not weaken the checks and balances of Congress on the President.
Essentially what we recommend is democratizing trade negotiation with transparency and participation. We recognize that the process we suggest will require much more participation by the people and Congress and therefore will make trade negotiation more difficult. But, the US claims to be a democracy and trade negotiation should be a democratic process.
The TPP will impact every part of our lives and, from the leaks we have seen, will give corporations power over our lives down to the food we eat, the water we drink, how we communicate on the Internet and so much more. So far, this has been an anti-democratic process, conducted in secrecy and even dishonesty by the US Trade Representative. For example we know the US Trade Representative has falsely described portions of the agreement because leaks have shown the US Trade Representative’s comments to be inconsistent with what has really been negotiated. And, the US Trade Rep gives lip service to public participation with phony Public Interest Trade Advisory Committees.
Global Trade needs to be Transformed
The globalization of trade has resulted in record trade deficits for the United States, loss of jobs and enforcement of neo-liberal economic ideology on people around the world. It has destroyed agriculture in foreign countries, resulted in a race to the bottom in wages and permitted environmental destruction. It is a record of failure. The time is now to look honestly at the last two decades of globalized trade and learn from these failures so we can create a new form of trade that better serves the people and planet.
We do not see the suggestions we make in this article on goals of trade and the congressional process as final, rather they are the continuation of a discussion on what trade should look like in the 21st Century. This is a complicated issue and multiple views need to be heard.
Senator Wyden is right to start a debate on what 21st Century trade should look like, but he needs to put these issues on the table more clearly so that before any legislation is introduced multiple views are heard. He should not only be listening to fellow senators, big business and big unions – trade impacts all of us and he needs to open this discussion up so other views are heard.
Let’s enter 21st Century trade negotiation with our eyes open to the actual effects of rigged corporate trade agreements. It’s time to acknowledge the damage and correct past mistakes. Let’s go forward with priorities that will secure a just and sustainable future for everyone.
This article is produced by PopularResistance.org in conjunction with AlterNet. It is a weekly review of the activities of the resistance movement. Sign up for the daily news digest of Popular Resistance, here.