Corporate TPP Factsheet Flurry: Many Sheets, Few Facts
Corporate America has just felled a (closed) national park’s worth of trees to draft 51 fancy, fanciful factsheets in attempt to better sell to a skeptical Congress the controversial Trans-Pacific Partnership (TPP) –the sweeping 12-country “free trade” agreement (FTA) mired in deadline-missing negotiations.
In projecting TPP impacts, the factsheets are heavy on platitudes and light on, well, facts.
The factsheet series was released yesterday by the Business Roundtable (e.g. Goldman Sachs, Verizon, Pfizer, Exxon Mobil), the Coalition of Services Industries (e.g. Halliburton, Walmart, Citigroup), the National Association of Manufacturers (e.g. Lockheed Martin, Merck, Smithfield Foods), the U.S. Chamber of Commerce and other corporate conglomerates. The series posits one set of counterfactual claims, and then replicates them in 50 state-specific variations. The resulting 306-page ream of TPP cheerleading is impressive for its girth, if not its veracity.
Here are the corporate alliances’ three claims about the TPP – sourced from conjecture – followed by some inconvenient and contradictory facts – sourced from data:
1. Claim: The TPP will “expand trade between the United States and existing FTA partners.”
Fact: The U.S. is not even discussing trade expansion (i.e. tariff reduction) with most existing FTA partners in the TPP negotiations. How can something not under discussion be promised as a result of the deal?
Of the 11 countries negotiating the TPP with the United States, six already have FTAs with the U.S.: Australia, Canada, Chile, Mexico, Peru, and Singapore. The U.S. Trade Representative has stated that the U.S. is not negotiating tariff reductions with most of these countries, in part because tariffs with these FTA partners are already relatively low. Despite this, the corporate factsheets state, “the TPP negotiations provide an opportunity to…address a range of important tariff…barriers that currently impede exports to these countries.” Even the TPP-promoting government officials negotiating the deal would have to disagree.
2. Claim: The TPP will “open new markets in countries that are not current FTA partners.”
Fact: U.S. exports have actually suffered under FTAs, not gained. How can we do more of the same and expect different results?
U.S. goods exports to Korea fell 10 percent in the first year of the U.S.-Korea FTA, a template for the TPP that took effect in March 2012. Overall, U.S. export growth has actually been better without FTAs than with them. Growth of U.S. exports to countries that are not FTA partners has exceeded U.S. export growth to countries that are FTA partners by 38 percent over the last decade. Repeating the tired claim that we need FTAs to boost exports does not make it true.
In addition, some of the particular export growth “opportunities” highlighted by the corporate groups require a reality check. For example, they cite New Zealand’s 5% tariff on U.S. lactose products as a barrier that, if only reduced via TPP, would herald an increase in U.S. dairy exports to New Zealand. But U.S. dairy producers fear just the opposite. U.S. dairy producers have lobbied against the reduction of dairy tariffs between New Zealand and the U.S., fearing that it would lead to their displacement, not a new export “opportunity.” The corporate factsheets’ tariff reduction promises are dotted with such inconvenient facts that, like flies on ointment, tarnish the rosy picture painted for Congress.
3. Claim: The TPP will “encourage companies based in TPP countries to increase their business investment in the United States.”
Fact: Study after study has shown no correlation between a country’s foreign investment levels and its willingness to be bound to the extreme sort of investor privileges enshrined in the TPP. With no proven upside, why would we sign up for the proven downside of empowering foreign investors to bypass domestic courts, drag the government to an extrajudicial tribunal, and demand taxpayer compensation for public interest policies that they find inconvenient?
The corporate factsheets identify corporations based in TPP countries with operations in the United States, arguing (despite the evidence) that TPP investor privileges would encourage them to boost their business. In fact, the TPP would empower these foreign firms, on behalf of any of their 30,000 subsidiaries in the U.S., to directly attack U.S. health, financial, environmental and other public interest policies that they view as undermining new foreign investor rights that the TPP would establish. Extrajudicial tribunals, comprised of three private attorneys unaccountable to any electorate, would be authorized to determine the validity of the challenged policies and order unlimited taxpayer compensation if the policies undermined corporations’ “expected future profits.”
This extreme “investor-state” system already has been included in a series of U.S. FTAs, forcing taxpayers to hand more than $400 million to corporations for toxics bans, land-use rules, regulatory permits, water and timber policies and more. Just under U.S. pacts, more than $14 billion remains pending in corporate claims against medicine patent policies, pollution clean ups, climate and energy laws, and other public interest polices. Are these the “barriers” to investment that the corporate alliances hope the TPP will remove?
In the wake of this corporate factsheet flurry, the message to Congress is simple: check the facts. For they are not found on these sheets. And they reveal a truer and uglier picture of the TPP than the corporations’ latest attempt at airbrushing.