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  • Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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December 21, 2013

Get Ready for the 2014 Trade Tsunami

Hard work, smart planning and perseverance made 2013 a year of inspiring fair-trade activism. 

Vibrant grassroots activism and dogged D.C. advocacy resulted in a new level of public and congressional concern about the perils of Fast Track and the Trans-Pacific Partnership (TPP). In November, three of every four Democrats – and a remarkable number of Republicans – publicly stated their opposition to Fast Track trade authority. The extreme procedure is seen as critical by TPP’s corporate boosters because it could railroad the TPP through Congress despite growing concerns about many aspects of the pact.

And, thanks to civil society pressure in Asia and Latin America, the other TPP country governments did not give in to all of the U.S. corporate-inspired demands for medicine monopolies, financial deregulation and expanded corporate investor tribunals in the TPP. As a result, the Obama administration failed to wrap up TPP negotiations in Singapore this month, missing yet another do-or-die, self-imposed deadline for the deal. 

This sets the stage for the most important U.S. political and policy fights on globalization and “trade” in decades, beginning in a few short weeks. The stakes couldn’t be higher.

In the first months of 2014, Congress will decide whether it will maintain its constitutional authority over trade or succumb to White House and corporate demands to give away its power to save us from more damaging “trade” deals.

This week, the Obama administration announced that top priorities for 2014 will be to sign the massive, dangerous TPP it has been negotiating for four years and extract Fast Track trade authority from Congress. The extreme Nixon-era Fast Track procedure would allow the TPP and a Trans-Atlantic Free Trade Agreement (TAFTA) to be signed before Congress approves them with a guarantee that they can be railroaded through Congress with limited debate and no amendments. (TAFTA would empower the European corporations with 24,000 subsidiaries operating here to drag the U.S. government before foreign tribunals to demand taxpayer compensation for U.S. laws they claim undermine their expected future profits.)

Cue the rattling chains: in 2014 we must banish the ghosts of NAFTA, which haunt us still. 

Twenty years ago on New Years’ Day, the North American Free Trade Agreement (NAFTA) went into effect. The World Trade Organization (WTO) opened shop a year later. Unlike past trade pacts, which dealt mainly with cutting tariffs, these agreements included investment rules that incentivized the “offshoring” of American jobs, ushering in a new era of growing U.S. trade deficits. These pacts also granted corporations new powers that raised medicine prices and limited food safety and financial regulation.

Yet despite NAFTA’s devastating track record and the U.S. loss of five million manufacturing jobs since its advent, the White House has decided to double-down on a failed economic experiment. In the TPP and TAFTA, Obama has taken the NAFTA model, injected it with steroids, and invited scores more countries to sign on.

Although there are powerful, deep-pocketed, international forces that will use everything at their disposal to get the trade deals passed, there is hope – and opportunity – for those of us who want to defeat them. 

The fiery international debates over NAFTA and WTO gave birth to a new fair trade movement in our country.  The devastating outcomes triggered by the trade pacts unified ordinary Americans against them. Polls show a majority of Americans – Republicans, Democrats and independents –think these sorts of pacts are bad not only for themselves and their families but for the nation.

And, the harsh lessons of NAFTA were learned worldwide. This certainly contributed to the other TPP countries’ concerns about the NAFTA-on-steroids proposals in the TPP.

But we face a race against time. Will growing public opposition to the TPP in Asian and Latin American countries overcome what President Obama heartbreakingly announced this week will be his new personal effort to seal the deal in the first months of 2014?

Continue reading "Get Ready for the 2014 Trade Tsunami" »

December 20, 2013

Corporate Tribunals: A U.S. / EU Holiday Gift to Foreign Firms?

A moratorium on fracking. A strong anti-smoking cigarette label. A requirement to clean up industrial pollution. A medicine patent policy that could tamp down health costs. A decision to phase out nuclear energy. 

Each of these has been attacked by a foreign corporation using "trade" and investment treaties that allow firms to circumvent domestic legal systems and directly challenge domestic public interest policies before private international tribunals.  Such tribunals, comprised of three lawyers, are currently deciding whether to order governments to hand foreign corporations taxpayer money for each of the health and environmental safeguards above. 

The extraordinary system that enables such assaults on domestic policymaking, known as the investor-state regime, could be vastly expanded by a "trade" deal under negotiation this week between the U.S. and the European Union.  A "trade" deal only in name, the Trans-Atlantic Free Trade Agreement (TAFTA) would empower an unprecedented number of foreign corporations to attack health, environmental, financial, product safety, labor, Internet and other domestic policies in both the U.S. and the EU. Here's a synopsis of what's at stake. 

Empowering Foreign Corporations to Directly Attack Public Protections

U.S. and EU officials have called for TAFTA to grant foreign firms the power to directly attack domestic health, financial, environmental and other public interest policies that they view as undermining new foreign investor privileges and rights that TAFTA would establish. TAFTA could empower individual foreign corporations to drag the U.S. and EU governments before extrajudicial tribunals, comprised of three private attorneys, that would be authorized to order unlimited taxpayer compensation for domestic policies or government actions perceived as undermining firms’ “expected future profits.”  

This extreme “investor-state” system already has been included in U.S. “free trade” agreements, forcing taxpayers to pay firms more than $400 million for toxics bans, land-use rules, regulatory permits, and water and timber policies. Just under U.S. pacts, more than $14 billion remains pending in corporate claims against medicine patent policies, pollution cleanup requirements, climate and energy laws, and other public interest polices.

TAFTA could vastly expand the investor-state threat, given the thousands of corporations doing business in both the United States and EU that would be newly empowered to attack standards and safeguards. More than 3,300 EU parent corporations own more than 24,200 subsidiaries in the United States, any one of which could provide the basis for an investor-state claim. This exposure to investor-state attacks far exceeds that associated with all other U.S. “free trade” agreement partners. Similarly, the EU could be exposed to a potential wave of investor-state cases from any of the more than 14,400 U.S.-based corporations that own more than 50,800 subsidiaries in the EU. In sum, TAFTA could newly enable corporate attacks on behalf of any of the U.S. and EU’s 75,000 cross-registered firms.

The EU is proposing for TAFTA an even more radical version of investor privileges than that found in past U.S. pacts. But even if TAFTA would simply replicate the sweeping terms of past agreements, thousands of corporations would gain a new tool to undermine the policies on which we all rely. Consider these extreme features:

Continue reading "Corporate Tribunals: A U.S. / EU Holiday Gift to Foreign Firms?" »

December 19, 2013

Monsanto’s Plan B: A Backdoor to Genetically Modified Food

One week ago, the governor of Connecticut signed into law the country's second genetically modified organism (GMO) labeling policy, following one approved in Maine (both require adoption of GMO labeling laws in neighboring states to take effect). The movement demanding the right to know when food is genetically modified has gained steam recently, pushing more than half of U.S. states to consider labeling initiatives. As Connecticut Governor Malloy stated upon signing last week's bill, "This is not a movement you are going to stop."

But that doesn't mean that the likes of Monsanto aren't trying.  The latest tool sought by GMO corporations to ensure unimpeded and unlabeled production and consumption of GMO products is a sweeping "trade" deal under negotiation this week between the U.S. and the European Union.  A “trade” deal only in name, the Trans-Atlantic Free Trade Agreement (TAFTA) would require the United States and EU to conform domestic financial laws and regulations, climate policies, food and product safety standards, data privacy protections and other non-trade policies to TAFTA rules.

We profiled recently the top ten threats this deal poses to U.S. consumers.  Here's how TAFTA could threaten GMO limits and labels.   

The EU/U.S. TAFTA Agenda: Deregulation in Disguise

U.S. and EU TAFTA negotiators, advised by the world’s largest agribusinesses, have used coded language in pushing for TAFTA rules that could chill attempts to label food containing GMOs and government approvals of GMO seeds and cultivation of GMO crops. A majority of European consumers and a plurality of U.S. consumers are concerned about the impacts of genetically modified food and crops on human health and the environment.

The EU requires GMO seed approvals that are based on the precautionary principle – that in the face of uncertainty about a product’s safety for consumers or the environment, policies must seek to avoid exposure to risk. Governments have long relied on this principle to shield their populations from uncertain risks from new or emerging products. The U.S. drug safety system is based on the precautionary principle. Thus, drugs must be proved safe before they are permitted on the U.S. market. As a result, the United States did not allow sale of the morning sickness drug Thalidomide in the 1960s, which prevented a generation of children from being born with severe birth defects. In countries where medicines were allowed on the market before being proved safe, thousands of “thalidomide babies” were born.  

The EU GMO approval policy requires that a seed/crop must be assessed for its consumer health and environmental implications before it can be marketed. Moreover, EU member countries maintain the authority to altogether ban cultivation of GMOs, which nine nations have done. In addition, the EU and an increasing number of U.S. states have responded to consumers’ demands for GMO labels that allow people to choose whether or not to consume GMO foods.

However, U.S. and EU negotiators are now proposing TAFTA rules that could undermine both precautionary principle-based approvals for GMO seeds and cultivation and GMO labeling. U.S. negotiators have stated that TAFTA should “seek to eliminate or reduce non-tariff barriers…such as sanitary and phytosanitary (SPS) restrictions that are not based on science.” Translated out of trade jargon, this means that instead of agribusinesses being required to prove that a GMO seed does not pose a threat before it can be sold, limits on GMO seeds or cultivation would only be permitted under TAFTA rules if governments can show that there is scientific evidence of a specific threat to human, animal or plant life. Not only would this endanger the EU GMO approval process, but it would directly undermine the current rights of EU member states to ban cultivation of GMOs.

Continue reading "Monsanto’s Plan B: A Backdoor to Genetically Modified Food" »

December 18, 2013

TAFTA Studies Project Tiny Economic Gains, Assume No Costs from Gutting Safeguards

Over the last several days we've highlighted the threats that a new U.S.-EU "trade" deal, under negotiation this week, could pose to food safety, financial stability, and efforts to rein in climate change.  A “trade” deal only in name, the Trans-Atlantic Free Trade Agreement (TAFTA) would require the United States and EU to conform domestic financial laws and regulations, climate policies, food and product safety standards, data privacy protections and other non-trade policies to TAFTA rules.

To sell such a dramatic rewrite of domestic safeguards to U.S. and EU policymakers and the general public, corporate lobby groups and TAFTA negotiators contend that the deal would bring economic benefits. TAFTA’s corporate proponents repeatedly point to a few theoretical studies to justify claims of increased national income resulting from the deal.

These studies use many dubious assumptions, questioned by economists at institutions such as the UN, to project TAFTA’s economic impact. Similar studies, when used for prior pacts, have produced vastly inaccurate predictions of gains. But even if one accepts all such assumptions regardless of their basis in reality, the studies project negligible economic “benefits” from TAFTA. Meanwhile, they ignore TAFTA’s likely costs to consumers, workers and the environment, despite the abundant evidence of such costs resulting from prior pacts.

Pro-TAFTA Study Projects Trade “Benefit” of Three Cents per Day

A standard argument for “free trade” agreements is that such deals reduce tariffs, thereby expanding trade, and that the benefit to all from access to cheaper imports outweighs the damage to those who lose their jobs. But tariffs between the United States and the EU are “already quite low,” as acknowledged by the U.S. Trade Representative. The EU and U.S. officials promoting TAFTA have readily stated that TAFTA’s primary goal is not tariff reduction, but the “elimination, reduction, or prevention of unnecessary ‘behind the border’” policies, such as domestic financial regulations, climate policies, food safety standards and product safety rules. 

That is why studies focused on the impact of TAFTA’s possible tariff reduction have produced meager estimates of any economic impact. Under the most optimistic scenario envisioned by a frequently cited pro-TAFTA study by the European Centre for International Political Economy, TAFTA tariff reductions would result in an estimated 1 percent increase in U.S. gross domestic product (GDP). But that estimate is unrealistically high, given that it assumes a contentious proposition of tariff reductions causing strong “dynamic” economic growth, a dubious theory at best. Noted academics have repeatedly cited empirical evidence showing no such trade-growth causation.  By omitting this assumption, the study notes that the theoretical TAFTA-prompted increase in U.S. GDP of $182 billion drops to just $20.5 billion, a 0.1 percent blip in what is projected to be an $18.3 trillion U.S. economy in the assumed year of TAFTA implementation. By comparison, economists estimate that the introduction of the fifth version of Apple’s iPhone delivered a GDP increase up to five times higher than the projected TAFTA effect.

TAFTA’s trivial trade impact shrinks even further when considering what the deal would mean in terms of actual income. The pro-TAFTA study projects that total annual U.S. national income would be just $4.6 billion higher under the deal. Even this number is unrealistic, given that it assumes that 100 percent of existing tariffs between the EU and the U.S. would be fully eliminated under the deal, an unlikely scenario given that the EU has already stated that sensitive products should be afforded exemptions from tariff reductions.  But proceeding with this inflated figure still results in deflated “benefits.” After adjusting for inflation and population growth in the years before the pact would be fully implemented, the projected $4.6 billion boost would amount to an extra three cents per person per day

Studies Ignore Costs, Use Big Assumptions to Project Tiny Gains from Weakened Safeguards

Several other studies touted by pro-TAFTA officials and industry associations focus not on the reduction of tariffs but on the deal’s central goal of reducing health, financial, environmental and other public interest regulations that have been euphemistically renamed “non-tariff barriers” or “trade irritants.” Leaked EU position papers reveal that TAFTA could include obligations for products and services that do not comply with such domestic safeguards to be allowed under processes called “equivalence” and “mutual recognition,” or obligations to actually alter domestic U.S. and EU policies to conform to new trans-Atlantic standards negotiated to be more convenient to business.  

Pro-TAFTA studies ignore the proven costs of such safeguard weakening while employing models based on the unproven business mantra that curtailing health, safety and environmental regulations would produce economic benefits for everyone. Despite such lopsided calculations, the studies still produce meager projections for TAFTA’s economic gains. An oft-cited pro-TAFTA study, commissioned by the European Commission and prepared by the Centre for Economic Policy Research, estimates that, if public interest regulations are significantly diluted or eliminated, TAFTA could produce a 0.2 – 0.4 percent increase in U.S. GDP (a $66 – 126 billion addition in 2027).

To arrive at this estimate of a smaller TAFTA gain than was delivered by the latest iPhone, the study assumes that up to one out of every four non-tariff barriers – which, according to the study, could include Wall Street regulations, food safety standards and carbon controls – would be reduced or eliminated. (The study acknowledges that some safeguards could not reasonably be slated for dismantling because doing so “may require constitutional changes…; because there is a lack of sufficient economic benefit to support the effort;...because of consumer preferences…; or due to other political sensitivities.”) To generate projections of economic gains from such safeguard dismantling, the study employs a methodology that UN economists have criticized as inchoate and unreliable: using an assumptions-laden computable general equilibrium model to study non-tariff policies.

In addition to the social and environmental toll that would result from such a degradation of health, safety, environmental, and other public interest standards, such regulatory weakening would also result in quantifiable monetary costs for U.S. consumers and the broader economy. The study ignored such costs.

For example, in the financial sector, the study names the Sarbanes-Oxley Act of 2002 as a “non-tariff barrier” on the target list of European businesses and officials. The Act created enhanced accounting and anti-fraud standards to prevent a recurrence of the Enron, WorldCom, and other corporate accounting scandals that destroyed billions of dollars of U.S. investments. The study also lists as a barrier U.S. “regulatory capital requirements,” which limit financial firms’ ability to take on risky bets that could lead to bankruptcy and financial instability. Indeed, the EU’s top financial regulator, Michel Barnier, has repeatedly criticized proposed U.S. capital requirements for foreign-owned banks – designed to rein in the excessive risk-taking that led to the Great Recession – while calling for such Wall Street reforms to be subject to TAFTA negotiations. Undermining such critical financial reregulation via TAFTA would heighten the risk of more accounting scandals or another financial crisis, threatening dire impacts on the real economy. Such risks hardly seem worth a small, speculative blip in GDP.  

December 17, 2013

A Clean Energy Future or another Dirty Deal?

Last month, just before the international climate change conference in Warsaw, super typhoon Haiyan struck the Philippinnes as the strongest tropical typhoon to make landfall on record.  As Filipinos grappled with the death of thousands and displacement of millions, advocates and policymakers amplified their calls for the serious policy changes needed to curb greenhouse gas emissions and halt the march toward unmitigated climate change. 

This month, such climate change initiatives could be undermined by talks on a new U.S.-EU "trade" deal.  The leaked agenda for the deal reveals how it could not only constrain governments from taking new, bold action on climate change, but make it easier for fossil fuel corporations to roll back existing green policies. 

Negotiators from both sides of the Atlantic are converging in Washington, D.C. this week for a third round of talks on the Trans-Atlantic Free Trade Agreement (TAFTA).  What is TAFTA?  A “trade” deal only in name, TAFTA would require the United States and EU to conform domestic financial laws and regulations, climate policies, food and product safety standards, data privacy protections and other non-trade policies to TAFTA rules. 

We profiled recently the top ten threats this deal poses to U.S. consumers.  Here's a synopsis of how TAFTA's expansive agenda jeopardizes efforts to rein in the destructive effects of climate change. 

The EU/U.S. TAFTA Agenda: Deregulation in Disguise

U.S. and EU TAFTA negotiators, advised by the world’s largest oil and coal corporations, have used coded language in pushing for TAFTA rules that could roll back critical climate and energy initiatives such as:

  • Fuel efficiency standards: The U.S. and EU governments now are requiring automobile manufacturers to progressively boost fuel efficiency to meet emissions-reducing targets. But a leaked EU position paper reveals that EU negotiators are pushing for TAFTA to eliminate such mandatory standards: “Such standards ought in principle to be left voluntary, in order to allow sufficient flexibility for industry to choose the technical solution that best fits its needs.” That is, corporations should pick their own emissions standards.
  • Buy Green policies: Leaked EU procurement demands reveal that TAFTA could impose “disciplines” on environmental requirements that federal and state governments include in procurement contracts. Requirements that taxpayer-funded, government-purchased products be made according to low-carbon standards or that government agencies purchase a share of renewable-source energy, for example, could be exposed to challenge under the deal.  
  • Fracking regulation: A leaked EU position paper demands that TAFTA require “the elimination of export restrictions” for “natural gas” and other fossil fuels. Indeed, if TAFTA were to take effect, due to a decades-old loophole, the U.S. Department of Energy could lose its authority to determine whether exporting natural gas to the EU – the world’s largest natural gas importer – is in the public interest. A resulting surge in natural gas exports could raise energy prices for U.S. consumers and ramp up the chemical-laden practice of fracking, threatening our air and water.

Corporations’ TAFTA Agenda: Deregulation without Disguise

European and U.S. oil, auto, airline and other corporations, in their formal demands issued to TAFTA negotiators, have been remarkably candid in naming the specific U.S. and EU climate regulations that they would like to see dismantled:

  • Tar sands oil: To reduce greenhouse gas emissions of fuels used in road vehicles and non-road machinery, the EU Fuel Quality Directive sets reporting rules on fuel suppliers, including a requirement to report the lifecycle greenhouse gas emissions from supplied fuels. A proposed methodology for this lifecycle analysis would identify highly carbon-intensive fuel, such as that slated for shipment from Canadian tar sands to U.S. refineries, including potentially through the proposed Keystone XL pipeline. The American Fuel and Petrochemical Manufacturers, representing oil corporations such as Chevron and Exxon Mobil, explicitly requested that U.S. negotiators use TAFTA to halt the proposed EU tar sands standard, arguing that it “constitutes a discriminatory action against U.S. refiners.” That is, TAFTA should foreclose the use of policies to fully measure and better control emissions while expanding trade in dirty fossil fuels. U.S. Trade Representative Michael Froman has informed Congress that in TAFTA negotiations, “we continue to press the [European] Commission to take the views of stakeholders, including U.S. refiners, under consideration…”
  • Auto emissions: The EU and U.S. auto industries, represented by the American Automotive Policy Council and European Automobile Manufacturers Association, have stated that TAFTA negotiators (not the U.S. Congress and the EU Parliament) should have the power to create a new singular set of “environmental regulations.” They specifically recommend changing domestic regulations in “tailpipe criteria pollutants,” “diesel smoke,” and “real driving emissions” in a way that “could be beneficial for the industry.” 
  • Airline emissions: Airlines for America, the biggest U.S. airline industry association, has offered a list of "needless regulations [that] impose a substantial drag on our industry" – regulations that they hope can be dismantled via TAFTA. First on their list is the EU Emissions Trading Scheme, Europe’s central climate change policy, which required airlines to pay for carbon emissions. Airlines for America labeled the policy as a “barrier to progress,” asking that the program’s current temporary suspension be made permanent.  
  • Alternative fuels: BusinessEurope, representing European oil corporations such as BP, has asked that TAFTA be used to ban U.S. climate initiatives such as tax credits for alternative, climate-friendly fuels.  In its formal comments on TAFTA, under the heading of “Climate change and energy,” the business conglomerate states, “US fuel tax credits and Cellulosic Biofuel Producer Credit should become impossible in the future.”  The TAFTA-threatened tax credits incentivize producers to invest in algae-based and other emerging fuels that reduce carbon emissions.

Investor Privileges: Dirty Energy Corporations Empowered to Directly Attack Clean Energy Policies

U.S. and EU corporations and officials have called for TAFTA to grant foreign firms the power to skirt domestic courts, drag the U.S. and EU governments before extrajudicial tribunals, and directly challenge climate policies that they view as violations of TAFTA-created foreign investor “rights.” The tribunals, comprised of three private attorneys, would be authorized to order unlimited taxpayer compensation for domestic policies perceived as undermining the “expected future profits” of oil, gas, coal or nuclear firms. This is not a hypothetical threat. Under NAFTA, firms have filed such cases against a renewable energy feed-in tariff and a moratorium on fracking. The Swedish Vattenfall corporation has launched such attacks on Germany’s regulation of coal-fired electricity plants and phase-out of nuclear energy, demanding billions in compensation. Such extreme “investor-state” rules have already been included in U.S. “free trade” agreements, forcing taxpayers to pay corporations more than $400 million 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 cleanup requirements, climate and energy laws, and other public interest polices. The EU is proposing an even more radical version of these rules for TAFTA, offering firms a new tool to roll back climate policies.

Fast Track: Railroading Democracy to Railroad Safeguards?

How could a deal like TAFTA get past Congress? With a democracy-undermining procedure known as Fast Track – an extreme and rarely-used maneuver that empowered executive branch negotiators, advised by large corporations, to ram through unfair “trade” deals by unilaterally negotiating and signing the deals before sending them to Congress for an expedited, no-amendments, limited-debate vote. As a candidate, President Obama said he would replace this expired, anti-democratic process. But now he is asking Congress to grant him Fast Track’s extraordinary authority – in part to sidestep growing public and congressional concern about pacts like TAFTA. We must ensure that Fast Track never again takes effect and instead create an open, inclusive process for negotiating and enacting trade agreements in the public interest. 

December 16, 2013

A Deal Only Wall Street Could Love

Last week, U.S. financial regulators took a step toward reining in some of the Wall Street risk-taking that led to the financial crisis by finalizing the Volcker Rule, designed to stop banks from engaging in risky, hedge-fund-like bets for their own profit.   

But this week, EU and U.S. trade negotiators could move in the opposite direction, pursuing an agenda that could thwart such efforts to re-regulate Wall Street.  

Negotiators from both sides of the Atlantic are converging in Washington, D.C. this week for a third round of talks on the Trans-Atlantic Free Trade Agreement (TAFTA).  What is TAFTA?  A “trade” deal only in name, TAFTA would require the United States and EU to conform domestic financial laws and regulations, climate policies, food and product safety standards, data privacy protections and other non-trade policies to TAFTA rules. 

We profiled recently the top ten threats this deal poses to U.S. consumers.  One area of particular concern is how TAFTA's expansive agenda implicates regulations to promote financial stability.  Here's a synopsis. 

The EU/U.S. TAFTA Agenda: Deregulation in Disguise

U.S. and EU TAFTA negotiators, advised by Wall Street banks and EU financial conglomerates, have made clear their intent to use TAFTA to roll back the financial reforms enacted in the wake of the global financial crisis. EU negotiators have explicitly called for new “disciplines” on financial regulations to be included in TAFTA. They have listed the Volcker Rule, state-level regulation of insurance and the Federal Reserve’s proposed rules for foreign banks as particular targets for regulatory rollback. U.S. negotiators have proposed regulatory disciplines under another name: “market access” rules that simply ban many common forms of financial regulation, even if applied to domestic and foreign firms equally. The U.S. plan to include such restrictions in TAFTA conflicts with:

  • Initiatives to ban various risky financial services or products, such as certain derivatives
  • Efforts to put size limitations on banks so that they do not become “too big to fail”
  • Proposals to “firewall” different financial services (a policy tool used to limit the spread of risk across sectors, as Glass-Steagall did between commercial and investment banking)

The pact’s rules could also ban financial transaction taxes (e.g. the proposed “Robin Hood tax”) or capital controls, endorsed by the International Monetary Fund, to curb financial speculation’s destructive impact.

The Bankers’ TAFTA Agenda: Deregulation without Disguise

The European and U.S. banks, in their formal demands issued to TAFTA negotiators, have been remarkably candid in naming the specific U.S. and EU financial regulations that they would like to see dismantled via TAFTA.  Here’s a sampling of the regulatory rollbacks the banks hope for in TAFTA, as stated by the banks themselves:

  • Exempt banks from regulations: The U.S. Securities Industry and Financial Markets Association – a conglomerate of Wall Street firms like AIG, Citigroup, JP Morgan, Bank of America and Goldman Sachs – suggests that via TAFTA, U.S. and EU governments could simply “agree to exempt financial services firms of the other party from certain aspects of its regulatory regime with respect to certain transactions, such as those with sophisticated investors.” That is, so long as foreign banks are dealing with “sophisticated” investors, regulators need not bother with regulating the banks.
  • Weaken the Volcker Rule: The Association of German Banks has made clear it has “quite a number of…concerns regarding the on-going implementation of the Dodd-Frank Act (DFA) by relevant US authorities,” referring to the Wall Street reform enacted in the wake of the financial crisis. The banking conglomerate includes Deutsche Bank, a German megabank that received hundreds of billions of dollars from the U.S. Federal Reserve in exchange for mortgage-backed securities in the aftermath of the crisis. The German banking behemoth particularly takes issue with the Volcker Rule, designed to keep banks from taking risky bets with federally-insured funds for their own profit, calling the centerpiece of Wall Street reform “much too extraterritorially burdensome for non-US banks.”   
  • Outsource risk regulation: The European Services Forum, a banking conglomerate including Germany’s Deutsche Bank, has stated that TAFTA should prevent U.S. regulators from placing tougher regulations on too-big-to-fail foreign banks operating in the United States unless foreign government entities do so first: “we think that it should not be possible for a company operating globally to be designated as a systemically important financial institution (SIFI) in a foreign jurisdiction but not in its domiciliary jurisdiction.”
  • Remove state-level leverage limits: Insurance Europe, a collection of Europe’s largest insurance firms, has stated its hope that TAFTA can be used to  “remove” collateral requirements enacted by U.S. states to keep insurance corporations from taking on risky degrees of leverage: “Insurance Europe would like to see equal treatment for financially secure well regulated reinsures regardless of their place of domicile with statutory collateral requirements removed.”

Investor Privileges: Empowering Banks’ Deregulatory Push

U.S. and EU corporations and officials have called for TAFTA to grant foreign banks the power to skirt domestic courts, drag the U.S. and EU governments before extrajudicial tribunals, and directly challenge domestic financial safeguards as violations of TAFTA-created foreign investor “rights.” The tribunals, comprised of three private attorneys, would be authorized to order unlimited taxpayer compensation for financial regulations perceived as undermining banks’ “expected future profits.” Such extreme “investor-state” rules have already been included in U.S. “free trade” agreements, forcing taxpayers to pay corporations more than $400 million 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 cleanup requirements, climate and energy laws, and other public interest polices. The EU is proposing an even more radical version of these rules for TAFTA, further empowering banks’ efforts to return to the deregulatory era that led to financial crisis. 

Fast Track: Railroading Democracy to Railroad Safeguards?

How could a deal like TAFTA get past Congress? With a democracy-undermining procedure known as Fast Track – an extreme and rarely-used maneuver that empowered executive branch negotiators, advised by large corporations, to ram through unfair “trade” deals by unilaterally negotiating and signing the deals before sending them to Congress for an expedited, no-amendments, limited-debate vote. As a candidate, President Obama said he would replace this expired, anti-democratic process. But now he is asking Congress to grant him Fast Track’s extraordinary authority – in part to sidestep growing public and congressional concern about pacts like TAFTA. We must ensure that Fast Track never again takes effect and instead create an open, inclusive process for negotiating and enacting trade agreements in the public interest. 

December 13, 2013

This Deal Could Make You Sick: A Backdoor for Food Contamination

Next week, the safety of our food could be up for negotiation.  

In case you missed it, negotiators from the European Union and the Obama administration will converge in Washington, D.C. next week for a third round of talks on the Trans-Atlantic Free Trade Agreement (TAFTA).  What is TAFTA?  A “trade” deal only in name, TAFTA would require the United States and EU to conform domestic financial laws and regulations, climate policies, food and product safety standards, data privacy protections and other non-trade policies to TAFTA rules. 

We profiled recently the top ten threats this deal poses to U.S. consumers.  One area of particular concern is how TAFTA's expansive agenda implicates food safety.  Here's a synopsis. 

The EU/U.S. TAFTA Agenda: Deregulation in Disguise

U.S. and EU TAFTA negotiators, advised by the world’s largest agribusinesses, have used coded language in pushing for TAFTA rules that could roll back food safety standards. A leaked EU position paper reveals that EU negotiators are pushing for TAFTA to impose sweeping restrictions on food safety policies by mandating that such measures “must be applied only to the extent necessary to protect human, animal, or plant life or health.” Such terms would enable foreign governments to second-guess the “necessity” of domestic safety standards. U.S. negotiators have called for parallel TAFTA restrictions. Some members of Congress have even openly called for TAFTA to do away with “spurious” sanitary regulations, asking that TAFTA-created tribunals be empowered to rule on the validity of domestic food safety standards challenged by foreign governments.

Food Corporations’ TAFTA Agenda: Deregulation without Disguise

European and U.S. food corporations, in their formal demands issued to TAFTA negotiators, have been remarkably candid in naming the specific U.S. and EU safety regulations that they would like to see dismantled via TAFTA.  Here is their wishlist for food safety rollbacks, as stated by the corporations themselves:

  • Contaminated food: BusinessEurope, Europe’s largest corporate group, states, “Key non-tariff barriers affecting EU exports to the US include the US Food Safety Modernization Act.” The landmark 2011 law authorizes the U.S. Food and Drug Administration to recall contaminated food, a prerogative that European corporations would apparently like to see removed via TAFTA. 
  • Questionable meat: The EU corporations in BusinessEurope also state consternation with U.S. “import restrictions on uncooked meat products.” The loosening of such restrictions would allow more European meat to enter the United States at a time when many European countries are eliminating regular meat inspections – a fact that likely contributed to the 2013 scandal in which meat exported by the United Kingdom as “beef” was found to be horse meat.
  • Chlorinated chicken: The U.S. meat industry has stated its annoyance that EU consumers and regulators do not wish to eat meat products treated with “hyperchlorination and organic acids,” as spelled out by the North American Meat Association. Europe’s stronger safety standards limit poultry products’ exposure to contaminants during slaughter and processing. U.S. rules allow for more possibility of contamination, and then for chicken to be treated with antimicrobial chemicals such as chlorine to kill E. coli and other microbes afterward. The corporate group laments that “only the application of water and steam are permitted for use on meat carcasses by the EU.” Yum! Restaurants International, the owner of Kentucky Fried Chicken, has seconded this concern, asking that TAFTA be used to change EU food safety standards so that the company can sell Europeans chlorinated chicken.
  • Weaker U.S. Grade A dairy safety standards: The U.S. safety standards for Grade A milk have been listed as a TAFTA target by EU agribusinesses. The European Association of Dairy Trade acknowledges that the standards “were devised as a means of addressing the risk of food borne illnesses...”  But the industry group then complains that complying with the standards “is both highly cumbersome and expensive.”
  • Ractopamine growth-drug-fed pork: The American Meat Institute protests that “the EU continues to maintain its unjustified ban on meat produced with beta-agonist technologies, such as Ractopamine Hydrochloride.” Ractopamine is a drug approved in the United States to increase beef, turkey and pork muscle mass. It has been banned or limited in 160 nations (including EU member countries, Russia, and China) due to potential risks to human and animal health. The National Pork Producers Council has made clear that TAFTA should be the vehicle for erasing the EU ractopamine ban: “U.S. pork producers will not accept any outcome other than the elimination of the EU ban on the use of ractopamine in the production process...”
  • Fruits with higher pesticide residue: The California Table Grape Commission “is also concerned about European pesticide maximum residue levels (MRLs)…many of the MRLs established are at levels significantly lower than corresponding U.S. MRLs.” CropLife America, an agribusiness conglomerate that includes Monsanto, similarly complains that the EU does not allow as much pesticide residue on food as the United States permits – a “trade barrier” to be dismantled via TAFTA. The corporate alliance takes issue with European limits on pesticides that contain “endocrine disrupters” – a type of chemical linked with cancer and birth defects – complaining that European restrictions on such toxins “prevent U.S. agricultural and food products from entering the EU.”

Investor Privileges: Agribusinesses Empowered to Attack Food Safety Laws Directly

U.S. and EU corporations and officials have called for TAFTA to grant foreign firms the power to skirt domestic courts, drag the U.S. and EU governments before extrajudicial tribunals, and directly challenge food safety laws that they view as violations of TAFTA-created foreign investor “rights.” The tribunals, comprised of three private attorneys, would be authorized to order unlimited taxpayer compensation for domestic policies perceived as undermining agribusiness firms’ “expected future profits.” Such extreme “investor-state” rules have already been included in U.S. “free trade” agreements, forcing taxpayers to pay firms more than $400 million 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 cleanup requirements, climate and energy laws, and other public interest polices. The EU is proposing an even more radical version of these rules for TAFTA, offering firms a new tool to roll back food safety rules.

Fast Track: Railroading Democracy to Railroad Safeguards?

How could a deal like TAFTA get past Congress? With a democracy-undermining procedure known as Fast Track – an extreme and rarely-used maneuver that empowered executive branch negotiators, advised by large corporations, to ram through unfair “trade” deals by unilaterally negotiating and signing the deals before sending them to Congress for an expedited, no-amendments, limited-debate vote. As a candidate, President Obama said he would replace this expired, anti-democratic process. But now he is asking Congress to grant him Fast Track’s extraordinary authority – in part to sidestep growing public and congressional concern about pacts like TAFTA. We must ensure that Fast Track never again takes effect and instead create an open, inclusive process for negotiating and enacting trade agreements in the public interest.

December 12, 2013

The Top 10 Threats of the Trans-Atlantic “Trade” Deal To U.S. Consumers

Next week negotiators from the European Union and the Obama administration will converge in Washington, D.C. for a third round of talks on the Trans-Atlantic Free Trade Agreement (TAFTA). How might this immense deal impact you and your community?  To answer, we've dug through hundreds of pages of corporations' formal requests for the deal (which reads like a candid deregulatory wishlist) and decoded months of opaque government statements about the pact's controversial content.  Here we present a TAFTA 101 overview, including TAFTA's top 10 threats to U.S. consumers, to be followed by deeper looks at the particular financial, environmental, and consumer safeguards that TAFTA threatens. 

TAFTA 101

A “trade” deal only in name, TAFTA, which corporate proponents have tried to rebrand as the Transatlantic Trade and Investment Partnership (TTIP), would require the United States and EU to conform domestic food and product safety standards, financial regulations, climate policies, data privacy protections and other non-trade policies to TAFTA rules – rules being negotiated in secret.

TAFTA negotiations focus on demands by large corporations on both sides of the Atlantic to remove consumer and environmental safeguards that they dub as “trade irritants.” TAFTA rules are being negotiated behind closed doors. About 600 official U.S. corporate trade advisors are being provided access to documents and decision-makers, while the public and press are locked out.

Some products and services that do not meet U.S. health and safety standards could be allowed into our markets.  Other provisions could require U.S. regulations to conform to new trans-Atlantic standards negotiated to be more convenient to business, instead of standards developed by state and national laws over decades.

These constraints on U.S. domestic policy would be binding. Once TAFTA took effect, even if public opinion came out strongly against the weakening of safeguards or if the federal government changed, TAFTA’s terms could only be altered if all signatory nations agreed. Failure to comply with the new rules could result in trade sanctions against the United States or orders to compensate firms that claimed their newly established rights were violated. TAFTA negotiators have stated a goal of finishing the sweeping deal by the end of 2014.

TAFTA's Top 10 Threats to U.S. Consumers

1.  Attacks by foreign corporations on our local, state, and federal policies: European-based corporations that own more than 24,000 subsidiaries in the United States would be empowered to bypass U.S. courts and directly challenge the U.S. government before foreign tribunals. Comprised of three private attorneys, the extrajudicial tribunals would be authorized to order taxpayer compensation for public interest policies that European corporations claim undermine their TAFTA investor rights. Foreign companies have used such privileges in past “trade” deals to attack renewable energy policies, bans on toxins, medicine patent standards, financial regulations and land-use and other non-trade policies, extracting $3.5 billion so far from taxpayers under U.S. deals.

2.  Rollback of financial reforms: EU negotiators have explicitly called for TAFTA to roll back Wall Street reforms with new “disciplines” that would limit the regulation of banking, securities and insurance. They have explicitly targeted the Volcker Rule (a ban on hedge-fund-style trading by commercial banks), the Federal Reserve’s proposed rules for foreign banks, and state-level regulation of insurance. U.S. negotiators, advised by Wall Street banks, have also proposed TAFTA rules that conflict with proposals to ban toxic derivatives, limit the size of too-big-to-fail banks, enact financial transaction taxes and reinstate the Glass-Steagall Act.

3.  Tainted milk: European agribusiness corporations have listed U.S. safety standards for Grade A milk as an “obstacle” that they hope can be removed via TAFTA. The European Association of Dairy Trade acknowledges that the standards “were devised as a means of addressing the risk of food borne illnesses,” but the industry group hopes the standards can be weakened because the process for complying with them “is both highly cumbersome and expensive.”

4.  Dirty fuel: BusinessEurope, representing European oil corporations such as BP, has asked that TAFTA ban tax credits for alternative, more climate-friendly fuels like algae–based and other emerging fuels that reduce carbon emissions. The corporations openly state, “US fuel tax credits and Cellulosic Biofuel Producer Credit should become impossible in the future.”

5.  Unsafe medicines: European pharmaceutical manufacturers have called for the U.S. Food and Drug Administration to relinquish its current responsibility to independently approve the safety of medicines sold in the United States. They propose that the U.S. government automatically accept a European determination that a drug produced in Europe is safe for U.S. consumers.

6.  Invasion of data privacy: U.S. technology and communications corporations have bluntly asked that TAFTA make it easier for them to gather our personal information – mobile, location, social, PC and offline – and data mine it to create ongoing tracking and targeting profiles of consumers. Firms do not want meaningful privacy safeguards that would put consumers’ information off limits. The U.S. Council for International Business, which includes corporations like Verizon that have handed U.S. citizens’ personal data to the National Security Agency en masse, has stated that TAFTA “should include commitments that data can flow unimpeded across borders except for limited and well-defined public policy exceptions. The agreement should seek to circumscribe exceptions, such as security and privacy, to ensure they are not used as disguised barriers to trade.”

7.  Loss of local job creation through “Buy Local” rules: The EU intends to use the deal to ban popular Buy American and Buy Local policies that ensure that U.S. government projects are used to create U.S. jobs. While past “trade” deals have restricted some Buy American policies, the EU hopes that TAFTA can be used to go further and eliminate Buy Local policies used by state and local governments to reinvest tax dollars to create jobs at home. In a leaked position paper, the EU explicitly names 13 U.S. states and 23 U.S. cities it is targeting for rollback of Buy Local policies.

8.  Unlabeled genetically-modified food: About half of U.S. states now have legislation to label food containing genetically-modified organisms (GMOs). Unable to stop this trend domestically, GMO-producing firms like Monsanto are pushing for TAFTA to quash GMO labels. The National Confectioners Association bluntly states, “US industry also would like to see the US-EU FTA achieve progress in removing mandatory GMO labeling and traceability requirements.” The TAFTA rules advocated by U.S. firms to roll back EU regulation of GMOs could be used to counter the increasing moves by U.S. state legislatures and federal regulators to label genetically-modified food.

9.  Expensive medicines: The Pharmaceutical Research and Manufacturers of America (PhRMA), the powerful lobby group for U.S. pharmaceutical corporations like Pfizer, is pushing to limit the ability of the U.S. and EU governments to negotiate lower health care costs for taxpayer-funded health care programs through TAFTA. The U.S. government uses such measures to lower medicine costs for veterans and others. The Obama administration has proposed to do the same to limit rising Medicare costs.

10.  Dangerous toys: European toy corporations (represented by the Toy Industries of Europe) have recognized that there are differences between EU and U.S. toy safety regulations, including “flammability, chemical and microbiological hazards.” However, their stated goal is for U.S. parents to trust the safety of toys inspected abroad. The corporations hope to use TAFTA to overcome what they “expect” to be consumers’ “strong reluctance to accept the methods and requirements applying in [sic] the other side of the Atlantic.”

December 11, 2013

Ecuador’s Highest Court vs. a Foreign Tribunal: Who Will Have the Final Say on Whether Chevron Must Pay a $9.5 Billion Judgment for Amazon Devastation?

Investor-State Tribunal of Three Private Lawyers Ignores Years of U.S. and Ecuadorian Court Rulings, Tries to Extinguish Indigenous Communities’ Rights to Sue Chevron for Contamination

Last month, after a legal battle spanning two decades and two countries, Ecuador’s highest court upheld a ruling against Chevron that found the U.S. oil giant responsible for the contamination of a Rhode-Island-sized section of Ecuador’s Amazon.  The court ordered Chevron to pay $9.5 billion, which would provide afflicted indigenous communities with the clean-up and health care they desperately need.

Chevron is seeking to evade this ruling by asking three private sector lawyers to second guess the decision of a sovereign nation’s legal system. 

Vaughan Lowe, Horacio Grigera Naón, and V.V. Veeder -- these are the three men who have assumed the authority to cast aside 20 years of litigation and court rulings against Chevron under two sovereign legal systems.  To consider jettisoning the $9.5 billion ruling against Chevron.  To order Ecuador’s government to violate its own Constitution and block enforcement of a ruling upheld on appeal in its court system.  And, in a decision in September, to declare that rights granted by Ecuadorian law do not actually exist

Under what country’s legal system do these three men assume such astounding power? 

None.  The three have made all of the audacious decisions above as members of an extrajudicial tribunal that sits outside of any legal system and is unaccountable to any electorate.  The men derive their sovereignty-trumping power from the “investor-state enforcement system” included in a Bilateral Investment Treaty (BIT) between Ecuador and the United States. 

Oil in AmazonThey recently set new standards of audacity by proclaiming that some of Ecuadorians’ legal rights to mount a case against Chevron were unwittingly and permanently extinguished by a contract signed years before between the government and Texaco Petroleum Co., which became a Chevron subsidiary in 2001.

In ruling that the government’s liability waiver also waived the rights of private parties to sue Chevron, the tribunal contradicted Ecuadorian court decisions on this very issue. In real courts, Chevron’s attempts to raise this improbable argument failedChevron hopes that the tribunal’s revival of this dead argument will lead the tribunal to order the taxpayers of Ecuador, an $84 billion economy –- not the shareholders of Chevron, a $231 billion business -– to pay billions to clean up the vast Amazonian pollution.

Background: After Losing in Domestic Courts, Chevron Turns to Foreign Tribunal to Evade Payment

For 26 years, Texaco, Chevron’s predecessor company, performed oil operations in Ecuador. Ecuadorian courts have found that during that period, the company dumped billions of gallons of toxic water and dug hundreds of open-air oil sludge pits in Ecuador’s Amazon, poisoning the communities of some 30,000 Amazon residents, including the entire populations of six indigenous groups (one of which is now extinct). 

For 20 years, those communities have sought a basic notion of justice –- water that is safe to drink, the clean-up of the rivers and land on which their lives depend, and healthcare for the many stricken with pollution-related illness. They have demanded that the corporation that devastated their lives, livelihoods, and ecosystem pay for rehabilitation.  For 20 years, Chevron has tried to evade justice, seeking to have the case dismissed in both the U.S. and Ecuadorian court systems.  The company lost issue after issue under both legal systems.  In 2011, after Chevron insisted that the U.S. case be moved to Ecuadorian courts, deemed Ecuador’s legal system “fair and adequate,” and committed to comply with a final court ruling there, an Ecuadorian court produced a $19 billion ruling against Chevron for the massive contamination.  In 2012 the ruling was upheld on appeal.  Last month’s ruling from Ecuador’s highest court upheld the judgment against Chevron, but halved the fine after overturning the lower court’s order of punitive damages against Chevron for misconduct during the trial and a refusal to apologize for its actions.

Instead of paying as agreed, after having lost in two countries, Chevron has turned to the country-less investor-state tribunal of Vaughan Lowe, Horacio Grigera Naón, and V.V. Veeder in its quest to evade justice.  How was this even possible?  Chevron claimed that the ruling issued in the Ecuadorian legal process, a process upon which Chevron had insisted, was a violation of extraordinary investor privileges enshrined in a U.S.-Ecuador Bilateral Investment Treaty (BIT)

Under the BIT, Chevron asked the three-person extrajudicial tribunal to order the Ecuadorian government to suspend enforcement of the multi-billion dollar domestic court ruling.  The tribunal granted that wish, ordering the government of Ecuador to violate its own Constitution, interfere with the independent judiciary, and somehow get it to stop the ruling.  Such a maneuver would breach Ecuador’s constitutionally-enshrined “separation of powers,” a legal concept that was probably not foreign to the panelists.  (Imagine a foreign extrajudicial tribunal ordering President Obama to suspend a U.S. Supreme Court ruling and you get the picture.)  Reasonably, the government decided to heed its Constitution rather than the three lawyers. 

Now Chevron is asking the same extrajudicial tribunal to order Ecuador’s taxpayers to hand over to the corporation any of the billions in damages it might be required to pay to clean up the still-devastated Amazon, plus all the legal fees incurred by the corporation in its efforts to evade justice.

Continue reading "Ecuador’s Highest Court vs. a Foreign Tribunal: Who Will Have the Final Say on Whether Chevron Must Pay a $9.5 Billion Judgment for Amazon Devastation?" »

December 10, 2013

Vaunted 2013 Deadline for TPP Passes as Singapore Ministerial Ends Without a Deal, More Talks Slated for 2014

Obama Administration Bullies Other Nations into Accepting Terms Demanded By Big Pharma, Rolls Back Bush-Era Access to Medicine Reforms; Congressionally-Demanded Labor and Environmental Standards Not Agreed, Currency Manipulation Rules Not Discussed 

Thankfully, the do-or-die trade ministers meeting designed to seal a deal on the controversial Trans-Pacific Partnership by the Obama administration’s much-touted 2013 deadline ended without a deal, said Public Citizen. Ominously, trade Ministers agreed to meet again in January, but no new deadline for completing the deal was set.  However, many countries have caved to relentless U.S. demands that they alter their domestic patent and medicine pricing laws to meet the desires of large pharmaceutical firms.

“At this meeting, the negotiators’ political imperative to ‘make a deal’ - any deal - resulted in a raft of dangerous decisions that would severely threaten consumers’ access to affordable medicines, undermine Internet freedom  and empower corporations to attack our domestic laws,” said Lori Wallach, Director of Public Citizen’s Global Trade Watch. “At the meeting, there was an altogether new desperation to lock in a deal because the TPP is in a race against time: as more details emerge weekly about the damage TPP could do to workers, consumers and the environment, grassroots and lawmaker opposition in many countries is growing.” 

The outrageous secrecy surrounding these talks means that many details from the negotiations are being kept from the public and Congress. Officials issued a short declaration announcing “substantial progress” and plans to meet in January.

“At this stage, the draft TPP text must be released so those of us who will live with the results can know just what was this so-called “progress” entailed, and at whose expense,” Wallach said. “The ploy seems to be to try to seal a deal so there is a sense of inevitability, but a TPP that would lock in a corporate wish-list of anti-consumer, anti-environment policies and promote more job offshoring will hit a wall of massive opposition.”

It appears that U.S. officials did not even raise the demand made by 260 U.S. House and 60 U.S. Senate members that TPP must include enforceable disciplines against currency cheating. But a deal without these terms is dead on arrival in the U.S. Congress.

Leaks from the secretive talks this weekend showed that against nearly every other countries’ objections, U.S. negotiators were adamantly pushing an expansion of the investor privileges and investor-state dispute settlement that expose domestic policies to attack in foreign tribunals where foreign investors can demand government compensation for policies that undermine their expected future profits. Enforceable labor and environmental standards and enforceable disciplines on unfair subsidies for state owned enterprises that the U.S. Congress has demanded are still not agreed. And U.S. officials continued to insist, against every other countries’ opposition, that the TPP ban the use of important macroprudential financial measures in every signatory country – from capital controls to speculation taxes.

“If a final deal is made on those terms, it will be a deal that will be dead on arrival in the United States,” said Wallach. “What seems to be on the table after this meeting is a deal that would ensure that the U.S. Congress never delegates its constitutional trade authority to President Obama, which really begs the question of why the other countries are willing to trade away the health and other policies on which their people rely if doing so is likely to make the eventual congressional passage of any deal less likely.”

Meanwhile, market access negotiations - the portion of the TPP that is actually about trade - were deadlocked. Some countries conditioned their willingness to agree on the medicine terms and investor-state dispute settlement on obtaining market access demands, including access to U.S. sugar and dairy markets. Japanese officials maintained the position set by the Japanese parliament, which conditioned the nation’s participation in the talks on the exclusion of key agricultural commodities from the deal’s zeroing out of tariffs.

December 09, 2013

U.S. TPP Proposals Defy Congressional Objectives, Unanimous Partner Country Opposition

The most recent leaks on the secretive Trans-Pacific Partnership (TPP) negotiations reveal that the Obama administration’s trade negotiators are remarkably isolated in pushing controversial proposals for the deal, from increasing pharmaceutical corporations’ monopoly patent protections to empowering foreign corporations to challenge domestic policies in private tribunals.

In fact, a leaked chart detailing countries’ positions last month on the most contentious issues shows that the United States stands alone among TPP countries on 1 out of every 4 controversial issues.  In each of these contentious areas, all other TPP countries that have taken a position have rejected U.S. demands.  If adding issues in which the U.S. position is shared by just one or two of the 11 other negotiating partners, more than 40% of the unresolved issues constitute unpopular demands made by the United States, often at the behest of corporate interests.  Such divisions cast doubt on the Obama administration’s ability to meet its stated goal of concluding TPP negotiations this year, much less by tomorrow’s end of the current negotiating round in Singapore.

But the U.S. demands not only put U.S. trade negotiators at odds with other TPP nations, but with many members of the U.S. Congress.  Below is a chart of some of the U.S. TPP positions revealed in recent leaks, juxtaposed with statements by members of Congress that directly contradict the U.S. position.  Such lack of concern for congressional priorities in the secretive TPP negotiations does not bode well for the administration’s ability to secure the extraordinary Fast Track authority it seeks to railroad the TPP through Congress.  More than 150 Democrats and about 30 Republicans have already indicated their opposition to Fast Track.  Revelations of the rogue U.S. positions in the TPP negotiations stand to invite further opposition. 
 

Position of U.S. TPP Negotiators

Position of Members of Congress

Currency Manipulation: There is no evidence from the recent leaks that U.S. negotiators have tabled any proposal to counteract currency manipulation within the TPP.

Bipartisan majorities of both the House and Senate (60 Senators and 230 Representatives) have signed letters explicitly calling for currency manipulation disciplines to be included in the TPP.  Congressional leaders on trade policy such as Rep. Sandy Levin (D-Mich.) have flatly stated that they will oppose the TPP if it does not include currency manipulation disciplines.

Access to Medicines: U.S. TPP negotiators are demanding terms, rejected by nearly all other TPP countries, that would allow pharmaceutical corporations to extend monopoly patent protections to the detriment of cheaper generic medicines, and that would impede governments’ ability to negotiate lower medicine costs for public health programs.

Members of Congress have repeatedly criticized the inclusion of such proposals in the TPP, which would not only decrease access to life-saving medicines abroad, but would hamper the Obama administration’s own efforts to lower health care costs at home. Today six House members again denounced such provisions in a letter to Obama, stating, “trade negotiations conducted behind closed doors are not the place to make changes that would have such profound consequences for patients and veterans, as well as state and federal budgets.”

Internet Freedom: The U.S. proposals for copyright provisions, rejected by most other TPP countries, include draconian rules, such as requiring Internet Service Providers to police common web content.

Defenders of Internet freedom and online innovation in Congress have long pushed against the inclusion of such terms in the TPP, which were roundly defeated in the polemical Stop Online Piracy Act (SOPA). In a press conference last Thursday, Rep. Zoe Lofgren (D-Cal.) stated, “It looks like there are some elements of SOPA that are being inserted in this trade agreement and I don’t think the American people are going to put up with it.”

Wall Street Reform: The recent leaks reveal that the U.S. TPP negotiators has shown “zero flexibility” in its demands, which reportedly include 1990s-era deregulatory rules that conflict with efforts to rein in Wall Street risk-taking, and a ban on capital controls – a widely-endorsed policy tool to prevent speculative capital flows from contributing to financial crises.

Members of Congress such as Rep. Sandy Levin (D-Mich) and Rep. Barney Frank (retired, D-Mass) have made clear that deals like the TPP must not inhibit usage of capital controls.  Sen. Elizabeth Warren (D-Mass.) has warned against the usage of the TPP as a backdoor means of rolling back Wall Street reforms, calling such deals “a chance for these banks to get something done quietly out of sight that they could not accomplish in a public place with the cameras rolling and the lights on.”

Corporate Tribunals: The U.S. has faced near-unanimous pushback from TPP countries related to it proposal to empower foreign corporations to bypass domestic courts and challenge TPP governments before private tribunals for health, environmental and other public interest policies they see as inhibiting “expected future profits.” 

Members of Congress continue to criticize this extraordinary TPP proposal to expand the “investor-state” system, which corporations are currently using to attack Canada’s medicine patent policies, Australia’s tobacco controls, and Germany’s phase-out of nuclear energy.  In a statement from the House floor last Wednesday, Rep. Mark Pocan (D-Wis.), criticized the proposal for the TPP to empower foreign corporations to bypass domestic courts, creating “situations where a foreign-owned business could have more power than our own sovereign courts…”

New Leaked TPP Documents Reveal Daunting Obstacles for Obama's 2013 Deadline to Complete the Deal

At Ministerial Meeting's Midpoint, U.S. Isolated on Outrageous Demands that Nations Alter Policies on Medicine Prices, Internet Freedom, Financial Regulations; Congressionally-Demanded Disciplines on State Owned Enterprises, Enforceable Environmental Standards MIA

The Obama administration’s do-or-die 2013 deadline for the Trans-Pacific Partnership (TPP) came into question at the midpoint of closed-door negotiations underway in Singapore, as newly-leaked documents show deep disagreement between Washington and its prospective TPP partners on key aspects of the pact – as well as concerns by a government involved that missing yet another deadline could undermine the process.

With TPP talks shrouded in intense secrecy, the leaks provide the clearest view into the range of sensitive “behind the borders” issues that have spurred growing public opposition to the sweeping agreement in some participating countries.  The documents also reveal U.S. negotiators pushing an agenda in line with American corporate interests on a range of issues, including expansive intellectual property rights, limits on financial regulation and expansive new investor rights to demand compensation from government over policies they claim undermine expected profits.

“Before entering into specific detail in some areas of negotiation, it is noted that the scenario for Singapore seems uncertain given the number of outstanding issues that still remain... The aforementioned, even leaving aside the more complex issues (IP, SOEs and Environment), demonstrates a situation that makes it very difficult to think of a complete closure in December,” according to one leaked memo, which had been prepared by a member nation in advance of the ministerial-level talks. “Some suggested the need to prepare different scenarios, in order to not suffer surprises that affect the process. This involves being prepared for a partial closure scenario or even a failure in December…”

The Huffington Post broke the news about the leaked memo, posting it and a chart showing the positions of each country on scores of unresolved issues. The documents reveal that many Obama administration demands have serious consequences for member nations and their populations – including higher drug prices, vastly extended copyright terms, tough new Internet restrictions similar to the unpopular Stop Online Piracy Act (SOPA), and curbs on financial regulation that face widespread rejection from other TPP countries as well as stiff opposition in the U.S. Congress.

“This leak guts the sense of inevitability about TPP that the negotiators have been so relentlessly building both because it shows, thankfully, how far from agreement the countries are and it puts people in all of the involved countries on notice about just how dangerous this deal would be for them,” said Lori Wallach, Director. “Having these documents released also puts the kibosh on the usual triumphant announcements that follow each of these high-level TPP meetings regardless of what actually happened in the talks.”

The leaked documents reveal that, going in to the Singapore talks, there were 119 contested issues in the TTP draft Intellectual Property chapter.  The United States has been largely isolated in pushing an agenda favorable to large pharmaceutical firms, including extended patents, data exclusivity and other monopoly powers that would hike medicine prices.

The memo and chart reveal that the U.S. promotion of Hollywood and recording industry-inspired proposals that would greatly extend copyright durations, limit innovation and access to educational materials and force Internet providers to act as “copyright police”  also remains widely opposed. 

Financial services issues raised in TPP talks are “paralyzed,” according to the memo.  U.S. officials haven’t budged on what other partners consider outrageous demands – including requirements that TPP member nations agree to a ban on countries’ use of various common-sense, macro-prudential measures, including capital controls that the IMF now endorses to avoid floods of speculative capital that cause financial crises.

The leak reveals that lead TPP negotiators meeting in Salt Lake City just before Thanksgiving  missed a key milestone in market access negotiations. Japan continued to insist that certain agricultural commodities be excluded from TPP’s rules zeroing out tariffs. U.S. refusal to make offers on sensitive market access issues also raised ire from other countries, according to the memo. 

Japan recently reiterated its position when U.S. Vice President Joe Biden visited Tokyo last week: “The minister in charge of the Trans-Pacific Partnership free trade negotiations said Sunday that Tokyo can make no more concessions to Washington on sensitive issues after a Japan-U.S. meeting ended without progress.”  Japan’s parliament has listed five “sacred” commodities it says must be excluded from TTP rules zeroing out tariffs: rice, beef and pork, wheat and barley, sugar and dairy.

The United States and Japan were isolated, according to the leaked memo, in pushing to extend the controversial investor-state dispute settlement system, which empowers private firms to skirt member nations’ laws and courts and instead present grievances in a private tribunal, demanding compensation from governments for policies they claim undermine investor rights.

Both the environmental chapter and a text on state-owned enterprises (SOEs) appeared to be in shambles at the Singapore talks began. The Obama administration faces considerable political peril on these issues. Democrats and Republicans alike have insisted that TPP include enforceable rules ensuring state owned firms competing in the private sector do not obtain any support from governments.

With respect to environmental standards, Congress forced Obama’s Republican predecessor, President George W. Bush, to insert labor and environmental standards into his Free Trade Agreements -- standards enforceable through the same trade sanctions as the pacts’ commercial provisions. If the Obama administration rolls back those policies, it will lose almost all Democratic congressional support for TPP. It is unclear if U.S. officials have even raised the currency discipline provisions that 60 Senators and 230 House members have demanded.

In another chapter relating to medicine pricing, the United States has reintroduced an Annex that it drafted in 2011 that all other TPP countries had rejected. Cynically dubbed the “Annex on Transparency and Procedural Fairness for Healthcare Technologies” it would allow drug firms to challenge TPP nations’ medicine formulary reimbursement and pricing decisions. The target: the national health care systems of New Zealand, Australia and other TPP nations, which have used  formulary lists to greatly reduce healthcare costs. Grassroots and legislator opposition to these terms in those nations is virulent, which may explain why U.S. reintroduction of the proposal has generated ire. U.S. state officials and Democratic congressional supporters of Obamacare also oppose those terms, which could undermine use of formularies to reduce U.S. healthcare costs.

Among the controversies revealed by the memo, which was written after the November 16-24 Salt Lake City round of TPP talks:

 

Continue reading "New Leaked TPP Documents Reveal Daunting Obstacles for Obama's 2013 Deadline to Complete the Deal" »

December 07, 2013

Measuring the Outcomes of the TPP “End Game” Ministerial in Singapore

Reporters Memo from Public Citizen

The Obama administration has invested significant time, effort, and political capital trying to meet the do-or-die 2013 deadline it set for the Trans-Pacific Partnership (TPP) -- the economic arm of the administration’s “pivot” to Asia. As a result, the Singapore TPP Ministerial meeting is critical: it’s their last chance to complete the deal before time runs out.

Nearly all of the politically sensitive issues that have arisen in the secretive, closed-door TPP talks are still unresolved. So, the Obama administration has resorted to extreme tactics at Singapore to try to wring out a deal, including setting up invitation-only “Green Room” meetings where decisions on difficult issues can be “worked out” with some countries excluded.

But to what end? After nearly four years of TPP negotiations, President Obama still hasn’t convinced Congress to give him Fast Track Trade Promotion Authority for the deal. And, congressional opposition to TPP itself is building because lawmakers’ core demands – including sanctions-enforceable labor and environmental standards as well as binding disciplines on currency manipulation and subsidies for state owned enterprises – still haven’t been achieved. As well, many lawmakers oppose the drug patents terms and copyright protections being demanded by U.S. negotiators as well as the ban on the use of capital controls. Blocs of lawmakers also oppose various market access offers U.S. officials may be poised to make.

Missing yet another deadline to complete the TPP would call into question the viability of the process. The Obama administration seeks to lock in policies favorable to American business interests throughout the Pacific Rim. But in many nations, U.S. demands that governments alter their domestic policies on medicine prices, Internet freedom, “buy local” procurement preferences, financial regulations and a host of other sensitive, non-trade issues is spurring growing opposition. And, the extreme secrecy surrounding TPP negotiations has generated outrage: last week, the Australian Senate passed a motion calling for disclosure of the TPP text.

Thus, many observers expect the administration to once again declare a deal has been reached --  regardless of the Ministerial meeting’s actual outcomes. (They deployed the tactic after the TPP missed a previous 2011 deadline.) By withholding any actual agreement text from the public and press, the White House can announce a “final” deal, spurring wide press coverage and creating a false perception of inevitability while negotiations continue. [This memo ends with a checklist that includes the issues that would have to be resolved for an actual TPP deal to be completed at the Singapore Ministerial.]

Congress Warns Obama Not to Rush into Deal at Singapore: Four days ago, Rep. Steve Israel (D. N.Y.), chair of the Democrat’s Congressional Campaign Committee, declared he’s “very concerned” about the TPP, chiefly because leaked documents show the pact doesn’t include the “checks and balances” necessary to ensure congressional approval.  Israel warned that the Obama administration shouldn’t rush to finalize a deal during the Singapore Ministerial. He also reiterated the broad congressional opposition to using the Nixon-era Fast Track authority for the deal: “Twentieth Century ‘fast-track’ just does not work for a 21st Century agreement.”

Obama Unable to Secure Fast Track Authority: With just four days remaining before the end of this session of Congress, lawmakers haven’t even introduced legislation to grant TPP Fast Track authority. This is not altogether surprising – congressional opposition to the controversial procedure, which forbids all congressional amendments to signed trade deals, is widespread and growing.

This represents in part deep divides among lawmakers, who don’t want to cede their authority to amend any deal that undermines their views on sensitive issues, such as intellectual property. For instance, Sen. Orrin Hatch of Utah, the senior Republican on the Senate trade committee, has declared that countries unwilling to meet U.S. demands for patent extensions and other expansive intellectual property protections should be thrown out of the negotiations. But a large bloc of House and Senate members vowed to block TPP if it includes patent terms that could raise prices for medicine or insert  copyright terms similar to those in the Stop Online Piracy Act (SOPA), which Congress – and the public - rejected last year.

Two weeks ago 151 Democratic and 30 Republican members of the U.S. House of Representatives sent letters to the president declaring their opposition to Fast Track.

“In light of the broad scope of today’s trade agreements, it is even more vital that Congress have a fulsome role in shaping these pacts’ terms,” according to the letter sent by Democrats. “Given our concerns, we will oppose ‘Fast Track’ Trade Promotion Authority, or any other mechanism delegating Congress’ constitutional authority over trade policy, that continues to exclude us from having a meaningful role in the formative stages of trade agreements and throughout negotiating and approval processes.”

Even if legislation to establish Fast Track were introduced today, it would require the better part of 2014 for it to be passed by both houses of Congress. Recently Washington observers are suggesting that it may not be possible for Fast Track to obtain majority support in the House of Representatives at all. All Representatives face election in November 2014. Already 85 percent of those needed to stop Fast Track from being applied to TPP have stated their opposition.

Real Deal Check List: Were These Issues Resolved at the Singapore TPP Ministerial?

As Trade Ministers arrived in Singapore, nearly all of the TPP’s 29 chapters include a set of sensitive issues that haven’t been resolved.

 

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December 06, 2013

WTO’s Legitimacy So Weak that Ability to Agree on Anything Is Touted as Success

11pm: Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch on Conclusion of Bali WTO Ministerial

Hype about this outcome ‘saving’ the WTO reveals just how dire the WTO’s crisis of legitimacy has become. The actual deliverables were a rollback of existing WTO agricultural rules, a commitment that countries will update their customs procedures and implementation of trade benefits for least developed countries that had been agreed to years ago.

It is perverse to declare that this outcome restores the WTO’s credibility when the biggest ‘breakthrough’ was simply that yet another WTO meeting did not melt down altogether. 

Consider the context of this deal: the Doha Round WTO expansion agenda remains deadlocked after more than a decade.  The most apt headline to describe today’s outcome comes from Monty Python: I’m not dead yet!

Except for formal adoption of new duty free access for least developing countries that had been agreed years ago, this deal includes no new trade market access. Ironically, another WTO Ministerial meltdown only because the United States agreed to a waiver for existing WTO agricultural rules that developing countries had demanded to help ensure food security for their populations.

The other texts issued from the meeting merely “affirm” past agreements. Notably, agreement could not even be reached to force compliance with a 2005 WTO decision that all countries must eliminate agricultural export subsidies by 2013, which has not occurred.

The fundamental principle of the WTO – that 160 countries should conform their domestic food,  financial, health, energy, patent, procurement and other policies to terms favored by the world’s largest corporations – faces growing opposition worldwide.

It’s not surprising that the core ‘Doha Round’ proposals that would have expanded the WTO’s power have been rejected, given the damage WTO has caused so many people around the world, and that developing countries have instead insisted on rolling back of some of the existing WTO rules.

 

4pm: Breaking News -- The face-saving deal that WTO members desperately tried to conclude today, meager as it was (see below), has now taken a face-plant.  Four Latin American countries have "firmly rejected" the deal's last-minute text as "unbalanced" in favor of developed countries at the expense of developing countries.  It's unclear what will happen next.  A spokesperson for the WTO Secretariat stated today, "We don't know when the next meetings will be. We don't know when the next press conference will be. I can't tell you anything."  WTO members might still scramble to eke out a deal similar to that described below, in which case WTO proponents will have to try to sell a deal that waives WTO rules as a success of the WTO.  Or talks may break down entirely, marking another in a long string of WTO negotiations that have collapsed due to the WTO's stubborn adherence to an unpopular agenda. 

 

11am: As Doha Round WTO Expansion Agenda Remains Deadlocked for More than a Decade, Today's “Big Breakthrough” Amounts to: Developing Nations Force Waiver of Existing WTO Ag Rules, Nations Agree to Finish Deal by July to Update Customs Procedures, Previously-Agreed Trade Benefits for Least Developed Nations Adopted

After nearly two decades of futile efforts to expand the authority and scope of the World Trade Organization (WTO), another WTO Ministerial meltdown was averted in Bali today when the United States agreed to a waiver for existing WTO agricultural rules that developing countries had demanded to help ensure food security for their populations.

Countries also are poised to agree to finalize a “trade facilitation” deal by July 2014 that would require countries to update customs procedures, and to formally adopt a package of trade benefits for the poorest nations that was agreed to years ago. The other texts issued from the meeting merely “affirm” past agreements. Notably, agreement could not even be reached to force compliance with a 2005 WTO decision that all countries must eliminate agricultural export subsidies by 2013, which has not occurred.

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December 05, 2013

Democrats’ Congressional Campaign Chair, Senior Party Members Warn Obama: Don’t Rush into a TPP Deal in Singapore

They Vow to Block Any Pact Without Enforceable Labor and Environmental Standards, Currency Disciplines or that Includes Patent or Copyright Extensions

Senior Democratic members of Congress said Thursday the still-secret Trans-Pacific Partnership (TPP) trade pact is dead on arrival in Congress if it doesn’t meet their demands to protect American workers and punish currency manipulation as well as provide enforceable labor and environmental standards, in addition to meeting other conditions. 

During a Thursday news conference call, Democratic Congressional Campaign Committee Chair Steve Israel (D-N.Y.), Steering and Policy Committee Chair Rosa DeLauro (D-Conn.), Education and Workforce Ranking member George Miller (D-Cal.), Ways and Means member Earl Blumenauer (D-Ore.) and a leading congressional expert on high tech issues Rep. Zoe Lofgren (D-Cal.) said that the TPP so far excludes many of the provisions that are necessary for it to pass in Congress. 

The U.S. Trade representative will join trade ministers from the other 11 Pacific Rim nations at a meeting this weekend in Singapore  to try to hash out a final deal after four years of TPP negotiations. The Obama administration has insisted that the TPP must be completed this year. Opposition to the expansive pact is growing in many of the nations involved in the talks.

“My bottom line this weekend [when] our trade representatives will join trade ministers from other TPP countries to try and make a final deal: a good deal is more important than a final deal,” said Israel, who noted his opposition to any TPP ban on Buy American procurement preferences.

DeLauro said currency manipulation must be addressed in TPP, or any deal made in Singapore would fail in Congress. Limits on access to affordable medicines, she said, would also undermine support for the deal. Lofgren said that efforts to implement expansive new copyright protections through the “backdoor” of TPP could derail the pact. She noted that a recently leaked TPP chapter in intellectual property included aspects of the “Stop Online Piracy Act” (SOPA) that Congress pulled after mass public opposition.

Miller said that TPP must require countries to provide the labor rights of the ILO Conventions, with failure to do so subject to trade sanctions, or it would fail in Congress. Blumenauer noted the same for a TPP that does not include enforceable environmental standards, including bans on trade in endangered species, rules to prevent overfishing and enforcement of TPP nations’ obligations in Multilateral Environmental Agreements.

Link for recording of news conference: http://www.conferenceplayback.com/stream/66218019/74193201.mp3

Excerpts from Recording of the Representatives’ Comments at Today’s Press Conference

Rep. Rosa DeLauro (D-CT): We all know next week the trade ministers from the 12 nations will meet in Singapore. Their goal is the announcing of a deal on the TPP free trade agreement, a deal on an agreement that we know still has outstanding many of the core demands that have been made by the Congress and the U.S. public…. Several of our TPP partners have a history of or are currently manipulating their exchange rates to promote their exports, which is why including currency discipline in the agreement is critical, which will allow us to level that playing field for American workers. The Congress has been very vocal, our colleague Mike Michaud has led a bipartisan effort in the House, that received more than half of all House members, with 230 signed a letter urging the administration to include currency disciplines in the agreement. A similar letter in the Senate was signed by 60 senators. So not doing something on currency in this agreement would be a slap in the face to Congress…. There appears to be no discussion about currency manipulation, and like labor, environmental standards, intellectual property chapter, among other things- it threatens to limit access to affordable medicines – that remain undecided going into Singapore to this gathering next week…. It is Congress that has a final say on whether a trade deal is approved. Any deal that does not meet the Congress’s prerogative such as insistence that such a deal includes disciplines against currency cheating will not pass in Congress. In other words, any deal announced as final next week is far from it.

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Members of Congress: Fast Tracking the TPP is a Non-Starter

On the eve of an attempt by executive branch negotiators to rush the controversial Trans-Pacific Partnership (TPP) to conclusion in negotiations happening in Singapore this weekend, members of Congress, speaking from the floor of the U.S. House of Representatives on Wednesday, declared that an attempt to Fast Track the secretive, sweeping pact through Congress would be dead on arrival. Below is a transcript of excerpts of floor speeches made by Representative Mark Pocan (D-Wisconsin), Representative Rosa DeLauro (D-Connecticut), and Representative Jared Polis (D-Colorado).

See video highlights here: 

 

Rep. Mark Pocan (D-WI)

“…Unfortunately we appear to have a massive, secret and likely very harmful unfair trade deal on our hands, the TransPacific Partnership or the TPP for short. It is a NAFTA-style agreement between the U.S. and 11 other nations that has been largely negotiated in secret and seems to not just repeat, but perhaps worsen the mistakes made in the past.

In fact, this coming week, TPP negotiators are going to meet again in Singapore and they plan to have a deal by the end of the year, in less than a month, meaning that we may be less than 30 days away from having a final TPP deal, a deal that we have no idea what may contain. And while we may not know what’s in the deal, we do know what we have been promised: and so much of the promises that people across the country and in my state of Wisconsin have been told before about these massive trade deals – from NAFTA to CAFTA to the U.S.-Korea free trade agreement. We’ve been told that free trade would lead to increased U.S. jobs, it would reduce our trade deficits, it would boost our exports, and it lead to improved human rights and labor standards around the globe. Unfortunately, almost every single one of those promises have gone unfulfilled. In Wisconsin we have seen the devastating effects of the free trade agreements such as NAFTA to our local manufacturing industries and our jobs…"

Rep. Rosa DeLauro (D-CT)

“...This could have been a new opportunity. It represented an effort to create something that was new, a sustainable model that promoted economic development, with shared prosperity. But as you know, unfortunately, the talks have gone down the same road as previous trade agreements. Export of more jobs, not more goods, unsafe imports, and threats to public health, among other things…

There is no reason to believe that the Trans-Pacific Partnership trade deal will not be the same kind of a raw deal for U.S. workers and more, as the agreement would be unprecedented in scope.

The president himself has commented that the pact would establish rules that extend far traditional trade matters to include, and I quote, “a whole range of new trade issues that are going to be coming up in the future: innovation, regulatory convergence, how we are thinking about the Internet, and intellectual property.”

The agreement will create binding policies on future Congresses in numerous areas to include those that are related to labor, patent and copyright, land use, food, agriculture and product standards, natural resources, the environment, state-owned enterprises, and government procurement policies, as well as financial, health care, energy, telecommunications and other service sector regulations. This is a treaty that goes beyond tariffs. The scope is as I’ve outlined: it is unbelievable. And we also know that the lack of transparency on this treaty is unbelievable.

It’s interesting to know that industry has had great access to the process and what’s going on. Members of Congress on both sides of the aisle have not had that same access to the information in this trade agreement. And it is our constitutional authority, as members of Congress, to approve trade agreements. We cannot be frozen out any longer. We’re not going to tolerate that.

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December 04, 2013

Live from Bali: WTO to Blame for WTO's Failures (not India)

Screen shot 2013-12-05 at 8.12.50 AM
Protests supporting India's position outside (above) and inside (below) the 9th WTO Ministerial in Bali, Indonesia.

During this week’s 9th World Trade Organization (WTO) Ministerial in Bali, activists, largely led by Indian farmers' groups, have been gathering in the halls, chanting “food sovereignty now!” and carrying signs reading “USA – Hands off our food!” and “Support the right to food.”  Farmers, fisherman, and other members of civil society have also been protesting in large numbers against the Ministerial.

These actions are juxtaposed against finger-pointing by the U.S., other developed countries, and the mainstream media, which have been blaming India for the possible collapse of the talks in Bali (see: BBC, Financial Times, Washington Post, for example). Some are going so far as to imply that it is India’s stance that would be responsible for a resulting loss of legitimacy for the WTO and the entire multilateral trading system.

India’s transgression? Wanting to protect an ambitious and innovative law designed to address hunger and poverty in a nation that, according to the UN, is home to 25% of the world’s hungry poor. That law, the National Food Security Act, requires the Indian government to help pull the poorest farmers out of poverty by purchasing staple goods at a fixed price, and to feed the hungriest families by providing food at subsidized, below-market prices. 

IMG_5086India's not alone.  Latin American and African countries, not wanting to face WTO challenges for their own programs to increase access to food, have indicated support for India's defense of its food security initiative. 

The U.S. has labeled such programs as “trade-distorting.” But the hypocrisy of the U.S., which grants some of the highest levels of subsidies to its own farmers, totaling more than $14 billion in 2012 alone, remains an elephant in the room. That elephant has been largely unreported by the media and unmentioned in the speeches of U.S. officials that have criticized India’s refusal to subject food security to WTO rules.

Perhaps the real culprit of the WTO’s failure to produce a deal for nearly 19 years (a track record unlikely to be broken this week) is the WTO itself. The world's most powerful commerce agency continues to push an old model of globalization favored by corporate interests.  Despite opposition on a global scale, it has not proven willing to accept innovative approaches to address development concerns.  The breakdown of discussions in Bali (and before that in Seattle, Geneva, Cancun, Hong Kong...) is an unsurprising result of the WTO’s obstinate refusal to change –- not the result of a country’s decision to defend food security.

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