TPP Chiefs Raise Doubts about USTR’s Corporate IP Wish List

At the May 13th stakeholder briefing of the Trans-Pacific Partnership (TPP) trade talks outside Dallas, at least six countries' Chief Negotiators began to openly distance themselves from the Office of the United States Trade Representative (USTR), particularly from USTR’s radical intellectual property (IP) proposals, which would expand the scope and duration of pharmaceutical monopolies and challenge internet freedom.

In the past, these stakeholder briefings have felt like exercises in the art of saying little. USTR has sought to keep all nine countries on a common, limited message. But perhaps USTR can only push other countries and the public so far.

Early in the session, I asked the Chiefs:

The past year has witnessed the rise of an internet freedom social movement, with more than 3 million people petitioning the US Congress to block SOPA [the Stop Online Piracy Act] and tens of thousands protesting in the streets across Europe to shut down ACTA [the Anti-Counterfeiting Trade Agreement]. I think in Poland, these may have been the largest demonstrations since the Solidarity movement. Even Germany’s ministry of economic development is recommending against developing countries signing ACTA. Given that you are not releasing the TPP text, how will you assure people that the TPP will not pose similar problems?

Chile kicked things off, answering:

We are nine countries with many different positions—we are not all the same.

This may sound tame, but for those listening to the evolution of TPP sound bites, it was a surprisingly public distancing from USTR and its copyright and enforcement demands. And it set the pace for the day.

TPP = Corporate Power Tool of The 1 Percent

DALLAS- Tuesday, the Trans-Pacific Partnership (TPP) twelfth round of negotiations will begin behind closed doors at the Intercontinental Hotel here. Branded as a "trade deal" by its corporate proponents, the TPP in reality would establish new corporate rights to ease job offshoring, attack environmental and health laws in foreign tribunals and extend medicine patents. Its expansive non-trade provisions would impose constraints on government regulation of financial firms, food safety and more. As the Huffington Post's Zach Carter reported, the TPP would even ban "Buy America" procurement policy.

The TPP also includes aspects of SOPA, the controversial Stop Online Piracy Act. The pact would even elevate corporations to equal status with signatory governments allowing them to privately enforce their new rights be suing government in foreign tribunals to demand taxpayer compensation for policies that undermine the companies' expected future profits. Intensive negotiations have been underway for two years under conditions of extreme secrecy. More than 600 hundred corporate "advisors" have access to the draft texts while the press, public and Congress are shut out. This comic video, set to a parody tune based of the Jackson Five's ABC, aims to pierce the dangerous lack of public awareness about this audacious corporate power grab. With funny animation and a sarcastic tone, it highlights that the TPP is "all about secrecy" and has "nothing to do with trade you see". You can learn more about the TPP at www.TPP2012.com

Members of Congress Urge Obama to Stop the TPP from Banning Buy American

Here is the text of the letter:

Dear President Obama,

 We write in strong support of Buy American procurement policies, including the various federal programs that have been in place since the enactment of the Buy American Act in 1933 and passage by many states of similar preference policies.  We are concerned about proposals we understand are under consideration in the Trans-Pacific Partnership (TPP) agreement negotiations that could significantly limit Buy American provisions and as a result adversely impact American jobs, workers, and manufacturers.

Under the proposed TPP framework, individual states and the federal government would be obligated to bring existing and future domestic policies into compliance with norms set forth in 26 proposed TPP chapters, including one covering government procurement policy.  Failure to conform our domestic policies to these terms would subject the United States (U.S.) government to lawsuits before international dispute resolution tribunals empowered to authorize trade sanctions against the U.S. until our policies are changed.

In the past, U.S. Free Trade Agreements (FTA) required that all firms operating in a signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold.  To implement this “national treatment” requirement, the U.S. waived Buy American procurement policies for firms operating in FTA-signatory countries. Effectively, in exchange for opportunities for some U.S. firms to bid on contracts in smaller foreign procurement markets, we traded away an important policy tool that can ensure that billions in U.S. government expenditures are recycled into our economy to create jobs, strengthen our manufacturing sector, and foster our own new cutting-edge industries.

We do not believe this approach is in the best interest of U.S. manufacturers and U.S. workers. Of special concern is the prospect that firms established in TPP countries, such as the many Chinese firms in Vietnam, could obtain waivers from Buy American policies.  This could result in large sums of U.S. tax dollars being invested to strengthen other countries’ manufacturing sectors, rather than our own.  At a time when U.S. manufacturing only employs 11.71 million people, a 40% decline from its peak in 1979 and the lowest since 1941, we simply cannot allow this to happen. 

As you know, procurement policy established in trade agreements cannot be later modified without consent of all signatory countries.  This would deprive Congress and U.S. state legislatures of their authority to modify procurement policies despite fundamentally changed national or international circumstances.  Therefore, we are writing to inquire about U.S. negotiators’ procurement proposals for the TPP and to encourage your Administration not to provide “national treatment” for U.S. government procurement.  This matter is of considerable urgency given the stated goal of completing these talks this summer and the special TPP intercessional negotiations on procurement held early last month.

 While we may have different views on other aspects of the prospective TPP, we are united in our belief that American trade agreements should not limit the ability of Congress and U.S. state legislatures to determine what procurement policies are in our national interest.  Thank you for your consideration of our views, and we look forward to your response on this important matter.

 

Sincerely,

Donna F. Edwards                                                                Nick J. Rahall, II

Member of Congress                                                      Member of Congress

 

 cc: The Honorable Ron Kirk, United States Trade Representative

Korean Supreme Court urges renegotiation of investor-state clause; expresses concerns of “extreme legal chaos”

An English language Korean newspaper broke some startling news earlier this week. See the full story here.

In 2006, the Supreme Court in Korea submitted an opinion to the government recommending a renegotiation of the investor-state clause, citing concerns that the dispute system could lead to “extreme legal chaos” resulting from increased arbitration requests from U.S. investors.

Five years (and a negotiated trade deal) later, the court’s request has finally been disclosed.

The document warns against problems of sovereignty infringement, extreme investor rights, and legal instability. It also notes that “whether or not to introduce an investor-state dispute system is a decision to be made after the sufficient gathering of opinions from the South Korean public.”
(See here for more on that.) Apparently, one of the bases for their concern was a NAFTA case brought against the U.S., which we detail here.

And according to the article,

The South Korean government announced that it would be renegotiating investment-related provisions in the KORUS FTA with the US within 90 days of its effective date of Mar. 15. It has had a task force working since March on a negotiation draft.

U.S. Abandons Final Pretense of Transparency or Inclusion of Consumer, Health, Environmental, Labor Perspective in Trans-Pacific Partnership (TPP) Talks

WASHINGTON D.C. – U.S. trade officials have quietly cut stakeholder presentations from the next set of Trans-Pacific Partnership (TPP) agreement negotiations, eliminating the last pretense that the process of the talks is transparent and inclusive and sending a message that only the views of the 600 official corporate trade advisors provided special access to the talks will be reflected in the final deal, Public Citizen said today. At previous TPP negotiating rounds, a day was set aside for civil society groups and others with concerns about the TPP to make presentations to negotiators.

“The message is clear: From now on, not only will the talks remain behind closed doors, but all pretense of consideration of consumer safety, health, environmental or labor concerns has been thrown out in favor of ensuring that the damning record of past U.S. trade pacts use of the same terms being pushed by the U.S. for TPP are not brought into the discussion,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

“The stakeholder presentations were the last vestige of transparency in these TPP talks,” Wallach said. “Many negotiators from other countries have told me that the stakeholder process was very valuable because it provided detailed information on the problems caused by past U.S. trade agreements (and on how they have actually worked) that was not generally available and certainly not being shared by U.S. negotiators, who generally have promoted positions promoted by industry interests.”

                Indeed, the U.S. Chamber of Commerce recently noted on its website that it had “led the business community’s advocacy for U.S. negotiators to include strong disciplines in the TPP trade agreement on intellectual property and path-breaking new rules on regulatory coherence, due process in antitrust enforcement and state-owned enterprises. In these and other areas, U.S. negotiators have proposed negotiating text that hews close to the chamber’s recommendations.”

Public Citizen earlier this month joined with other public interest groups from the nine TPP countries to demand that the draft TPP text be released. Negotiating texts for past deals have been released, such as for the Free Trade Area of the Americas in 2001. Currently, more than 600 official corporate trade advisors have access – to which the press and public are denied. Indeed, TPP countries signed an agreement in 2010 to not release negotiating texts until four years after a deal is completed or negotiations abandoned.

To date, U.S. Trade Representative (USTR) Ron Kirk has refused to release any draft TPP text, despite repeated calls from civil society groups for more than a year. U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee’s Subcommittee on Trade, has led congressional efforts to make the process more transparent. Wyden told Oregon Live, “When international accords, like ACTA, are conceived and constructed under a cloak of secrecy, it is hard to argue that they represent the broad interests of the general public.”

“USTR’s response to the request by civil society groups and Sen. Wyden to see draft texts of a massive agreement that will rewrite wide swaths of U.S. non-trade law has been to slam the door shut, instead of opening up the process and making it more transparent,” said Wallach.

The fallout from the U.S. decision already has begun. In response, New Zealand civil society groups have called on their government to “pull the plug” and walk away from the TPP talks. The TPP negotiations cover issues ranging from banning Buy America policies, to curbing Internet freedom, to providing offshoring incentives and special rights for corporations to attack U.S. laws in foreign tribunals.

“You can only assume that the TPP would not survive the light of day, and that is why the U.S. public is being denied access to details and now civil society groups are being sidelined,” Wallach said. “The Obama administration declares itself the most transparent administration ever, and President Barack Obama campaigned on transparency in government. It’s time he put those words into action.” The next round of TPP talks will take place May 8-18 at the InterContinental Dallas hotel in Addison, Texas.                                                               

                                                        ###

As Secretive Trade Negotiations Resume in LA, Public Interest Groups Demand Transparency

LOS ANGELES, Calif. — As trade negotiators from throughout the Pacific Rim meet in Los Angeles this week for talks aimed at moving the Trans-Pacific Partnership Free Trade Agreement (TPP) towards a rapid completion, labor, environmental and consumer advocates demanded that negotiating proposals be made available for public review and comment. 

“Americans deserve the right to know what U.S. negotiators have been proposing in our names,” said Tim Robertson, director of the California Fair Trade Coalition.  “This is the third year of serious negotiations on a pact that’s supposed set the standard for international trade and investment across the globe.  It’s outrageous that the public hasn’t been told what our representatives are negotiating for and what domestic policies they are giving away.”

The TPP is soon entering its twelfth major round of negotiations between the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, and is explicitly intended as a “docking agreement” that other nations will join over time.  Canada, Japan and Mexico have already indicated their interest in doing so.  U.S. negotiators are pushing for the completion of the TPP negotiations this year. 

The U.S. has reportedly introduced text for most, if not all, of an estimated 26 separate TPP chapters covering everything from our environment to financial regulations, drug patents to public procurement.  While approximately 600 corporate lobbyists and a handful of others have been given “cleared advisor” status enabling them to review and comment on these proposals, the general public has not been allowed to do so.  This is a far less transparent negotiating process than many other international agreements, including those at the World Trade Organization, where draft negotiating texts are published online. 

“On the table in these talks are critical issues related to the rights of workers, climate change, biodiversity and our global economy.  It is crucially important that there is transparency around what is being negotiated and time for open debate and public participation,” said Ilana Solomon, trade representative with the Sierra Club.

TPP negotiations in Los Angeles are occurring from April 1 to 4 on labor, environmental and government procurement provisions.  What information is available on U.S. proposals comes primarily from a small handful of leaked documents and conversations with negotiators from other countries. 

“If U.S. negotiators get their way, the public will be barred from reviewing any proposals until the negotiations are over, at which point it will be virtually impossible to make any substantive changes,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.  “That’s a bad way of making public policy, to say the least.  Frankly, it reinforces the worst public perceptions about government working behind-closed-doors with moneyed interests at the expense of the general public.” 

                                                        ###

Public Citizen Applauds President Obama's Decision to Finally Release Draft Trans-Pacific Partnership (TPP) Trade Agreement Text Over Objections Of U.S. Trade Representative Vlad von Dracula

 WASHINGTON:  Today President Obama removed a mortifying blot from his claim of having the most transparent administration ever by releasing the draft text of a massive regional trade agreement now in its third year of negotiations that will affect wide swaths of U.S. federal and state non-trade policy, said Public Citizen.

"We thought the secrecy could not get worse than when the previous U.S. Trade Representative (USTR) Ron Kirk actually admitted under Senate Finance Committee questioning in March that he would not release the TPP text because doing so would ensure he could never complete the deal," said Public Citizen's Sunshine Isthebest. “Then the new USTR, Vlad von Dracula, announced that not only would the text never be made public until the deal was set in stone and unchangeable, but that negotiations could no longer be conducted during daylight hours to minimize the chance that those who will live with the results could get a peek.”

Although draft trade agreements have been made public by negotiating governments in the past, including the last major regional trade deal the Free Trade Area of the Americas, and the World Trade Organization posts draft negotiating texts, the TPP text has been kept secret. Indeed, in a special TPP secrecy agreement signed in 2010, the Obama administration agreed for the first time in trade pact history to keep negotiating texts secret for four year after a deal was signed or abandoned. Only 600 corporate representatives serving as officials U.S. trade advisors and officials of the 8 other TPP governments have had access to the texts, which is to say everyone but the U.S. public, press and most in Congress.

                                                                ###

 

Despite free-trade pact, S. Koreans don’t fancy U.S. cars

Just days after the Korea FTA was implemented, the word on the streets of Seoul is that buying U.S. cars is NOT a priority.

Here's a clip from the Washington Times:

SEOUL — If President Obama wants to sell more American-made cars to South Korea, nobody has yet told the average South Korean.

In a Starbucks in downtown Seoul, Shin Yoon-chu, 38, was asked for his opinion of automobiles made in the U.S.A.

“Not that popular,” Mr. Shin said. “We have a feeling that they require a lot of fuel. And if you compare to the European cars, the design is not that great.”

The Korean-U.S. free-trade agreement went into effect March 15, just before Seoul played host to Mr. Obama and more than 50 other heads of state at this week’s nuclear security summit. Mr. Obama, hoping to energize his union base and boost the economy, is fond of saying the long-sought FTA will help the U.S. auto industry by increasing exports.

“Thanks to the bipartisan trade agreements I signed into law with you in mind, there will soon be new cars on the streets of South Korea imported from Detroit, Toledo and Chicago,” he told a United Auto Workers convention in Washington in February.

Read the rest from the Washington Times by clicking here.

Global Trade Watch's Director Lori Wallach in The American Prospect

PACIFIC ILLUSIONS: NEW REPORT EXPOSES TRANS-PACIFIC PARTNERSHIP SHORTCOMINGS, AS OBAMA PRESSES AHEAD

 Washington, DC -- Today, President Obama will announce plans to escalate the administration's trade offensive against China. This follows the administration's pattern of taking a hard line on narrow issues, while at the same time working to finalize a much more consequential grand-bargain with the region: the Trans-Pacific Partnership (TPP). As Obama’s main trade and diplomatic thrust in the Pacific, the TPP is meant to revive the U.S. export economy and counter Chinese influence. In reality, it does neither. 

Pacific Illusions, a new special report by The American Prospect, examines why the TPP appears doomed to repeat the failures of previous free-trade agreements. 

Read Pacific Illusions online: http://bit.ly/AxMS2R

Pacific Illusions shows how the TPP fails on trade because it doesn’t address the most important issues: currency manipulation, trade with state-owned companies, investment subsidies to induce off-shoring, and the asymmetry between the mercantilist policies and practices of much of Asia and the free trade regime of the United States. 

Contributors and issues covered include:

-- Clyde Prestowitz, President of the Economic Strategy Institute, explains why the TPP will undercut the U.S. strategic position in "The Pacific Pivot."

 

-- Jeff Faux, founder of the Economic Policy Institute and now its distinguished fellow, analyzes how the deal will accelerate offshoring and drive down wages, in "The Myth of the Level Playing Field."

-- Lori Wallach, director of Public Citizen’s Global Trade Watch, argues that the provisions of the proposed deal and its secretive negotiations amount to a covert attack on regulation, in "A Stealth Attack on Democratic Governance."

-- Kevin P. Gallagher, associate professor of international relations at Boston University and senior researcher at the Global Development and Environment Institute, Tufts University describes how the damage won't be limited to the U.S., as the economies of smaller Asian countries will also take a hit, in "Not A Great Deal For Asia."

-- Merrill Goozner, senior correspondent for The Fiscal Times, takes a look at how U.S.-based solar and microchip industries will be harmed the agreement; Harold Meyerson, editor-at-large at The American Prospect, addresses the negative impact on auto and steel manufacturing. 

 

Obama Ignores Korean Request for Changes to Trade Deal; Implementation Rushed to Beat Korean April Election

Korean Party Expected to Win Warns Obama It Will Revoke Pact Absent Changes

 WASHINGTON, D.C. – The Obama administration should accept Korean demands to remove controversial private corporate protections from the Korea Free Trade Agreement (FTA), rather than rush to implement the deal ahead of the April 11 Korean parliamentary elections (which recent polls indicate will elevate a political party that has vowed to terminate the pact unless the “investor-state” enforcement system is altered), Public Citizen said today. The mid-month implementation date being pushed for the Korea FTA is extremely rare for the United States. Generally, trade pacts are implemented on the first day of a month, since tariff cut phase-ins are determined from the date a pact goes into effect.

On Dec. 27, 2011, the Korean parliament passed a resolution calling for FTA renegotiations to remove the private investor enforcement system. On Feb. 8, nearly 100 parliamentarians – mainly from the opposition Democratic United Party (DUP), which is expected to gain control of the parliament in April – wrote President Barack Obama, vowing to terminate the FTA if it is implemented without changes. Shortly thereafter, the United States Trade Representative announced that the pact would be implemented on March 15.

Tens of thousands of anti-FTA protestors are again in the streets of Korea, while Korean polling shows 70 percent opposition to the pact. The FTA is one of the defining issues of the Korean election. The ruling party reorganized under a new name after polling predicted defeat by the DUP, which has made opposition to the current FTA one of its marquee issues.

“Just how damaging this deal is to the 99 percent in both countries has been repeatedly revealed from this latest disgrace of trying to outrun the democratic accountability of Korea’s election to the White House, notably canceling a public bill-signing ceremony after the FTA was passed here,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “By rushing the implementation, the Obama administration is trying to cement in the extreme NAFTA-style corporate investor privileges that candidate Obama pledged would not be included in his trade agreements and that a large majority of Korea’s parliament also opposes.”

 NAFTA-style foreign investor privileges and their private “investor-state” enforcement are among the most controversial aspects of past U.S. trade deals. In fact, this provision is now emerging as a point of major contention in the Trans-Pacific Partnership (TPP) negotiations, where Australia has indicated it will not accept “investor-state” enforcement. The terms of “investor-state” promote job offshoring by requiring host countries to guarantee privileged treatment for foreign investors, forbidding limits on investors’ capital transfers, and providing corporations with a private enforcement of these rights. The system allows corporations to sue governments directly for cash damages in tribunals of three private-sector lawyers who alternate between serving as “judges” and bringing cases against governments for corporations, and who operate under arbitration rules of the World Bank and United Nations.

 The “investor-state” regime eliminates many costs and risks normally associated with relocating production to low-wage developing countries. It also exposes a wide range of common government policies and actions to challenge outside domestic courts. Currently, Chevron is using an “investor-state” tribunal to try to avoid paying $18 billion in environmental cleanup and punitive damages ordered after 18 years of U.S. and Ecuadorian court rulings. Philip Morris is using the system to attack Australian and Uruguayan cigarette plain packaging laws. More than $675 million has been paid by governments to corporations under U.S. pacts’ “investor-state” provisions alone, 70 percent of which has been in attacks on environmental, health and other non-trade policies.

 A greater percentage of Democrats in the U.S. House of Representatives opposed Obama on the Korea FTA’s passage (and two other trade deals passed the same day) than on any other legislation during his presidency. A higher percentage of House Democrats voted against Obama on this deal than did House Democrats against former President Bill Clinton’s North American Free Trade Agreement (NAFTA) or China’s entry into the World Trade Organization.

 The official U.S. International Trade Commission study showed that the Korea FTA is projected to increase the overall U.S. trade deficit, with seven U.S. manufacturing sectors particularly hard hit. The Economic Policy Institute used government trade balance data to project that the pact would cost 159,000 American jobs in its first seven years.

 The pact, signed before the global financial crisis, also includes limits on financial regulation. The Obama administration did not remedy this problem in 2010 when it tweaked auto trade provisions of the pact that had been signed in 2007 by then-President George W. Bush. Citigroup called the Korea FTA “the best financial services chapter negotiated in a free trade agreement to date.”

“The Korea FTA has become the major campaign issue in Korea. And given the growing focus on American manufacturing in the U.S. election, I suspect many American politicians will rue the day that they supported a deal that even the official government studies show will increase our trade deficit and slam seven U.S. manufacturing sectors,” said Wallach.

 

                                                            ###

Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org

USTR May Trade Away Internet Freedom, But We Won't Know Until It's Too Late

At Wednesday's Senate Finance Committee hearing on the Obama administration's 2012 trade agenda, Senator Ron Wyden grilled U.S. Trade Representative Ron Kirk about the intense secrecy surrounting the Trans-Pacific Partnership (TPP) negotiations. Since the TPP is set to include provisions similar to the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA) decried by internet freedom advocates, Americans deserve information about such a controversial policy. Sen. Wyden notes that the TPP negotiations are not a matter of national security, but are a matter of policy of broad public concern:

I’m not asking for everything to be published, and certainly, I respect your judgment with respect to, you know, issues that affect national security and classified matters.  But, issues that pertain to freedom and innovation on the net are policy questions, and the American people want the chance to participate.

The hearing heats up at minute 7:02:



Ron Kirk replies with the tired line that trade agreements could not be negotiated without this kind of secrecy, but provides no arguments or evidence to support this assertion. This claim is false on its face. The public is now provided access to negotiating documents of the WTO, arguable the most important venue for trade negotiations. There is no reason why the public should not have access to the same information for the TPP negotiations.

Not only is the text secret during the negotiations, but all TPP countries signed a secret agreement to calssify the negotiating texts for at least four years after the TPP goes into effect. After taking heat for this secret agreement that keeps everything secret, New Zealand was forced to release the text of the secrecy pact. Though neither the public nor members of Congress are permitted to view the negotiating texts, over 600 representatives from corporations have access to the texts, allowing them to steer the negotiations in their favor.

Choking on sugarcoating

Last night, the Office of the U.S. Trade Representative (USTR) released its hefty, annual Trade Policy Agenda and Annual Report. This statutorily mandated annual tome offers a good opportunity for Congress and the public to understand what USTR thinks it's doing, or what the agency wants us to think it's doing.

Unfortunately, the Trade Policy Agenda is (once again) an exercise in sugar-coating so extreme that it's surprising it got past Michelle Obama's nutrition advisers.

We've detailed how, after some initial honesty in the 2009 Trade Policy Agenda, USTR by President Obama's second year was back to the same old Bush administration rhetoric on trade policy. The 2012 agenda is in that latter vein as well. Here are just some of the flaws in the latest report:

Trade without a net (calculation). As we've detailed on this blog many times over (see here and here), one of the administration's biggest sins in its recent push for the Korea and Colombia trade deals was its claim that these deals would boost bilateral exports by $12 billion, without noting that the government's own numbers project that the deals will increase job-displacing imports more than job-creating exports. In other words, these deals are projected to be a net negative for job creating exports. We were kinda hoping that the administration might stop misrepresenting its own research once they got Congress to pass these deals. But this seems to be a case of repeating the same incorrect line so many times that you start to believe it's true.

American-made smoke and mirrors. The very first page of the Trade Agenda mentions the "Made in America" theme twice. But USTR is actually pushing the exact opposite of Made in America. Not only have our trade deals meant that imports of products Made-Overseas swamp exports of products Made-in-America, but these pacts also require that the U.S. roll back Buy American requirements for our trading partners. In fact, today, the morning after the Trade Agenda touting Made in America was published, USTR issued a determination stating that Korean-made products will be treated as if they were American for U.S. government procurement purposes.

Korea deal hurts U.S. auto sector. Everyone loves to love on the auto sector these days, and the Trade Agenda paints the Korea deal as a boon to Detroit. But once again, the government's actual numbers show that Korean auto imports will outstrip U.S. auto exports under the deal. Moreover, the harebrained (and high profile in Korea) exemption of U.S. autos from having to meet Korean auto safety and environmental standards will read like a "Do Not Buy American cars for your teen" label to every concerned Korean mother and father.

No mention of significant WTO attacks. The Trade Agenda also celebrates U.S. participation in the World Trade Organization (WTO) in 2011, but fails to mention the most important news: the U.S. lost not one, not two, but three high-profile WTO attacks on U.S. consumer protection policies. As the majority of WTO members cheered from the sidelines, three panels of nine unelected foreign "judges" ruled that U.S. efforts to reduce teen smoking and inform consumers about the origin of meats and the impact of tuna fishing on dolphins violate WTO rules. These three rulings were the first ever under controversial terms of the WTO's Agreement on Technical Barriers to Trade, and could open the U.S. up to trade sanctions. (Now, if you bother to look through the full 393 pages of the extended Annual Report, these disputes are mentioned, albeit with insufficient detail or balance to develop an informed view.)

Working hard to export less. Significant USTR resources are being expended on the Trans-Pacific Partnership (TPP). The Trade Agenda touts U.S. exports to the eight TPP nations (supposedly to point out how awesome the deal will be for U.S. exports), but fails to mention that USTR already put FTAs in place with the four most significant nations on the list (Peru, Chile, Singapore and Australia). Oops.

Don't Let the TPP Prohibit Capital Controls, Say 100 Economists

+++ Joint press release of the Global Development and Environment Institute and the Institute for Policy Studies +++

In advance of Trans-Pacific trade talks, over 100 economists are sending a letter today urging negotiators to promote global financial stability by allowing the use of capital controls.

Signatories include prominent scholars from six of the nine countries currently involved in the Trans-Pacific talks:  Australia, Chile, Malaysia, Peru, New Zealand, and the United States. The other participating countries are Brunei, Singapore, and Vietnam. Trade officials will meet March 1-9 in Melbourne, Australia for the 11th round of negotiations.  Click here for the full statement and list of endorsers.

The economist statement reflects growing consensus that capital controls are legitimate policy tools.  It notes, however, that nearly all U.S. trade agreements “strictly limit the ability of trading partners to deploy capital controls – with no safeguards for times of crisis.”

They recommend that the Trans-Pacific Partnership agreement “permit governments to deploy capital controls without being subject to investor lawsuits, as part of a broader menu of policy options to prevent and mitigate financial crises.”

Tucker in Extra!: The Trade Debate That Wasn’t Reported

Our own Todd Tucker has a piece on the media distortion of last year's trade debate in this month's edition of Extra!, Fairness and Accuracy in Reporting's magazine. Here’s a snippet:

++

In the 16 months leading up to the congressional vote on a set of trade deal with Korea, Colombia and Panama in mid-October, new reporting on the agreements scarcely mentioned that critics existed; when they were acknowledged, their objections were frequently mischaracterized. With media doing little to evaluate misleading claims made by the trade pacts' proponents, all three were approved by Congress by considerable margins.

There were two major points that opponents of the trio of deals – including  labor, environmental, consumer and even Tea Party groups – consistently emphasized in reports, press releases, letters and direct outreach to reporters.

First, these trade deals were modeled on the controversial North American Free Trade Agreement (NAFTA), a pact whose actual content reporters have historically paid little attention to (Extra!, 11-12/97). The combined text of the three new deals was nearly 4,000 pages; as with NAFTA, the bulk of the provisions were not related to "trade" issues per se, but rather restrict how the U.S. and the other nations might regulate their domestic economies. For instance, corporations are given new rights to challenge environmental and other regulations outside of national court systems, and demand that taxpayers compensate them for regulations' potential impact on profits.

Second, unlike earlier trade deals, even the government's own projections showed that the pacts would increase the U.S. trade deficit (Extra!, 10/11). The projections were produced by the independent U.S. International Trade Commission (ITC), which typically produces overly rosy estimates of trade deals' impacts.

But at two of the country's most prominent papers, the New York Times and the Wall Street Journal, such criticisms were almost entirely absent.

++

The full article is available by subscription.

Bankers Trying to Use NAFTA to Kill Financial Reform

Remember the Volcker Rule? Proposed by former Federal Reserve Chairman Paul Volcker and endorsed by five former Secretaries of the Treasury, it aims to prohibit commercial banks from trading stocks, bonds, currency, and derivatives for their own profit. (Customers of banks could still ask their banks to buy and sell these financial instruments if the customers front the cash.) Banks' risky trades played a huge role in the development of the 2008 financial crisis and precipitated the bailout for these overextended banks.

A form of the Volker Rule made it into the Dodd-Frank financial reform bill that became law in 2010, but bankers are trying to cripple the rule as regulatory agencies write the details of how the rule will work. The Investment Industry Association of Canada has raised the possibility of attacking the Volker Rule with NAFTA. In a letter sent to the Federal Reserve last month, the Association claims:

[T]he Volcker Rule will clearly interfere and raise the costs of cross-border dealing in Canadian securities. As a result, the Volcker Rule may contravene the NAFTA trade agreement.

The Investment Industry Association of Canada perfectly illustrates how "trade" agreements can reach inside nations' borders and interfere with public interest regulations that have nothing to do with the flow of goods between countries. Since NAFTA was enacted, bankers have gotten much more aggressive in their attempts to block regulation through trade deals. For example, the Korea FTA, passed by Congress in October, included much worse restrictions on financial sector regulations than NAFTA. On top of that, the General Agreement on Trade in Services of the WTO has its own set of rules that conflict with policies on capital controls, bans on risky financial services, size limits on banks, and “firewalls” between banking and investment services.

Necessary efforts to make our financial system stable like the Volker Rule may continue to run into obstacles unless we have a turnaround in trade policy to protect, rather than restrict, the right of governments to regulate in the public interest.

99 Percent Asked to Leave While the 1% Takes Center Stage At Trans-Pacific FTA Hearing

The Occupy movement was in full force in Washington last week, as local activists and members of Trade Justice New York Metro attended the Trans Pacific Free Trade Agreement (FTA) hearings. The activists wanted to tell members of Congress as well as officials from the Office of the U.S. Trade Representative (USTR) that the Trans-Pacific FTA needs to live up to the high standards the Obama administration promised the American people.

The activists donned t-shirts, with the messages “Don’t Trade Our Lives Away,” “Make Trade Fair for the 99 percent,” and “Got Text?” to represent their opposition to the way the Trans-Pacific FTA has been negotiated thus far. During an intermission between panelists, the activists linked arms and stood by the door to allow the press and members of Congress to read their messages of dissent. The Capitol police photographed the activist attending the hearing and then promptly asked them to leave. While it was clear that the 99% was not wanted at the hearing, the 1% took center stage before the powerful Ways and Means Committee, which oversees trade deals.

First, the panel heard the testimony of Deputy U.S. Trade Representative, Ambassador Demetrios Marantis.

Angela Hoffman, Vice President of Global Integrated Sourcing and Trade for Wal-Mart Stores, also testified in favor of some very one-percenter policies. The Wal-Mart representative stated, “USTR should consider alternative approaches to yard forward provision.” The “yard-forward rule of origin” provisions was presented by members of Congress trying to protect over 470,000 American workers in their districts, who are employed in the US textile industry and cannot compete with the low wages paid to workers in Vietnam and China. Wal-Mart also pushed for greater liberalization of non-tariff regulations such as “limitations on size, geographic locations and merchandise assortment.

One of the concerns presented by the activists is the lack of transparency. While Obama and the USTR stated that they would usher in a new era of transparency, this has not been the case. Instead, the only text of the negotiations that has been released is a memo of understanding signed by the Obama administration and negotiating parties that they will not release the text of the negotiations until 4 years after the deal is concluded or the talks have ended. Activists were also concerned with troubling limitations on access to medicines, which may occur if trade negotiators extend intellectual property rights as well as data exclusivity beyond the May 10, 2007 agreement, which helped to increase access to medicine by allowing low income countries to produce generic medicines under more flexible arrangements.

Members of Congress have also issued letters to the United States Trade Representative, Ron Kirk, to ensure that the new TPP negotiations do not worsen access to medicines for critical programs to combat AIDS, malaria, tuberculosis, and other life-threatening diseases. Yet, it seems as if US trade negotiators hear the voices of the 1% far louder than those of the 99%, and are now considering a medical pricing proposal brought to them by Big Pharma. We have not forgotten the words made when President Obama was simply the Senator from Illinois, fighting for the 99% “Together, we must forge trade that truly rewards the work that creates wealth, with meaningful protections for our people and our planet.” We will fight to keep this promise even if the 1% do not.

Now They Tell Us: Korea FTA Auto Tweaks Were Useless

In the run-up to the congressional vote on the Korea FTA, the Obama administration claimed that its small tweaks to the Korea FTA's auto provisions would lead to greater exports of U.S. autos to Korea. The relaxation of Korean environmental and safety standards for imported U.S. vehicles was supposed to soften the blow of the clobbering that U.S. automakers would suffer when U.S. tariffs on Korea vehicles were lifted under the FTA. Trusting this claim, Congress passed the Korea FTA last month. Now Bloomberg is reporting that the tweaked auto provisions were all for naught:

When Back Seung Chul bought a new car in Seoul, he didn’t even look at imported models from General Motors Co. (GM), Chrysler Group LLC and Ford Motor Co....

Back’s decision -- he bought a Sportage R sports utility vehicle from Hyundai (005380) affiliate Kia Motors Corp. -- suggests that a new U.S.-Korea trade deal won’t mean a leap in sales in the Asian country for U.S. automakers, which accounted for just 1.1 percent of the market last year. The agreement, likely to take effect Jan. 1 after it was signed by President Lee Myung Bak in Seoul today, calls for the phasing out of South Korea tariffs on U.S. vehicles.

“It is highly unlikely American cars will do well in the Korean auto market,” said Kang Sang Min, a Hanwha Securities Co. analyst in Seoul. “Local automakers like Hyundai and Kia can make good cars and offer quick, convenient service.”

The article also discusses the widespread preference for fuel-efficient vehicles in Korea, since Koreans must buy gasoline at double the price of U.S. consumers. Somewhat ironically, the Obama administration's efforts to have Korea relax its fuel efficiency standards for imported U.S. vehicles will only solidify the negative perceptions of U.S. vehicles in Korea.

In sum, Koreans' preference for domestic vehicles over U.S. vehicles - not safety regulations - is the reason that sales of U.S. vehicles have lagged. We warned about this in our comments to the U.S. International Trade Commission (USITC) about the methodology that they would use to predict the impact of the FTA upon the U.S. auto sector. Even though the USITC did not adopt the modifications to their methodology that we recommended, its report still predicted that the annual U.S. auto trade deficit would rise by hundreds of millions of dollars under the Korea FTA. Although Bloomberg's reporting on this issue can be viewed as better late than never, it is certainly too late for the thousands of U.S. auto workers who will likely lose their jobs from the Korea FTA.

Election 2012: the Candidates on Trade

(Disclaimer: Public Citizen has no preference among candidates for office.)

With the budget and other scandals dominating political discourse, little space has remained for discussion of trade policy among possible presidential candidates.

To fill this void we decided to examine exactly where the politicians fall on key trade issues:

Bachmann
Although foreign policy hasn’t always been her strong suit, Rep. Michele Bachmann (R-Minn.) is pretty confident about her views on trade. Bachmann interrupted her presidential campaign and broke a streak of 88 absences to cast a vote in favor of the free trade deals with Korea, Colombia and Panama. In a press release she writes that these deals will “spur economic growth… without cost to taxpayers.” Notably, the representative voted against Trade Adjustment Assistance, which would provide support for workers displaced by the deals. Bachmann also voted against Fast Track cancellation in 2008 and in favor of the Peru trade deal in 2007.

In a blog post urging lawmakers to pass the Korea, Colombia and Panama trade deals, Bachmann writes that the “role of free trade as an expression of liberty….signifies the very principles our country was founded upon.” Unfortunately, these trade deals were negotiated under Fast Track, leaving Congress no authority to amend the agreements. (The constitution, or the document our country was actually founded upon, outlines a system of checks and balances granting Congress the power to “regulate commerce with foreign nations”).

Paul
A self-proclaimed proponent of free trade in its most pure form, Rep. Ron Paul (R-Tex.) opposes NAFTA-style trade deals because they erode U.S. sovereignty and are unconstitutional. He has voted against almost every trade deal that has surfaced during his tenure in office, including Peru, Oman, Bahrain, CAFTA, Australia, Singapore and Chile. Paul has also been an advocate of withdrawing from the World Trade Organization.

US-Korea deal approved over heated opposition

After months of demonstrations and heated debate over the US-Korea trade deal, the Grand National Party called a plenary session and immediately voted on the bill before the opposition legislators could stop them. One lawmaker in particular tried to halt the vote by detonating a tear gas canister (read the details of the vote here). Still, the desperate attempt failed to detain the ruling party from passing the deal 151 to 7. As the New York Times reports,

In the 299-seat National Assembly, 170 members showed up for the vote Tuesday, most of them governing party lawmakers. The opposition members either voted against the bill or abstained.

Watch the video of the scuffle between the ruling party and the opposition:



The vote has prompted massive demonstrations in the street. Our allies in Korea reported that more than five thousand protesters occupied the streets in Seoul. The police aimed water cannons at them and arrested many activists.

Watch the video of the protest here:



Like many Americans who will hold their congressional leaders accountable for their vote on the trade deal, the Korean Alliance against KorUS FTA (KoA) and other opponents of the deal will be launching a campaign against the lawmakers who voted for the agreement in the next general election. The outrage in both countries yet again demonstrates the need to change the current unfair trade model that benefits the 1%.

Showdown in Korea Over Trade Deal's Investor Provisions

Tensions in Korea are still mounting over the US-Korea trade deal. The agreement passed in the US Congress despite the vast majority of Democrats voting against the bill. Now all eyes turn to Korea as Korea’s Democratic Party opposition leaders and the ruling Grand National Party come to a standstill over the Investor-State Dispute clause in the trade pact.

While Korean corporate groups are pushing for speedy ratification of the trade pact, opposition is mounting over what the opposition party sees as a threat to its domestic laws. The Investor State Dispute clause has become a point of contention. The Korea FTA Industry Alliance claims, “It is necessary to protect the $21.7 billion that it has invested in the United States over the past 5 years.” Yet, the opposition party sees the investor state claims as an affront to Korean sovereignty and its ability to enforce domestic policies.

Public Citizen also raised the investor state dispute settlement clause as one of the fundamental flaws in the Korea deal. The Investor state clause would allow for Korean and US multinational investors to have disputes heard before foreign tribunals, despite the fact that both countries have strong domestic court systems. These clauses allow investors to be awarded taxpayer-funded cash compensation if environmental or health policies get in the way of their expected future profits.

In order to ease tensions, President Lee, in a rare move, addressed parliament and has agreed to renegotiate the investor state clause with the US three months after the agreement is ratified. The Democratic opposition party is not backing down and is echoing the sentiment of the thousands of daily protestors that have gathered in Seoul to protest the trade deal. Party spokesman Lee Yong Sup stated that the party will not agree to ratification of the FTA before the investor state clause is renegotiated.

Songs of Protest Occupy APEC

While world leaders met inside well-secured hotels and facilities last weekend during the Asia-Pacific Economic Cooperation, the streets of Waikiki were occupied with voices of dissent.

First, on Friday, union workers from the International Brotherhood of Electrical Workers (IBEW) went on strike against the phone company Hawaii TelCom. Striking workers protested against the company’s export of Hawaii jobs to Saipan and its demand to reduce crucial worker benefits.  The opportunity to demonstrate the connection to APEC and the current negotiations between the Trans-Pacific Free Trade Agreement (FTA) countries was not lost on workers and civil-society. IBEW and UNITE-HERE Local 5 sponsored a rally and teach-in on the FTA that was attended by labor groups, international allies and local activists. Hundreds poured in during the rally to denounce APEC’s conference of bankers, corporations and politicians and the secret negotiations seeking to expand a NAFTA of the pacific.

The following day many more protesters and Occupiers marched from Honolulu to the center of Waikiki chanting and voicing their opposition to APEC’s free trade talks. (Read more about the march here.) But the most creative outlet to decry the summit’s intent on corporatizing the world came from renowned Hawaii guitarists and singer Makana. The artist was invited to perform at an APEC gala held inside Hale Koa hotel. He surprised world leaders by not only wearing a t-shirt that read “Occupy with Aloha,” but also by singing protest ballad called “We are the Many.” Check out the performance below:


Read more about Makana occupying APEC here.

Korean Public Still Resilient against US-Korea deal

After the trade deal with Korea was approved in Congress in mid-October, I received a message from one of our close Korean activists and member of the Korean Alliance against the KorUS FTA (KOA). He wrote: Now, it is our turn.

Grassroots activists, civil-society groups, and labor unions (all members of KOA) along with students, OccupySeoul, and dissenting politicians have lived up to their rhetoric. Against all odds, they have successfully delayed the vote on the trade deal using an array of political tactics and civil disobedience.

Last week, opposition National Assembly members from the Democratic Party and Democratic Labor Party occupied the hearing room of the foreign affairs committee, which must make a preliminary vote on the trade pact before it is voted on by National Assembly. In occupying the room, they prevented the committee from voting—sending a clear message of defiance to Korea’s ruling party and key FTA supporters.

On the ground, the Korean Alliance, students, and Occupiers have been holding mass demonstrations and daily candlelight vigils in the streets of Seoul. Several times they have marched in protest and have been confronted by police (see more pictures and videos here).


On November 10th, a disturbing observation from KOA was sent to us, reporting, “At the protest held today near the National Assembly building, the policemen turned a water-cannon to shoot protesters. This caused one of the protester's eardrums to rupture. And 11 were arrested.” (See video here.) One of the protesters arrested is a member of the Korean Confederation of Trade Unions (the equivalent of the AFL-CIO) who visited Washington, DC earlier this year and spoke with members of Congress about the Korea trade deal’s economic impacts on the auto industry.

Although protesters are being confronted by police officials almost on daily basis, the Korean Alliance and other activists will continue to demonstrate. This weekend another mass protest will take place as plans for an international day of solidarity are currently in the works with Occupiers and other groups in the US.

Japan Forces Down Value of Yen, Raising Concerns on Trans-Pacific FTA

Last week the Japanese central bank undertook the single largest intervention in its currency market since at least 1991 when it bought about $100 billion in U.S. dollars. The intervention was designed to push down the value of the yen, and it worked: the value of the yen fell five percent against the dollar, the largest single-day drop since the depths of the financial crisis in October 2008.

Even in ordinary times, this intervention would concern U.S. policy makers, as it will likely boost the U.S. trade deficit with Japan as Japanese imports become cheaper and U.S. exports to Japan rise in price. But now in particular it should give pause to policymakers since Japan has expressed interest in joining the Trans-Pacific Free Trade Agreement (FTA) talks. U.S. trade negotiators will be meeting with their counterparts from other countries to discuss the Trans-Pacific FTA during the Asia-Pacific Economic Cooperation summit this weekend in Honolulu, and Japan's interest in joining is sure to come up. As of yet, there is no sign that the Trans-Pacific FTA will discipline currency manipulation, so the U.S. could end up signing a trade deal with a country that is willing to massively intervene in the currency market, leaving U.S. businesses and workers vulnerable to artificially cheap imports.

Japan has a long history of intervening in its currency market for trade advantage. According to the Congressional Research Service, Japan has intervened heavily in its currency market to hold down the value of the yen in the periods 1976-1978, 1985-1988, 1992-1996, and 1998-2004. During the last period of heavy intervention, stretching from 1998 to 2004, the Japanese yen was undervalued by about 20 percent, or about 600 percent greater than the average U.S. normal trade relations tariff of 3 percent. To put this into perspective, GM estimated that the undervaluation of the yen amounted to a subsidy on Japanese autos sold in the U.S. of about $3,000 per vehicle in 2003. This virtual exchange rate subsidy likely hurt sales of U.S.-made vehicles in the United States and cost jobs.

The latest estimates of the equilibrium yen exchange rate suggest that the yen is undervalued against the dollar by about 10 percent, contributing to the $60 billion U.S. trade deficit with Japan. And those estimates were developed before Japan initiated its latest round of currency intervention. Will U.S. policymakers blindly sign a trade deal with a country that manages its exchange rate for trade advantage, like they did with Korea? Or will they steer the Trans-Pacific FTA negotiations toward the 21st-century fair trade model that the Obama administration has promised?

Sherrod Brown Tosses the Panama FTA

Well, not quite. But, man, that FTA text does look pretty heavy, and like it could put a hurtin' on some of the senators in the room that are against fair trade.

But here's a floor speech from fair trade champion Sen. Sherrod Brown (D-Ohio) on the night the Senate voted on the Panama, Korea and Colombia trade deals. It's about 30 minutes, and a very eloquent description of why these trade deals are no longer primarily about "trade," but about how we regulate our domestic economy. Brown's TRADE Act would go a long way to getting "trade" policy right.

Wallach and Tucker in American Prospect: Parties realign on flawed trade deals

Our own Lori Wallach and Todd Tucker have a piece in the American Prospect today. Here’s a snippet:

++
 
As he gears up for a difficult re-election campaign, President Obama risks losing key swing states that he won in 2008 because of a recent flip-flop on trade commitments…
 
Even the government’s own study, produced by the U.S. International Trade Commission (ITC), showed that these pacts would increase U.S. imports by more than exports…
 
Instead of probing such matters, most mainstream press reports over the entire four-plus year debate simply parroted corporate and Obama-administration talking points.

The missed political storyline, too, was equally astounding. Two-thirds of Democratic House members opposed Obama on the Korea pact and 82 percent who opposed him on the Colombia pact. It's his biggest split with House Democrats thus far. The number who voted against the deal is even greater than the percentage of House Dems who opposed the Patriot Act (63 percent) or the war-funding bills (56 percent). And of course, Obama got nothing in return for the capitulation: Republicans advanced the trade pacts while blocking his second stimulus package. So much for negotiation.

It took Bill Clinton nearly eight years of NAFTA job losses, sellouts, and scandals to have about two-thirds of the House Democrats vote against China’s entry into the World Trade Organization in 2000. Obama managed to meet and beat that record with his first trade votes. The percentage of Democratic House votes against these deals even surpassed Democrats’ average level of opposition to Republican presidents’ trade initiatives.

++
 
Click here for the full article.

Trade Talks in Peru Meet Strong Opposition

As trade negotiators from the U.S. and eight other Pacific Rim countries met in Lima, Peru this week for Trans-Pacific Free Trade Agreement (FTA) talks, Peruvian and global activists criticized the continued secrecy of the talks and the public health implications of recently leaked texts on drug patents and pharmaceutical pricing.

Read Public Citizen's statement about the dangers of the leaked U.S. proposals.

And here's some television coverage from a leading Peruvian news network of a civil society rally outside the hotel where talks are taking place, featuring some of our Peruvian and international allies.

 

 

Recently Revealed ‘Secrecy Pact’ for Trans-Pacific Trade Talks Belies Obama Administration Promises of Transparency in Trade

U.S. Groups Escalate Demands for Access to Trans-Pacific Trade Texts as Global Push for Transparency Builds on Eve of Talks

WASHINGTON, D.C. – After a leaked document revealed that the Obama administration signed a special pact to keep all documents relating to Trans-Pacific Free Trade Agreement (FTA) negotiations secret, a broad array of U.S. groups – including Public Citizen – joined their global counterparts today in demanding an end to the secrecy surrounding the controversial negotiations.

Twenty-two U.S. labor, consumer, faith, environmental and human rights organizations – including the AFL-CIO, Sierra Club, Presbyterian Church (USA) and Public Citizen – sent a letter to U.S. Trade Representative Ron Kirk calling on the U.S. government to implement the administration’s transparency pledges, to take the lead in ending the recently revealed secrecy pact and to release Trans-Pacific FTA negotiating texts. Groups in other participating countries sent similar letters to their governments.

“The fact that negotiators have gone out of their way to execute a special secrecy agreement has made a lot of people wonder just what exactly they are so afraid the press, the public and Congress would see if there was openness,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “While executives from hundreds of corporations have been named ‘official trade advisors’ by the Obama administration and given access to the texts, the people whose lives would be most affected may never get to see what our negotiators are bargaining for – and bargaining away – until it’s all over.”

Trans-Pacific FTA talks have taken place behind closed doors, and none of the draft texts has been released despite President Barack Obama’s promises that the Trans-Pacific FTA will usher in a new era of transparency in trade agreement negotiations and result in a “high-standard, 21st century agreement.” Two-thirds of all House Democrats just voted against Obama on FTAs he submitted that had been negotiated in secret by the previous administration. A greater percentage of House Democrats opposed Obama on the passage of these trade pacts than on any other legislation since he took office.

“Given that texts are released by the World Trade Organization and other negotiating venues in which these countries participate – and after years of Obama administration pledges that its trade policymaking would be open and inclusive – it is really outrageous that they signed a special pact to keep the content of these talks that will affect so many peoples’ lives totally secret,” said Wallach.

Today’s letter comes after an effort earlier this year to obtain access to negotiating texts. Obama administration officials never responded to the past demands, which also were made by major Democratic base organizations. In February, scores of civil society groups in five of the nine countries involved in the negotiations launched a coordinated “release the text” campaign with letters to their trade ministries. Parliamentarians in some countries have become involved in combating the secrecy surrounding the talks. It was not until the September negotiating round in Chicago that negotiators admitted that in May 2010 they had signed a secrecy agreement that would keep all negotiating documents secret for four years after the talks conclude.

“With numerous negotiating texts now established in addition to the investment and financial services chapters, the relevance and urgency of our request has only increased,” the letter said.

Read the full letter, as well as other letters from the international campaign, here. 

###

Vast Majority of Dems Abandon President, and Media Misses It

It's typically treated as pretty newsworthy when a majority of a president's own party votes against a signature presidential initiative. Double that when over two-thirds do so. Triple the newsworthiness when it's the first time that magnitude of opposition has occured in a president's tenure.

Quadruple for when talking heads are debating whether elected officials will carry the banner of a wide-ranging new progressive protest movement that has declared its independence from that same president. And quintuple when the president has presented a two-plank carrot-stick deal with Republicans - controversial trade deals that won't create jobs plus stimulus spending that will - and when the Republicans move forward with the job-killing plank. But the job-creating plank? Not so much.

This describes precisely what happened with last night's votes to expand NAFTA-style deals to Korea, Colombia and Panama. But you wouldn't know it from any of this morning's press coverage of the vote, which lauded the "bipartisanship" of a deal that was supported by only a tiny cohort of corporate Democrats.

This is deeply misguided, as Lori Wallach noted over at FireDogLake,

"Today a larger share of House Democrats voted against a Democratic president on trade than ever before. It took Bill Clinton nearly eight years of NAFTA job losses, sell outs and scandals to have (not even) two-thirds of the House Democrats vote against him on trade."

Obama managed to do the same in three, getting Democratic opposition nearly 20 percentage points higher than Clinton ever did.Over 82 percent of Democrats opposed the Colombia FTA, while over two-thirds opposed the Korea FTA and over 64 percent opposed the Panama FTA. Even a majority of the New Democrats - the most pro-NAFTA grouping in the party - opposed. These percentages go well beyond the previous high-water mark of House Dem revolt from the president (the February vote on the Patriot Act).

Why were Dems so opposed? The deals won't do anything to help the jobs crisis, and could make things worse. On top of that, they contain hundreds of pages of non-trade provisions that put obstacles in the way of re-regulation of Wall Street and environmental protection. Rep. Mike Michaud (D-Maine), a leading Blue Dog, lays out the analysis in this compelling speech that takes the White House to task.

Democrats' declaration of independence wasn't the only thing that was missed in the coverage. The media also missed the storyline of the Tea Party's abandoning of its principles. Candidate Rand Paul, for instance, railed against the WTO as as an intrusion on U.S. sovereignty. Countless House Tea Party candidates ran paid ads attacking job offshoring, helping them make key inroads among working class voters. Yet virtually the entirety of the Tea Party backed candidates sided with the president for job offshoring deals.

Indeed, there has always been several dozen Republicans who could be counted on to vote against unfair trade policy - even in super-close votes like Bush's push in 2005 for CAFTA, which passed by two votes. Fast forward to 2011, when ONLY SIX Republicans voted against the Panama FTA. This is a historic shift for a party who has always had a more trade-skeptical segment going back centuries.

These political shifts are likely to have major consequences in the upcoming elections. Many Democrats have - like the movement on the streets - declared their political independence. Will it be enough to make up for being down-ticket from a president who flip-flopped on his own campaign pledges to overhaul U.S. trade policy? The world will be watching.

(P.S. The media also was also mum that the president was misrepresenting the government's own studies on the likely economic impact of the deal. These studies, unlike similar studies for all earlier trade deals, showed an increase in the trade deficit. For virtually the entire four-year debate on the bills, the media mentioned only the projected export increase, without discussing the projected import increase. This was Very valuable political cover, but not particularly good reporting. But that's another story.)

Job-Killing Trade Deals Pass Congress Amidst Record Democratic Opposition

Obama and Tea Party Flip Flop on Fair Trade Campaign Commitments

Statement of Lori Wallach, Director of Public Citizen’s Global Trade Watch

With nine percent unemployment and Americans desperate for job creation, it is unconscionable that President Obama and House Republicans would push through a trio of NAFTA-style job-killing trade agreements that even the government’s own studies show will increase the U.S. trade deficit.

This represents a complete flip-flop for President Obama, who won crucial swing states by pledging to overhaul our flawed trade policies. So it is no surprise that a sizeable majority of Democrats in Congress voted against these agreements, against Obama and for American jobs.

Today a larger share of House Democrats voted against a Democratic president on trade than ever before. It took Bill Clinton nearly eight years of NAFTA job losses, sell outs and scandals to have nearly two-thirds of the House Democrats vote against him on trade.

Given the strong Democratic opposition, ultimately it was the Tea Party GOP freshmen who passed these job-killing deals despite their campaign commitments at home to stand up for Main Street businesses, against more job offshoring and for Buy American requirements. The three pacts explicitly ban Buy America procurement policies. The Korea FTA is projected to increase the trade deficit, with seven U.S. industrial sectors hardest hit and job losses of 159,000 in its first seven years.

Members of Congress that voted for these job-killing agreements – backed by Wall Street and America’s most notorious job-offshoring corporations and harmful to American workers, small business and consumers – will face a reckoning as the damage of these pacts hits home. We promise to closely track and publicize every development.

Everyone is asking what the Obama administration could have been thinking to push the sorts of NAFTA-style trade deals that polls show majorities of Democrats, Independents and even GOP voters oppose as job killers, especially after the lesson of the 1993 NAFTA vote, when a Democratic president’s blurring of the distinctions between the parties on trade and jobs caused a disgruntled base to stay home. 

Every election cycle, more Democrats and GOP are campaigning against these sorts of NAFTA-style trade pacts. Given this and the high unemployment rate, it will be very rough for those officials who then betrayed folks at home and voted for these deals loved only by Wall Street and job-offshoring corporations.

Record of Congressional Democratic Opposition to Democratic Presidents on Trade Pacts

- 82.3% of House Democrats opposed the Colombia FTA (158 Democrats against, 31 for)

- 67.7% of House Democrats opposed the Korea FTA  (130 Democrats against, 59 for)

- 64.1% of House Democrats opposed the Panama FTA (123 Democrats against, 66 for)

- 60.6% of Democrats opposed NAFTA (1993)

- 35% opposed the WTO (1994)

- 65.56% opposed China PNTR (2000)

 

Record of Congressional Democratic Opposition to GOP Presidents on Trade Pacts

- 62.6% opposed the Chile FTA (2003)

- 62.14% opposed the Singapore FTA (2003)

- 41.3% opposed the Australia FTA (2004)

- 39.32% opposed the Morocco FTA (2004)

- 92.6% opposed the Central America Free Trade Agreement (2005)

- 40.4% opposed the Bahrain FTA (2005)

- 87.6% opposed the Oman FTA (2006)

- slightly more than half opposed the Peru FTA (2007)

House Dems Take White House to Task

Check out this powerful speech by Rep. Mike Michaud (D-Maine), a fair trade champion, sayin' stuff that needs to be said:

 

Livetweeting the Unfair Trade Pact Trifecta

Follow us on Twitter @pcgtw.Going on now!

Also, check out Fairness and Accuracy in Reporting's take on the press coverage around the FTAs, and Glenn Hurowitz over at HuffPost on the awful political calculus the adminstration made by taking up these deals.

Obama Shifts Away From Jobs Message to Promote Bush-Signed Trade Pacts Projected by Official Government Studies to Increase Trade Deficit

Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch

It is bizarre that President Barack Obama has switched from his long-awaited focus on jobs to spending effort passing three George W. Bush-signed, NAFTA-style trade deals that official government studies show will increase our trade deficit even as polls show most Americans oppose NAFTA-style trade pacts and recognize that they kill American jobs.

The only way these deals will pass is if congressional GOP lawmakers expose themselves to the foreseeable election attack ads and provide President Obama almost all of the votes; most congressional Democrats will oppose these deals, which are loved by the U.S. Chamber of Commerce and despised by the Democratic base groups.

Apparently, the Obama team has a way to win re-election that does not involve Ohio or other industrial swing states. We saw with NAFTA in 1993 the dire political consequences of a Democratic president blurring distinctions between the parties on this third-rail issue of trade and jobs. And unlike NAFTA, this time, even official government studies show that these pacts will increase our trade deficit.

Trade disaster: Congress votes tomorrow

A message from Lori Wallach, Director of Public Citizen's Global Trade Watch

You don't hear from me often. Over the past year, I have spend most of my time on Capitol Hill, meeting with members of Congress, educating them about our current flawed trade policy and how we can create a trade model that works.

I have been working to get a majority on Congress to say NO to the three devastating NAFTA-style trade deals signed by Pres. Bush that now Pres. Obama is trying to ram through Congress.

But today, I urgently need a favor from you. It will take about five minutes. Congress will vote on these job-killing, unsafe-import-flooding deals on Wednesday. I need you to pick up the phone and call 1-800-718-1008 right now to stop the three unfair trade deals with Korea, Colombia, and Panama.

Take 5 minutes to save jobs. Dial 1-800-718-1008 and tell your Representative to vote NO on all three flawed trade deals.

Here’s why:

• The Korea trade deal is the largest offshoring deal of its kind since NAFTA. If approved, the deal will displace 159,000 American jobs in the first seven years. Even the official U.S. government study on the Korea pact says that it would increase our trade deficit, and it hits the "jobs of the future” sectors hardest – solar, high speed trains, computers. [Learn more]
• We should have never even discussed a new trade deal with Colombia, the world capital for violence against workers. More unionists are assassinated every year than in the rest of the world combined. In 2010, 51 trade unionists were assassinated. Do you think we would consider a trade deal with a county where 51 CEOS were murdered? So far in 2011, another 22 have been killed, despite Colombia’s heralded new "Labor Action Plan.” [Learn more]
• The Panama agreement has many of the same problems as the other two deals -- undercutting the reregulation of the big banks and speculators who destroyed our economy and empowering foreign investors to attack U.S. health, safety, labor and environmental laws before foreign tribunals. But, Panama is also one of the world’s largest tax havens. There, rich U.S. individuals and over 400,000 corporations take advantage of the offshore financial center, many dodging paying the taxes our communities desperately need. This FTA would undercut our current tools to fight tax dodging and money laundering. [Learn more]

Stop the trade deals that replicate the failed policies of the past. Call your Representative today.

Behind the scenes and throughout the country, our team has done everything we can do to try and get through to the leaders in Congress to stop these trade agreements. But it looks like many of our leaders in Washington—both Democrats and Republicans—are siding with corporate lobbyists instead of learning from the experience of working Americans.

YOU know the reality of these trade deals better than corporate lobbyists—and Congress needs to listen to you.

Please call 1-800-718-1008 right now.

Speak out with millions of Americans against the job-killing trade deals that only reward fat cats, off-shore our jobs and undermine our environmental and financial stability safeguards.

Lori Wallach on HuffPo: "Obama Flip-Flopped Off Trade Cliff"

Check out Lori Wallach's latest piece on the Huffington Post.

 

Obama Flip-Flopped Off Trade Cliff

"Apparently, Obama has a plan for winning re-election that does not involve Ohio... oh, and he is tired of talking about job CREATION..."

Read the entire piece at the Huffington Post.

November Deadline for Obama’s First Trade Deal Falls Away as Controversies Roil Chicago Trans-Pacific Trade Talks

American Medical Assoc. Enters Fray Over Inclusion of Tobacco, Alcohol in Deal; Obama Administration Proposal Limiting Access to Medicines Stirs Fury

CHICAGO – A range of controversies, mostly on health issues, has emerged at negotiations of the Trans-Pacific Free Trade Agreement (FTA) in Chicago this week, such that the vaunted deadline to complete the deal – the November Asia-Pacific Economic Cooperation (APEC) summit in Hawaii – will not be met. And after this eighth round of negotiations, troubling signs are emerging that the Obama administration’s first trade deal could roll back initial reforms made on affordable access to medicines made during the last round of George W. Bush-era trade deals, Public Citizen said today.

“While the administration keeps touting this potential first Obama trade pact as a new 21st century model, and instead of implementing the many specific trade reforms President Obama pledged as a candidate to avoid more job loss and ensure import safety, it appears the administration is pushing for something like NAFTA on steroids with Vietnam and Malaysia,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Growing controversy over the trade deal’s threats to domestic regulation of cigarettes and alcohol escalated when the American Medical Association (AMA) made its first foray into the trade debate, sending a letter on Sept. 8 to U.S. negotiators demanding that tobacco and alcohol be excluded from the pact. The AMA and other public health groups intensified their focus on trade talks after the World Trade Organization (WTO) ruled recently that the U.S. ban on clove, cola and candy-flavored cigarettes in the 2009 legislation to combat youth smoking violated WTO requirements, and ordered the policy changed. This followed an attack by tobacco giant Philip Morris Asia against Australia’s proposed cigarette “plain packaging” rules using an international commercial agreement that follows on a similar assault by a Swiss Philip Morris unit on a similar Uruguayan law initiated last year. Both attacks use the “investor-state” private enforcement system the Obama administration is pushing for in the Trans-Pacific pact.

Meanwhile, various countries and U.S. health, consumer and development groups reacted with ire as the Obama administration sought to distract attention from a proposal it was submitting earlier this week to roll back Bush-era 2007 improvements for affordable medicines access by expanding trade pact patent rules. While the U.S. proposal was being submitted behind closed doors, a paper was released publicly announcing a U.S. “Trade Enhancing Access to Medicines (TEAM) initiative” that was advertised as revealing a new policy to increase access to medicines for consumers. In fact, this initiative simply repackaged many of the most problematic aspects of the long-standing, retrograde U.S. position on trade patent rules that restrict medicinal access.

“It is insulting that the Obama administration released this paper on ‘access to medicines’ on the same day that it put forth its most controversial and access-restricting provisions at the Trans-Pacific FTA negotiations,” said Peter Maybarduk, director of Public Citizen’s Global Access to Medicines Program. “The U.S. intellectual property proposal rolls back even some of the few protections for access to medicines in the Bush-negotiated trade pacts. The administration is heading rapidly in the wrong direction, at the expense of global public health.”

The Obama administration’s attempts to roll back the “May 2007” reforms of trade pact patent rules relating to medicine access, its insistence over objections by Australia and other countries that private corporate “investor-state” enforcement be included, and its rejection of exclusions for any product from the deal is likely to add more dead weight to its efforts to pass pending Bush-negotiated trade deals with South Korea, Colombia and Panama. These deals were signed in 2007. After months of insisting votes would happen “within weeks,” it is increasingly likely that Congress could consider the deals in October. These three trade deals contain the same foreign investor rights and private enforcement used by Philip Morris to attack tobacco regulation in other countries.

“Obama folks always say that there just was not much they could do to fix the Bush-negotiated Korea, Colombia and Panama deals, but that when the new administration negotiated its own trade pacts, it would do them differently,” Wallach said. “Well, now they’re negotiating their own trade deal, and it’s looking like a Bush NAFTA-style deal in key respects – and even worse in some areas – and that only builds even more opposition to Obama’s call to pass Bush’s  old deals.”

Trans-Pacific FTA negotiations currently include Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam. The next round of Trans-Pacific FTA negotiations will be held next month in Lima, Peru. No high-level negotiations will take place at the APEC summit in Hawaii in November.

At least 18,600 jobs offshored by corporations signing pass-the-FTAs ad

As part of the corporate ad campaign to push congressional passage of the NAFTA-style trade deals with Korea, Colombia, and Panama, the heads of 32 corporations placed an "open letter" in yesterday's National Journal Daily (subscription only). Thing is, many of these very corporations are certified by the U.S. government as having offshored thousands of jobs under past U.S. trade agreements. That's right, the advertisement claiming that these Bush-era FTAs are needed to create U.S. jobs is sponsored by many chronic trade-agreement offshorers of, um, U.S. jobs.

Moreover, while these CEOs claimed that these deals would create U.S. jobs, the government’s own official studies predict an increase in the U.S. trade deficit from the deals. And, an independent economist projected the net loss of hundreds of thousands of jobs from the pacts. The historical record of similar trade agreements is that the United States has slower export growth to countries we have NAFTA-style deals with than with other countries.

In reality, it's likely that these corporations are licking their chops waiting for the offshoring opportunities that will come with another batch of unfair trade deals. Thanks to the Department of Labor's Trade Adjustment Assistance (TAA) data on workers laid off due to imports and offshoring, we can see how these corporations have taken advantage of past unfair trade deals to ship jobs overseas. (And, given it provides a list of corporate offshorers, we can also see why the Republicans in Congress are keen to kill off this program that provides training and extended unemployment benefits to workers whose are certified as casualties of trade pacts, offshoring, and rising imports.)

We have a searchable form of the TAA database on our website. There you can see that some of these 32 corporations have shipped a combined 18,600 American jobs overseas since 2001. Consider that an example rather than a full accounting of the damage, as TAA is a narrow program that excludes many workers who may well have lost their jobs to trade pacts and imports but who do not meet the program's criteria. If a broader range of trade-related job loss is utilized, the Department of Labor reports over 35,000 workers who have lost their jobs at these companies due to trade since 2001.

Just to pick out a few examples, Whirlpool took advantage of NAFTA and shipped over 1,000 jobs at their Fort Smith, Arkansas facility to Mexico in 2008. Caterpillar, a major backer of the proposed trade pact with Colombia, laid off 338 workers at its Mapleton, Illinois facility when it shifted their work to Mexico. And it looks like Texas Instruments was getting a head-start on the offshoring possibilities offered by the Korea trade deal when it shipped 149 jobs at its Attleboro, Massachusetts facility to South Korea, Mexico, and China in 2005. It just so happens that electronics is going to be the hardest-hit sector in terms of the ballooning deficit from the Korea pact, so the remaining Texas Instruments workers in the United States should be wary.

This ad came the day of Obama's big jobs speech, and it turned out that he slipped in one definitely anti-jobs pitch, advocating for the passage of the Korea, Colombia, and Panama pacts. (Although this time, unlike in the State of the Union address, he did not make the dubious "70,000 jobs supported" claim.) If this isn't bad enough, Larry Summers, Obama's former director National Economic Council, last month argued that "We should not oppose offshoring or outsourcing."

After the jump is a list of the incidents of offshoring at the corporations that signed the letter pushing the three trade pacts:

(UPDATED 9/12/11)

Lori Wallach on HuffPo: "Trade Pacts Obama's Flacking in Jobs Plan Would Increase Trade Deficit Say Government Studies"

Check out Lori Wallach's latest piece on the Huffington Post.

 

Trade Pacts Obama's Flacking in Jobs Plan Would Increase Trade Deficit Say Government Studies

Everyone expects Obama's imminent jobs plan and related speeches to include a pitch to pass Bush's leftover Free Trade Agreements (FTA) with Korea, Colombia and Panama. ... Problem is, whatever one thinks about the idea of "free trade," the federal government's own studies predict that these three deals would increase the U.S. trade deficit. Higher deficits mean more jobs will be displaced by imports than are created by exports. This was a critical factoid largely missed by reporters covering Obama's speeches after the debt ceiling deal -- with many stories simply repeating Obama's claim that these FTAs were vote-ready job-creators for Congress to take up ASAP."

Read the entire piece at the Huffington Post to find out what you need to know about the trade aspects of Obama's jobs plan.

U.S. measures to reduce teenage smoking deemed WTO violation

U.S. measures to reduce teenage smoking violate World Trade Organization (WTO) rules, according to a panel ruling released late last week. Indonesia successfully argued that the U.S. Family Smoking Prevention and Tobacco Control Act (FSPTCA) of 2009 violated WTO rules. The ruling opens the door to more teenage tobacco addiction, while further imperiling the legitimacy of a WTO that rules against environmental, health and other national policies 90 percent of the time.

The FSPTCA took a series of unprecedented and bold measures to combat teenage smoking, including the banning of many forms of flavored cigarettes. There is substantial evidence that tobacco companies produce and market these cigarettes as "starter" or "trainer" cigarettes in order to hook teenagers into a lifetime of nicotine addiction.

However, as the U.S. noted in its defense in the WTO case, the U.S. did not ban all types of cigarettes. In particular, regular tobacco and menthol cigarettes were excluded from the ban. The justification for these exclusions was that, unlike candy flavored or clove cigarettes, large numbers of adults are also hooked on regular and menthol cigarettes. To abruptly pull these products out of the market could cause a strain on the U.S. healthcare system (as lifetime addicts would instantly seek medical treatment for wrenching withdrawal symptoms) and might lead to a rise in illicit black market sales and associated crime. Nonetheless, various studies were ordered on the feasibility of banning menthol cigarettes in the future.

The FSPTCA banned candy and clove cigarettes regardless of where they were produced or who produced them. But Indonesia successfully argued that, since its exporters are the primary providers of clove cigarettes to the U.S. market, the FSPTCA constituted de facto discrimination, in violation of WTO rules under the Agreement on Technical Barriers to Trade (TBT). The WTO panel accepted this argument, despite the fact that the FSPTCA was totally non-discriminatory and many U.S. cigarette makers (such as those that make cola-flavored cigarettes) were also blocked from making these harmful products.

This severe blow to consumer protection comes on the heels of two other WTO rulings against America's dolphin-safe tuna and beef country-of-origin labels, and are likely to put a significant damper on the Obama administration's efforts to pass trade deals with South Korea, Colombia and Panama that contain similar anti-consumer rules.

More on the details of the case after the jump.

What You Need To Know About the Trans-Pacific FTA Negotiations in Chicago

Trade negotiators from throughout the Pacific Rim will be meeting in downtown Chicago from September 6–15 to negotiate a new Trans-Pacific Free Trade Agreement. Labor, environmental, public health, consumer and community advocates from Chicago and beyond will also be present to demand a “Fair Deal or No Deal.” 

This memo tells you what you need to know.

U.S. Trade Representative's New Jobs Strategy

Last week, amid mounting signs that the job market may be deteriorating further, Tim Robertson, Director of the California Fair Trade Coalition, interviewed U.S. Trade Representative (USTR) Ron Kirk about the implications of the Korea, Colombia, and Panama trade deals. In the course of the interview, Kirk seemed to suggest that the Obama administration's trade policy encouraged shrinking the number of jobs in the United States. According to Kirk, our massive trade deficit is inconsequential since the imports constitute goods that "we don't want to make in America." He explains:

Let's increase our competitiveness... the reality is about half of our imports, our trade deficit is because of how much oil [we import], so you take that out of the equation, you look at what percentage of it are things that frankly, we don't want to make in America, you know, cheaper products, low-skill jobs that frankly college kids that are graduating from, you know, UC Cal and Hastings [don't want], but what we do want is to capture those next generation jobs and build on our investments in our young people, our education infrastructure. Our advanced services like [at the architecture firm where we met], there's no reason in the world ... why would we not want to capture the economic benefit of that here in America? I mean, I would argue that that is exactly the reason that we're doing it.

With the unemployment rate at nine percent, it's hard to fathom a government official saying that the United States should pass up jobs, even if those jobs don't require a degree. Shoes are arguably some of the "cheaper products" that Kirk references. The Washington Post recently ran a piece about New Balance's shoe plant in Maine where the workers are glad to be keeping their jobs, contrary to Kirk's assertion that we don't want to make them anymore:

“We want to fight really hard to keep this business in Maine,” said Lori Cook, 28, a single mom with two kids. “I’d like to keep my job.”

The Korea trade deal, projected to result in the loss of 159,000 U.S. jobs, will not just displace workers in the apparel industry, however. The Korea FTA will increase the U.S. deficit in cutting-edge industries, including electronics and motor vehicles, costing us even the "next generation" jobs that Kirk extolls. The Korea, Colombia, and Panama trade deals clearly endanger President Obama's job creation agenda, and USTR Ron Kirk should go back to the drawing board to formulate a trade policy that creates jobs instead of one that eliminates them.

Brookings FTA Paper Falls Short on the Facts

Last month, the Brookings Institution published a policy brief advocating for the passage of the Korea, Colombia and Panama trade deals (or FTAs). The policy brief contains little in the way of new research, but it certainly quotes existing research in a selective way.

Like the Obama administration, the policy brief incorrectly cites the U.S. International Trade Commission's (USITC) predictions for the change in exports to Colombia under the Colombia FTA as the increase in U.S. exports ($1,060 million), rather that prediction for the change in total U.S. exports under the FTA ($654 million). Moreover, the brief does not discuss the jobs implications of the fact that U.S. imports will increase more than exports under the Korea and Colombia trade deals. Since imports will increase more than exports, net job losses will likely result.

By now, this export mistake is familiar. What is new in the Brookings policy brief is it emphasizes the USITC's predicted change in nominal GDP under the FTAs. The policy brief says that the USITC predicts the Korea FTA will boost U.S. GDP by up to $12 billion and the Colombia FTA will boost GDP by $2.5 billion. (The USITC did not give a GDP estimate for the Panama FTA since the model that they used for that study could not estimate GDP changes.)

In reality, the numbers that the policy brief quotes are actually the USITC's estimates for changes in nominal GDP, i.e. changes in GDP that take into account price changes due to the FTAs. Basically, this is the number that is not adjusted for the inflation that occurs within the model. In a footnote to its $12 billion GDP estimate for the Korea deal, the USITC explains:

GDP here is defined as nominal GDP, which takes into account both the price and quantity changes of its components. Welfare, on the other hand, summarizes the real (i.e., exclusive of price effects) value of present and deferred consumption....Increases in the prices of consumption or investment will lead to an increase in GDP, but not in welfare.

In plain English, this means that the $12 billion figure cited in the policy brief is not the change in the quantity of goods and services produced by the U.S. economy. Rather, a separate measure called welfare represents this change in the real value of the economy that actually matters to businesses. Browsing through the tables (specifically, Table 2.1) in the report reveals that the USITC's estimate of the real increase in GDP under the Korea FTA is only $1.8-2.1 billion. Real GDP under the Colombia FTA is expected to increase by $419 million.

So, the predicted increase in GDP is smaller than claimed, but there's still an increase, and therefore we benefit, right? The truth is that the small predicted real GDP gains under the FTAs will not be enjoyed equally by everyone. The big economic issue with FTAs is that some of them may boost overall GDP slightly, but the gains go almost exclusively to corporations and those Americans who already have a lot of wealth. Meanwhile, the adjustment costs fall upon the middle and working classes, leading to net losses for them. Incidentally, the USITC's model simply assumes that adjustment costs don't exist. This distributional issue in trade policy is critical. Josh Bivens at EPI estimates that trade flows have increased income inequality in the U.S. by 7 percent, costing an average household $2,000 per year.

The policy brief also repeatedly claims that the U.S. is losing market share in Asia to its competitors. It argues that the Korea FTA will reverse this "trend."  This claim has scant evidence to back it up. As we pointed out in our latest Trade-ifact, U.S. exports to the Pacific region have grown 35 percent since 2005, while overall U.S. exports to the world have grown at a slower rate, 25 percent, over the same period.  And without FTAs the United States continues to edge out competitors, increasing its market share in most of the major Asian economies since 2005, including South Korea.

In a claim about the "benefits" of the Colombia FTA, the authors of the policy brief seem uninformed about the realities of Colombia’s rural economy. They write, "[The Colombia FTA] supports U.S. goals of helping Colombia reduce cocaine production by creating alternative economic opportunities for farmers." However, the Colombian Ministry of Agriculture and Rural Affairs conducted a study of the effects of an FTA with the U.S. upon nine primary agricultural products and found that full liberalization would lead to a 35 percent decrease in employment in those sectors (see pages 162-163 of the study). The study said that with an FTA without agricultural protections, rural Colombians “would have no more than three options: migration to the cities or to other countries (especially the United States), working in drug cultivation zones, or affiliating with illegal armed groups” (pg. 180). Thus, contrary to the claims of the policy brief, all evidence indicates that the FTA would reduce agricultural opportunities for farmers, possibly increasing cocaine production.

Unlike Budget Debate, Basic Math Error on Trade Continues to Go Unchallenged

The Obama administration spent much energy over the weekend attempting to discredit Standard & Poor’s credit rating agency’s downgrade of U.S. debt, which they said was based on a “basic math error of significant consequence.”

In sum, the administration argued that S&P applied the Budget Control Act’s deficit reduction dollar amount of $2.1 trillion to a non-inflation adjusted baseline scenario, when that number was derived from a scenario where discretionary spending levels grew with nominal GDP. In 2021, government debt as a share of GDP would be 93 percent under S&P’s original methodology, while it would be 85 percent under what Treasury maintains is the correct methodology. This claim of an error has been all over the press for days.

It would sure be nice if the Treasury and press got as worked up about basic math errors that the White House itself is making on the three pending trade deals with Korea, Colombia and Panama.

The administration maintains that the Korea deal will boost U.S. exports by $11 billion, when in fact the administration’s own numbers within the U.S. International Trade Commission study show that the deal will lead to a decline in net exports of about $416 million. The S&P’s debt number overstated the debt by about nine percent, but the administration’s claim of exports under the Korea deal overstates the magnitude of the change in the trade balance by 25,000 percent, in addition to getting the direction of the change wrong. If, as the Treasury Department says, the S&P debt error was “of significant consequence,” the administration’s trade-deal export claims must qualify as a misstatement of colossal consequence.

Similarly, the administration says that U.S. exports will increase by $1 billion under the Colombia deal, when the administration’s own numbers show that net exports will take a $66 million hit under the deal. (No estimates have been provided for the U.S.-Panama deal.)

Why these discrepancies? In its public statements, the administration is selectively looking only at one side of the ledger, extracting a number for bilateral exports, while not accounting for the overall change (the change in exports minus imports under the deal). In budget economics, this would be akin to looking only at what the government is taking in as revenue, without looking at what the government is spending. If the government simply assumed away any government spending, I’m betting that the press would call them on this “basic math error of significant consequence.”

The administration is also selectively looking at just the change in U.S. exports to Korea and Colombia under the pacts. But as the administration’s own reports show, these deals will also induce changes in trade patterns with other countries. At the end of the day, the U.S. is projected to be importing more than it is exporting as a result of these deals.

It is newsworthy that the administration’s own reports (produced by the USITC) conclude that net exports will decline under the deal, especially since their primary public rationale for the deals is that exports will increase. These USITC reports in the past have tended to be wildly optimistic, such as underestimating the increase in the U.S.-China trade deficit after China entered the World Trade Organization by $166 billion. But, the reports have nonetheless always concluded that, even if bilateral deficits increase, the global U.S. balance will improve. That is, until the reports on the three pending deals, and the deal with Peru (negotiations on all four were concluded in 2007), predicted a worsening of the overall balance.

This fact was even trumpeted by no less of a champion of NAFTA-style deals than Sen. Chuck Grassley (R-Iowa), who said that the total net export number is the “the one number that is of significance to our economic health.” (See full quote below, after the jump.)

It is unclear why the press continues to report as fact (or unchallenged assertion) the claim that the pending trade pacts will create jobs. These claims rely on using the wrong trade numbers from the government’s own study. Unlike many complex economic debates, all these numbers are publicly available, very straightforward and involve reading no more than two pages in two reports to simply verify the administration’s claims (pages 2-14 and 2-15 of the Korea report and pages G-12 and G-13 of the Colombia report). Moreover, the administration’s basic math error has been known for over nine months, and communicated to reporters and their editors repeatedly over that time (see “Survey of Studies on Potential Economic Effects of the Korea FTA Show Rising Deficits and Job Losses”,  “Survey of Studies on Potential U.S. Economic Effects of Korea Trade Deal Shows Rising Deficits and Job Losses, 2010 ‘Supplemental Deal’ Does Not Alter These Outcomes”, “Guide to the the State of the Union on Jobs, Exports”, “Previewing Ways and Means Chair Camp’s Request for USITC Analysis of the December 2010 Korea FTA Supplemental Auto Deal”, “The Korea FTA is Lose-Lose for the U.S. and Korea: The Facts”, “Here’s an Impediment to Job Creation That Ways and Means Hearing Should Discuss: Korea Trade Deal Is Projected to Increase the Overall U.S. Trade Deficit”.

Reporters can and should quote advocates of these trade deals, and explore their reasoning for wanting Congress to pass them. But, to the extent that job and export claims are based on the administration’s basic math errors, this needs to be pointed out in reporting.

(For what it’s worth, there is also no historical support for the notion that NAFTA-style deals increase exports in relative terms. This would also cast doubts on the administration’s stated rationale for pushing the agreements. However, one would not even have to examine the record to report that the administration is misrepresenting its own research.)

Incorrect Numbers Continue to Pop Up in Trade Reporting: Trade-ifact III

The announcement late Wednesday of a nebulous "agreement" in the Senate on a legislative "path forward" for the Korea, Colombia, and Panama trade deals (or FTAs), has renewed the trade chatter in the newswires. But we're still seeing a lot of questionable claims about the FTAs in these stories, so it's time for another edition of Trade-ifact.

For the third installment , we've organized the stories by theme.

 

Faulty Export Numbers

Misquotes of the official U.S. International Trade Commission (USITC) studies of the three trade deals continue to pop up in news articles, either directly or through quotes of FTA proponents.

As we have said before, FTA supporters only look at the USITC's bilateral export numbers and do not consider the USITC's projections on the change in overall U.S. imports. When the global changes in exports and imports are taken into account, the USITC studies reveal that net exports would decline by $482 million under the Korea and Colombia trade deals (instead of the “bilateral exports only” of $11-12 billion). The USITC made no overall trade estimate for Panama.) 

There were several stories that misreported this $12 billion export number as fact, including:

- Doug Palmer (Reuters), US Congress leaders agree path to pass trade deals (8/3/2011)

- Angus Loten (Wall Street Journal),  Trade Pacts Urged for Export Growth (7/27/2011)

There were several additional stories that reported the incorrect number as the opinion of an interviewee or the Obama administration, but failed to note its misleading origin. These included:

- Mark Drajem (Bloomberg), U.S. Senate Leaders End Impasse on Three Free-Trade Deals, Workers’ Aid (8/4/2011)

- Jim Abrams (AP),  Senate deal on taking up worker, trade bills (8/4/2011)

- Suzy Khimm (Washington Post),  How can Washington help create jobs? (8/3/2011)

- Doug Palmer (Reuters), U.S. business hopes debt deal clears way for trade (8/1/2011)

Doug Palmer’s stories also round up the administration's export claims from $12 billion to $13 billion.

 

Faulty Jobs Numbers

News stories are also continuing to report that the trade deals will create or support 70,000 jobs. This has got to be one of the most popular outright errors in the history of trade debates. As we show here, it is derived from applying an incorrect methodology to an incorrect number (bilateral export projection). But even if one accepts the administration’s methodological choices, applying that method to the correct number (net exports) would reveal a decline in jobs.

Doug Palmer's US Congress leaders agree path to pass trade deals (8/3/2011) misreported this number as fact.

There were several additional stories that reported the incorrect number as the opinion of an interviewee, but failed to note its misleading origin. These included:

North Korean dictatorship poised to benefit from trade pact: Huffington Post

A new reporting and video series has been launched by Zach Carter and company over at the Huffington Post that will explore how the Korea trade deal will benefit the North Korean dictatorship.

As Carter writes,

In 2004, Hyundai inked one of the best land deals in history. For a mere $12 million, the South Korean car company secured the rights to 50 years of use on over 41,000 square miles of industrial space -- $292 per square mile, only about 10 percent higher than the rate the U.S. paid France under the Louisiana Purchase.

For a manufacturing giant, the Hyundai deal was a dream: plenty of space for factories, room for worker housing and a population that would work for less than half the wages that Hyundai was accustomed to paying for labor in its Chinese factories.

Products made In this sweatshop, finds Carter, can be incorporated into goods assembled in South Korea, and then shipped to the U.S. duty-free under the U.S.-South Korea trade deal. If the U.S. attempted to block it, South Korea could use trade pact rights to challenge the U.S.

Future installments will look at tax haven abuses in Panama and labor murders in Colombia, and how the package of three trade deals being pushed by the administration could make these matters worse.

Pelosi pushes back against Obama-backed unfair trade agreements

The Hill reports that:

House Minority Leader Nancy Pelosi pushed back Wednesday against several pending free-trade agreements championed by President Obama.

The California Democrat signaled doubts that looming trade deals with South Korea, Panama and Colombia would benefit U.S. workers. President Obama on Tuesday called on Congress to approve the deals, which he and Republicans argue would create jobs.

“The White House may support it, but the Congress may have a different view,” Pelosi warned on MSNBC.

During a lengthy interview, MSNBC's Andrea Mitchell suggested that the long-delayed trade pacts “could have produced more jobs.”

Pelosi responded, “Well, that's debatable.”

Unlike Mitchell and too many other reporters, Pelosi may have examined the government's own numbers, which show that the U.S.-Korea and U.S.-Colombia deals will increase the U.S. trade deficit. Or she may have examined the record of past trade deals, which have led to loss of U.S. jobs, and accounted for lower-than-average export growth.

Or she may have examined the text of the U.S.-Panama trade pact, which effectively excludes the Panama Canal expansion project from its scope. (See here, page 17.) That project is the one commercially meaningful piece of business happening in that economy, which specializes in offshore tax evasion. It will give Panama new tools to attack U.S. financial transparency initiatives, just as they've used trade pact rules in the past to successfully attack Colombia's (all too scarce) attempts to address money laundering.

And all three pacts will allow corporations to challenge environmental and public health initiatives, in foreign tribunals, outside the U.S. court system, for taxpayer funded compensation. These investor rules wreak havoc wherever they go.

Congrats to Pelosi for standing up for jobs instead of corporate/ideological initiatives like the three unfair trade deals.

Pelosi responded, “Well, that's debatable.”

Op-Ed Round-Up

Here's a round-up of some of the best opinion pieces over the last couple of months about the pending trade deals:

 

U.S.-Korea trade deal is bad for both countries

By Chun Jung-bae, National Assembly of the Republic of Korea

"There is some rosy fantasy that the pending U.S.-Korea Free Trade Agreement will create tens of thousands of well-paying jobs in both countries and strengthen and expand the U.S. relationship with Korea. This is a fabrication of multinational corporations that have no allegiance to either country. As a member of the Korean National Assembly, I would like to set the record straight: In reality, the deal is lose-lose."

Read the entire piece here.

 

 

Congress should reject proposed trade agreements and insist on better policies

By Lynne Dodson, secretary-treasurer of the Washington State Labor Council, and Kathleen Ridihalgh, senior organizing manager of the Sierra Club in Washington and Oregon.

"The definition of insanity is doing the same thing over and over and expecting a different outcome. This summer, insanity reigns over proposed U.S. trade agreements with South Korea, Colombia and Panama. For more than 20 years, "free" trade agreements have systematically undermined the American economy and the middle class. The growing disparity between the "haves" and "have nots" is turning the American dream into a nightmare. It is a direct result of our failed trade policy, and it needs to stop now."

Read the entire piece here.

 

US-Colombia free trade agreement bad idea for both countries

By John I. Laun and Cecilia Zarate-Laun, Colombia Support Network

"In the coming days, the U.S. Congress will be debating a free trade deal between the United States and Colombia. The agreement, if finalized, will have a negative impact on both countries. It will not lead to job creation in the United States. Instead, it will cost U.S. jobs, as multinationals will relocate to Colombia in order to avoid paying higher wages here. But Colombia will not benefit, either."

Read the entire piece here.

 

Trading Our Future: Tax Cheating and the Panama Free Trade Agreement

By Dylan Ratigan, host of MSNBC's "The Dylan Ratigan Show"

"If you want to know why politicians are so eager to pass a free trade agreement with Panama this month, type "Panama offshore banks" into Google and look at the paid ads. What you'll see is advertising by law firms and banks that will offer you help to set up a secret corporate structure in Panama immune from taxes."

Read the entire piece here.

 

Free Trade Pacts Will Cost Tennesseans Jobs

By Robert E. Scott, director of trade and manufacturing policy research at the Economic Policy Institute

"Based on past U.S. experience with NAFTA and other trade agreements, I have estimated that the U.S.-Korea and Colombia FTAs will displace 214,000 U.S. jobs. These job losses will fall hardest in industrial states like Tennessee. Workers there would be well-advised to think twice before supporting these job-displacing trade agreements."

Read the entire piece here.

  

 So-called 'free' trade agreements harm American workers

By Steve Kagen, doctor and former member of Congress from Appleton, Wis.

"Professional politicians in Washington and their partners on Wall Street are lining up for another payday - this time by promoting 'free trade' deals with Korea, Panama and Colombia. But if you're not in Washington or on Wall Street, there's a problem. These new deals are just like the old deals. They are job-killers - just like NAFTA and CAFTA before them."

Read the entire piece here.

 

 
 
Say no to new trade deals and start over

Editorial

"If so-called free trade is not done right...the only winners are corporations without borders. The losers are the people who live and work in those developing nations and the American blue-collar workers who see jobs leave the States. ... There is a good reason that both Maine tea party groups and organized labor oppose the South Korea, Panama and Colombia trade agreements. After defeating them, Congress must create a better way to promote global trade."

Read the entire piece here.

 

Open borders, trade deals are ruinous for America

By James P. Hoffa, president of the International Brotherhood of Teamsters

"Three more job-killing trade deals are in the hopper, and you can bet the news media will swallow whole the phony claims made about them by the U.S. Chamber of Commerce and other groups. Congress is now considering trade agreements with Colombia, where trade unionists are routinely murdered; Panama, a well-known tax haven; and South Korea, in the biggest trade deal since NAFTA. It seems our trade policy is of the corporation, by the corporation and for the corporation."

Read the entire piece here.

 

Trade deals are no deal for US

By Steven J. D'Amico, former Mass. state Representative and member of the American Jobs Alliance

"Even after losing 682,000 jobs to NAFTA since it took effect in 1994, and 2.4 million to China since it joined the World Trade Organization, Washington continues in its blind faith that somehow these trade deals are good for us. This summer Congress is expected to take up three new trade deals - with Korea, Panama, and Colombia. These trade pacts are bad for American workers, bad for our domestic economy, and bad for democracy."

Read the entire piece here.

 

 
Free-trade deals would be costly to U.S.

By Tom Burga, president of the Ohio AFL-CIO

"For over a decade, the labor movement and development advocates have called for fair-trade policy that is part of a more coordinated and coherent national economic strategy.  Unfortunately, the Korean, Colombian and Panamanian free-trade deals before Congress do not address the fundamental policy failures of the North American Free Trade Agreement and China's inclusion into "favored nation status," which has led to catastrophic job loss in the U.S. and the explosion of our import/export deficit, now reaching $500 billion annually."

Read the entire piece here.

 

 Trade pacts bad for California agriculture

By Curtis W. Ellis, executive director of the American Jobs Alliance, and Joaquin Contente, president of California Farmers Union 

"Pending free trade agreements with Korea, Colombia and Panama are bad for California farmers and must be rejected if we are to preserve our way of life. All three trade treaties are based on North American Free Trade Agreement-style policies that have displaced American farmers while sending jobs that support California's rural communities offshore. In fact our leading export is jobs and we reward companies that outsource jobs. Since NAFTA took effect, the United States has lost 300,000 farms and millions of jobs."

Read the entire piece here.

 

 
Wisconsin Farmers Union opposes free trade pact with Korea

By Darin Von Rudin, president of Wisconsin Farmers Union

"WFU strongly opposes the Korea-U.S. Free Trade Agreement and urges Congress to do the same. We feel our legislative leaders should be protecting and promoting American jobs, family farms and our rural communities through sound economic, environmental and labor policies. We don’t think this trade agreement adequately promotes these values."

Read the entire piece here.

 

 
Rep. Schrader is confused on international trade

By Steve Hughes, state director of the Oregon Working Families Party,Ray Kenny, International Brotherhood of Electrical Workers Local, and Frank Rouse, president of the Machinists Union Local 1005

"Congressman Kurt Schrader seems to be confused. On the one hand, he says he opposes trade deals that extend greater rights to foreign investors than exist for Oregonians doing business in our state. On the other hand, he is supporting a massive new free trade agreement with South Korea that does just that."

Read the entire piece here.

 

 
Free trade agreements jolt the economy, but not in a good way

By Jessica Lettween, director of the Minnesota Fair Trade Coalition

"It's easy to understand why multinationals adore the Korea agreement. But with around 7 percent unemployment in Minnesota, a budget crisis, and an electorate that is strongly opposed to more NAFTA-style trade agreements, it is baffling why any member of Congress would endorse a deal that will cost us so much."

Read the entire piece here.

 

Choose voters over donors on free trade

By Gordon Lafer, professor at the University of Oregon, former senior adviser to the U.S. House’s Labor Committee

"Like Republicans, the White House is eager to get these treaties done quickly, so that voters will have forgotten by the fall of 2012. To see the Obama administration and Republican leadership quietly collaborating to seal this deal in knowing violation of the voters’ will is among the most telling signs of corporate power in Washington, and among the most depressing stories in these tough times."

Read the entire piece here.

 

Obama's trade policy clearly shortsighted

By Karen Hansen-Kuhn, international program director for the Institute for Agriculture and Trade Policy

"More than two years into the Obama administration, we're still waiting for a 21st-century trade policy."

Read the entire piece here.

 

(Disclosure: Public Citizen has no preference among the candidates for public office.)

 

Trade-ifact Part Deux

It's time for the second installment of Trade-ifact: Keeping the Media Honest about Trade Deals. Since our last installment, FTA proponents in the administration and Congress have worked to move along the negotiations for curtailing Trade Adjustment Assistance (TAA), all while maintaining a straight face when claiming that these trade pacts will create jobs. Late yesterday, White House Chief of Staff Bill Daley said that they would submit the FTAs for Congressional approval within days, so next week expect the FTA debate to turn white-hot (and a wave of questionable claims to reach tidal wave heights).

Doug Palmer (Reuters)

US showdown looming on Korea trade without deal soon (7/10/2011)

Palmer writes, "A year ago, Obama moved to resolve Democratic concerns with the deals." Democratic concerns with the three FTAs remain unresolved. Despite small tweaks to the auto provisions in the Korea FTA, imports of Korean autos are still projected to slam U.S. autoworkers. Plus, nothing was done to address the Korea FTA's prohibitions on certain vital financial sector regulations. Murders of labor union leaders in Colombia continue, and many Democrats are vowing to oppose the Colombia FTA as a result. Finally, Panama's status as a tax haven will remain unchanged if the Panama FTA is approved. The FTA's investor-state provisions would even allow the Panamanian government and corporations to challenge U.S. policies targeting tax havens. Overall, there has been no fundamental change to the NAFTA trade model that Obama promised while he was a presidential candidate.

Palmer claims that Fast Track trade negotiating authority "has long been considered vital for securing trade deals with U.S. trading partners worried that without it their agreements could be picked apart by Congress."  As noted in our book on the history of Fast Track, scores of trade agreements have passed Congress without Fast Track protection, including 130 trade and investment agreements under the Clinton administration alone (Clinton lacked Fast Track authority from 1995 to the end of his second term). In 2000, former Clinton U.S. Trade Representative went as far as to say, "if you look at our record on trade since 1995, I don't think the lack of Fast Track impeded our ability to achieve our major trade goals."

Obama said ready to move on South Korea trade bill (7/14/2011)

Palmer says that Obama demands an "extension" of TAA be approved along with the three FTAs. The Obama administration's proposal on TAA is actually to narrow eligibility and cut benefits. As Inside U.S. Trade reports, under the new TAA plan workers displaced by trade could receive a maximum of 130 weeks of income support while undergoing retraining, while currently workers can receive up to 153 weeks of income support. It also would restrict income support eligibility for workers who are not in retraining programs, cutting the types of waivers for income support from six to three. Chairman of the House Ways and Means Committee, Republican Rep. Dave Camp, said of the deal, "The final result is a program that has been cut not only from 2009 levels, but also below 2002 levels in several key areas." The "2009 levels" are the elements of the TAA program that expired earlier this year, while the 2002 levels are the elements that are currently in effect. The cuts are a burden on displaced workers when they can least afford it.

Vicki Needham (The Hill)

Republicans split on trade tactics (7/13/2011)

Launch of Trade-ifact: Keeping the Media Honest about Trade Deals

Now that the House Ways & Means Committee and the Senate Finance Committee have held mock markups of the Korea, Colombia, and Panama FTAs, we could see votes on the FTAs very soon. One of the major unknowns at this point is whether trade adjustment assistance (TAA, or aid to trade-displaced workers) will be included in the implementing legislation for one of the FTAs. Earlier in the debate, President Obama appeared to have secured an agreement from Republicans to allow TAA to move forward – now, things seem less sure.

Now, more than ever, it’s important that Congress and the public be well informed about the likely impact of these deals, which are modeled on NAFTA.

Unfortunately, there has been too little reporting on the deals, and even less that is accurate and balanced. In the interests of accurate reporting, we're launching a new feature on the blog: Trade-ifact. (Think Politifact, but for Trade.)

We will highlight instances where reporters have gotten the facts wrong on the FTAs, starting with a roundup of the reporting of the last two weeks. We'll blog periodically about this accuracy-in-FTA-reporting issue as more FTA stories with errors are published.

The main factual errors that we have found time and again are:
- Misquoting export projections and quoting export  and jobs projections without a discussion of the likely import increases and job losses. This is like looking at your family’s budget, but only looking at your paycheck, and not what you owe. Like too many of our households, our nation buys more than it makes, resulting in a massive trade deficit. Reporters should be getting this right, and examining the likely impact of our trade policy on the deficit.

Liveblogging dueling congressional hearings on 3 NAFTA deals

President Obama has decided to introduce NAFTA-style deals with Panama, Colombia and Korea to Congress, bowing to pressure from corporations and Republicans.

Recognizing that the deals would cost jobs, the administration also agreed with House Republicans to cut (but partially renew) trade adjustment assistance (TAA) for workers displaced by trade.

Republicans, after getting what they want, are now threatening to block or muddle the push on the FTAs, because TAA was not cut enough, or out of concerns that pairing TAA with the FTAs backs up the notion that trade deals cost jobs. Well, yes.

The three deals will be considered under Fast Track trade promotion authority, which means that normal congressional procedures and debate are suspended. As we state in our book on the topic:

Core Aspects of Fast Track Trade-Authority Delegation

• Allowed the executive branch to select countries for, set the substance of, negotiate and then sign trade agreements – all before Congress had a vote on the matter.
• Required the executive branch to notify Congress 90 calendar days before signing and entering into an agreement.127
• Empowered the executive branch to write lengthy implementing legislation for each pact on its own, without committee mark ups. That is to say, the process circumvented normal congressional processes. These executive-authored bills altered wide swaths of U.S. law to conform domestic policy to each agreement's requirements, and formally adopted the agreement texts as U.S. law. As a concession to congressional decorum, the executive branch agreed to participate in "non" or "mock" hearings and markups of the legislation by the trade committees. However, this is a practice, not a requirement.

Today, we will attempting to live-blog the simultaneous mock markups in the Senate Finance and House Ways & Means Committees. I'll be focusing on the latter. [My comments will be in brackets; unless noted by quotes, all notes are paraphrased from actual statements.]

++

Chairman Dave Camp (R-Mich.): We obtained significant reductions in TAA. But the agreement was on substance, not process.

[See statement here. Camp has a key misrepresentation in his opening statement:

"The three trade agreements are a sure-fire way to create American jobs by growing U.S. exports of goods and services – and they do not require one dime of new government spending.  The independent U.S. International Trade Commission estimates that the three pending trade agreements together would increase U.S. exports by at least $13 billion.  These agreements will create and support jobs here in the United States – 250,000 jobs, using the President’s own measure."

This is a serious misrepresentation. In fact, consistent use of this methodology here would show a job loss from the trade deals, not a job gain.

And it's misleading to suggest that these deals don't cost money. In fact, as the Congressional Budget Office estimates have shown, the U.S. government will lose billions in tariff revenue from implementing the deals.

Korea FTA itself: $7,355 million over 2011-2021

Colombia FTA itself: $1,400 million over 2011-2021

Panama FTA itself: $6 million over 2011-2021]

++

Ranking Member Sander Levin (D-Mich.): Urging a "no" vote on mock markup of the 3 FTAs if his amendment to include TAA is not included. Is asking for a certification to be required that Colombia has met its action plan requirements before the agreement enters into force. Urging a no vote if this amendment to require certification fails.

[This Action Plan fails to accomplish the most important labor rights objective: requiring an end to unionist killings on the ground. It also falls far short of the extensive benchmarks laid out by Democratic labor rights leaders.]

Breaking: GOP Boycotts Mark-Up of NAFTA Deals

At 3 pm today, the Senate Finance Committee was supposed to hold an "un-mark-up" of the implementing legislation for the three NAFTA-style deals.(For the background on this arcane Fast Track procedure, see our book here.)

But all the Republicans on the Committee boycotted the hearing, so Chairman Max Baucus (D-Montana) called it off.

They objected to the inclusion of any trade adjustment assistance (TAA) in the Korea FTA, on fiscal austerity grounds. Or, as Sen. Orrin Hatch (R-Utah),

"Unions and other anti-trade zealots gleefully use TAA data to make the case that trade causes outsourcing and job loss... Instead of helping build the case for trade, TAA certifications are used to show that trade is bad.  In the end TAA really is just a government subsidy for anti-trade propaganda."

Yes, reality is so uncooperative with corporate spin sometimes!

Not that the administration's stance is much more coherent. As our own Lori Wallach told Politico,

“For most Americans, what’s newsworthy is not that the administration is pushing Trade Adjustment Assistance (TAA), which effectively is a job burial insurance program, but that pushing a deal on TAA is being used as political cover to move more NAFTA-style trade agreements that will kill more American jobs in the first place, especially given our high unemployment rates.” Wallach added. “The point that’s gotten lost in all this wrangling over TAA is that the three leftover Bush trade deals are bad in and of themselves.”

It's unclear what comes next. Senators had lined up a raft of amendments to the FTAs, on everything from restricting abortion rights to restroring the TAA health care credit funding that the Obama administration had agreed to reduce from current levels. There's still time to shelve the deals, reverse course, and actually have Obama make good on his commitments to truly overhaul our failed trade policy. We'll be watching, and out in the streets over this Fourth of July weekend around the country.