Public Submissions to U.S. Government Reveal Corporate Wishlist for IPEF: More Power at Our Expense
May 20, 2022
By: Sarah Grace Spurgin
In October 2021, President Biden announced the “Indo-Pacific Economic Framework” or IPEF. There have been few details about what this IPEF will actually entail, but what we do know is that corporations are loathe to miss an opportunity to codify exploitative and short-sighted measures into “trade” agreements.
U.S. Trade Representative (USTR) Katherine Tai has stated repeatedly that the Biden administration’s vision for trade will not repeat the past mistakes of prioritizing large business interests above all else, but will serve workers, consumers, and the environment. IPEF could be an opportunity to realize this new, lasting vision for trade. At the same time, the notion of an IPEF did not come from consumer advocacy organizations, environmental groups, or organized labor.
I spent a week combing through the public comments submitted by industry lobby groups to the official federal registry notice for IPEF, and barely scratched the surface. What I found should put us all on high alert. Here are five things the corporations want from IPEF:
- TPP 2.0
At a recent Senate Finance hearing, Senator Elizabeth Warren (D-Mass.) warned Ambassador Tai that:
Lobbyists for the giant corporations are celebrating IPEF as the second coming of the Trans-Pacific Partnership [TPP]. Now there’s a reason the original TPP was derailed. It would have offshored more jobs to countries that use child labor and prison labor and pay workers almost nothing. Let me be clear, the IPEF cannot be TPP 2.0.
The formal comment submissions from corporate interests to the administration justify Senator Warren’s concern. Despite the warranted unpopularity of TPP, more than a dozen Big Ag and Big Tech lobbyists took the federally mandated opportunity of public commentary to express their disappointment at the U.S. decision to abandon the pact, and urge the administration to resurrect the long-dead TPP.
For example, U.S. Chamber of Commerce suggested that “in the absence of a return to the TPP, important elements in the administration’s Indo-Pacific Strategy could be achieved through the IPEF.” They also claimed that, “U.S. trade policy history is littered with failed or partially realized ideas that might have yielded more economic and strategic benefits if officials had moved faster or if challenging political decisions had been made sooner.” This sure sounds like an attempt to have even more secrecy in the corporate-dominated negotiating process. Translation: ‘don’t waste time listening to stakeholders with smaller campaign donation budgets transparency is as unnecessary as it is wasteful.’ In reality, the TPP was so unpopular in Congress in part because civil society, the public, the press, and our elected officials were kept in the dark.
The Chamber went on to say, “Don’t reinvent the wheel… An attempt to completely reinvent U.S. trade policy tools or to reshape the entire global economic agenda to reflect the political forces in Washington is cumbersome, fraught with uncertainty, and far less likely to be successful.” What they mean by that is, ‘the status quo works for us even though it has decimated good jobs, reinforced systemic racism, and accelerated climate change and pandemics.’
The American Petroleum Institute called for the U.S. to join the CPTPP, the TPP’s successor, to “contain and coerce China.” And in its comment submission, the Coalition of Services Industries (CSI), referenced the words of Singapore Deputy Prime Minister Heng Swee Keat: “The U.S. cannot afford to be absent from the region’s evolving economic architecture… if not through the CPTPP, then it must have an equally substantial alternative.” If by “equally substantive,” he means ‘scrap the president’s interest in developing new, people-centered trade policies and agreements that advance worker rights, racial equity and consumer safeguards and revert to the TPP or CPTPP approach,’ then the Deputy PM has it backwards. That is exactly what we cannot afford.
For those who need a reminder, as these corporate lobbyists clearly do, there are good reasons the TPP was so unpopular. The TPP was a controversial 12-nation, corporate-rigged “free trade” agreement that failed to obtain majority support in the U.S. Congress after a massive grassroots campaign against the deal. At the heart of the TPP were new rights for thousands of corporations to sue the U.S. government before a panel of three corporate lawyers that could award unlimited sums, including for loss of future expected profits, to be paid by American taxpayers when the corporations claim U.S. policies violate the new entitlements the TPP would provide them. The TPP also included extreme monopoly protections for pharmaceutical firms that blocked competition and ensured high medicine prices. The deal’s environmental standards were even weaker than those in the previous four agreements negotiated by George W. Bush. The labor standards replicated ones that had failed to stop egregious labor abuses in agreements with other countries, and the TPP included several nations notorious for labor abuses.
Not only was the TPP bad policy, but it was also bad politics. Politicians talk about trade in macro terms, but the cost of bad trade agreements can be felt on the micro level by American workers. For example, take Michigan, Wisconsin, and Pennsylvania, three states that played pivotal roles in delivering Trump to the White House in 2016 and Biden in 2020, and that have been directly hit by corporate-rigged trade agreements. According to the Department of Labor’s Trade Adjustment Assistance (TAA) database, since 1994 Michigan has lost 186,769 jobs to trade, compared to 89,030 jobs lost in Wisconsin and 207,832 jobs in Pennsylvania. TAA is a narrow program, only covering a subset of workers who lose jobs to trade, so the numbers are certainly an undercount. In the past two presidential elections, these states have been decided by margins smaller than the number of jobs lost to trade in those states.
These numbers are more than statistics. They’re families affected when a parent no longer has work. They’re members of communities, towns and cities that dried up when factories were closed, and jobs were sent overseas. They’re the actual lived reality of globalization and outsourcing run amok. That was the anger Trump was able to tap into during his 2016 run that painted Hillary Clinton as the champion of the trade status quo hurting the American worker thanks to her too-little-too-late rejection of the TPP and earlier support of NAFTA.
- More Power Online, at the Expense of Our Privacy
Just like Senator Warren pointed out in a recent Senate Finance hearing, “[t]ech companies like Facebook and Amazon are a huge part of global trade – and they’re also involved in spreading misinformation, mistreating workers, and squashing competition. They also hire hordes of lobbyists to protect their appalling way of doing business.” Consumer organizations including Consumer Action, Consumer Federation of America, National Association of Consumer Advocates, National Consumers League, Public Citizen, and more are warning the administration of harmful “Trojan Horse” provisions in so-called “digital trade” agreements the US is being encouraged to join. (Check out a letter from the organizations here). Nowhere are these efforts more evident than in the hundreds of corporate comments submitted on IPEF.
The so-called “digital trade” proposals corporate lobbyists are pushing throw out an obligatory vague phrase here or there alluding to the importance of cybersecurity and consumer privacy, but a closer reading of their proposals shows their desire to undermine domestic policy space on important issues like gig economy worker protections, discrimination and algorithm transparency, corporate liability, and consumer privacy.
- Binding rules to limit the ability of governments to regulate where Big Tech firms send and store our data
One of the most-covered topics in these comments was the quest to bar governments from regulating where and how data can be stored. When you use a service online for free, chances are you and your personal data is actually what’s for sale. The company operating the online site or service is making money by turning our personal data – including shopping history, location tracking, home address, and sensitive medical and financial information – into a new commodity to sell or to target advertising. [ICYMI, John Oliver had a great segment a few weeks ago on data brokers and what they’re doing with our personal data.] The biggest companies in the world are racing to control this valuable resource our personal data and they don’t want consumer safeguards that governments could enact to protect your privacy standing in their way.
Big Tech glorifies the so-called “free flow of data,” but what that really means is binding rules to limit the ability of governments to regulate where Big Tech firms send and store our data. That would mean high-tech giants like Amazon, Google and Facebook would be free to transfer our data to any other country and thus avoid privacy and other consumer protections that governments may require. These rules mean consumers have no guarantee that their data would be protected where the data were transferred even if domestic laws require such protections. Countries that have superior privacy laws could see their data protection rules undermined, while U.S. congressional efforts to enact privacy rules could be thwarted.
A number of lobbying groups including Information Technology Industry Council, PhRMA, the U.S. Chamber of Commerce, and the American Chemistry Council called for a ban on data localization requirements, which would significantly undermine the ability of governments to secure their citizens’ data against unauthorized or unlawful exposure or processing, or against cybercrime, accidental loss, destruction or damage.
[Fun fact: Last year, the American Chemistry Council was revealed in this exposé from the New York Times & Greenpeace as the lobbyists urging U.S. trade negotiators to strongarm Kenya into reversing its limits on plastics — including a tough plastic-bag ban as the world moves away from fossil fuel energy sources.]
We’ve seen these digital trade terms prohibiting limits on data flows appear in trade negotiations from the TPP to the Digital Economic Partnership Agreement, to the WTO “e-commerce” talks and what is clear is that governments are signing up to these terms without understanding the implications for their domestic policymaking. Big Tech sees the IPEF as the latest opportunity to cement these rules.
- Rules that undermine investigation of discriminatory source code and algorithms, intrusive surveillance practices and violent incitement online via prohibitions on technology transfer requirements and “trade secrets” protections.
Everyday decisions made by artificial intelligence (AI) components of online platforms affect which individuals and communities can access public and private services. Critical components of economic and social stability like home loans, job postings, medical treatments, targeted ads, and much, much more are influenced and determined by AI algorithms, thereby enabling a sort of 21st century redlining. Governments are likewise increasingly turning to these algorithms developed by private corporations for aid with “predictive policing” and other surveillance functions. It’s clear that there is a huge need for a collaborative effort to address this growing crisis.
Instead, organizations like Biotechnology Innovation Organization, National Foreign Trade Council, the Business Software Alliance (BSA), he Association for Competitive Technology, and more are calling for a prohibition of what BSA considers the “improper digital policies or practices that undermine data security and economic opportunity in the United States and among like-minded allies, including:… forced technology transfer requirements (e.g., source code transfer mandates); source code and encryption key disclosure/access mandates; [among others].”
“Digital trade” terms that require governments to provide trade secrets protection for source code and algorithms would limit governments to accessing such information only to instances of known violations of law. Congressional committees, scholars and public investigators would be barred from reviewing code and related data to identify racist, sexist and other practices deserving of scrutiny and correction. To add insult to injury, some pacts with “digital trade” rules require governments to enact liability shields for online firms that allow them to evade responsibility for discriminatory conduct, online racial incitement, and other civil rights violations. More on that below.
Rather than shield these “trade secrets” from public scrutiny, continuous, independent oversight and transparency is key to ensuring human and civil rights are maintained in the digital age.
- Manipulating “trade” tools of “market access,” ”trade discrimination” and “conditions for business” to exploit workers in the gig economy
There is a false notion that workers providing services online or in the gig economy are somehow different from those in their brick-and-mortar counterparts, and so domestic policies that generally apply to protect the rights of workers do not apply to them. “Digital trade” rules can make illegal “trade barriers” out of requirements that large ride-sharing companies meet driver hours-of-service rules or contribute to drivers’ social security, for example. Corporations push U.S. trade officials to consider enforcement of domestic laws to be “discriminatory” if such laws affect them more than other businesses. But sometimes, certain businesses are more affected because they have monopolized that industry. Take, for example, an antitrust Korean law to end anti-competitive App Store practices. But Apple and Google are pushing U.S. trade officials to attack the law as “discriminatory” because, thanks to their monopoly practices, it would affect them more than other businesses. Similarly, some public interest policies are characterized as illegal limitations to “market access” if they’re shut down due to violations of or conditioned upon the following of local labor (or other) laws.
As I searched the IPEF public comments database for mentions of non-discrimination or market access, it took days just to get through the pages of results, let alone the comments themselves. While some of these discrimination and market access concerns may and can be legitimate business concerns, it’s a useful way to disguise attempts to avoid regulation altogether.
Additionally, firms like Google and others want to bar governments from requiring a local representative or office as a condition for doing business, which could make enforcement of local labor laws that much more difficult. In issues of unsafe labor practices, say concerning drivers who work for a ride-sharing app, if there is no local representative, the authorities’ only option would be to enforce labor laws against the drivers themselves, not their employer. A local legal entity extremely useful for holding corporations accountable to their workers, consumers, and more.
- Codifying a still-debated tool to shirk liability for fraud and counterfeit sales
Another growing area of public debate is over the rules that govern the internet, particularly Section 230 of the 1996 Communications Decency Act. Section 230 says that no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. Online platforms use this law to claim they’re not liable for content posted by third parties, for example, fraudulent or defamatory posts on Facebook. Some experts say this is a core component of free speech online, while others say it mainly helps mega-corporations avoid liability for negligence. One thing’s for sure, overly broad corporate liability waivers like Section 230 have no business in a trade agreement.
There is vigorous opposition to and support for Section 230 by Democrats and Republicans. That’s why this is exactly the sort of policy that should not be locked in via a trade agreement, but should be decided in an open and democratic forum. Policymakers must have flexibility to address concerns with Section 230, not have the ever-expanding digital policy space preempted by international trade agreements, so we need to be vigilant as Big Tech attempts to include a corporate liability shield under the guise of “digital trade.”
But corporations and lobby groups like the Computer & Communications Industry Association, as well as the Entertainment Software Association (ESA) are doing just that. To use ESA’s language: “Video game companies maintain online platforms that host user generated content and are beneficiaries of the limitations on attendant liability afforded by Section 230 of the Communications Decency Act… ESA considers the inclusion of a provision on this issue an important objective in negotiating the Framework.”
- Ever-Expanding Intellectual Property Demands, Consolidating Life-Saving Medicine and Tech for the Rich
Corporations such as Google are also demanding a ban on technology transfers and intellectual property disclosure, which have been a major debate in the COVID-19 vaccine equity crisis. The doubling-down on IP barriers is both increasingly concerning as well as exceedingly paternalistic. Take this comment from the U.S. Chamber of Commerce for example:
The COVID-19 pandemic has made clear that countries around the world, including many in the Indo-Pacific region, remain ill-equipped to participate effectively in the global ecosystem for intellectual property (IP) development and technology transfer... These structural shortcomings in their own systems have led such countries to inappropriately identify intellectual property rights and related trade commitments as a barrier to access to technology.
I went through thousands of pages of comments. None made me need to take a lap, scream into the void, and lay face-down on the floor all at once quite like this.
First of all, limiting life-saving technology for only the wealthy who can pay top dollar for a good, be it a vaccine, medical treatment, renewable energy, or otherwise, is both immoral and ultimately self-sabotaging, as we’re currently seeing with the ongoing global COVID-19 vaccine apartheid & ensuing variants. Secondly, more than 100 facilities across the world were identified as possible producers of COVID-19 vaccines, despite pharmaceutical lobbyists’ decidedly racist lies about developing nations remaining “ill-equipped” to produce them. Setting aside colonialist culprits that created the structures that reinforce asymmetries of power and participation in the global economy, the U.S. Chamber of Commerce goes so far as to suggest that countries are apparently too poor and dumb to even understand the vaccine crisis they face.
PhRMA, the lobby group representing the pharmaceutical industry (that enjoys spending millions and millions of dollars to keep prescription drug prices high) submitted comments on IP protection that are almost laughable if they weren’t so outright poisonous. “PhRMA therefore encourages Commerce to negotiate an IPEF agreement that is as comprehensive and ambitious as possible and that includes strong IP protections… [that] facilitate the manufacturing and distribution of lifesaving medicines and other IP-intensive products.”
I can’t think of an industry lobbying group more responsible for the lack of manufacturing and distribution of lifesaving medicines such as Paxlovid or COVID-19 vaccines than PhRMA and their ongoing campaign to block a waiver of WTO IP rules.
And it’s not just PhRMA and other Big Pharma companies. Industry groups like the Payments Leadership Council, representing multinational financial corporations, and tech companies all see a future cash cow in doubling-down on IP barriers at the expense of human rights.
Further entrenching extreme IP barriers sets an incredibly dangerous precedent. As we face increasing climate emergencies and pandemics, it could not be more critical that we ensure any and all economic agreements, frameworks, side-deals and declarations put people before profits.
- Power to Sue Governments Over Laws They Don’t Like
No call for public comments on any sort of trade platform involving the US, no matter the scale or venue, is without the classic demands we are constantly battling. ISDS, the Investor State Dispute Settlement mechanism, is a classic hit. ISDS allows multinational corporations to sue governments before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits, on claims that a nation’s policy violates their rights. Their decisions cannot be appealed. ISDS has been used to stall and rollback climate progress, and by foreign investors against states that took necessary steps to contain COVID-19. It’s an unforgivable abuse of power and has no place in democratic institutions, but for obvious reasons (money), corporations love it.
Take the commentary from the Information Technology Industry Council:
“With growing two-way ICT investments between U.S. and many IPEF economies there may be room to focus on strengthening investment protections: to protect investment abroad in countries where investor rights are not already protected through existing agreements (such as modern treaties of friendship, commerce, and navigation, or free trade agreements).”
The American Petroleum Institute similarly called for “clear investment protections.” ISDS is so unpopular on a bipartisan basis that President Biden campaigned on a pledge to not include it in any future agreements. It’s a politically toxic, undemocratic tool, so these corporate lobbyists have to tread lightly, but reading between the lines and based on their long-standing positions, “strengthening investor protections” is likely code for “We want ISDS, and we want more of it.”
- Rolling Back Public Interest Safeguards to the Lowest Common Denominator
Similarly, “unified process” was a recurring phrase throughout the corporate comments. Again and again, corporations listed demands for a unified entry system, unified online payments, unified customs procedures, etc. The Payments Leadership Council, the National Foreign Trade Council, the U.S. Chamber of Commerce, and more organizations are calling for such uniform processes. Phrases like these should always give us pause, because any call for ‘regulatory practice uniformity’ could be trade speak for achieving lowest common denominator in consumer safety oversight.
Granted, cooperation among regulators is not inherently a bad idea. What IS very dangerous is for such cooperation to happen in the context of a traditional free trade agreement that prioritizes reducing costs for businesses over any protection of consumers or the environment. The biggest banks, agribusiness, chemicals and pharma corporations in the U.S. have made clear time and time again: it’s consumer and environmental protections they intend to undermine in the name of “regulatory cooperation.” Uniformity and high consumer, environmental, labor standards aren’t mutually exclusive, but should never be considered a tradeoff.
So now what?
That was a lot of prophet-of-doom-ing.
To be clear: this process is only just beginning to begin to start to form. This federal comment period for IPEF, meant to invite public input toward developing US negotiating objectives and positions, just ended on April 11, 2022.
USTR Tai is adamant that IPEF will be a new type of economic arrangement, one that “goes beyond what we've done traditionally with all of the traditional trappings and the traditional pitfalls.”
The global economic system that shattered when COVID-19 hit is one that we must not, and frankly cannot, return to, per USTR Tai’s insistence (and ours) (and those that have suffered from neoliberal, corporate-rigged hyperglobalization worldwide). This effort to build a new trade paradigm can reflect this administrations goals of a worker-centric, sustainable, equitable trading system – it’s exciting! But to avoid the mistakes of the past, we have to be cognizant of the demands corporations are pushing. They might have the money and the armies of lobbyists making grandiose demands in their side, but we have reality and justice on ours.