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Beware of Outlandish Claims About Economic Benefits of U.S.-EU ‘Free Trade’ Deal

This Week’s U.S. International Trade Commission Study Assumes Total Elimination of U.S.-EU Consumer, Environmental, Financial Policy Differences, Follows British Embassy’s 50-State Rehash of Discredited 2009 Study Based on Similar Assumption

On Thursday, the U.S. International Trade Commission (USITC) sent a report to the U.S. Trade Representative (USTR) on the projected economic impact of the Trans-Atlantic Free Trade Agreement (TAFTA), a report that is premised on the ridiculous assumption that 100 percent of the differences between U.S. and EU health, safety, environmental and financial regulations will be eliminated. Given that the report, which is not being made available to the press or public, relies on a premise that can only lead to fanciful results, U.S. negotiators should not consider it, much less use it to guide their approach to the agreement.

That study comes two days after yet another think tank report that recycled a litany of flawed assumptions from a 2009 study on TAFTA, chopping up baseless findings to present a 50-state version of imaginative projections of economic gains from a similar dismantling of public interest safeguards.

The core premise of these studies is the unproven business mantra that rolling back Wall Street reforms, food health standards and medicine safety regulations will somehow deliver economic gains to us all. The main contribution of the recent flurry of studies is the addition of extra gloss and fancy printing to the old, debunked assumption that such an assault on consumers, workers and the environment would have zero costs.

In its request for Thursday’s study, the USTR asked the USITC to assume an impossible outcome of U.S.-EU negotiations: “that any known U.S. non-tariff barrier will not be applicable” to imports from the EU if the sweeping deal were to take effect. By the USTR’s own definition, “non-tariff barriers” include differences in domestic financial regulations, food safety standards, product safety rules and other U.S. public interest safeguards that TAFTA apparently would render null. 

Even the most fanciful pro-TAFTA study, the 2009 ECORYS study prepared for the European Commission that has been regularly rehashed, including in a British Embassy report this week, avoided such an outlandish assumption, stating, “It is unlikely that all areas of regulatory divergence identified can actually be addressed … because this would require constitutional changes … ; because there is a lack of sufficient economic benefit to support the effort; …because of consumer preferences…; or because of political sensitivities.”

On Tuesday, the findings of the 2009 study were revived in another TAFTA-touting study, commissioned by the British Embassy in Washington, the Bertelsmann Foundation and the Atlantic Council. That glossy piece recycled the 2009 study’s improbable assumptions – breaking them down to state-by-state projections – to hypothesize the “gains” that TAFTA could deliver to each state if public interest safeguards were sufficiently weakened. The study assumes that TAFTA would eliminate one of every four “non-tariff barriers” – from the Volcker Rule at the center of Wall Street reform to safety standards for children’s toys to the U.S. ban on beef linked to mad-cow disease – at no cost to consumers.

While ignoring costs, the report uses a computable general equilibrium model to generate projections of hypothetical economic gains, despite studies showing that this methodology is inchoate and unreliable when studying non-tariff policies. Past studies using this cost-ignoring, gain-inflating methodology have still producedmeager projections for TAFTA’s “gains.” A pro-TAFTA study whose findings were recycled in Tuesday’s report estimated that, if TAFTA would significantly dilute or eliminate public interest regulations, the deal could produce a tiny 0.2 – 0.4 percent blip in U.S. gross domestic product (GDP). According to economists, that’s a smaller contribution to GDP than was delivered by the latest version of the iPhone

The list of “non-tariff barriers” slated for elimination in the underlying 2009 study includes food safety standards such as “Grade A dairy safety … rules and inspection requirements” for milk and financial stability measures such as the Sarbanes-Oxley Act that enacted accounting and anti-fraud standards to prevent a recurrence of Enron-like corporate accounting scandals. The study ignored the predictable social and economic costs that would result from such extreme regulatory rollback, such as an increase in the incidence of foodborne illness and a rise in financial instability.

Tuesday’s report, like its predecessors, made clear that TAFTA is not primarily about trade. Acknowledging that tariffs between the United States and the EU are “already quite low,” USTR and EU officials have made clear that TAFTA’s primary focus will be on the “elimination, reduction, or prevention of unnecessary ‘behind the border’” policies, such as the health, financial and environmental regulations targeted by Tuesday’s study. Attempts to exclusively measure the economic impact of TAFTA-prompted tariff reductions have produced embarrassingly meager results, estimating that even in the unlikely scenario of 100 percent tariff elimination, TAFTA would deliver economic benefits equivalent to three extra cents per person per day.

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Protests Expose Secret Negotiations, Cast Light on Shadowy TPP Deal

Construction workers stopped working and peered down from the scaffolding high above. Tourists stopped to take pictures. The sound of chanting could be heard blocks away. It was a beautiful day for a rally.

Last Friday, nearly 100 environmental, labor, family farm, faith, public health and trade activists gathered outside the U.S. Trade Representative’s (USTR) office to show the Trans-Pacific Partnership (TPP) lead negotiators that people in the U.S. do not want a “free trade” deal that puts corporate interests over those of the middle class.  

Crowd shot 2The TPP negotiators were not in Washington, D.C. for a formal round of negotiations, but for a below-the-radar “intersessional” meeting. Such secretive meetings are now being scheduled at a moment’s notice in countries across the Pacific Rim as the U.S. cracks the whip in desperate attempt to get negotiations all wrapped up and tied with a neat bow by the end of the year, despite the yawning controversies and gaps in agreed-upon text. 

These “intersessionals” drive the backdoor TPP talks even further underground and away from public scrutiny. Unlike the formal rounds, USTR is not even revealing the location, timing or agenda of the intersessionals. And there are no “stakeholder sessions" to which concerned groups and the general public are invited.

So we created our own stakeholder session.  On the street.  Outside of USTR’s office.

Crowd shotNot about to let top-secret meetings get in their way, the crowd gathered in front of the USTR office last week filled the air with demands for fair trade, against the TPP’s corporate coup, and against Obama’s plan to railroad the controversial deal through Congress with Fast Track.

A medical student in his white coat waved a sign next to a union member demanding the end of "trade" agreements that jack up the cost of medicines while shipping U.S. jobs overseas. Student activists held signs calling for greater transparency. As the D.C. lunchtime crowd merged with tourists walking by, the rally swelled to incorporate newcomers who grabbed signs and joined the cries for justice:

Regulating Wall Street is what we need, it’s time to flush the TPP!”

“People with AIDS under attack, No TPP and no Fast Track!”

“It might be really good for Monsanto, but it sure ain’t good for us!”

“The TPP has gone astray, there’s no shame to walk away!”

With a crowd diverse enough to include a middle aged white man in a suit, a tattooed girl with dreads, a Chinese exchange student, and a modern day hippie in clogs, it was clear that the TPP impacts each and every one of us in profound ways.  Across the U.S., people from all walks of life with all sorts of different interests are coming together to derail Fast Track and stop the TPP. The contagious, hopeful, and determined energy that rocked the crowd on that sidewalk outside the USTR building is increasingly being manifested all over the country in rallies, town hall meetings, teach-ins, and meetings with members of Congress.

TPP-USTR-Ann-Meador-Large-signIn D.C., protests continued throughout the negotiators’ visit. One of the most dramatic moments happened on Monday when activists from FlushTheTPP.org, CODEPINK, Veterans for Peace, and Earth First! emblazoned the very headquarters of TPP scheming with anti-TPP banners.  Disguised as construction workers, activists scaled scaffolding to reach the roof of the USTR’s buildings, and then covered the USTR offices with banners saying no to the TPP and demanding transparency for the sweeping deal.

The fight is on. No matter how deep into the shadows the TPP negotiators try to hide, activists all over the world will be there to shine a light on a deal gone terribly wrong. 

--Lacey Kohlmoos

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Gussying Up Old Assumptions: Today’s TAFTA-Touting Report Is a Re-Run

If you say something enough times, does it become true?  That seems to be the calculation of some proponents of the Trans-Atlantic Free Trade Agreement (TAFTA), a sweeping deal that would require the U.S. and EU to conform domestic safeguards to deregulatory rules currently being negotiated under corporate supervision.  Pro-TAFTA think tanks have been rehashing the same set of starry-eyed prognostications of TAFTA economic benefits at a frequency (and concern for accuracy) that rivals iterations of the “Fast and the Furious” movie series. 

But repetition does not truth make.  As we’ve pointed out time and again, these reports keep using sweeping assumptions to project that TAFTA would bring a surprisingly miniscule economic blip.  And to get that blip, they assume that we’ll be willing to watch corporate-advised TAFTA negotiators dismantle a swath of health, environmental, financial, and other safeguards.  Click here for our retort to this parade of studies. 

Another TAFTA-touting report came out today, commissioned by the British Embassy in Washington, the Bertelsmann Foundation, and the Atlantic Council (whose advisors include executives from J.P. Morgan and Big Pharma). 

The report offers 71 glossy pages of rewarmed speculations.  Here are the five main takeaways:

1. The “new” study is not really new.  It is largely a recycled version of another recycled version of a study that appeared in 2009.  Today’s report hypothesizes what TAFTA could mean for each U.S. state, assuming economic gains primarily from the weakening of financial regulations, climate policies, food and product safety standards, data privacy protections and other “trade irritants.” Those “gains” were tabulated about four years ago, dusted off in a study disseminated in March, and sliced up by state in today’s report.

2. The study confirms again that TAFTA is not about trade.  Since tariffs (an actual trade issue) are “already quite low” between the EU and U.S., pro-TAFTA government officials have readily stated that TAFTA’s primary goal is not tariff reduction, but the “elimination, reduction, or prevention of unnecessary ‘behind the border’” policies, ranging from Wall Street reforms to milk safety standards to GMO food labels. 

That’s why attempts to measure the economic impact of TAFTA-prompted tariff reductions have produced embarrassingly meager results.  A frequently cited pro-TAFTA study estimates that even in the unlikely scenario of 100% tariff elimination, TAFTA will deliver economic benefits equivalent to three extra cents per person per day.  To project a higher benefit, the study released today had to not just repeat this unrealistic assumption of 100% tariff reduction, but also assume that TAFTA would reduce health, financial and environmental regulations that have been euphemistically renamed “non-tariff barriers.” 

3. The study assumes zero downside of eliminating consumer and environmental safeguards. Today’s study assumes that TAFTA would eliminate one out of every four “non-tariff barriers” – from the Volcker Rule at the center of Wall Street reform to safety standards for children’s toys to the ban on beef linked to mad-cow disease – at no cost to consumers.  In addition to an obvious social and environmental toll, such a degradation of safeguards would also result in quantifiable monetary costs for U.S. consumers and the broader economy.

For example, the 2009 study on which today’s report relies counts “Grade A dairy safety…rules and inspection requirements” for milk and “a US ban on the import of uncooked meat products” in the case of “a health risk” as “non-tariff barriers” that could be slated for dismantling under TAFTA. The elimination of such consumer protections would likely result in greater incidence of food-borne illness in the United States, which would not only increase the medical costs of affected consumers, but would reduce their productivity levels and number of days at work, spelling a negative impact on aggregate economic output.

In financial services, the study names the Sarbanes-Oxley Act of 2002 as a “non-tariff barrier” on the target list of EU businesses and officials. The Act created enhanced accounting and anti-fraud standards to prevent a recurrence of the Enron, WorldCom, and other corporate accounting scandals that destroyed billions of dollars of U.S. investments. Undermining such critical financial reregulation via TAFTA would risk a return to such costly scandals. Today’s study ignored such costs.

4. The study uses contested models with assumptions that can turn economic losses into gains.  While ignoring costs, today's study strives to capture all theoreticaly plausible benefits by relying on assumptions-laden methods, such as using a computable general equilibrium (CGE) model to assess removal of “non-tariff barriers” (NTBs).  A U.N. study has questioned the reliability of this inchoate approach. It argues, “ongoing liberalization policy efforts to eliminate the restrictive effects of NTBs are proceeding with little economic analysis…the modeling of NTBs using general equilibrium modeling techniques is still in its early stages.” The U.N. study tested the usage of differing assumptions in a CGE model to estimate the economic effects of NTB removal and found that a change in the assumptions meant that the net economic effect of NTB removal actually switched from positive to negative for some countries (even before taking into account the above costs).  If today’s study performed any such testing of assumptions, it did not reveal the results. 

5. The study assumes a massive rollback of Buy American and Buy Local policies.  Another assumption of today’s study is that TAFTA would eliminate one half of all “procurement barriers,” a euphemism for popular policies like Buy American and Buy Local to ensure that U.S. government projects, funded by U.S. taxpayers, are used to create U.S. jobs.  It is rather fanciful to think that the U.S. Congress, state legislatures, or the U.S. public would accept such a clear-cutting of policies that enjoy 90% support.  Indeed, today’s study assumes an even greater undercutting of Buy American and Buy Local than the EU negotiators themselves are hoping for. In a leaked EU position paper on government procurement, the EU explicitly names 13 U.S. states and 23 U.S. cities it is targeting for rollback of Buy Local policies.  Today’s study assumes that the U.S. will offer to eliminate Buy Local in about twice as many states as the EU itself requested.

For more information on the lineage of TAFTA-touting studies from which today’s rosy report descended, click here to see our factsheet.  

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Obama’s Corporate Export Council Ignores Dismal Export Data, Backs More-of-the-Same “Trade” Deals

Yesterday, just before a meeting of the President’s Export Council, we asked whether the powerful, Obama-advising group would recognize that U.S. export growth is seriously lagging and that status-quo “free trade” deals have failed to fulfill promises of increased exports.

They didn’t. 

Somehow the room full of corporate representatives and government officials, “the principal national advisory committee on international trade,” which exists to “promote export expansion” and “discuss and resolve trade-related problems,” made it through two hours of prepared speeches without once acknowledging that we’re 18 years behind schedule to meet Obama’s goal to double exports.  

Groupthink is one plausible explanation.  The members of Obama's top "export" panel include:

  • 17 executives of Fortune 500 corporations and 8 other business representatives
  • 17 administration officials, 9 hand-picked members of Congress, and 2 state and local government officials
  • 0 representatives of labor, environmental, health, consumer, family farmer, or any other public interest groups

It turns out that Obama's "principal national advisory committee on international trade" doesn't need to include a broad cross-section of groups and concerns implicated by trade policy.  Perhaps if a single worker, farmer, or advocate had been present, someone would have pointed out the obvious: exports (i.e. the group's raison d'être) are not doing well.  

Export CouncilInstead, the group touted insignificant data points as “gains.”  For example, President Obama declared, “Part of the reason we set up the Export Council was to make sure we meet our goal of doubling exports in a relatively short period of time.  And we now sell more goods overseas than ever before.” 

Um, the second sentence’s mundane “achievement” is irrelevant to the first sentence’s central goal.  We have actually “sold more goods overseas than ever before” in 43 of the last 53 years – rising exports has been a longstanding accompaniment to economic growth, not a novel cause for bragging rights. 

Actually, Obama’s unremarkable claim may not even prove true for 2013. The most recent government data indicates that U.S. goods exports so far this year are actually one percent lower than they were in the same period last year.  At the current rate, we’d expect 2013 to be a historically unique year of falling exports. 

If so, Obama’s export-doubling goal, which already looked impossible after last year’s sluggish two percent growth rate (mentioned just once during the Export Council meeting), would become even more remote.

Choosing to ignore this elephant in the room, the President’s Export Council called for a hearty embrace of status quo trade policy. Corporate CEOs and administration officials praised two more-of-the-same pacts currently under negotiation: the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Free Trade Agreement (TAFTA)

No one brought up how exports have actually fared under similar pacts.  No one mentioned that exports to Korea have actually fallen 10 percent under the Korea “free trade” agreement (FTA), a blueprint for the TPP.  No one mentioned that export growth to countries that are not FTA partners has actually exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade.

Instead, the Council affirmed the tired and counterfactual narrative that deals like the TPP and TAFTA, which would rewrite wide swaths of non-trade domestic policies, are necessary for export promotion. 

And they reiterated that getting the increasingly controversial deals past a skeptical Congress and a critical U.S. public would require Fast Track – the undemocratic tool used to ram through Congress the Korea FTA, NAFTA, and other past controversial deals whose results the Council resolutely ignored. 

In a decision that took less than thirty seconds, and entailed zero deliberation, the Council approved a resolution supporting Obama’s push for Fast Track.  The Chair, representing Boeing, did not even bother to call a voice vote, opting instead to “assume no objection” and then declare approval of the resolution by stating, “I so move, all in favor, okay.”

So is the President’s Export Council really blind to the current export problems that are central to its mandate?  Are they really unaware of the shoddy export record of “free trade” deals to which they are unblinkingly committed? 

Or do the Council members, representing some of the country’s most aggressive corporate interests, have something else to gain by advocating for the TPP and TAFTA?  For example, Council member J.P. Morgan, Wall Street’s largest firm, might be less concerned with the deals’ implications for exports and more interested in the constraints that the pacts would impose on the reregulation of Wall Street

Maybe Pfizer and Merck, both incoming Council members, decided to join the powerful body to push for the TPP proposal to expand their monopoly patent protections, increasing their profit margins and our medicine prices.  And Walt Disney may be particularly keen, as a Council Member, in pushing for the TPP to include some of the draconian copyright provisions that the corporation failed to get enacted in the Stop Online Piracy Act (SOPA), defeated in Congress as a threat to Internet freedom.  Archer Daniels Midland, meanwhile, would probably like to use its Council membership to push for TAFTA to weaken EU limits on genetically-modified food, while Council member Verizon has already expressed its hope that the pact can be used to roll back Europe’s data privacy safeguards

It’s possible that the President’s Export Council is delusional about the shoddy export record of the status-quo “trade” model that the TPP and TAFTA would expand.  It’s more likely that they are willfully ignorant.  The corporations’ unqualified support for the pacts likely stems not from data-defying hopes of export promotion, but from realistic expectations that the sweeping deals would rewrite health, environmental, financial, and other domestic safeguards that the corporations find inconvenient – and that most of the rest of us find essential.

Will President Obama grant the wishes of his corporate Council members?  In his closing remarks for the meeting, Obama joked, “I am expecting a gold watch from Boeing at the end of my presidency, because I know I’m one of the top salesmen for Boeing.” As Obama continues attempting to sell the TPP and TAFTA to the U.S. public and fast track the controversial pacts through Congress, the likes of Boeing, J.P. Morgan, and Pfizer must be lining up the gold watches.  
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As President’s Export Council Meets, No Chance to Meet Obama’s Export Doubling Goal; Exports Fall Under Free Trade Agreements

Obama’s Quest for Fast Track Authority and for Support for Trans-Pacific Partnership Pact Undermined by FTA Outcomes; U.S. Exports Have Declined in Each of 16 Months Since Korea FTA Implementation

As President Barack Obama’s Export Council convenes today to discuss his request for Fast Track authority and the status of the increasingly controversial Trans-Pacific Partnership (TPP), recent government data show it will be virtually impossible to meet Obama’s stated goal of doubling exports by the end of 2014. The same data shows that in 16 out of 16 months since the Korea “free trade” agreement (FTA) took effect last year, U.S. goods exports to Korea have fallen below the average export level in the year before the deal. At last year’s sluggish overall two percent U.S. export growth rate, the United States will not achieve Obama’s export-doubling goal until 2032, 18 years behind schedule.

The actual dismal outcomes of the current free trade agreement model are having a significant impact in Congress, where skepticism is growing about both Obama’s request for the rarely used Fast Track trade authority and the TPP.

“Given the dismal data on U.S. export growth, it would be very revealing if the Export Council just calls for more of the same policies and procedures that have gotten us these bad results,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “But whatever the Export Council says, many members of Congress are well aware that the Korea pact has been a loser and that this Trans-Pacific deal would just expand that model to more countries, which seems to be fueling opposition to the president’s request that Congress delegate its constitutional authority over trade to him via the Fast Track process.”

The overall U.S. export record under FTAs has not been helping Obama make his case for Fast Track or the TPP. Growth of U.S. exports to countries that are not FTA partners has actually exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade.

The export record of the Korea FTA is even worse. In the first year of the deal, U.S. exports to Korea fell 10 percent (a $4.2 billion decrease), imports from Korea rose 2 percent (a $1.3 billion increase), and the U.S. trade deficit with Korea swelled 37 percent (a $5.5 billion increase), compared to the prior year. Approximately 40,000 net U.S. jobs were lost under the deal’s first year, according to an economic study.

“If the president is serious about growing exports, he would do well to ditch these NAFTA-style so-called ‘trade’ pacts that export U.S. investment dollars and American jobs and look for a new model,” said Wallach. “As long as the administration keeps pushing more of the same instead of acknowledging the damaging record of the past trade deals, of course members of Congress must maintain their constitutional authority over trade so they can make sure we do not end up with yet another damaging pact.” 

Click here for a PDF of this release.

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Study: "Trade" Deal Would Mean a Pay Cut for 90% of U.S. Workers

The verdict is in: most U.S. workers would see wage losses as a result of the Trans-Pacific Partnership (TPP), a sweeping U.S. "free trade" deal under negotiation with 11 Pacific Rim countries.  That's the conclusion of a report just released by the non-partisan Center for Economic and Policy Research (CEPR).  

TPP's corporate proponents have tried to sell the NAFTA-style deal to the U.S. public and policymakers by claiming that it will result in gains for the U.S. economy.  They often cite a study from the Peterson Institute for International Economics that used sweeping assumptions to project a tiny benefit from the TPP. We brought that study down to size back in January, showing that, even if one accepts the pro-TPP authors' litany of optimistic assumptions, the much-touted "benefit" from the TPP would amount to an extra quarter per person per day

As this week's CEPR report points out, the pro-TPP study projected a meager 0.13 percent increase to U.S. gross domestic product (GDP) by 2025 if the controversial TPP would be signed, passed, and implemented.  By comparison, economists have estimated that Apple's iPhone 5 contributed a 0.25 - 0.5 percent increase to U.S. GDP.  

That is, the TPP's total contribution to the U.S. economy is expected, by TPP proponents, to be about one half to one fourth of the contribution of the latest iPhone version. 

Well, you might say, a nearly invisible blip in GDP is better than no blip in GDP.  (You might say this if you ignore the host of dubious assumptions used to project said blip, and ignore the TPP's expected threats to medicines affordability, environmental protections, food safety, Internet freedom, and financial stability.) 

But what would such a paltry GDP rise mean for your pocket?  Answering that requires taking into account the increase in income inequality that typically results from such "free trade" deals.  The author of the CEPR report, economist David Rosnick, explains, "There are winners and losers from trade, and research has shown that trade contributes to inequality. In fact, it would take only a very small contribution to inequality due to trade to wipe out all of the gains that most workers would get from this agreement."  Rosnick then uses the empirical evidence on the trade-inequality relationship and shows that even taking the most conservative estimate of trade's contribution to inequality (that trade is responsible for just 10% of the rise in inequality), the losses from projected TPP-produced inequality indeed would "wipe out" the tiny projected gains for the median U.S. worker.

That is, as a result of the TPP, the median U.S. income would fall. It would not just fall in comparison to the incomes of the wealthy (which would rise). It would fall in absolute terms, forcing middle-class U.S. workers to take home less in 2025 than they earn today. 

Such wage losses would afflict most U.S. workers.  Rosnick shows that if we assume that trade has contributed just 15% of the recent rise in inequality (a still conservative estimate), then the TPP would mean wage losses for all but the richest 10% of U.S. workers.  So if you're making less than $87,000 per year (the current 90th percentile wage), the TPP would mean a pay cut.  And if you're making more than $87,000 per year, you may still be a tad concerned about how the deal could jeopardize the safety of your food, threaten clean water protections, roll back Wall Street reforms, etc. 

Click here for the disturbing report from CEPR

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Exports Fall Short under Korea FTA for 16 out of 16 months

At this week's G20 summit in Russia, President Obama has been trying once again to sell two enormous "trade" pacts -- the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Free Trade Agreement (TAFTA) -- using the beleaguered pitch that such deals will deliver jobs by boosting exports.  

But government trade data released this week douses Obama's export promise with another bucket of cold reality.  Under the Korea "free trade" agreement (FTA), a model for the TPP, U.S. exports have been steadily falling, imports have been rising, and job-displacing trade deficits have surged.    

In fact, in every single month since the Korea FTA took effect in March 2012, U.S. goods exports to Korea have fallen below the average export level seen the year before the deal took effect.  Average monthly exports to Korea since the FTA have sunk 11% below the average monthly level before the FTA. 

The U.S. monthly trade deficits with Korea, meanwhile, have soared about 50% higher than the pre-FTA level.  In 16 out of 16 months since the FTA took effect, the U.S. trade deficit with Korea has exceeded the average monthly deficit seen the year before the deal.  

The dismal record of the Korea FTA for U.S. exports and jobs does not bode well for the administration’s attempt to push the controversial TPP through Congress on a democracy-defying Fast Track under the tired and counterfactual promise of export promotion.  Members of Congress are not likely to be persuaded to revoke their constitutional authority over trade and allow the TPP to be railroaded through Congress after seeing the disappointing data for a deal upon which the TPP is modeled.  

Sep Korea 1

Sep Korea 2

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Latin American Lawmakers Call for Public Debate on Secretive "Trade" Deal


Peruvian lawmaker Verónika Mendoza, signatory to the resolution, speaks at a Public Forum on the TPP.

While the negotiations of the ultra-secretive Trans-Pacific Partnership (TPP) have gone further underground, lawmakers in Chile and Peru are urging their country to open a public debate to shed light on the deal's sweeping implications for their countries.

Last week, members of the Peruvian parliament put forth a resolution (English translation available below) requesting that the government open a "public, political, and technical debate" on the binding rules being negotiated in the TPP. The request mentions several of the lawmakers' specific concerns, including the lack of transparency of the process, proposed TPP provisions limiting access to affordable medicines, and the TPP's expansion of the investor privileges model known as investor-state dispute resolution. Under this system, a wealthy U.S. magnate has demanded that Peru's government pay $800 million for asking the company to comply with its contractual obligation to clean up the grave pollution caused by its metal smelter in La Oroya, one of the world's most polluted communities.

The resolution put forth by the Peruvian lawmakers was introduced a few weeks after four Chilean senators sent a very similar formal request to open a public debate about the TPP in Chile. The document introduced by the Chilean senators quotes Rodrigo Contreras, the ex-lead TPP negotiator for Chile who has been publically critical of the TPP.

Considering that large swaths of domestic policies -- from environmental protections to financial regulations to public health laws -- would need to be rewritten to conform to the TPP's deregulatory rules, it is outrageous that elected lawmakers have been excluded from access to the text or the negotiating process. A public debate about this expansive "trade" deal is long overdue. 

Here's the translated text of the Peruvian resolution:



The undersigned Members of Congress of the Republic, members of the group Parlamentario Acción Popular-Frente Amplio, under Article 68 of the Congressional Rules of the Republic, propose the following motion:


Whereas the Transpacific Economic Partnership (TPP), which aims to integrate 12 economies: the U.S., Canada, Peru, Mexico, Brunei, New Zealand, Singapore, Australia, Malaysia, Vietnam, Chile and Japan, into a free trade zone of the Pacific, seeks to finalize an agreement on goods, services, and agriculture, as well as agreements on intellectual property rights, investment, rules of origin, competition, labor and environmental standards;

Whereas our attention is drawn to the excessive zeal of the negotiations, declared secret, and the lack of transparency making it impossible to know the contents of the TPP negotiation texts and therefore what standards we as a country are implicating.

Whereas the document that leaked in 2011 about the intellectual property chapter proposed by the U.S., proposes to require TPP signatory countries to conform to copyright rules that impose serious limits to intellectual and artistic creation as well as technological innovation putting at risk freedom of expression, privacy and the capacity to innovate of all Peruvians. This being a new attempt to tighten intellectual property rules;

Whereas the TPP promotes mechanisms, rejected in other negotiations, which limit competition and the entry of generic medicines into the market and endanger the aim to protect biologic medicines, particularly important cancer-fighting medicines, and this is a proposal that should not be accepted;

Whereas, additionally, it threatens the free access to information, the use of the internet and cultural goods: the U.S. proposal seeks to impose rigid copyright rules, similar to those criticized in SOPA (Stop Online Piracy Act) recently rejected in that country, because it would impose serious threats to the right to information, the free use of the internet and other cultural goods (books, software, music, etc.);

Whereas, furthermore, it promotes a model of investment protection that is being questioned internationally because it allows anonymous private capital and transnational corporations to evade domestic courts and challenge necessary measures and the sovereignty of countries, affecting the development of laws in favor of public health or environmental sustainability.  We urge the correction of errors that have allowed an $800 million lawsuit to be filed against Peru by Doe Run in the case of La Oroya under the investment chapter of the FTA with the U.S., and to not expand these advantages for corporations with a new set of nine [sic] countries;

With respect to the agreement of the Chilean Senate, dated August 13, 2013, demanding that the President of the Republic open a public debate about the TPP, alerting how it affects national and regional interests.

The agreement says: “Requesting your excellency the President of the Republic that, beyond diplomatic procedures and mechanisms in the context of the negotiation the government is conducting in the Trans-pacific Partnership (TPP), to open a public debate, that is technical and political, timely and open, about the implications that the agreement could have for Chile   economically and for international relations, especially with respect to the process of regional integration of which we are a part, and of our relationship with China, the country’s main trading partner.”

Whereas it is necessary to have a strong negotiating position in the face of the ambitions and pressure by economically stronger states and reject the imposition of a model conceived for the purpose of the realities of countries with higher incomes, which are very different than the other participating countries;

Whereas it is essential to analyze the impacts and the cost-benefit analysis for the country and determine the reasons for Peru to adhere to this trade agreement;

By the above considerations, the full Congress of the Republic,


First: We ask the government to open a public, political, and technical debate on the proposals of the Trans-Pacific Partnership (TPP) negotiations of which Peru is a part.

Second: We invite the Minister of Foreign Trade and Tourism and the technical team in charge of the Trans-Pacific Partnership (TPP) negotiations to report on the matter.

Lima, 28 de Agosto del 2013

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