New Infographics Reveal Jump in U.S. Exports to China of Ventilators, Masks in Early 2020 as U.S. Imports of Same Goods Fell; Plus 1989-2019 Data on Sources for U.S. Medical Imports
Corporate Power and the Disappearing Face Mask

Rethinking Trade - Season 1 Episode 2: Crisis Capitalism COVID Response: Let’s Do More Rigged Trade Deals, No One’s Watching

With everyone rightfully focused on fighting COVID-19, corporate lobbyists are hard at work pushing for more of the same failed trade policies that helped create the unreliable supply chains now failing us all. We dive into a couple of their latest attempts, including proposed free trade deals with Kenya and the UK and efforts to use stealthy World Trade Organization talks to limit regulation of monopolistic online platforms and climate-killing energy firms.

Transcribed by Lauren Martin

RYAN HARVEY: Hey everyone and welcome back to Rethinking Trade. I’m Ryan and I’m joined once again by our in-house trade expert, Lori Wallach. Lori is a long-time fighter for economic justice, she’s among the leading experts on international trade policy in the United States and she’s also the director of Public Citizen’s Global Trade Watch. 

So, Lori, in our last episode you talked about the coronavirus and the role hyper globalization and bad trade deals have played in creating the shortages and supply chain failures for medical equipment that we’ve been dealing with here. And so, while we’re living in a sort of quarantine standstill, these corporations who got us into our current trade mess are not taking a break, are they? Their plan seems to be to use a sort of crisis capitalism strategy in the background to continue pushing their failed policies in several venues, right?

LORI WALLACH: So, while we’ll all very distracted trying to get through our daily lives, and those of us who have the privilege of doing so continuing to do their jobs from home, a lot of the usual corporate interests- the big pharma companies, the Wall Street firms, big oil, are trying to use that distracted period to double down on some of the worst policies that helped get us into this failure of being able to get the things we need in a time of crisis. And it’s happening in two main places that folks in the US would want to pay the most attention to. 

First, at the World Trade Organization, the global commercial body that’s based in Geneva, they’re trying to continue the negotiations to make more corporate rigged agreements that they had started before this crisis. And the two really big ones that we need to pay attention to and in future episodes of this podcast we’re going to dig into them, one of them is called the ecommerce Negotiations. But that is a bait-and-switch name, it’s really trying to set global rules that would handcuff all of the hundred and fifty plus countries in the WTO from setting policies to regulate the digital giants. So that struggles to protect people’s privacy, to try and break up these huge outsized, uncontrollable monopolies, to try and make sure that we’re not getting unsafe products, and fake products through ecommerce, to try and make sure people aren’t getting discriminated against in the way different search algorithms work. All those big issues the idea that these WTO negotiations is to set global rules that set rights for the Facebooks and the Googles and the Ali Babas and then to basically constraint every government right to make policies domestically to protect workers and consumers. So those so-called ecommerce negotiations are really bad news and they are continuing.

Second thing is negotiations relating to what is described as “domestic regulation of the service sector.” What that means-and Wall Street is all over that one especially, but also the big oil companies because it’s covering energy- is services, basically everything you can’t drop on your foot. So, education, healthcare, all sorts of transport services, etc., energy extraction. All of those kinds of interests have been fighting for years to get WTO rules that further handcuff countries from setting domestic regulations of those kinds of activities. And already the WTO has an agreement called the General Agreement in Trade in Services, GATS (as compared to GATT which is the General Agreement in Trade and Tariffs, GATT is about goods).

GATS was this really unthinkable expansion of so-called trade rules to just pretend it's about trade and have rules limiting service sector regulation that was done when the WTO was hatched in 1995. These service sector regulation constraints would be on top of the constraints already in the GATTS, which are bad enough as it is. 

And the third area is what is called investment facilitation. That’s a sneaky way for multinational corporations to have new rights and privileges with respect to the ability to buy up natural resources and to do what they want with them in other countries. And for multinational corporations like the big chain retailers to be able to invest in countries and not have to follow zoning rules or rules about how big they are. 

So that’s going on in the WTO and there’s been a big global letter that started to circulate of civil society groups that says basically, “what the hell are you people doing, thinking about going on as business as usual, trying to quickly lock in more of the bad rules that got us in part of this global crisis of lack of supply and lack of strong response to the COVID crisis. And stop all of it, the only thing you should be doing at WTO is waiving the existing rules, for instance that the pharmaceutical companies have longer monopolies.” So that’s the WTO mess.

Then if you’re in the US, you also have to pay attention to two new trade negotiations that have been launched. One with Kenya, an Eastern African country, it would be the first country in sub-Saharan Africa the US would have a free trade agreement with. And number two with the UK. Now both of these agreements are basically seen by the corporate lobby as a way to try and set up a new paradigm of what a trade agreement should look like. And it’s really a battle of what the future of trade agreement should be. How auspicious that that’s happening right now in the middle of this crisis? Which is to say, when some of this got started a couple months ago with Kenya and six months ago with the UK, those companies were very eager to try and double down and have business as usual. 

Now with this crisis a lot of people are realizing how totally damaging this current hyper globalization model is, and not just to the manufacturing workers who got clobbered with 5 million manufacturing jobs lost, but to all the consumers who no longer in this crisis can get the basic things they need because we don’t make any of it here in this continental sized country. We basically now have an opportunity to try and make sure that those agreements aren’t about the usual corporate rigged rules but rather put people and the planet first. And the Kenya agreement is what I want to just quickly touch on right now, because it’s kind of especially pernicious. Because the first question is, why the hell are we even negotiating a trade agreement with Kenya? 

As best as anyone can tell, what happened was the president of Kenya, President Uhuru Kenyatta, came to have a long sought summit with Donald Trump and Trump apparently signaled that Africa’s existing, existing for the last 25 years, special trade preferences called the Africa Growth and Opportunity Act, that somehow that would go away. That law lasts until 2025 and it gives African countries that meet certain criteria the right to have duty free access to the US market beyond what they would otherwise have. And it was a law that was fairly controversial when it was started. A lot of unions and a lot of African countries were hoping to have a more progressive set of conditions, but the laws worked to some degree to provide some special access for goods made in Africa, which has made it easier for them to actually compete with goods that are similar things- textiles, apparel, footwear- that are made in China, where Chinese goods still face some tariffs and the African goods are duty free. 

So that law goes through 2025 and it keeps getting renewed in five or ten year chunks. So, it appears that Trump insinuated that that law was going to go away in 2025. Which is just ridiculous, because heaven forbid if he wins his second term, he’s not going to be around in 2025, but anyway it’s congressional legislation, it’s not a dictate of the executive branch. So, President Kenyatta apparently, convinced that if they didn’t make some kind of a trade agreement deal they would have nothing, agreed to start these negotiations. The thing is, the way it works now, African countries don’t have all the dangerous reciprocal corporate obligations that show up in US trade agreements, like to provide big pharma longer monopoly rights and to guarantee, for instance, that service sector providers, financial firms, others, can have unregulated access to operate in their countries. And so, Kenya’s basically about to break with the rest of Sub-Saharan Africa, which certainly would be, Kenya would be negotiating on its own against the US which would be a very unbalanced negotiation.

And the real question is, to what end? So, if there’s a good go for it, okay, great if we get the right rules. Is the goal to make things better for people in the US and the people in Kenya? Is the goal to try and promote common environmental or human rights or health goals? Is the goal even to show Eastern African countries that the US can be a good partner and not just China, that’s spent a lot of time basically making unfortunate very large loans that will soon be due, to do big projects in Africa. But it’s really unclear what the real goal is. And so the goal for the corporations that’s filled in for being clear about the other goal is, is to just try and use this as a model, to make a cookie cutter that then all the other African countries that should get knocked out of this existing program and they have to sign up for these corporate rules. So it’s really on us to make clear that one, maybe there shouldn’t be this agreement unless it’s really clear that it will be good for people, and two, if it’s going to be this agreement then what are the terms that we would want, that really put people and planet first. And for once, unusually, there is this short window where you actually have a say about what should be in an agreement.

So right now is a period where the public can comment and to make it really easy for folks, we have got some model comment notes that you can get access to and send in, we have a very easy single action way for you to actually put your two cents in about whether there should be this Kenya agreement and if so, what should be in it. If you go to rethinktrade.org and sign up to get our updates one of the first things you can get is how to put your two cents in, your comments to the federal government and some information. It’s right at the starting stage and that’s the only stage that in the current US system, which is otherwise very secretive and closed, that the public actually gets a say. 

This is our time to really say what we think. And, the big corporations and all their lawyers on K Street, the lobby gulch in DC, are going to be submitting lots of comments about all the goodies they want for themselves. So, we’re the team that needs to send our comments to say “hey, if this Kenya agreement is happening, people and planet first. Not another race to the bottom trade agreement that is rigged for the big companies.” And with the WTO keep an eye out for the global sign on letter calling on all governments, all the member governments to the WTO and the WTO itself to put a halt to these negotiations now ongoing in Geneva to try to expand the WTO’s failed rules to give even more power and privileges to companies and instead, the WTO should be focusing on how its existing rules that helped get us in this mess are waived so that we can get more production of medicine around the world without the WTO’s special monopoly patent rights for corporations. 

We can get more production of ventilators and medical devices without countries being worried that if they make that stuff without getting permission and paying the big licensing fees for the patents that they’re going to get nailed at the WTO with big tariffs. We basically need the government to have the maximum flexibility to make sure that their residents are able to get the medicines and treatments they need in this crisis. And to that end the WTO should not be obsessing with how to enforce its existing anti-people and planet rules or for that matter expanding them, but rather getting the heck out of the way. So, WTO get the heck out of the way. Everyone else, stay the F at home until our next episode. This is Rethinking Trade, I’m Lori Wallach.

HARVEY: Rethinking trade is produced by Public Citizen’s Global Trade Watch where we don’t just talk about trade policy, we fight to change it. Visit rethinktrade.org today to get involved in our campaigns and help us fight for global economic justice. Thanks for listening.

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