The vote on Fast Track Trade Promotion authority earlier this year showed that opponents of trade deals can get within striking distance of a win in the House of Representatives. In the final vote, it passed by only 219-211. The administration will have to hold on to roughly the number of votes it got then, and opponents will try to get a few to flip.
One sticking point will be the agreement’s chapter on investor-state dispute settlement (ISDS).
ISDS is a legal system that has been included in investment treaties and trade agreements over several decades, including under the North American Free Trade Agreement (NAFTA). Under these rules, foreign investors can legally challenge host state regulations outside that country’s courts. A wide range of policies can be challenged: Argentina has had its macroeconomic policieschallenged, Australia its anti-smoking efforts, Costa Rica its environmental preservation laws. While the United States has never lost a case, U.S. corporations have won many of their complaints against foreign governments.
The system is unusual in international law. Most international courts only allow disputes between states. ISDS, in contrast, creates one-way rights: Corporations can sue governments, but not vice versa.
It’s also ad hoc: The legal challenges are decided by arbitrators hired for that case only. The typical set-up is that the foreign investor appoints an arbitrator, the host state appoints a second, and the two parties or arbitrators appoint a third to chair the case. After their decision, they are paid by the parties, and the tribunal is dissolved.
Finally, it’s also unusually powerful for international law. Arbitrators can order governments to pay cash to the investor, who can then enforce arbitrators’ decisions with the full force of domestic courts. As the U.S. Supreme Court determined last year, domestic courts must defer to their decisions and not review the merits of the decision.
The White House faced substantial criticism for its decision to include ISDS in TPP. Progressives like Sen. Elizabeth Warren (D-Mass.) see the system as lacking checks and balances and as an attack on regulatory sovereignty.
It was promised these agreements would ensure American manufacturing remained strong and wages remained high. When jobs started leaving our shores we were fed the lie that outsourcing is the only way to compete in the global economy, and that new service industry jobs would provide the strength for our economy. They have not; manufacturing is the only way to establish our economy on firm financial ground.
Because of this, we no longer manufacture what we need to sustain ourselves, which has caused trade deficits amounting to trillions of dollars. Up to 70% of our economy is made up of consumer purchases, and since much of this comes from foreign imports, it leaves us on shaky ground.
When we run trade deficits, it means the majority of money spent on foreign imports leaves our economy and never returns. The money that does return is the means by which foreign companies are able to accumulate funds to purchase our best companies.
We allow our vital assets to be sold off and take on massive debt to sustain a standard of living we can no longer afford. This is not the way America became a superpower and if we continue it is a sure way to lose that status.
There are several solutions we must take if we are going to turn the tide and restore our economy. Some of these include:
- making American manufacturing competitive and profitable by getting rid of unfair “free trade” agreements and putting in place tariffs and subsidies that favor American companies
- protecting our economy from foreign predatory practices
- creating an industrial research and development division similar to the government-sponsored National Institute of Health (NIH) in medicine or the Apollo project
- changing the tax structure for select industries vital to strategic American interests – steel, transportation, cement and others
- controlling the balance of our trade deficit
- amending or getting out of our agreement with the WTO. It places our domestic trade laws in the hands of an undemocratic organization whose decisions have been consistently and unfairly adjudicated
- implementing our own Value-Added Tax (VAT), which would help to level the playing field on imports and give American exports an equal chance to those of foreign countries
- analyzing every international trade deal by considering whether it benefits America; most deals do not
- using tariffs selectively to prevent the loss of strategic and endangered industries
- curtailing subsidies foreign-owned companies receive from state governments, and discouraging technology transfer and outsourcing of manufacturing that results in the loss of industries
- preventing the sale of strategic companies or institutions to foreign ownership
- encouraging research and development to make American-made goods the best in the world
While most politicians go out of their way to avoid the term “trade war,” which harkens back to the days of the Depression and protectionist tariffs, the fact is the United States is currently engaged in just such a battle. Unfortunately, the U.S. is unilaterally disarming itself in the trade war by allowing China and other nations to get away with mercantilist practices with no consequences.
Much like the Japanese attempted to destroy America’s naval fleet ahead of World War II, removing a key element of the American war machine, America’s rivals in the trade war have tried to take out a key piece of the nation’s economic machine: its manufacturing base.
Since the 1970’s, American politicians of both parties have neglected the nation’s manufacturing sector in favor of expanded free trade in a rush to be at the forefront of the globalization movement. But “free trade” has been anything but beneficial to American manufacturers, and the problems have only accelerated in the past two decades, right along with the pace of globalization.
American producers were already struggling to keep up with their low-cost foreign competitors before the North American Free Trade Agreement and China’s entry into the World Trade Organization, but soon after the situation grew exponentially worse.
Every day, an average of 14 American factories close their doors, with roughly three-fourths of those employing over 500 people while they were in operation.
Most of those factories didn’t go out of business. Instead they chose to pack up and move their operations to Mexico, China or India, where wages are cheap, environmental and labor standards almost non-existent and profits are bountiful. Iconic American companies such as Coca Cola, Ford, RCA, General Motors, General Electric and Nokia have all opened up assembly plants in Mexico. In fact, GE employs 30,000 Mexicans in 35 factories in that country.
Because of disastrous “free trade” agreements and our membership in the World Trade Organization (WTO), Americans are now forced to compete with China’s 113 million-strong manufacturing workforce, who earn an average wage of 81 cents-per-hour, just three percent of their U.S. counterparts’ pay, according to the U.S. Bureau of Labor Statistics. Mexico, whose 10.7 million industrial workers average just $2.92 per hour, is only slightly better.
But instead of responding with tariffs and other policies to level the playing field for U.S. manufacturers, the American people have been spoon-fed academic arguments, such as “free trade” is the best for everyone economically over the long run or that free trade brings freedom or prevents war.
Unfortunately, “free trade” is an academic luxury of ivory tower elites that average Americans can ill-afford.
“With all due respect, USTR has cherry picked the single provision designed to block generic entry to the market,” Bresch wrote.
If you haven’t guessed it yet, drug companies are pushing hard for the TPP agreement to pass. It would guarantee them at least 12 years of exclusivity. Essentially, you won’t be able to find the generic version of a drug until 12 years later, when a new and improve one is out and the one you originally needed is outdated.
After reading leaked texts some are estimating that the intellectual property provisions chapter would limit access to medicines for at least half a billion people. “We consider this the worst-ever agreement in terms of access to medicine,” said Rohit Malpani, director of policy and analysis at the MSF Access Campaign. “It would create higher drug prices around the world- and in the U.S. too.
The TPP is a 12 nation trade agreement currently being negotiated in complete secret, even from our elected officials. The only reason why anyone knows what is in the TPP is because of Wikileaks who have leaked texts of the TPP. The Transparency Chapter was released on June 10th which goes over transparency and procedural fairness for pharmaceutical products and medical devices has many concerned.
Citizens, organizations, and businesses have relied on leaks of the TPP text for information since everything is being done in total secret. However hundreds of lobbyists representing various multinational corporations have had the opportunity to read the text and suggest revisions.
It is a sad day for America when we must rely on leaked information. Even our elected officials are having a difficult time with the TPP. The negotiations have been going on for nearly a decade and up until recently, Congressmen weren’t even allowed to sit in a meeting! Now, if they want to read the TPP, they must request a special meeting, be stripped of any electronics when walking into the room, have someone over their shoulder the entire time, and leave in silence since they aren’t allowed to talk to anyone, including their staff, about this.
How are our leaders expected to memorize 1,000 pages worth of text? They simply cant’.
While on the other hand, 600 corporate lobbyists have full 24 hour access to the text. They can simply log in and read the TPP and attend any negotiating meetings they want. How is this possible?
Although there are countless alarming issues with the TPP itself, the negotiating of the TPP, TTIP, and TISA are disturbing own its own. The secrecy and lack of transparency is appalling to Americans and we cannot allow this tyrannical president to continue doing so. Now that the TPP member nations have reached an agreement, we will finally be able to read the text in about 30 days. Lets hope there is still enough time to make the information as public as posible so the American people’s voice can be heard in the matter.