THE BLOG

A Trade Pact in the Corporate Interest

05/05/2015 12:31 pm ET | Updated May 05, 2016
ASSOCIATED PRESS

Spurred on by powerful multinational corporations and aided by their corporate lobbyists, the administration wants Congress to sign a blank check for yet another "free trade" deal, with the same inadequate safeguards as previous failed deals. The administration is pressuring Congress to pass special legislation, known as "fast track," intended to prevent a full and open discussion of an expansive new trade deal, the Trans-Pacific Partnership. Because tariff barriers are very low, this is not really a trade deal; it is about the protection of corporations. This deal contains major new provisions that would directly affect the lives of every American by moving important national decisions on regulating corporations, from product labeling to pollution out of the hands of the legislature and into those of special corporate dominated international tribunals.

Neither the history of past trade agreements nor the way "fast track" has been handled to date should give the American people confidence that we can dispense with full Congressional discussion and a thorough examination of the proposed new agreement.

In 1974, when the first "fast track" bill was enacted into law, its proponents provided rosy predictions that have not come true. Then, the U.S. had almost a zero international trade deficit. Since, it has grown. First, slowly, then after NAFTA exploding to over sevenfold. Instead of opening vast new markets for American-made goods American corporations moved their production abroad to exploit cheap foreign labor, tax havens and accept foreign subsidies, and then import these foreign-produced goods into the American market causing these massive trade deficits. "Fast track" has been good for corporate shareholders and CEOs but disastrous for American workers whose jobs have disappeared and whose wages have not increased in thirty years.

Nor does it inspire confidence that until very recently the content of the Trans-Pacific Partnership was kept an official secret. Not even Congress was allowed to know what was in it until Congressional pressure resulted in limited access to the agreement in its present form.

The Pacific Rim nations with whom we are negotiating are waiting for Congress to approve this latest "fast track" authority. They understand that if it does, Congress will have given away its power to make any changes in what the trade negotiators agree to. Final deals will be made by the negotiators and Congress will then be obliged to simply vote yea or nay on the entire, complex package of investment rules and other non-trade items.

Conflicting views about trade itself abound in today's world. Textbooks teach the virtues of unrestrained free trade, but their arguments assume a static world of full employment and immobile capital; not a world where lower standards can become a comparative trade advantage, and businesses are free to move their production to the country that taxes least and subsidizes most.

The American people, however, do not live in a textbook world, they are obliged to live in a world of increasingly capable competitors that are subsidized by their governments, and, all too often use America's own technology being exported to them. We live in a world in which obvious currency manipulation goes unpunished and state-owned enterprises do not need to operate at a profit, for example, dumping solar panels, a key industry of the future, to drive America out of that industry. Today, we get cheap Chinese goods at low prices, but we pay a high price in lost jobs, in teaching our competitors our technology ,and, because we export far less than we import, a huge and ever-increasing debt to the Chinese government.

The proposed Trans-Pacific Partnership will not improve the present trade situation, it will do nothing to correct the huge imbalance of trade with China that is steadily increasing China's economic power and costing American jobs. But that shortcoming pales in comparison to the trade pact's most fundamental danger: The Trans-Pacific Partnership, if we accept it, will strongly constrain our national sovereignty. Foreign corporations will be empowered to sue national governments, including ours, who take actions in areas such as, energy policy, financial regulation, public health, land use, or wages and worker safety, if corporations claim those actions negatively affect their profits in this country.

And these suits will not be heard in our courts, but in special tribunals made up of international lawyers who shuttle back and forth between being corporate advocates and judges in these same courts.

Common sense tells us that these courts are not a good place to defend any rights that conflict with corporate profits. Though we are not allowed to know what this agreement says about wage levels, common sense tells us that we cannot expect it to do more than make a pretense of being supportive of higher wages. We need a congressional debate about, though not limited to, this new trade pact. We need to debate the whole trade system and its effects on our nation. And that debate needs to take place in the Congress of the United States, where the voice of the people still can be heard.

Congress must not give away its prerogatives to pressure groups. Congress must reject "fast track." Our elected representatives should be willing to, and empowered to, change new proposed trade arrangements before they go into effect. They should be willing to stand up before their constituents and say clearly where they think our country should be going on trade and on maintaining our national sovereignty.