The Parties Have Flipped On Free Trade And Tariffs

A couple of decades ago, it was the belief of most Republicans that free trade agreements was a good thing. Most Democrats opposed them -- believing they were unfair to workers and encouraged the exporting of good American jobs. That no longer seems to be the case.

Now, the Republican base sees free trade as a bad thing by a slim plurality while the Democratic base sees it as a good thing by a substantial majority. The same is true of tariffs. Republicans now favor the imposition of tariffs while Democrats oppose them.

I find this rather puzzling, and I wonder if it's because of Donald Trump. Have the Republicans adopted an anti-free trade and pro-tariff stance because that is what Trump wants? Have the Democrats adopted a pro-free trade and anti-tariff stance because of their hatred of Trump? Has the love or hate of Donald Trump changed the economic policies of both political parties?

The charts above show the results of a recent Pew Research Center survey -- done between April 25th and May 1st of a random national sample of 1,503 adults, with a margin of error of 2.9 points.

The Political Parties Have Flip-Flopped On Free Trade

When the idea of free trade agreements first came up, it was an idea supported by Republicans and viewed as a mistake by Democrats. That has now changed. As this poll shows, the Democrats support free trade agreements now more than Republicans do.

When asked if they support or oppose withdrawing from NAFTA, the Democrats were opposed (17% supporting withdrawal and 57% opposing it) by a 40 point margin. Republicans supported withdrawing by a 22 point margin (46% to 24%).

And when asked whether they would support negotiating more free trade agreements like NAFTA, the Democrats were 10 points more in favor than Republicans (51% to 41%).

It would seem that Democrats are now the "free trade" party.

These charts reflect the results of the newest Economist / YouGov Poll -- done between September 3rd and 5th of a random national sample of 1,500 adults (including 1,309 registered voters), with a 3 point margin of error.

Are Free Trade Agreements Really Good For Consumers ?

One of the major arguments in favor of Free Trade Agreements is that it allows American consumers to buy cheaper goods made in other countries -- and that this allows them to enjoy a better standard of living. But that is not necessarily true.

We know that these agreements are good for giant corporations and bad for American workers, but it may also be a bad deal for Americans in general (including consumers).

Here is how Josh Bivens at the Economic Policy Institute explains it:

Often, proponents of expanding trade argue that its benefits are progressive because it lowers the prices of goods that are disproportionately consumed by low- and moderate-income households. This, however, looks at only one narrow facet of trade’s impact: lower prices for consumers stemming from cheap imports. But these lower prices for consumers are the gross benefits of expanded trade, so of course focusing solely on them would show trade helps everybody. One also has to examine the other effects of trade—those that impose gross costs as well.

For example, while expanded trade lowers prices for imports, it also raises domestic prices for exported items. At the national level, because imports are more likely than exports to be consumption goods, this does mean that trade’s net effect is to lower prices faced by consumers. But it is possible that exported items are also disproportionately consumed by low- and moderate-income households. Take an obvious example: the U.S. exports a lot of food products (grain, beef, etc.). If it did not export a lot of these food products, their prices would be cheaper in the United States. Given that lower-income households likely spend a higher share of their income on food than higher-income households, expanded trade of food exports could well have regressive effects.

Further (and much more importantly), looking only at prices misses the effect that growing trade has on wages. The same fall in import prices that benefits consumers also leads to lower wages for most workers. Essentially, as growing imports lower prices of import-competing goods produced in the United States, domestic production of these import-competing goods becomes less profitable, and so this production shrinks. As this domestic production shrinks, resources displaced from this sector have to try to find employment in more capital-intensive sectors. This leads to a reduction in demand for labor (as well as bidding up the price of capital), and this in turn triggers adverse wage effects. The more imports drive down domestic prices for domestic goods, the worse the wage effect is. This wage effect, again, harms most workers, not just those located in particularly trade-exposed regions.

It is clear that the decline in wages stemming from this process will be larger than the decline in prices. This means that falling import prices are not a net benefit from trade for the majority of American workers on the wrong end of globalization’s distributional conflict.

Finally, the estimates of wage declines caused by growing trade in this paper are real, inflation-adjusted wage changes—that is, they fully price in the effect of price declines driven by trade (or by anything else). So it is absolutely clear that these workers are losing, regardless of price declines.

Republicans Have Flipped Their Position On "Free Trade"

From the Pew Research Center:

About two-thirds of Republicans and Republican-leaning registered voters (68%) say free trade has been a bad thing for the U.S., while only 24% say it has been good for the country. These views, which have shifted starkly since May 2015, when 51% of Republican voters said free trade was a good thing for the U.S. and 39% said it was bad, came as President-elect Trump criticized free trade throughout the 2016 election cycle. Democrats, on the other hand, remain largely positive about free trade. 

Trump Is Lying To Us - NAFTA Was Done By Republicans

The silly meme at the left is something Donald Trump is campaigning on. He is trying to get white working class votes by claiming that Bill Clinton is responsible for the North American Free Trade Agreement (NAFTA), and that Hillary Clinton supported Bill doing that.

There only one thing wrong with that -- it's an outrageous LIE! NAFTA was originally a Republican idea, and it was started, passed, and singed into law by Republicans -- and it was done before Bill Clinton ever took office.

The idea of NAFTA had its roots in the Reagan administration. In fact, Ronald Reagan actually campaigned on the idea of a "North American common market" (i.e., free trade agreement).

Then in 1984, the Republican Congress passed the Trade and Tariff Act. This law allowed the president to begin negotiations with Canada and Mexico on a free trade agreement.

The negotiations actually became a reality in 1990, under President George H.W. Bush. The negotiations resulted in the agreement we call NAFTA in 1992 -- and the agreement was signed by President Bush in December of 1992 -- at least a month before President Clinton was sworn in for his first term. Both houses of Congress than ratified it in 1993.

Trump is lying when he blames Bill Clinton for NAFTA. If any presidents are to blame, it is Ronald Reagan and George H.W. Bush -- both Republicans. We can debate whether NAFTA was a good idea or not, but it is simply not the fault of Bill Clinton either way.

Who Supports Free Trade (You Might Be Surprised)

The general belief is that Republicans are in favor of free trade and Democrats are against it. And in Congress, that is how it has worked. Congressional Republicans have voted to support free trade agreements, and any opposition to those agreements has come from congressional Democrats.

But this may surprise you -- the bases of both parties don't necessarily agree with their congressional representatives. Only 18% of Republicans say free trade has helped, while 47% say it has hurt. For Democrats, 24% say it has hurt, while 33% say it has helped. That seems backward, and it surprises me.

Now you might think the party with a plurality favoring free trade would not be worried about the growing income equality (since free trade helps the rich) -- and the party with a plurality opposing free trade would want action taken to reduce the income gap. But that would be too simple, and untrue.

It turns out that 86% of Democrats (who have a plurality supporting free trade) believe the huge income gap is a serious problem, and 61% want Congress to take action to narrow the gap. On the other hand, only 50% of Republicans (who have a plurality opposing free trade) think the income gap is a serious problem, and only 17% want Congress to take action to narrow it.

The charts above are from the recent Politico / Harvard T.H. Chan School of Public Health Survey -- done between August 31st and September 4th of a random national sample of 1,000 adults, with a margin of error of 3.7 points.

A "Free Trade" Conundrum

The chart above was made from results in a new YouGov Poll -- done between March 10th and 13th of a random national sample of 1,000 adults, with a margin of error of 4.6 points.

The results are a conundrum. It shows that more Democrats (49%) think free trade has been a good thing than Republicans (38%). Meanwhile, more Republicans (48%) think it has been a bad thing than Democrats (29%).

This is just the opposite of what their party leaders think. Most, if not all, Republican leaders are huge supporters of free trade. Many Democratic leaders (including both presidential candidates) seem to be opposed to free trade.

Make of it what you will. I just thought it was strange.

Why Do Americans Like Free Trade Agreements ?

President Obama is currently negotiating a free trade agreement with Pacific nations -- the Trans-pacific Partnership (TPP). I think this is a bad deal for Americans, especially American workers. Just like other free trade agreements (NAFTA, CAFTA, etc.), this agreement will encourage the offshoring of U.S. jobs and result in a further downward pressure on worker wages in the United States.

And it seems that a significant number of Americans agree with me about jobs and wages 9see the charts above). All of the charts on this page were made from a new survey by the Pew Research Center. They questioned a random national sample of 2,002 adults between May12th and 18th (and the survey had a margin of error of 2.5 points). Note that 46% said free trade agreements costs this country jobs, while only 28% said they create jobs. And a similar 46% said they result in lower wages for U.S. workers, while only 33% said they raise wages.

Looking at those results, one might think that most Americans would oppose free trade agreements (including the TPP), but that would be wrong. As the chart below shows, 58% of Americans believe free trade agreements have been good for the country. How could this be? The bottom chart gives us a clue. It seems that a plurality of Americans say free trade agreements lower the price of goods.

Personally, I find that to be sad -- and very troubling. A lot of Americans seem to be willing to throw American workers under to bus to save a few pennies on the things they buy. In my opinion, this is backwards. We should be willing to pay a few pennies more to keep good jobs in this country (and help American workers make a decent wage).

Warren Asks Public To Stop The TPP's Corporate Giveaway

Here is Senator Warren's latest plea to Americans to help her stop the Trans-Pacific Partnership:

The United States is in the final stages of secret, closed-door negotiations on the Trans-Pacific Partnership, a massive trade agreement with 11 other countries.

Who will benefit from it? One provision hidden in the fine print – “Investor-State Dispute Settlement” – may sound harmless, but don’t let that fool you: ISDS could let foreign companies challenge US laws without ever stepping in an American court.

That would undermine US sovereignty and tilt the playing field even further in favor of multinational corporations.

Here’s how ISDS would work: Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge that regulation in a US court.

But with ISDS, the company could skip the US courts and go before an international panel of arbitrators. If the multinational company won, the ruling couldn’t be challenged in US courts, and the arbitration panel could require American taxpayers to cough up millions – and even billions – of dollars in damages.

If that seems shocking, buckle your seat belt. ISDS could lead to gigantic fines, but it wouldn’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Really.

And if the tilt toward giant corporations wasn’t clear enough, consider who would get to use this special court: only international investors, which are, by and large, giant corporations. So if a Vietnamese company with US operations wanted to challenge our refusal to import a dangerous chemical, it could use ISDS. But if an American labor union or human rights group believed Vietnam was allowing Vietnamese companies to pay slave wages in violation of trade commitments, the American labor group would have to make its case in the Vietnamese courts – and if an environmental group thought the Vietnamese company was dumping waste in their rivers in violation of the new trade agreement, they would have to go to a Vietnamese court as well. In other words, the great deal for corporations is only for corporations – everyone else is left out.

Opposing ISDS isn’t a partisan issue – even your Tea Party relatives should be worried about this dangerous provision:

• Conservatives who believe in US sovereignty should be outraged that ISDS would shift power from American courts, whose authority is derived from our Constitution, to unaccountable international tribunals.
• Libertarians should be offended that ISDS effectively would offer a free taxpayer subsidy to countries with weak legal systems.
• And progressives should oppose ISDS because it would allow big multinational corporations to weaken labor and environmental rules.

If a final TPP agreement includes Investor-State Dispute Settlement, the only winners will be multinational corporations. Join me in saying No to ISDS.

Thank you for being a part of this,

Elizabeth

(Both of the images above are from the Flickr archives of DonkeyHotey.)

Green Party Urges Opposition To TPP And Corporate Rule

The Trans-Pacific Partnership is the biggest "free trade" agreement yet -- and it would hurt both workers and consumers, while giving more power to giant corporations. It's a terrible idea that would march us much further down the road to corporate rule. Like all intelligent democracy-loving people, those in the Green Party oppose it. Here is their view, as expressed by Green Party Shadow Cabinet members Kevin Zeese and Margaret Flowers:

Several major international agreements are under negotiation which would greatly empower multinational corporations and the World Economic Forum is promoting a new model of global governance that creates a hybrid government-corporate structure. Humankind is proceeding on a path to global corporate rule where transnational corporations would not just influence public policy, they would write the policies and vote on them. The power of nation-states and people to determine their futures would be weakened in a system of corporate rule.

The Obama administration has been negotiating the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) over the past five years is currently pushing Congress to pass trade promotion authority (known as fast track) which would allow him to sign these agreements before they go to Congress. Then Congress would have a limited time to read thousands of pages of technical legal language, debate the contents and be banned from making amendments.

Fast track would drive us down a dangerous path. The TPP and TTIP have been negotiated with unprecedented secrecy. For the first time texts of international agreements have been classified so that members of Congress have had very limited access and are not able to discuss what they’ve read. These are more than trade agreements. The portions that have been leaked show that they will affect everything that we care about from the food we eat to the jobs we have to the health of the planet. The fast track legislation could last seven years, meaning that more agreements could be rushed through Congress without open consideration of their potential impacts, cementing corporate rule.

Given the harm that has already been done to economies, human rights and the environment by neo-liberal economic systems required by the World Trade Organization and ‘free’ trade agreements such as NAFTA; this is not the time to be rushing into new agreements or to cede our power to write the future of the planet.

We are in the midst of a critical political conflict over the future of global governance. Do we want to be ruled by corporations or ruled democratically? This not the time to fast track , it is the time to step back and re-think how to conduct global trade and manage the global economy to prevent further exploitation and harm.

Twenty Years of Experience: Lost Jobs, Trade Deficits and Increased Inequality

Globalization was initiated in its current form by President Bill Clinton when he signed NAFTA and the World Trade Organization (WTO). NAFTA came into force on January 1, 1994 and the WTO became law on January 1, 1995. Modern trade agreements have had serious negative effects on the US economy. Reuters reports:

“Since the pacts were implemented, U.S. trade deficits, which drag down economic growth, have soared more than 430 percent with our free-trade partners. In the same period, they’ve declined 11 percent with countries that are not free-trade partners. Since fast-track trade authority was used to pass NAFTA and the U.S. entrance into the World Trade Organization, the overall annual U.S. trade deficit in goods has more than quadrupled, from $218 billion to $912 billion.”

Trade agreements have also undermined jobs in the United States. Reuters continues: “Nearly 5 million U.S. manufacturing jobs — one in four — have been lost since NAFTA and the various post-NAFTA expansion deals were enacted through fast track.” And, the Bureau of Labor Statistics reports: 3 out of 5 displaced workers who found a job are earning less money and one-third took a pay cut of 20% or more.

These are just two examples of many of the negative economic impacts. The impacts in other countries are also negative. The only beneficiaries are trans-national mega corporations which desire to move capital and businesses across borders without restrictions. Trade agreements consistently expand the wealth divide andincrease income inequality as transnational corporations seek lower wages and costs in order to increase profits.

The current global economic system is unstable because of the connections between global trade and global financial markets. Interconnectedness and a lack of regulation of finance created a cascading worldwide impact during the 2008 financial crisis. Around the world, this has led to tremendous economic dislocation and revolts against the unfair economy and the financial institutions and governments that are responsible.

With this record it is not time to fast track more of the same rigged corporate agreements through Congress; it is time to stop and ask: How can global trade be made to work for everyone?

At a Crossroads in Global Governance

The economic crash raised doubts about whether international governmental institutions can handle the globalized economy. It resulted in calls for transformation of the government and economy from both grass roots revolts protesting lost jobs, lower incomes, austerity, corruption and an unfair economy as well as from corporate elites.

The World Economic Forum (WEF) began a Global Redesign Initiative (GRI) as a result of the 2008 economic crash (GRI is bankrolled mainly by Qatar).  WEF participants saw globalization threatened because there has been a loss of legitimacy and ineffectiveness of global governance: Too many countries, organizations and people were openly critical of globalization and multinational banking.  The WEF blames nation-states, the United Nations and groups like the G-8 for failing to respond appropriately to the economic crisis. In an analysis of the GRI, the Center for Governance and Sustainability at the University of Massachusetts Bostonwrites:

“WEF is concerned that such widespread public skepticism can lead to widespread doubt about the underlying principles of the global system. They recognize that when corporate leaders are seen as lacking morals, it does not take much for the institutions of globalization to be seen as immoral. In this situation, it would become harder and harder for the G20, for the IMF, or for individual corporate spokespersons to command respect and effective leadership on global matters of concern to the Davos community. They know that it would be increasingly problematic if important messages from the world's elite leaders were ignored by large communities of people around the world.”

To save globalization the WEF believes governance must be redesigned. David Sogge describes their view in “Davos Man”: “When it comes to tackling global problems, nation-states and their public politics are not up to the job. Their old, run-down institutions should be re-fitted …” The WEF solution is a greater role for multi-national corporations in decision making and the weakening of nation-states. They want the UN remade into a hybrid corporate-government entity, where corporations are part of decision-making. The goal is to end nation-centric decision making and include corporations as decision makers.

The WEF points to how trade rules have stalled in the WTO as an example of the failure of nation-state governance. They believe by making corporations partners in decision making the ‘can do’ attitude of business will push these rules forward where the ‘failure mentality’ of the state-centric system stalls trade rules.  From the perspective of people’s movements, this is an example of why we do not want corporations to replace nations as decision makers.

The WTO has been stalled because their rules are opposed by people around the globe. There have been massive protests at their negotiations because, for example, international trade agreements (misnamed “free” trade, really rigged trade for transnational corporations) have had a devastating impact on agriculture by destroying traditional farming, forcing farmers into cities and creating a downward depression of wages. Social movements oppose policies that promote private profit over public necessities.  A growing worldwide movement led by communities most affected by globalization seeks another direction.

In light of the failure of the WTO, the elite’s push toward global corporate rule is now being codified into law through international agreements like the TPP and Trans-Atlantic Trade and Investment Partnership. Under these agreements corporate sovereignty will increase while the sovereignty of governments shrinks and people lose their ability to influence public policy. These corporate trade agreements will create a series of laws designed to aid corporate profits over the health, safety, income and well-being of most people and further undermine the already at-risk ecology of the planet.

National and local laws will be required to be rewritten to be consistent with trade agreements negotiated in secret. This “harmonization” will require a new bureaucracy to review all laws and regulations for consistency.

The profits of transnational corporations will become so important that governments can be sued if their laws to protect public health, safety or the planet interfere with expected profits. The cases will be heard in special trade tribunals, staffed mainly by corporate lawyers on leave from their corporate jobs. Their decisions cannot be appealed to any other courts. This makes the public interest secondary to the market interests of big business.

The WEF sees itself as the model for future governance writing “The time has come for a new stakeholder paradigm of international governance analogous to that embodied in the stakeholder theory of corporate governance on which the World Economic Forum itself was founded.” The Center for Governance and Sustainability describes this in the context of the UN:

“This integration of global executives with UN diplomats and civil servants was seen as a way to rejuvenate the acceptance of globalization. The thinking is that, if globalization leaders were more involved in the policy development and program implementation of the UN, then organizations and peoples throughout the world may well look more favorably on the legitimacy of their combined efforts.”

People will react in horror to the dystopian idea of the UN becoming a corporate-government hybrid. People already see corporations wielding too much influence at the UN and within nations. The WEF approach will inflate corporate power, creating a corporate neo-feudalism that will kill democracy and the body politic.

How did the WEF arrive at this proposal that so narrowly focuses on building the power of corporations, while weakening national sovereignty? The Center for Global Governance and Sustainability describes the process:

“A key constraint for the broad acceptability of WEF’s new system is the narrow band of experts they convened to develop their proposals. WEF did not call openly for proposals. It did not invite a number of key international constituencies to participate in the process. And it did not even establish a website for public comments. WEF selected its friends to work on its Global Redesign Initiative. Over 50% of WEF's experts were working in the US while advising World Economic Forum on this project, hardly an indication of a geographically well balanced team. Even though GRI's finances came heavily from non-OECD countries, only 2% of its experts were working in developing countries at the time. Of WEF’s friends, only 17% were women. This narrow base has serious consequences. It undermines the WEF claims that it truly understands a multi-polar world and that it has the ability to pick the global leaders of today and tomorrow.”

This process is exactly what must be avoided in the debate on global trade and why we mustn’t allow new agreements to be fast tracked through Congress. The current system has already been too dominated by the interests of multi-national corporations and has excluded the voices of those who are harmed by its impacts.

We need a broader debate on how globalization should be handled. What is the role of transnational corporations? How can transnational corporations with larger wealth than some nations be regulated? How do we ensure the planet’s ecology is protected at this critical time of the climate change tipping point, mass species die-off, oceans under severe stress, depleting aquifers, floods and increasing desertification? How do we shrink the wealth divide that is impacting almost every country, creating widespread poverty and strife?

Twenty years into modern corporate globalization, we need to stop, think, discuss and debate, not blindly fast track more of the same failed system. Fast track would permit presidents to approve secretly negotiated trade agreements and rush them through Congress without transparency, public participation or real congressional review for the next seven years. This is the opposite of is needed.

Similar Rhetoric, Different Visions for the Future

There is a shared frustration in the global community with the inability of governments and international organizations to respond to the global financial crisis. The United Nations has shortcomings. As the Center got Global Governance and Sustainability puts it:

“Some are frustrated with the international system because urgent state functions in the international arena are not solved by the UN system. There are wars and the UN cannot stop them. There are major ecological catastrophes and the international system cannot get relief supplies into the affected areas fast enough. There are starving people in Africa and the IGOs do not prevent their unnecessary deaths.”

The WEF uses language very similar to what social movements use. For example, the WEF claims it seeks “bottom-up” decision-making, but does not define what that would look like. For social movements, this means less hierarchy, public participation, transparency, democracy and governments listening to the people at the bottom, rather than taking their cue from the elites at the top.

The WEF promotes a philosophy couched in the concept of “multi-stakeholderism,” another idea consistent with the view of social movements that the world is not unipolar, it has many actors.  The WEF uses this concept to give transnational corporations, undemocratic non-state actors, decision-making power, while social movements see big business already having too much influence.

Multi-national corporations wield great influence over the global economy. They decide the distribution of vital necessities, e.g. the prices and quantities of food and medicine, how much workers will be paid as well as the distribution of wealth and the selection of products to be manufactured and where. Control of international markets is more in the decision-making power of transnational corporations than of governments. WEF sees this as a reason to formalize the decision making power of transnational corporations, making them part of government, while people’s movements see a need to expand public participation in government to act in the public interest rather than the private interest for commercial profit.

Which Path Forward? What You Can Do

David Sogge writes in the “State of Davos” that “By custom and by law, the formal management of international affairs is a matter for sovereign nations and their representatives.” He points out “the UN Charter begins with ‘We the peoples’ and affirms the ‘equal rights of men and women and of nations large and small.’”

As globalization begins its third decade, the question before us is, do we want corporate rule or people’s rule? Is the wealth of a few more important than human rights?  What can be done to empower people? Should the nation-state become a thing of the past and corporate sovereignty reign, or is there another path? This is a debate that cannot be fast tracked; it must be brought into the open before trade agreements cement corporate rule for decades to come.

We urge people to put their effort into stopping fast track legislation in Congress. This will not be easy because it is high on the president’s agenda, many pro-business legislators and entities like the Chamber of Congress. It can only be stopped if people work together persistently to oppose it. Get involved here.

We expect that as fast track legislation moves through Congress, the White House and corporate lobbyists will inundate members of Congress with promises in exchange for votes. In the past, votes were held open past the legal time limit as members of Congress were picked off one by one until there were enough votes to pass.

We need to maintain persistent pressure on Congress to oppose fast track. When we stop fast track, there should be a broad discussion of our vision for a globalized world structured to support universal human rights and protection of the planet.

The TPP is Bad For American Workers And Consumers

Regular readers of this blog will know that I am an opponent of the Trans-Pacific Partnership. I believe this new "free trade" agreement is a massive give-away to multi-national corporations, and it will hurt both workers and consumers in the United States (and in other countries).

Unfortunately, it is supported by both President Obama and the Republicans (who control both houses of Congress), so the chances of stopping it are slim, and getting slimmer.In the hope of building more opposition to the TPP in this country, I bring you the following article by former Secretary of Labor Robert Reich (pictured). The article was originally written for Alternet. Mr. Reich says:

Republicans who now run Congress say they want to cooperate with President Obama, and point to the administration's Trans-Pacific Partnership, or TPP, as the model. The only problem is the TPP would be a disaster.

If you haven't heard much about the TPP, that's part of the problem right there. It would be the largest trade deal in history -- involving countries stretching from Chile to Japan, representing 792 million people and accounting for 40 percent of the world economy -- yet it's been devised in secret.

Lobbyists from America's biggest corporations and Wall Street's biggest banks have been involved but not the American public. That's a recipe for fatter profits and bigger paychecks at the top, but not a good deal for most of us, or even for most of the rest of the world.

First some background. We used to think about trade policy as a choice between "free trade" and "protectionism." Free trade meant opening our borders to products made elsewhere. Protectionism meant putting up tariffs and quotas to keep them out.

In the decades after World War II, America chose free trade. The idea was that each country would specialize in goods it produced best and at least cost. That way, living standards would rise here and abroad. New jobs would be created to take the place of jobs that were lost. And communism would be contained.

For three decades, free trade worked. It was a win-win-win.

But in more recent decades the choice has become far more complicated and the payoff from trade agreements more skewed to those at the top.

Tariffs are already low. Negotiations now involve such things as intellectual property, financial regulations, labor laws, and rules for health, safety, and the environment.

It's no longer free trade versus protectionism. Big corporations and Wall Street want some of both.

They want more international protection when it comes to their intellectual property and other assets. So they've been seeking trade rules that secure and extend their patents, trademarks, and copyrights abroad, and protect their global franchise agreements, securities, and loans.

But they want less protection of consumers, workers, small investors, and the environment, because these interfere with their profits. So they've been seeking trade rules that allow them to override these protections.

Not surprisingly for a deal that's been drafted mostly by corporate and Wall Street lobbyists, the TPP provides exactly this mix.

What's been leaked about it so far reveals, for example, that the pharmaceutical industry gets stronger patent protections, delaying cheaper generic versions of drugs. That will be a good deal for Big Pharma but not necessarily for the inhabitants of developing nations who won't get certain life-saving drugs at a cost they can afford.

The TPP also gives global corporations an international tribunal of private attorneys, outside any nation's legal system, who can order compensation for any "unjust expropriation" of foreign assets.

Even better for global companies, the tribunal can order compensation for any lost profits found to result from a nation's regulations. Philip Morris is using a similar provision against Uruguay (the provision appears in a bilateral trade treaty between Uruguay and Switzerland), claiming that Uruguay's strong anti-smoking regulations unfairly diminish the company's profits.

Anyone believing the TPP is good for Americans take note: The foreign subsidiaries of U.S.-based corporations could just as easily challenge any U.S. government regulation they claim unfairly diminishes their profits -- say, a regulation protecting American consumers from unsafe products or unhealthy foods, investors from fraudulent securities or predatory lending, workers from unsafe working conditions, taxpayers from another bailout of Wall Street, or the environment from toxic emissions.

The administration says the trade deal will boost U.S. exports in the fast-growing Pacific basin where the United States faces growing economic competition from China. The TPP is part of Obama's strategy to contain China's economic and strategic prowess.

Fine. But the deal will also allow American corporations to outsource even more jobs abroad.

In other words, the TPP is a Trojan horse in a global race to the bottom, giving big corporations and Wall Street banks a way to eliminate any and all laws and regulations that get in the way of their profits.

At a time when corporate profits are at record highs and the real median wage is lower than it's been in four decades, most Americans need protection -- not from international trade but from the political power of large corporations and Wall Street.

The Trans Pacific Partnership is the wrong remedy to the wrong problem. Any way you look at it, it's just plain wrong.

"Free Trade" Only Benefits Large Corporations

These two charts show what has been happening to this country (and the American worker) thanks to the "free trade" agreements. Those agreements were supposed to benefit American workers by providing more markets for products produced in the United States. But what they really did was hurt American workers by allowing corporations to shut down plants in this country, so they could abuse workers in poverty wage countries -- and then let those corporations ship those products made in other countries back into the U.S. without tariffs or penalties.

The chart on the left shows the trade deficit of the United States between 1962 and 1992 -- before the "free trade" agreements. The chart on the right shows the ballooning trade deficit of the United States after those "free trade" agreements were passed. Those agreements allowed foreign companies (and American corporations making products overseas) to ship much more into this country, while very little more was shipped from this country to other countries (and American workers continued to see their jobs outsourced to other countries).

Now a new trade agreement is being worked out -- the Trans Pacific Partnership (TPP). And believe it or not, it is even worse than the other trade agreements (like NAFTA and CAFTA). It will give multi-national corporations the power to defy American laws, promote even more outsourcing of American jobs, and balloon the U.S. trade deficit to even greater heights.

The TPP must be stopped. We cannot afford to give even more power to the corporations and lose more American jobs.

Green Party Opposes "Fast Tracking" of The TPP

The United States is now considering a new "free trade" agreement, this time with several Pacific Rim countries. It is called the Trans-Pacific Partnership (TPP), and it is a bad agreement for consumers and workers. If you thought NAFTA and CAFTA were bad, the TPP is even worse. But the multi-national corporations love it, and they've convinced a lot of elected officials in Congress that it's a good idea. That's because it would give those corporations the ability to overrule the laws of any country in the agreement (including the United States) to protect their profits -- even if those laws were passed to protect the public.

Now it looks like the corporate powers may have talked Congress into "fast tracking" -- passing it without little or no debate, and no chance to amend it. This is a bad agreement, and "fast tracking" it is an even worse idea -- because it prevents Congress from amending it to protect American citizens. Here is what Kris Alman, writing for the Green Party Shadow Cabinet, has to say about this absurdity:

The mainstream media should be ashamed of its minimal attempts at informing the American people about the TranPacific Partnership (TPP). Negotiated in secret, the TPP is NAFTA on steroids. It’s urgent we demand that Congress oppose a “fast track” of this treaty.

You may be muttering, “Why pay attention to this irrelevant issue?” After all, we’re too busy working long hours to buy cheap Nike shoes, iPads and apparel from retailers like Walmart to celebrate the Christmas® holidays.

Indeed, we are so busy buying stuff destined for landfills that we don’t realize we are disposable too. The wizards behind the curtain of the TPP are 600 corporate “advisors” for rich multi-national corporations that don’t care about public health, the environment and human rights. They care about profits—period.

Over the weekend, the New York Times published a front-page story, “Tobacco Firms’ Strategy Limits Poorer Nations’ Smoking Laws.” While the Times pointed out that the U.S. is among twelve Pacific Rim Countries completing talks on a major new trade treaty that will be a “model for the rules of international commerce,” they made no mention of the TPP. “Fast tracking” the TPP requires a complicit mainstream media—one that eliminates enough dots so citizens can’t connect them.

The Oregonian is no different. As a scribe for Nike, the Oregonian reports that the TPP would eliminate tariffs on sneakers (outsourced to manufacturers who pay low wages overseas) and magically, we'll have more high-paying jobs here! Money needs to circulate for a society to thrive. Since the 2008 recession, we’ve learned that money is heading in just one direction: upwards. Global trade agreements will further concentrate money and power when corporate boardrooms reward their executives—including Nike CEO Mark Parker.

A Nixon innovation, fast track limits Congress to a no-amendments, no-filibuster, simple majority vote on complex trade agreements—even though the rare Congressman or Senator has read the TPP. Fast track expired in 2007. A midterm election compels the most do-nothing Congress to make amends to their corporate donors. Passing fast track in early 2014 is a bipartisan agenda.

The TPP is much more than tariffs. There are twenty-nine chapters and only five chapters deal with traditional trade issues. In mid-November, Wikileaks released draft text of the TPP Intelligential Property Rights chapter. This text includes an investor-state protection clause that gives multi-national corporations the right to sue communities, states and nations enacting laws that might compromise future profits.

The TPP singles out tobacco as a health concern, but the Chamber of Commerce says this “would leave the door open for other products, like soda or sugar, to be heavily regulated in other countries.” The Chamber of Commerce sent a letter to U.S. Trade Representative Michael Froman, opposing the “last-minute inclusion of a product-specific reference to tobacco or any other product.” They claimed “the TPP nor any prior U.S. trade agreement prevents American officials from regulating in the public interest—period. Trade agreements only require that such measures be based in sound science…”

Like the “sound science” performed by Monsanto that “proves” GMOs are safe and labeling is a costly regulatory burden?  One of the lobbyists that co-signed the letter is the Grocery Manufacturers Association. The Grocery Manufacturers Association amassed $7.2 million (of over $22 million in the opposition coffers) to successfully oppose GMO labeling in Washington State. PepsiCo, Nestle USA and Coca-Cola each donated over $1 million to that Grocery Manufacturers Association slush fund.

Corporations are tribal when they collectively fight public health campaigns because it’s costly for corporations to also fight “sin taxes.” In 2010, these same corporations helped to raise over $16 million to pass Initiative 1107 which repealed a tax on candy and soda in Washington. This discouraged Upstream Health, a nonprofit in Oregon, to mount a similar campaign to tax sugary sodas in 2013, especially since they couldn’t get a hearing for the same bill in 2011. Yet there is no question that sugar-sweetened beverages promote obesity.

Since the mainstream media protects corporate interests, WikiLeaks came to the rescue in publishing the Intellectual Property chapter of the TPP. If you can't stomach Julian Assange, turn to Joseph Stiglitz, (Columbia professor and winner of the Nobel Prize for Economic Science in 2001), who wrote an open letter to the TPP negotiators. Sadly, we must look to blogs for this publication. Stiglitz concludes, "The investor state dispute resolution mechanisms should not be shrouded in mystery to the general public, while the same provisions are routinely discussed with advisors to big corporations.

The invisible hand of “free” market forces is what Milton Friedman calls “the possibility of cooperation without coercion.” In the current era of mass communicationand micro-targeted advertising, corporations have the upper hand when they defend their ability to obfuscate harms, laying blame on people that should take “personal responsibility” for their consumer choices.

More than three-quarters of the world’s smokers now live in the developing world, too poor to fight corporate lawsuits that might arise if they try to place limits on advertising, packaging and sale of tobacco products. With deep pockets, corporations squelch the voice of public health advocates while they belittle consumer protections as the “nanny state.”

The TPP subordinates public health, the environment and human rights to corporate profits. As global citizens, we must take time to learn more about the TPP. Call Congress and demand NO FAST TRACK.

Green Party - TPP Is Bad Deal For Workers

American workers are already in a bad situation -- with the median income falling and companies shipping good American jobs to other countries. Now the federal government is negotiating a new free trade agreement -- the Trans Pacific Partnership (TPP). This agreement will further depress wages for American workers, because it will do the same thing the other free trade agreements have done -- make it easier for big corporations to ship jobs overseas, and use that threat to lower wages in this country.

The TPP will be a boon for big corporations (a group that doesn't need any help), but it will be a bad deal for American workers (who need the government to take some kind of action to help them). Unfortunately, even the president and the Democrats seem to have bought into the lie that whatever is good for corporations is good for all Americans (a belief that has never been true, and is especially untrue when it comes to agreements like the TPP).

The Green Party understands this. Here is what Green Party Shadow Cabinet member Richard McIntyre had to say about the TPP on September 26th:

As the Trans Pacific Partnership (TPP) talks continue behind closed doors, the case for the trade deal becomes more and more untenable. Reviews of the impacts of past free trade pacts, as well as modelling of the TPP, paint a grim picture of lower labor standards and greater inequality.

The Center for Economic and Policy Research (CEPR) has been producing excellent critical research on globalization for over a decade. One of the center’s early publications, “The Scorecard on Globalization: 1980-2000” made a clear and accessible indictment of the right wing economics that took hold in the US and elsewhere in the late 1970s and early 1980s. It was released when the debate over globalization was at its hottest, just before 9/11, and CEPR became a go-to source for documenting the results of twenty years (at that time) of market fundamentalism on income growth, life expectancy, health, and education.

The Center publishes many useful special issue reports including a new one by David Rosnick on the effect of the proposed TPP trade agreement on wages. In my view this agreement will lower labor standards, strengthen the hand of management and ownership, and it has been negotiated in a profoundly anti-democratic manner. Rosnick adds a statistical estimation of the TPP’s possible effects on wages. He does this by critiquing a study produced by the pro-TPP Peterson Institute for International Economics.

His results are consistent with the predictions of standard academic trade theory. The so-called “factor price equalization” theorem states that wages and returns to capital will be equalized across countries that establish free trade. Since most of the countries currently expected to sign the agreement have lower wages than the US, orthodox trade theory predicts that wages would fall in the US if we enter the agreement.

Rosnik separates out the likely effects of TPP on different groups of people. Workers in the bottom quarter of the income distribution are unlikely to be affected much, as their income is determined more by the minimum wage rate. Those at the top of the income distribution will likely gain due to easier enforcement of copyrights and patents. These gains and losses are not large but they are consistent with the overall direction of economic policy since the Reagan era: increasing protection for capital incomes and increasing exposure of workers to competition from low wage countries.

This policy set has been more consistently applied under recent Democratic than under Republican Presidents. Reagan and both Bushes included some “protectionist” elements in their coalition but the Democrats under both Clinton and Obama are increasingly the party of Hollywood, trial lawyers, cultural liberals, the West Coast technology giants, and finance capital, with a certain kind of charity for the poor. Not bad people necessarily but generally the winners from recent globalization of capitalism.

TPP’s proponents rely on an old argument that free trade is beneficial even if some groups lose because, at least in theory, the winners – capital and those who have monopoly-like positions in the labor market – could compensate the losers and still have something left over. In this case, as even the pro-TPP studies indicate if you dig into them, the expected gains for the US are so small that no one is even talking about trying to compensate the losers. In fact, the issue here is not necessarily the gains and losses that economists are most comfortable estimating but the extension of corporate control over both the global economy and the global policy-making apparatus.

If the economic argument for free trade is that overall output will rise, the political argument is that it is always necessary to pursue freer trade so as to beat back the forces of protection. Thus for the Peterson Institute researchers it is better to have a less ambitious agreement soon than to wait for a better agreement as waiting might allow protectionist “special interests” to gain control of the agenda. Given the evident failure of the now decade old Doha round at the WTO this is not an idle fear. The people don’t support these agreements and so moving fast and more or less undercover has been the Obama administration’s TPP strategy.

Studies like Rosnick’s at CEPR and his opponents at Peterson create the impression that economists can predict things with a precision that they are simply not capable of. For one thing, Rosnick’s predicted effects are drawn from data on current and recent past trading patterns, not on the new ones that TPP might generate. More important, as Rosnick himself intimates, the effects of these agreements are swamped by large and unpredictable events such as 9/11, the financial crisis, etc.

Most American economists generally support free trade out of an almost religious belief in the power of markets and not because of empirical studies. Such studies tend to justify pre-determined beliefs rather than the other way round, in the case of the Peterson Institute study the beliefs of the political and economic elites. Increasing the effective labor pool and securing foreign property rights have been consistent aspects of American trade policy for a generation and a half. It is good that CEPR continues to expose specious claims to the contrary.

Green Party Says Trans-Pacific Partnership Will Increase The Power Of The Giant Transnational Corporations

The Obama administration is currently negotiating a new "free trade" agreement with 11 other Pacific Rim nations (Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and Japan). It is called the Trans-Pacific Partnership (TPP), and like the other "free trade" agreements the U.S. has entered into, it is a good deal for giant mega-corporations but a bad deal for workers, consumers, and voters.

The Green Party says (and I agree) that the agreement will undermine the laws of this country by greatly increasing the power of the giant corporations (those transnational corporations who owe no allegiance to any country -- but only to their own bottom line). Unfortunately, the governments of the countries involved (including the United States) seem to believe that whatever is good for these giant corporations is good for everyone. They are wrong.

Following are two op-ed pieces written by members of the Green Party Shadow Cabinet. The first is written by Kevin Zeese and the second is by David Cobb. They are fairly short and present a valid point of view opposing the TPP. I repost them below because I believe it is important for Americans (and others) to hear both sides of this issue -- and hopefully put pressure on government to stop this insane process of turning our government over to the mega-corporations.

The Rule of Law demands corporations be subordinate to government

The Trans-Pacific Partnership is a global corporate coup that undermines democracy and makes corporations more powerful than government.  It creates a “trade tribunal” system that allows corporations to sue governments for expected lost profits resulting from environmental, labor, health, consumer protection and other laws. The judges in the tribunals will be corporate lawyers on temporary leave from corporate job in order to rule on cases brought by corporations and then returning to their corporate job.  This rigged rule of law system will prevent countries from acting in the public interest and for the protection of the planet.  The TPP undermines the rule of law.

Article 1, Section 8, Clause 3, of the Constitution empowers Congress “to regulate Commerce with foreign Nations. . . .” The Obama administration has turned this constitutional power on its head by negotiating the TPP in secret without any congressional involvement but including 600 corporate advisers in the proces.  The Obama administration not sharing its proposals with the Congress or American people, and is not releasing text as it has been negotiated being less transparent than any previous president.

The Obama administration seeks to make this constitutional violation even worse by passing this secretly negotiated trade deal under “Fast Track” provisions, also known as Trade Promotion Authority, which would undermine the role of Congress and destroy the checks and balances of the Constitution.  Fast Track would allow the president to negotiate and sign the TPP and then Congress would only have an up or down vote with no committee hearings or amendments.

For too long people have been serving corporations, rather than corporations serving the people. If the TPP becomes law countries will be subservient to corporations under rules that prohibit many forms of regulation, require ever-green patent protections for pharmaceuticals, and create a rigged legal system that favors corporate profit over people and planet.  In addition, public services are defined as “state-owned enterprises” and because they receive benefit from government – as they are part of government – corporate interests will be able to sue claiming public services are unfair competition. Neoliberal economics seeks to privatize public services so that corporations can profit from governments that provide clean water, healthcare, transportation, retirement and other necessities of the people.

People who feared a “new world order” should fear the TPP because it creates a corporate rule of law that empowers transnational corporations and weakens democratic rule.  Rather than the people ruling through elected representatives, corporations will rule through the power granted to them by trade agreements.

Other trade agreements have had similar provisions and the results have been devastating.  In one case brought under NAFTA  a US company Lone Pine Resources is suing the Canadian government sued for more than $250 million due to lost profits from Quebec's moratorium on fracking, which prevents Lone Pine from fracking under the St. Lawrence River.  This is one example among many, “. . . corporations such as Chevron, Exxon Mobil, Dow Chemical, and Cargill have launched 450 investor-state cases against 89 governments, including the United States. Over $700 million has been paid to corporations under U.S. free trade agreements and bilateral investment treaties, about 70 percent of which are from challenges to natural resource and environment policies. Corporations have launched attacks on a range of public interest and environmental regulations, including bans or phase-outs of toxic chemicals, timber regulations, permitting rules for mines, green jobs and renewable energy programs, and more.” Even limits on the cigarette industry have been undermined by trade agreements and resulted in trade tribunal litigation against packaging requirements.

Expanding the right of corporations to sue in rigged trade tribunals further undermines the rule of law, democracy and national sovereignty.  Rather than “free market” trade agreements like the TPP, NAFTA and WTO, we should urge fair trade that empowers people and puts the planet and people before profits. 

The “Trade Trade Reform, Accountability, Development and Employment Act” is a more balanced approach that shifts toward improved trade that is fair.  It seeks to protect wages, health, the environment, human rights, food and consumer safety and essential services provided by governments.  It seeks to reverse the loss of jobs due to offshoring, the race to the bottom in wages, the damage to the environment as well as to family farms and the food supply.  The time is now for people to join together to stop the TPP and work toward a trade regimen that serves the people and planet, not corporate interests.

As immediate steps three steps are required:

1. The Obama administration should release all propoals it is making as part of the TPP negoations.
2. The Obama administration should release the text of all TPP sections that have been negotiated.
3. The Congress should refuse to enact fast track, Trade Promotion Authority, so that the normal congressional process of committee hearings, testimony from witnesses and amendments can be followed.

The reason the TPP is being kept secret is because its provisions will be unpopular with the American people.  As the former trade representative, Ron Kirk, said the TPP would raise such opposition that it could make the deal impossible to sign. If a law is so unpopular that it must remain secret to pass then, in a democracy, it should not become law.

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Why the TPP is all about corporate power, not trade

The Trans-Pacific Partnership (TPP) — just like the North American Free Trade Agreement (NAFTA), the World Trade Organization (WTO) and every other so-called "trade agreement" — isn't really about trade at all.

Whether it is framed as "free trade" as touted by conservatives or "fair trade" as promoted by liberals, the real question is about who gets to make decisions about how goods, services (and now money itself) flows between international borders. 

The TPP is just the latest and most blatant effort to shift decisionmaking authority away from and beyond citizen control to unelected and unaccountable transnational corporate CEOs. Transnational corporations are ever more running to the international level to escape what semblance of public control exists at the nation-state level — all in the name of "harmonizing" laws. In every single instance, it has resulted in a race to the bottom regarding both wages and health, safety and environmental protection laws.

It is worth noting that historically, corporations have attempted to escape democratic control for more than a century in three ways:

  1) From one level of government to another (more to less accountable): from local to state, state to nation. The TPP is simply the latest effort to shift decisionmaking from the nation state to the global level where there are even fewer pressure points given the rigged pro-corporate decisionmaking process.

  2) From the legislative to judicial arena. Judges are often appointed and, thus, easier to influence by the corporate crowd. There are fewer judges to influence and legislators. Legislators are the closest elected officials (at least on paper) to the public.

  3) From the legislative to the regulatory arena. Regulatory bodies shield public officials and corpses between the public and themselves, providing a wonderful foil where the public receives their obligatory 3 minutes to testify. 

This last process deserves further scrutiny. Today, most regulatory bodies are often about the business of "regulating" vs prohibiting harms — prohibitions are what legislators do. Regulatory decisions, when they do go against the public, can still be appealed to courts. Frankly, these days environmental regulations regulate environmentalists, worker safety regulations regulate workers, and so on.

Historically, regulatory agencies were used to counter widespread calls for publicly owned enterprises. They still are. To understand the history and context of how the agencies that purport to regulate a given industry are actually controlled by the industries themselves,  I strongly recommend  "Help I've Been Colonized and I Can't Get Up: Take a Lawyer and an Expert to a Hearing and Call Me in a Decade"  by Jane Anne Morris, available at www.poclad.org.  Indeed, this process is so widespread and common that it has a name in the law profession: "regulatory capture."  

And as profoundly undemocratic as the process of reguallatory capture is, let's be clear that the Obama administration's TPP proposal will allow corporations to bring a challenge directly against a country over so-called trade "barriers." You know, the few remaining health, safety, environmental and consumer protection laws that we have left!  Under the TPP, any corporation can take a conflict to a "dispute resolution" process which bypasses any courts or juries of any nation.

Maybe we should start calling Obama's TPP proposal what it really is: The Corporate Power Proposal (CPP).  After all, only 5 of 29 of the proposal's chapters even deal with actual trade.  As an important side note, one provision of the Corporate Power Proposal would either ban or severely limit the ability of local and state governments to set up public banks, which is gaining momentum every day as an alternative to the "Too Big to Fail, Too Big to Jail" banks that are pushing for the TPP.

We at the Green Shadow Cabinet are "all-in" regarding our opposition to the TPP. Who's at the table during the negotiations…and who's not…is basically all one needs to know about how much this agreement promotes peace, justice, democracy and ecology.

Opposing the TPP provides an opportunity for "We the People"  to unify across the political spectrum on issues of protecting/expanding self-governance. It's going to take all of us. And we can and must win this one.