TPP Text: Corporations Win, Working People Lose

Celeste Drake Trade and Globalization Policy Specialist, AFL-CIO

It’s hard to believe but the text of the Trans-Pacific Partnership (TPP) deal is worse than we imagined, when it comes to working families. As it stands the TPP deal is made by corporations, for corporations, at the expense of working people and our democracy.

Here are five things in the TPP that are worse than we’ve been promised:

1. The auto rules of origin are so low that a car or truck could be majority “Made in China” and still qualify for TPP tariff benefits. The 45% nominal TPP car and truck content requirement has loopholes so large you could drive a truck through them.  Loopholes such as lower content requirements for certain important car parts. The TPP is an outsourcing deal—not a trade deal.  

2. Popular “Buy American” purchasing rules will be watered down. This means the Department of Veterans Affairs, the Department of State and even the Department of Homeland Security will be required to treat bidders from every TPP country as if they were U.S. bidders when making many purchasing decisions. This will send more jobs overseas.

3. More than 9,000 foreign companies will be empowered to bypass U.S. courts and access a private justice system called Investor-State Dispute Settlement (ISDS). This system allows companies to file suit over U.S. federal, state, and local government policies they think are “unfair.” There is no limit on taxpayer funds that can be won by foreign companies in these cases. They get to play the lottery with our democracy and possibly take home billions.

4. Any meaningful climate change measures the U.S. adopts in bi-lateral agreements (like the recent U.S.-China deal) could be wiped out because the TPP doesn’t require the other parties to meet U.S. standards or pay fees at the border to adjust the cost of carbon intensive goods. To avoid U.S. climate commitments, some companies may decide to move jobs offshore—threatening our jobs as well as our planet.

5. The lack of any enforceable currency manipulation rules in the TPP mean that any export gains that U.S. firms and their workers might see could be erased overnight. The side agreement, which is not included in the main text, is unenforceable window dressing designed to secure votes but not to protect U.S. workers.

This TPP means lost jobs and lowers wages. The agreement includes failed labor provisions that have already proved themselves ineffective in the case of Colombia. It provides extraordinary legal rights for foreign investors, and no tariff barriers between other TPP countries and the U.S.  Global companies have every incentive to move more production overseas for export to the U.S. market. Meanwhile already powerful global firms will have even more leverage to fight responsible labor, environment and consumer protection laws through ISDS’s “corporate courts.”

It’s easy to see, the TPP is bad for our jobs and our democracy.


This has been reposted from Daily Kos.