The Choice Is Not Between TPP Or No Trade
Director, Public Citizen's Global Trade Watch
The high-profile presidential primary revolt against decades of damaging American trade policy finally has forced the Trans-Pacific Partnership (TPP) into mainstream media coverage.
The usual free-trade-agreement cheerleading squad of chronic-job-offshoring corporations, Wall Street, agribusiness and their coterie of think tanks and pundits are unnerved.
After spending billions in campaign contributions, lobbying and PR since the 1990s to enact our current trade policies, they want us to believe there is no alternative. In recent weeks, they have ginned up a PR campaign with two main themes: Critics of free trade agreements in general and the TPP in specific are protectionists who want to stop trade and/or are ignorant and misled.
The recent Washington Post piece by Vice President Biden’s former chief economist Jared Bernstein does a great job explaining why the real choice is not between TPP and no trade. As he notes, we don’t need more free trade agreements to expand trade.
Indeed, U.S. export growth to countries that are not Free Trade Agreement (FTA) partners has exceeded U.S. export growth to FTA partners by 29 percent over the past decade. By the end of 2015, the aggregate U.S. trade deficit with FTA partners had increased by 418 percent since the FTAs were implemented while that with all non-FTA countries had decreased by 6 percent.
How can that be? For the same reason polls repeatedly show that most Americans are for trade and against our trade agreements: America’s trade policy and trade agreements have been hijacked by special interests.
Indeed, the TPP’s strongest opponents are not against trade and do know what is in such agreements. That is precisely why they oppose them.
This Washington Post infographic shows how our secretive trade negotiating process gives a privileged role to hundreds of official U.S. trade advisors representing corporate interests. They have turned our “trade” agreements into delivery mechanisms for an array of retrograde policies, many unrelated to trade, that have hurt most Americans.
Having lived with the damaging results over the past decades, it should be no surprise that many Americans are against these corrupt special interest trade policies.
And now we have presidential candidates from both parties revealing the truth: There is nothing inevitable about the damage, but rather the rules have been rigged against us.
We can do better and we must.
Trade agreements and policies are how we can write rules for the global economy.
And the United States is uniquely able to set trade policies that others have to follow. That leverage is the only upside to having the largest trade deficit in history.
China, Vietnam, Mexico, Japan and other nations are deeply reliant on being able to sell things here. That means these governments need to come to agreement with us on terms of trade or risk economic disruptions that could undermine their own political viability.
But to date, this leverage has been squandered to obtain special protections for Big PhRMA and U.S. firms seeking to invest abroad rather than to secure terms that work for all of us.
We desperately need a new American trade policy.
To achieve that, first, we must do no further harm. As Paul Krugman put it in a recent New York Times column, we need “a standstill on further deals, or at least a presumption that proposed deals are guilty unless proved innocent.”
We must not enact any more-of-the-same, job-killing, race-to-the-bottom agreements.
Polls show majorities of Democrats, Independents and Republicans oppose the TPP. Currently there is not a majority in the House of Representatives to pass it. Supporters’ hope is to slime it through Congress in a lame duck session post-election with the votes of retired and fired representatives.
Second, we must review and replace our existing trade policies and pacts. The special interests that put our current system in place are jealously intransigent about commonsense changes for which there is now growing consensus.
This includes enforceable disciplines against currency cheating; removing offshoring incentives, bans on Buy American preferences, patent extensions and the investor-state tribunal system in trade pacts; conditioning access to the U.S. market on countries meeting international labor, environmental and human rights standards; eliminating existing U.S. tax credits, subsidies such as Export-Import bank loans, and government contracts for firms that ship jobs overseas; enacting domestic tax and procurement policies that reward firms producing here; expanding Buy American procurement preferences; eliminating the corporate benefits for companies that relocate their corporate headquarters overseas to take advantage of a tax loophole and so forth.
Third, before we consider negotiating any new agreements, we must create a new model that ensures any future pacts create jobs here and raise wages.
What would a good trade agreement look like? In 2009, Congress’ leading fair-trade champions worked with economists, trade experts, businesses and environmental, labor, consumer, faith and family-farm organizations to develop that alternative. They hoped it would shape the approach taken by the new incoming Obama administration.
That is not how history played out, and thus we have the TPP — NAFTA on steroids.
But the 2009 Trade Reform, Accountability, Development and Employment (TRADE) Act provides a good blueprint for trade pacts that could benefit more Americans. The legislation set forth what must and must not be included in future pacts – basically eliminating the special interest non-trade riders that now comprise the majority of our Trojan horse agreements and adding the rules to make actual trade terms more fair.
It also included criteria for what countries would be appropriate U.S. trade agreement partners – those that offer American exporters opportunities and where strong labor, environmental and human rights standards exist in practice, not just on paper.
Unless and until we enact a trade policy that can harvest the benefits of expanding our exports to create well-paying American jobs and prosperity for American farmers while growing jobs at home, raising wages and promoting democracy, human rights and a healthy environment, the trade fury we are now witnessing will only grow.
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This has been reposted from the Campaign for America's Future.
