Secrecy tips the case of the Trans-Pacific Partnership by Marjorie Arons Barron

The entry below is being cross posted from Marjorie Arons Barron’s own blog.

photo NPR

photo NPR

President Obama’s proposed trade deal, the Trans-Pacific Partnership (TPP), has me in a quandary.  I’ve long held that free trade benefits everyone in the long run.  It’s what happens in the short run that can be daunting.  Reduce or eliminate barriers to other nations’ products and we get the benefit of lower prices and greater selection as consumers.  But open our markets to products that are less expensive due to exploitive wages and environmental degradation, well, that’s another question. We enjoy the benefits while closing our minds to the human costs.

Both sides in this debate can be convincing. Senator Elizabeth Warren warns of the dispute resolution mechanism in the closely held proposal, which, she says, “would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty. ” Similarly, noted economist Joseph E. Stiiglitz warns that TPP provides a “secret corporate takeover.” Of particular concern are provisions allowing multinationals do end runs around U.S. regulations.  Phillip Morris, for example, is suing Uruguay and Australia for requiring warning labels on cigarettes. There are reports of similar provisions getting inserted into the trade bill.

Warren is particularly fired up about the bill’s liberalizing derivatives trading and returning to government bailouts, which, she said, works for “the big guys” but does nothing for those who are not rich and powerful. In other words, TPP will upend a major accomplishment of Dodd-Frank financial reform and thus threaten our economy.   This wouldn’t be the first time that a domestic financial rule was attacked pursuant to a trade treaty.  Canada challenged the Volcker rule under NAFTA.

Former Congressman Barney Frank, like Warren and most Democrats in Congress, thinks that trade may benefit the overall economy but skews it toward the best off and hurts those at the bottom.  He thinks that President Obama’s push for TPP is wrong, but that, if Obama insists on going forward, he should condition his push on whether the proponents are willing to support minimum wage increase, labor unions, and measures to keep companies from sending jobs overseas.

TPP supporters, especially in the business community and on the GOP side of the aisle, say the agreement won’t kill jobs because the United States already has free trade agreements with six of the 11 participant countries and runs surpluses with the remaining ones.  The 11th, Japan, they argue, is already a high-wage country so relative labor costs wouldn’t affect U.S. jobs.

They  concede the problem of currency manipulation (see relevant Washington Post editorial), wherein countries devalue their currency to increase exports but says it’s too complex to be included in a treaty and should be dealt with diplomatically.  They also concede human rights violations by Vietnam, would prefer that country not join the TPP till the issues were address, but note there are unprecedented provisions in the trade promotion bill.  The scope of trade with Vietnam, they observe, is “tiny.”

capuano 2015What tips it for me is the secrecy, which Congressman Michael Capuano detailed Monday to the New England Council. “The President has classified the trade bill,” he said, so members of Congress are forbidden  to go out and talk to people.  “That’s anti-American,” he said. “I can go to a dark room, read it one page at a time and cannot take my notes out of that room. And I cannot talk to anyone about what I read.”

“C’mon, would any of you do that?” he asked his audience.  Members of Congress, he said, are generalists. They form their opinions by reading legislation and asking questions of experts on all sides of the issue.  Accordingly, Capuano read the 2000+ pages of the Affordable Care Act, and then did his own research and questioned many people to enable an informed vote.  Fast track, of course, allows only an up or down vote, which disrupts the balance of power in government. Capuano appears resigned that, “In the final analysis, the President will get what he wants.”  But, he says, that’s not the way the system should work.

It’s impossible to sort out the pros and cons without transparency. In 2001, even  George W. Bush  made his trade pact proposals available to Congress and the public well before a vote would take place. President Obama’s closed-door approach to the Trans-Pacific Pact stifles public debate and lets corporate interests and lobbyists put another one over on us. Put indecorously, the Obama administration wants us to buy a pig in a poke. And I’m not buying.

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