Trade Yes, But a Different Track

Larry Cohen

What does a global economy mean? And who does it serve?

These are the questions we need to ask as the United States seeks to negotiate new trade deals with Europe and Asia. Unfortunately, as 12 Pacific Rim nations race towards completing the Trans-Pacific Partnership (TPP), negotiators are only serving the needs of huge multinational corporations.

More than 600 corporate advisers have hashed out the agreement behind closed doors, and not surprisingly, they’re championing the interests of multinational corporations at the expense of small business and all the rest of us. Leaked documents tell us that provisions in the TPP would make it even easier for companies to ship U.S. jobs overseas and would give foreign corporations new power to challenge government actions that affect their “expected future profits.” Draft texts of the TPP illustrate how food safety, labor and environmental standards would be undermined.

But, right now, we have an opportunity to press reset. The TPP is stalling under the harsh sunlight of disclosure and public discourse. Senate Majority Leader Harry Reid has expressed his opposition to “fast track” legislation, which would speed the approval of trade agreements in Congress. “Everyone would be well-advised just to not push this right now,” he said. Nearly 200 members of Congress – on both sides of the aisle — have expressed their concerns about the TPP to the White House.

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They echo what voters around the country are saying. CWA, Sierra Club and the U.S. Business and Industry Council sponsored a national poll from Hart Research Associates and Chesapeake Beach Consulting that found 62 percent of voters oppose fast track for the TPP.

Opposition is broad: No more than one-third of voters in any region of the country or in any age group approves of fast track. Sixty percent of voters with household incomes under $50,000 oppose fast track, as do 65 percent of voters with incomes exceeding $100,000. Republicans (87 percent) and independents (66 percent) reject fast track, while a narrow majority (52 percent) of Democrats are in favor when asked if they would support this president’s fast track proposal.

Voters overwhelmingly expect the TPP to be a good deal for large corporations at the expense of small businesses:

2014-02-03-1_tppchart6Americans believe that fast track for the TPP will lead to lower wages and fewer jobs:

2014-02-03-1_tppchart4And they believe the TPP will weaken consumer and environmental protections:

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We’re in the middle of a David vs. Goliath battle. Corporate lobbyists are waging a fierce campaign to get this trade deal rushed through Congress with little debate. But a broad coalition has come together to take on Goliath. CWA has joined with a growing network of environmental and consumer groups, small business, community organizations and others, coordinating actions that target fast track and calling for more transparency and a real national debate on fair trade vs. a continuation of 20 years of NAFTA-like trade deals.

Three major issues we must address:

  1. Our trade deficit is headed to $1 trillion a year — we can’t talk about exports without counting imports and the transfer of jobs out of the U.S., as multinationals move production to nations like Vietnam with minimum wages of 28 cents per hour and virtually no labor or environmental standards. Twenty years of trade deficits directly link to federal, state and local government budget deficits.
  2. In addition to 20 years of more than a million net job losses from bad trade deals, U.S. wages are held down as U.S. workers are forced to compete with low-wage nations or lose their jobs. When their employers are large multinationals, profits actually go up both from job transfer and depressed wages. But our economy suffers as purchasing power collapses.
  3. Multinationals — both foreign and U.S. — celebrate the protections they enjoy in the current TPP drafts and current fast track proposal. Corporations can sue for any loss of future profits caused by improvements in labor, consumer or environmental standards. If minimum wages go up, they can sue. If consumers are protected, for example by warning labels on cigarettes, companies can sue. If the environment is protected by new legislation curtailing deforestation, logging companies can sue. Corporations pursue these claims in international tribunals where the arbitrators are likely corporate lawyers, while other corporate lawyers prosecute their claims. Currently there are 500 cases pending against a wide range of nations seeking $15 billion in compensation for future loss of profits from other recent trade deals.

We agree with President Obama: America needs a raise. But the TPP trade deal would create a new race to the bottom, not lift up the standard of living for most U.S. workers. Of the nations with which we’re negotiating the TPP, nine have wages much lower than our own.

Previous so-called “free trade” agreements have carried a heavy cost — particularly in the form of manufacturing jobs. Now we risk destroying more service sector jobs as well. Economist Alan Blinder has determined that between 22 and 29 percent of all U.S. jobs are potentially offshorable. Forrester Research has calculated that 3.4 million service sector jobs are projected to be offshored between 2003 and 2015.

This is why we need citizens’ groups, small business and Congress involved in our trade deals. We know that the current negotiations aren’t really about trade and tariffs; they’re about maximizing corporate profits through the cheapest possible goods and services.

Ask Americans what kind of future they want. They’ll tell you they don’t want a $1 trillion trade deficit. They’re tired of stagnant wages and jobs moving overseas.

Instead of trade policies that give corporations more power than governments, we need policies that help restore the American Dream.

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