Nel's New Day

May 18, 2015

TPP Closer to Passing But No Better Deal

“The president has done an excellent job on [the Trans-Pacific Partnership].” Senate Majority Leader Mitch McConnell made this statement yesterday on This Week. That alone should tell people that the TPP is very wrong for the country. Those touting the wonders of the proposed trade agreement have refused to address its flaws.

Any legislator who reads the highly secret document in the windowless basement room of the Capitol is first stripped of any electronic devices, told they couldn’t take notes, and then strictly forbidden to tell anyone what they’ve read, on threat of prosecution. Sen. Jeff Sessions (R-AL) broke these rules and told members of Congress why they should oppose the proposal.

A major complaint is that the agreement is a “living document,” meaning that the president can change at will after Congress passes the TPP. Sessions is concerned, of course, about what President Obama would do after Congress okays the agreement, but others should be highly concerned about what a GOP president would do to the country through changing the TPP. The first trade representative in the Obama administration, Ambassador Ron Kirk, has said that “if the American people knew what was in this agreement it would never become law.”

President Obama attacked Sen. Elizabeth Warren (D-MA) for her opposition, dismissing her as a “politician.” When the Democrats turned on him for his treatment of her, he softened his approach, but Warren is still speaking about the TPP’s problems.

This morning Warren issued a report of failed trade enforcements, including ones by the current president. He has consistently insisted that the TPP contains robust labor protections and called Warren’s criticisms “dishonest,” “bunk” and “misinformation.” The U.S. consistently fails to enforce any labor protections in trade agreements, according to reports from the non-partisan Government Accountability Office (GAO) as well as the Department of Labor (DOL) and the Department of State. Since Barack Obama became president, the DOL accepted only five claims for labor violations, and the first-ever labor enforcement case too six years to restart after it was originally filed.

Of the 14 U.S. trade agreements with 20 countries, 11 countries continue to perpetrate child labor, forced labor, or other human rights abuses related to labor. The president called a deal with Colombia a “win-win for workers” in 2011, but 105 union activists have been murdered there in the past four years and 1,337 death threats have been issued since the special “Labor Action Plan” was finalized four years ago.

President Obama has said that he has a commitment to bring “the first-ever labor dispute under a free trade agreement”–in Guatemala. Although the AFL-CIO has pushed for action on violations in Guatemala for over six years, the dispute is unresolved, and the country remains one of the most dangerous places in the world for union workers. Seventeen labor activists were murdered there in 2013 and 2014, three of them during a dispute over unpaid back wages.

The Obama Administration predicted that the South Korea Free Trade Agreement would create 70,000 jobs and deliver up to $11 billion in exports. While imports have climbed to over $12 billion, the United States exported $1 billion to Korea. The growing good trade deficit with Korea eliminated over 75,000 jobs in the last three years.

The president touts the TPP as involving 40 percent of global GDP. The United States already represents 22 percent, and existing trade agreements with six TPP partners make up 80 percent of the TPP. Japan, with its 1.2 percent tariff has most of the rest.

GDPThe TPP will also not create “an additional 650,000 jobs,” according to Peter Petri of the Peterson Institute for International Economics. He said, “We don’t believe that trade agreements change the labor force in the long run.” Because the agreement increases copyright and patent protections, prices for drugs, movies and music will increase here and abroad.

Most of the arguments supporting the TPP cite improved trade, but the agreement backers ignore imports, and thus the rapidly increasing trade deficit. Another favorite argument is “containing China.” Either China can join the TPP because the agreement is a “living document,” or it can import goods into TPP countries with no tariffs without following any TPP regulations.

Robert Reich wrote, “[The TPP is] being sold as a way to boost the U.S. economy, expand exports, and contain China’s widening economic influence, [but] the biggest beneficiaries would be giant American-based global corporations, along with their executives and major shareholders.” He further explains how worker protections are unenforceable, as he discovered when he was Secretary of Labor and asked to implement NAFTA. It also won’t help U.S. exports because it does nothing to prevent other nations from manipulating their currencies to boost exports. Sen. Rob Portman (R-OH) is trying to fix that problem with amendment, but the TPP is a “living document.”

Warren also talked about the danger of trade agreements to the Dodd-Frank Act designed to protect consumers. Major financial institutions have lobbied hard for the Transatlantic Trade and Investment Partnership (TTIP), a proposed trade deal between the United States and the European Union, and strongly support the TPP.

The TPP may keep the Federal Reserve from imposing separate liquidity requirements on foreign banks that force banks to have a certain level of assets they can sell off in case of a crisis. Agreements could also change the Dodd-Frank compliance rules on derivatives that currently protect people from another recession. U.S. banks could reincorporate outside the country to avoid regulations. The TTIP also has a provision to evaluate bank regulations on trade impact instead of financial stability, again avoiding reforms. President Obama might not allow this, but President Jeb Bush would definitely put benefits to banks above those to individuals.

Supporters of TPP consistently declare that U.S. law can’t be changed without congressional action, but trade agreements automatically make laws for anyone dealing with corporations outside the United States. Many companies are moving to other countries to avoid U.S. law. Dodd-Frank would require 60 votes in the Senate to be repealed; the trade agreement is a much easier route for a GOP president. In addition to Dodd-Frank, environmental and labor regulations can be at risk through the same fast-track process.

Opposition to the TPP comes from legislators such as Sens. Harry Reid (D-NV), Warren, and Bernie Sanders (I-VT) as well as most Democrats in the House. These people are not isolationists; they support workers, the environment, net neutrality, and human rights.

The Apple Corporation is a classic example of the predatory companies that have designed the TPP. Apple’s overseas untaxed cash, now about $157 billion, is expected to be $200 billion within two years. Cheap construction of their products overseas makes enormous profits for the company. A 16 GB iPhone 6 costs about $200 to manufacture, but without an expensive phone contact with a wireless carrier such as Verizon or AT&T, the product sells for at least $650.

GOP presidential candidate Sen. Rand Paul (R-KY) has praised Apple for its job creation of over one million jobs in the United States. Apple, however, has 66,000 employees in the U.S., half of them retail store workers. The company pays their full-time retail “specialists” less than $30,000 a year while earning $600,000 profit for each one: employees generate $20 in profits for each $1 they are paid.

Laborers at Chinese factories such as Foxconn suffer from low wages, forced overtime, safety hazards, abuse, and increased production quotas. They worked 15 hours a day for ten weeks without a day off before the iPhone 6 launch in late 2014. These problems and others, such as locked fire exits, are reminiscent of the U.S. a century ago.

According to leaked documents, the TPP drops the tariff, bringing far more profits to Apple, Nike, and other huge corporations while destroying the middle class in the U.S. That’s why McConnell approves of the president’s “excellent job” and pushes for the TPP to pass the Senate this week. TPP will destroy the U.S. ability to set regulations, allow corporations to control U.S. law through international tribunals, further eradicate the middle class, outsource more jobs, and block manufacturing in the United States. And McConnell says that no one in Congress is going home until it passes.

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2 Comments »

  1. Reblogged this on It Is What It Is and commented:
    TTP explained. If Mitch McConnel says it’s good … we know it isn’t! When has he ever been in agreement with the Prez??

    Like

    Comment by Dr. Rex — May 19, 2015 @ 4:51 AM | Reply

  2. Okay, I’m finally disappointed in President Obama.

    Like

    Comment by Lee Lynch — May 19, 2015 @ 12:04 AM | Reply


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