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Is the Trans-Pacific Partnership Unraveling?

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President Obama returns from East Asia empty-handed after Japan rejects bilateral agreement – but if the TPP moves forward, will it be in the interest of most Americans?


CROWD: Flush the TPP right now!

JESSICA DESVARIEUX, TRNN PRODUCER: Flushing the Trans-Pacific Partnership trade deal is what these protestors are aiming to do. They staged a demonstration in front of the U.S. Chamber of Commerce because they say the Chamber is looking to ram through the trade agreement.

JILL STEIN, SPOKESPERSON, GLOBAL CLIMATE CONVERGENCE: —in the TPP. The Trans-Pacific Partnership is very much a—it’s sort of the ultimate in an attack on American sovereignty, American democracy, and our ability as American citizens to make laws and regulations that reflect our needs as a people.

DESVARIEUX: But most people have never even heard of the TPP. That’s largely because the negotiations have been held in secret. And what the public actually knows about the deal comes from leaks posted on WikiLeaks.

DESVARIEUX: On President Obama’s four-nation tour in East Asia, the TPP was high on his agenda. However, the president failed to come to an agreement with Japan over a bilateral deal which would have accelerated. Japan is one of the 12 countries a part of the TPP. If the TPP goes through, these countries make up 40 percent of the world’s gross domestic product.

But with a deal this big, how will it affect everyday Americans? So in another round of Real News myth-busting, let’s take a look at what’s been said about the TPP by the lead negotiator of the TPP, U.S. Trade Representative Michael Froman.

Myth 1: the TPP is all about trade.

AMB. MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE: And that’s what the trade agreements we’re negotiating are all about: lowering tariffs on made-in-America products, breaking down barriers to our goods and services, and setting standards

higher to level the playing field for American workers and firms, American farmers and ranchers, American entrepreneurs and investors.

BEN BEACHY, RESEARCH DIRECTOR, PUBLIC CITIZEN’S GLOBAL TRADE WATCH: There are 11 countries we’re negotiating with in the Trans-Pacific Partnership, the TPP, and six of those 11 countries the United States already has a free trade agreement with, and for most of those we’re not even discussing tariffs. It’s just not even on the table.

DESVARIEUX: Ben Beachy is the research director at Public Citizen’s Global Trade Watch. We sat down with him to understand what the language of the leaked drafts actually say about trade.

BEACHY: Most of the other chapters impose rules on broad swaths of domestic policies, what most people do not think of as trade, you know, the public health policies that affect the costs of medicines, copyright policies that affect internet freedom, the ability of corporations to sue a sovereign government over its environmental policies, etc. These are broad, sweeping rules that most people would say have no place in a trade agreement. And so really this is not principally about trade.

DESVARIEUX: Myth 2: the TPP protects American labor.

FROMAN: We’ve also been working to raise labor standards, raise environmental standards, raise intellectual property rights standards around the world so that our workers are not put at a competitive disadvantage vis-à-vis others. We can’t—without raising these standards, there’s going to be a race to the bottom. And we don’t—that’s not a race we can win. That’s not a race we want to run. Our job is to create a race to the top, where groups of countries come together and say, here are the standards we want to live by, and by doing so, we will attract investment and become the magnet for economic activity.

BEACHY: We’ve seen a race to the bottom in which, agreement after agreement, we’re pitting United States workers against lower-paid and lower-paid workers abroad. So we saw this with NAFTA, signing an agreement in which [it was] well known what was going to happen, that many factories were going to relocate to Mexico, or at least face steeper import competition from Mexico. And since NAFTA, hundreds of thousands of manufacturing jobs have been lost, about 900,000; even under the narrow program administered by the Department of Labor, they calculate about 900,000 people have lost, and it’s a very difficult program to qualify for, so it probably under-counts the number. So, many people have lost their jobs.

That matters not just in terms of job loss, but it also matters in terms of wages, even for those who don’t lose their jobs. Many of the people who have been fired have been decently paid manufacturing workers in the United States. The average manufacturing worker takes about a 20 percent pay cut, according to the Bureau of Labor Statistics. And so you take a 20 percent pay cut working in a service sector job, you know, working for a hotel or a food industry. That’s not bad just for the manufacturing workers, but it’s bad for those service sector workers as well, because as this glut of manufacturing workers enters the competition for their jobs, it drives down wages and keeps the minimum—it keeps middle-class wages stagnant, as they’ve been under the NAFTA era. And that’s really a major contribution to inequality. Another contribution is that it just—it gives the extra power—it gives a—it puts another card in the deck of the employer in companies that are looking to offshore in that if a union organizes and tries to organize for better wages, the employer can threaten more easily, more plausibly, that they would offshore their production to a country with which we’ve signed one of these deals.

DESVARIEUX: Myth 3: the TPP protects the environment.

FROMAN: We’re asking our trading partners to commit to effectively enforce environmental laws, including those laws implementing multilateral environmental agreements, and we’re committed to making sure our partners follow through. It encourages them to take a more sustainable approach to development, and it levels the playing field for those companies, including American companies, who maintain high standards for their workers and the communities in which they operate.

DESVARIEUX: But according to Ben Beachy, he says that the investment chapter related to the environment tells a different story.

BEACHY: It empowers foreign corporations to directly challenge a sovereign government over environmental, public health, or other public interest policies, not in any domestic court, but before an extrajudicial tribunal of three lawyers that sit outside of any domestic populace or the legal system. This is—you know, it really is incredible. It allows a foreign corporation to just completely circumvent our own domestic court system. It’s, unfortunately, not a theoretical threat.

DESVARIEUX: Its not theoretical, since it’s currently happening in Peru. The American company Renco Group, which is owned by billionaire Ira Rennert, is tangled in a battle with the government of Peru.

BEACHY: Renco, a corporation owned by one of the wealthiest men in the United States has launched a case against Peru. Renco operates a metal smelter in one of the ten most polluted towns in the world in Peru. And that metal smelter is responsible for a good degree of the pollution. So Peru signed a contract in which the corporation, Renco, committed to clean up the environment, to remediate a lot of the pollution itself was creating. You know, they missed the deadline for complying with that obligation. The Peruvian government said, okay, we’ll extend the deadline. Then they missed the second deadline, and the Peruvian government again said, we’ll extend the deadline. And then they requested one a third time: can you please extend the deadline for us to remediate our own pollution? And the government said no. And because of that, Renco is now using the U.S.-Peru free trade agreement to file an $800 million claim against the people of Peru or the government of Peru for essentially forcing Renco to do what it committed to do under contract.

DESVARIEUX: But the main argument behind the United States moving towards this Asia pivot is that if the U.S. doesn’t lead, then China will.

FROMAN: We’re not the only country out there. There’s a lot of activity going on around the Asia Pacific, to take as one example. There are bilateral agreements being signed, trilaterals. There are other regional agreements being signed. And those regional agreements that are being negotiated, you know, they don’t focus on labor and environment and intellectual property rights and state-owned enterprises and the free internet. You know, they don’t try and raise the bar in a way that levels the playing field for our workers and our firms. It creates a real opportunity for us to compete in what is the fastest-growing region of the world.

DESVARIEUX: But Beachy says that if you look at past trade deals, this idea of containment is not accurate.

BEACHY: We’ve found that, time and again, those very threats came true even though the free trade agreement was passed. That is, Venezuela’s influence in Central America increased after the Central America free trade agreement was passed. Japan-signed free trade agreements and China’s exports to Mexico both increased after NAFTA was passed with Mexico [sic].

DESVARIEUX: The TPP is not just being fought in the United States, but all over the world, in countries like the Philippines and Japan. Organizers in the U.S. say that they will be continuing to fight as well.

DR. MARGARET FLOWERS, ACTIVIST: We’ve been very successful so far in stopping the first round of fast track in Congress, and we expect that that’s going to be a dead issue, because election season is upon us. The next earliest time we expect it to come up would be in a lame-duck session in November. So in the meantime what communities are doing is they’re passing resolutions at the local level, at the city level, at the county level, basically saying that if the TPP is signed into law, that it’s a secret agreement, you know, it’s an agreement that was passed using a non-democratic, non-transparent process that will actually change our laws at the community level so that we can’t know what’s in our food, we can’t protect our environment, we can’t buy American, all these things that are really important. And so, basically, these resolutions are saying we won’t obey these illegal laws if they’re passed, we’re going to continue to protect ourselves. So that’s a very important phase. It helps people to understand that TPP affects us right at home.

DESVARIEUX: The TPP will be making its way to Congress this week, as Ambassador Froman will be testifying before the Senate Finance Committee on April 30 to make the case for the president’s trade policy. Activists say they will be watching closely their elected officials to see if they’re willing to trade democracy and transparency for the TPP.

For The Real News Network, Jessica Desvarieux, Washington.

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