The Trans-Pacific Partnership (TPP) is a mega free-trade pact that would link 11 Asian countries and the Americas. The member countries have nearly 800 million people, an annual gross domestic product of about $28 trillion and they account for 40 percent of the global economy and one-third of world trade.
That’s the good news. But there are plenty of things about this deal that should give us pause.
TPP has been negotiated in secret since 2009. According to Vermont Sen. Bernie Sanders, the minimum wage in Vietnam- one of the parties to the deal- is 56 cents per hour.
TPP is the economic cornerstone of President Obama’s pivot to Asia. China is not part of the deal. Indeed, the pact is seen as a way to bind Pacific trading partners closer to the United States and counter China’s growing power in Asia.
Prospects for approval advanced last week with the Senate’s 62-37 vote to give this president and his successor so-called trade promotion authority, also known as “fast-track.” This authorizes the president to negotiate the trade agreement and bring it back to Congress for an up or down vote – no amendments or filibuster allowed. And you thought legislative power was vested in Congress. This approach is taken because if Congress were to amend the trade package, it would have to go back to the 11 other countries for approval.
The battle now shifts to the House of Representatives, where a tougher fight is expected. The president’s effort to pursue TPP has split his own party due to labor’s concerns that previous trade deals have cost jobs and depressed wages for American workers competing with low-wage countries.
The draft TPP document is under wraps. If lawmakers want to read it, they and a staff member can go to a security office in the Capitol as long as the staff member meets certain security requirements, but they cannot discuss the details of what they read.
Industry executives and their lobbyists, on the other hand, have had direct access to the text, advising administration negotiators on terms and provisions while the public is excluded from reviewing the draft. It’s not exactly a process that rewards collaborative behavior and promotes transparency.
What the public has learned about the TPP has come from documents publicized by Wikileaks. About 18 months ago, Wikileaks published a draft of the “intellectual property” chapter of the text that would likely lead to higher drug prices because the pharmaceutical industry gets stronger patent protections, which would delay cheaper generic versions of drugs.
Even better, an “investor-state dispute settlement” (ISDS) provision would allow multinational corporations to sue countries over laws that might reduce the corporations’ “expected future profits.” Foreign investors can also sue if a regulation gets in the way of their ability to profit from an investment. Picture Phillip Morris suing Australia for passing laws to discourage children from smoking.
And the court ISDS creates to hear such a suit consists of three private-sector attorneys serving as judges.
Sen. Elizabeth Warren, D-Mass., is especially concerned that allowing foreign companies to sue national governments in special tribunals would infringe upon American sovereignty and could unravel financial sector regulations. The president played junkyard dog on her in an interview with Yahoo Politics when he said: “Elizabeth is, you know, a politician like everybody else. She’s got a voice that she wants to get out there. And I understand that. And on most issues, she and I deeply agree. On this one, though, her arguments don’t stand the test of fact and scrutiny.”
The more you learn about the TPP, the worse it looks. Is it any wonder that the draft has been kept under lock and key?
Perhaps the only thing more improbable than the Seattle Seahawks passing on second and goal from the one-yard line in the Super Bowl is the notion that the American public benefits from the lack of transparency surrounding the Trans-Pacific Partnership.
originally published: May 30, 2015