Many people know NAFTA has cost U.S. workers 700,000 jobs.
But how many know another effect was to drive Mexican small farmers out of business?
In the brave new world of free trade, Costco makes tortilla chips and salsa in the U.S. and trucks them to its stores in Mexico.
Congress will soon debate whether to “fast-track” a trade deal that would make job-killers like NAFTA look puny. The Trans-Pacific Partnership would give corporations the right to sue national governments if they passed any law, regulation, or court ruling interfering with a corporation’s “expected future profits.”
They could also sue over local or state laws they didn’t like. The TPP would cover 40 percent of the world’s economy.
Existing laws and regulations on,
food safety
environmental protection
drug prices
local contracting
internet freedom,
...would all be up for challenge.
And the decision-makers on such suits would not be local judges and juries; they’d be affiliated with the World Bank, an institution dedicated to corporate interests.
CAN IT BE STOPPED?
Citizen groups believe they can stop the TPP if there is enough outcry.
They point to previous victories over the WTO (World Trade Organization) and FTAA (Free Trade Area of the Americas).
Most unions, however, have been slow to get on board - even though the TPP would jeopardize, according to the AFL-CIO, millions of jobs. The Teamsters and Communications Workers have been the most active.
Greg Junemann, president of the Professional and Technical Engineers, says unions have given up, certain that,
“what Obama wants to do, they [Congress] are going to do.”
Junemann, with other union heads, sits on a labor advisory committee (LAC) on trade - which, he said, has been completely ignored.
In a June 6 letter, LAC chair Thomas Buffenbarger of the Machinists sharply criticized the administration for,
“restrictions on information that is shared with LAC members,” “unwillingness to share bracketed text or tabled positions from our negotiating partners,” and “refusal to include labor representatives on Industry Trade Advisory Committees.”
What Is the TPP?
It might as well stand for “Take Power from the People,” a Detroit postal worker said.
The Trans-Pacific Partnership has been under hush-hush negotiations since 2008.
It includes,
A “docking mechanism” would allow other countries, including China, to join over time.
The contents have not been made public, but are known to the 600 “corporate advisors” helping write it, such as,
Some information has come to light through leaks.
Like most trade agreements, the TPP is mostly not about trade but about giving corporations more rights to interfere with local laws.
TPP tribunals staffed by corporate lawyers, outside the control of any government, would rule whether a country’s taxpayers must pay monetary damages to wronged corporations.
Negotiations begin in July on a Trans-Atlantic Free Trade Agreement between the U.S. and the European Union.
Stopping TPP would help derail it, too
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FAST TRACK
Over the opposition of many unions, President Obama signed corporate-friendly trade agreements with South Korea, Panama, and Colombia in fall 2011.
He singled out the TPP as a priority in this year’s State of the Union speech and wants Congress to give him “fast-track” authority.
Veterans of the fight against Bill Clinton’s NAFTA will remember fast track - Congress gives away its ability to amend an international agreement, in favor of a simple up-or-down vote. Each house may debate the bill for no more than 20 hours.
Fast track is likely to come up in late summer or early fall.
But most Democrats in the House are opposed to fast track and the TPP, says Arthur Stamoulis of the Citizens Trade Campaign, and many Republicans will also vote against it (some because they want to deny Obama any appearance of success).
Junemann counters that, in the end, doing what big business wants will weigh more with Republicans than hurting Obama.
In any case,
“there is no way they can get TPP through without fast track,” Stamoulis said.
“When we defeated the FTAA [in the early 2000s], the first step was cross-border people’s movements dragging the proposal out of the shadows, shining a light on it, and introducing accountability and scrutiny to the negotiations.”
Light and scrutiny have both been sorely lacking thus far, but leaks about TPP’s contents are alarming.
LOCAL LAWS TRUMPED
Corporations could sue governments over laws not to their liking. They are already doing so under existing “trade” agreements, but TPP would vastly expand the number of corporations and countries involved.
For example,
Australia passed a law requiring plain packaging for cigarettes (no Joe Camel). U.S.-based Philip Morris is in court over predicted lost sales.
After the Fukushima disaster, Germany enacted a moratorium on nuclear power; a Swedish energy company is now suing the German government.
Bechtel sued Bolivia for undoing the privatization of its water supply.
Corporations have already collected $365 million by suing governments, usually in developing countries, under existing treaties, and $13 billion more is pending in suits under,
Most suits thus far are over environmental issues. But in June 2012, the French firm Veolia sued the Egyptian government for raising the minimum wage.
Under TPP, the corporation would sue the federal government, whether the case pertained to a federal, state, or local law or court decision. If the tribunal awarded damages to the corporation, the federal government would pay.
So if the government doesn’t want more suits, it has to change its laws (or pressure the local government to do so). Under NAFTA, the U.S. chemical company Ethyl Corp. sued Canada because it had banned the use of a gasoline additive called MMT, as a public health measure.
Canada backed down, allowed MMT, and paid Ethyl $13 million.
TPP would give international firms equal access to federal government contracts.
TPP would include aggressive intellectual property rules to protect Big Pharma’s patents and restrict access to generic medicines. The consequences for those unable to afford HIV drugs, for example, especially in poor countries, would include hundreds of thousands of deaths.
The U.S. Department of Energy has the authority to regulate exports of natural gas - but not to countries that have free trade agreements with the U.S. TPP would mean stepped-up natural gas exports, without review, to Japan, the world’s largest importer of natural gas, and therefore increased to find that gas.
And presumably, when U.S. states, counties, and cities ban fracking, energy companies from any interested country could try to get those bans overturned. (Domestic oil and gas companies are already suing over local fracking bans, such as in Longmont, Colorado, and Dryden, New York.)
JOBS GONE
These new rights for corporations are horrifying, but the most widespread effect of TPP would be job loss.
The minimum wage in Vietnam, for example, is $2.23 a day, so labor-intensive industries are already eager to move there.
The TPP would accelerate that process:
It would remove U.S. tariffs on goods produced in Vietnam and any other TPP country.
Manufacturers in capital-intensive industries (heavy machinery factories, paper mills, semiconductors), who might be reluctant to risk investment, would be protected against the threat of other countries’ passing new environmental or regulatory costs.
TPP’s protections against loss of “intellectual property” would reassure investors about building in Vietnam, where the majority of college grads are in math and science. Such concerns are currently a major disincentive for IT or research work in Vietnam, as its intellectual property practices are far looser than those in the U.S.
Through arm-twisting and over the objections of the unions who’d worked to get him elected, Bill Clinton pushed through NAFTA in 1993. But by the early 2000s, “free trade” had a track record.
The Free Trade Area of the Americas would have extended NAFTA to 31 more countries in the hemisphere. Some Latin American countries, notably Brazil, said no.
Big protests were held in Quebec City in 2001 and in Miami in 2003, and the FTAA died.
To stop fast track and the TPP, Citizens Trade Campaign suggests three actions:
Contact your Congressperson and urge a “no” vote
Spread the word widely about the TPP, through all channels
If TPP negotiations are held in North America, mobilize to greet the bargainers - à la Seattle 1999
See Expose the TPP. The Citizens Trade Campaign site has fact sheets, monthly briefings, and more.
See below video interview on “Democracy Now!”.
...Expands
Corporate Lawsuits Against
Nations for Lost Profits
June 6, 2013
from
DemocracyNow
Website
The latest round of
negotiations over the TTP
were
held in secret in Lima,
Peru, and the
Obama
Administration has rejected
calls to release the current
text.
Last year, a leaked chapter from the draft agreement outlined how the TPP would allow foreign corporations operating in the United States to appeal key regulations to an international tribunal.
The body would have the
power to override U.S. law
and issue penalties for
failure to comply with its
rulings.
The Obama administration is
facing increasing scrutiny
for the extreme secrecy
surrounding negotiations
around a sweeping new trade
deal that could rewrite the
nation’s laws on everything
from healthcare and Internet
freedom to food safety and
the financial markets.
The latest negotiations over the Trans-Pacific Partnership (TPP) were recently held behind closed doors in Lima, Peru, but the Obama administration has rejected calls to release the current text.
Even members of Congress have complained about being shut out of the negotiation process.
Last year, a leaked chapter from the draft agreement outlined how the TPP would allow foreign corporations operating in the United States to appeal key regulations to an international tribunal.
The
body would have the power to
override U.S. law and issue
penalties for failure to
comply with its rulings.
We discuss the TPP with two
guests:
Celeste Drake, a trade policy specialist with the AFL-CIO
Jim Shultz, executive director of the Democracy Center, which has just released a new report on how corporations use trade rules to seize resources and undermine democracy
"What is the biggest threat to the ability of corporations to go into a country and suck out the natural resources without any regard for the environment or labor standards? The threat is democracy," Shultz says.
"The threat is that citizens will be annoying and get in the way and demand that their governments take action. So what corporations need is to become more powerful than sovereign states.
And the way they become more powerful is by tangling sovereign states in a web of these trade agreements."
Obama-Backed Trans-Pacific Partnership Expands Corporate Lawsuits...
Against Nations for Lost Profits
|
|
Video Transcript
This is a rush transcript.
JUAN GONZÁLEZ: We turn now from domestic surveillance to secret trade deals.
The Obama administration is facing increasing scrutiny for the extreme secrecy surrounding negotiations around a sweeping new trade deal that could rewrite the nation’s laws on everything from healthcare and Internet freedom to food safety and the financial markets.
The latest negotiations over the Trans-Pacific Partnership, or TPP, were recently held behind closed doors in Lima, Peru, but the Obama administration has rejected calls to release the current text. Even members of Congress have complained about being shut out of the negotiation process.
Last year, a leaked chapter from the draft agreement outlined how the TPP would allow foreign corporations operating in the United States to appeal key regulations to an international tribunal.
The body would have the power to override U.S. law and issue penalties for failure to comply with its rulings.
Earlier leaks from the draft agreement exposed how it included rules that could increase the cost of medication and make participating countries adopt restrictive copyright measures.
AMY GOODMAN: To talk more about the TPP, we’re joined by two guests. Here in New York, Jim Shultz is with us, executive director of the Democracy Center.
The organization just released a report called "Unfair, Unsustainable, and Under the Radar: How Corporations Use Global Investment Rules to Undermine a Sustainable Future."
In Washington, we’re joined by Celeste Drake. She’s trade policy specialist with the AFL-CIO, the American Federation of Labor and Congress of Industrial Organizations, testifying today at the Senate Foreign Relations Committee hearing on labor issues in Bangladesh.
Jim, let’s begin with you. You’re just about to head off to the United Nations. You’re usually in Bolivia.
JIM SHULTZ: Yeah.
AMY GOODMAN: Talk about - I mean, most people have not even heard of what - what does TPP mean?
JIM SHULTZ: Right. Well, it’s the Trans-Pacific Partnership. And this is part of this global web of trade agreements that are being negotiated, that have been negotiated over the last 30 years, that, you know, from the outsider, it could seem like it’s a bunch of legal mumbo jumbo, but really what’s at stake is democracy.
The report that we just put out looked at a very troubling part of what these agreements involve, which are these special trade tribunals that are used by corporations to directly undermine the ability of citizen movements to influence their government.
You know, the famous case, of course, is the one from Bolivia, where Bechtel from San Francisco came in, privatized - took over the privatized water system, raised people’s rates up by more than 50 percent, was kicked out by a popular rebellion, and turned around on a $1 million investment and sued Bolivia for $50 million.
These cases - there’s almost 500 a year now of these cases being filed all over the world.
Philip Morris, the tobacco giant, is suing Uruguay for the sin of putting health warnings on their cigarettes. In El Salvador -
AMY GOODMAN: What do you mean?
JIM SHULTZ: So, Uruguay decided to put stiffer health warnings on cigarette packages.
And Philip Morris doesn’t like that, so Philip Morris uses a bilateral investment treaty between Uruguay and Switzerland - so, Philip Morris somehow puts on a Swiss hat and pretends it’s a Swiss company - and is suing Uruguay for hundreds of millions of dollars.
This is - this is everywhere.
I mean, one of the most egregious of the current cases is in El Salvador, where here’s the community of Las Cabañas that discovers that this Canadian mining firm is going to dump poisonous chemicals into their drinking water to suck gold out of the ground. And they do what citizens are supposed to do: They hammer on their government until they get the government to agree not to let the mining go forward.
So what does the company do? The company turns around, under one of these trade agreements, and sues for $315 million.
So what you have - it’s a win-win for the companies, because they either win huge amounts of money - I mean, this is 1 percent of GDP in El Salvador, the amounts of money are enormous - or, just as important, they have a chilling effect on the ability and the willingness of governments to protect their people.
JUAN GONZÁLEZ: And you’re saying there are as many as 500 lawsuits a year related to these kinds of trade infringements?
JIM SHULTZ: Yeah, it’s grown like this. And it’s a new - it’s a new derivatives market.
These companies that are bringing these cases will actually go to investors and say,
"We will sell you, for a price, 30 percent of the cut if we win the case."
I mean, it’s a marketplace. But the bottom line is, what it means is, if you are looking for the protection of your environment, watch out to be sued. And this is not just poor countries.
Germany is getting sued, because after Fukushima, the citizen movements there were able to win a moratorium on nuclear power. And so, the Swedish company involved in their nuclear power industry is suing them for 700 million euro.
And the TPP is just going to bring more of this.
JUAN GONZÁLEZ: But the other side of this...
JIM SHULTZ: Yeah.
JUAN GONZÁLEZ: ... is that obviously these corporations are reacting to an upsurge of citizen movements insisting on protecting their environments and protecting their resources.
So, is your sense is that there’s been a huge spurt over the past decade or two, in terms of the citizen movements forcing their governments to try to protect their resources?
JIM SHULTZ: Well, I think that’s certainly true if you look across Latin America, where citizen movements and more progressive governments have been able to take these kinds of actions.
And, look, if you talk to a lawyer who makes $1,000 an hour representing these corporations, they’ll say,
"Look, we need legal security. Companies need foreign investment. We need legal security. We’re just trying to protect against the possibility that someone comes in with soldiers and takes away our mine."
But this is not just about them getting the $5 million they put in back. Under these bilateral investment treaties, and certainly it’s going to be the same under the TPP, these corporations can sue for the profits that they expected to earn and didn’t.
That’s where you get these sums that are just off the charts.
AMY GOODMAN: President Obama has nominated Michael Froman as Kirk’s replacement for U.S. trade representative. Last year he defended the Trans-Pacific Partnership during a speech at the Center for Strategic and International Studies.
MICHAEL FROMAN: I don’t think I have to tell this audience how important the Asia-Pacific market is to the United States, its manufactured goods, agricultural products or services.
It represents 40 percent of global trade. In 2010, U.S. goods exports totaled $775 billion, comprising almost 60 percent of all of our goods exports. And goods exports to the region are up 25 percent over the last two years.
For our farmers and ranchers, nearly three-quarters of our total exports go to Asia-Pacific customers. And for our service providers, nearly 40 percent of their total services exports go to the region.
And these benefits are not just for the big multinational companies, but for Americans - America’s small- and medium-size enterprises, too, who export over $170 billion to the Asia-Pacific region.
AMY GOODMAN: That’s Michael Froman, the - nominated as the replacement for Ron Kirk as U.S. trade representative. Celeste Drake, if you can talk about the significance of what he said and the TPP, where you’re coming from, from the AFL-CIO?
CELESTE DRAKE: Absolutely. Thank you very much. I mean, we question the wisdom of pursuing the TPP in the first place.
We do have, for better or for worse, the World Trade Organization, which has lowered tariffs around the world and has allowed us to increase our exports, as Mr. Froman was explaining in the speech. So what the TPP is about is all of these other things around the tariffs.
So it is about these investor state dispute tribunals, it’s about harmonizing rules for food safety, it’s about harmonizing rules for intellectual property - a lot of rules that if citizens aren’t really participating in the formation of those rules, they’re not necessarily going to work out and inure to the benefit of working people and America’s citizens.
So we’re very active in following the negotiations, in advocating for better rules that will help workers, real farmers, small businesses, because our past trade agreements, starting with NAFTA and on down the line, have basically been big packages that benefit the 1 percent.
And if anybody else benefits, it’s really only by accident and not really by design.
JUAN GONZÁLEZ: Celeste Drake, you’re scheduled to testify on Bangladesh and the situation with workers there.
How would these trade agreements impact on this whole issue of the race to the bottom in manufacturing by many international corporations to places like Bangladesh, which result in these tragedies like the Tazreen fire and then the recent building collapse with more than a thousand workers killed?
CELESTE DRAKE: Well, in trade agreements, and beginning with NAFTA, which was a really poor example, the United States has tried to put in so-called labor obligations.
In NAFTA, it was a side agreement, largely unenforceable. They’ve gotten better through the years. But they’re really kind of a Band-Aid that tries to fix some of the really destructive patterns that have been caused by globalization.
Globalization on a corporate model has led to this race to the bottom, where the world’s biggest corporations really play a game of arbitrage, and they’re pitting especially developing countries one against the other, who can provide the lowest wages, the weakest worker rights regime, the fewest unions.
And, you know, the winner is really the loser, because they’ve got workers who are working really hard, putting in a hard day’s work, and very possibly putting their lives at risk, and definitely not raising their standards of living.
And when workers in any one country are allowed to be abused like that and have their rights repressed, it actually lowers the wages and the rights for workers all around the world. So, when we can try to improve it slightly through these trade agreements, that’s never going to be the silver bullet to really, really fix the problem.
We’ve got to address it globally, because it’s a global problem.
AMY GOODMAN: I also just wanted to point out Michael Froman has been in the news, the U.S. trade representative, longtime White House economic aide, nominated to be Obama’s trade representative, for having nearly half-a-million dollars in a fund based in the Cayman Islands, according to financial documents provided to the Senate Finance Committee.
The New York Times says, according to a 2011 document, that Froman had $490,000 in a fund managed by Citigroup based in Grand Caymans Ugland House, a modest whitewashed building that’s been widely cited as a symbol of tax avoidance, since it’s home to nearly 19,000 business entities seeking favorable tax treatment.
Jim Shultz, what’s the significance of that and the whole U.S. position on trade, who it is lobbying for?
JIM SHULTZ: You know, I don’t think there’s any question.
It’s all about U.S. corporations and large corporations, because if you think about it, what is the biggest threat to the ability of corporations to go into a country, whether it’s El Salvador, Bolivia, anywhere, and suck out the natural resources without any regard for the environment or labor standards? The threat is democracy, right?
The threat is that citizens will be annoying, get in the way, and demand that their governments take action. So, what corporations need is they need to become more powerful than sovereign states.
And the way they become more powerful by sovereign states is by tangling sovereign states in a web of these trade agreements that allow them to go to tribunal systems like the one at the World Bank and force governments to take these kinds of actions.
You know, I was at the U.N. yesterday, and there was a - I was talking about this, and there was a man from Kenya who was explaining, look, these bilateral investment treaties, these investor dispute resolutions, the corporate trade panels, they were imposed on his country, as they were in many countries, by the World Bank as conditions of lending.
So, it’s a straightjacket that the U.S. supports, because it is pursuing the interests of U.S. corporations. This has nothing to do with protecting public interest.
And it’s a violation of public interest and a blockade against democracy.
JUAN GONZÁLEZ: Jim, I’d like to ask you something not directly related to the TPP, but last month Bolivian President Evo Morales ordered the expulsion of the United States Agency for International Development, USAID...
JIM SHULTZ: Yeah, I heard about that.
JUAN GONZÁLEZ: - from his country. You’re very familiar with the situation in Bolivia. In a speech, Morales cited the recent comments of Secretary of State John Kerry, referring to Latin America as the U.S. backyard. He also accused USAID of using international assistance for political destabilization.
Your assess...
AMY GOODMAN: We have a comment of him saying this.
JUAN GONZÁLEZ: And we have a - yeah, we have a comment of Kerry saying that.PRESIDENT EVO MORALES: [translated] Some institutions from the U.S. embassy continue to conspire against this process, against the people, and especially against the national government.
And that is why, using this gathering and the 1st of May, we’ve decided to expel USAID from Bolivia. USAID is leaving Bolivia. I ask our brother foreign minister to immediately speak with the U.S. embassy.
No more USAID, which manipulates, uses our brothers with charity.
JUAN GONZÁLEZ: And for our radio listeners, that was obviously not John Kerry, because his Spanish is not that good. That was Evo Morales, the president of Bolivia.
Your comments?
JIM SHULTZ: Well, you know, it’s a double-edged sword.
There certainly are projects in public health, these kinds of areas, where USAID has provided funding, and it’s not political, and those programs are going to lose their funding. But it’s on the U.S.'s doorstep.
The fact is that the United States government has historically used USAID to have a political agenda to strengthen the opponents of the government.
And, you know, Bolivians don't feel any more happy about that than people in the United States would, if we found out that the Chinese government was funding Democracy Now! And so, I think that this is really what’s behind it.
But the reality - and this, I think, is important to know - Bolivia and the United States really don’t have any strategic interests with one another anymore. That’s really the heart of it.
Bolivia doesn’t really matter to the United States. It’s not a strategic player. And the United States really doesn’t matter very much to Bolivia. They haven’t had an ambassador since 2007.
So, I think that what you’re seeing is - it’s just a bad relationship that is not getting any better. And, you know, there’s always a lot of support in Bolivia when the president says something against the United States, and this is a good time politically for him to do that. You know, USAID’s money has been cut radically over the last few years.
There’s just really not much left of the relationship altogether.
AMY GOODMAN: Well, we want to thank you both for being with us, Jim Shultz of the Democracy Center, usually in Bolivia, here going to the United Nations today, and Celeste Drake of the AFL-CIO.
The AFL-CIO and Celeste Drake are going to be testifying before the Senate Foreign Relations Committee today on labor issues in Bangladesh.
When we come back, we’ll be speaking with the mayor-elect of Jackson, Mississippi.
Stay with us.