December 11, 2018
Contributors Latest News | Joyce McLain | Ranked-Choice Voting | Anthony Cipolle | Today's Paper

Job losses aren’t the biggest problem: Congress should dump Trans-Pacific trade pact

George Danby | BDN
George Danby | BDN

After six years of secret negotiations, the text of the Trans-Pacific Partnership was finally made public last November. The TPP, a pact among 12 countries that together account for 40 percent of the world’s economy, is the most important international agreement that you’ve probably never heard of. But as its provisions have begun to be known, more and more Americans are concluding that the TPP must be stopped.

Trade representatives from the TPP will sign the agreement in New Zealand on Thursday, to be followed by ratification according to the laws of each country. In the U.S. this means a vote by Congress. But under “fast track” procedures adopted last year, Congress can’t amend the TPP, but can only approve or reject it after very limited debate. (All four members of Maine’s congressional delegation voted against authorizing “fast track” and in favor of preserving congressional authority.) This vote may take place as early as a month from now.

What’s wrong with the TPP? Let’s start with economic impacts. On Jan. 15, the BDN reprinted a pro-TPP editorial from The Washington Post. The Post cited a World Bank report predicting that by 2030 the wages of U.S. low-wage workers would increase by 0.4 percent, and those of high-wage workers by 0.6 percent. This amounts to a measly 4 cents per hour for low-wage workers earning $10 per hour, and 15 cents per hour for high-wage workers earning $25 per hour. It’s hard to believe that economic science can forecast such tiny effects 15 years in the future.

Other studies are much less optimistic. A new report from Tufts University’s Global Development and Environment Institute, which included the effects of the TPP on employment levels and inequality in the analysis, unlike the World Bank study, found that the TPP would cost 448,000 U.S. jobs while reducing labor’s share of GDP and increasing income inequality in all TPP countries.

These economic arguments actually miss even larger problems with the TPP, including threats to jobs, the environment, health care, food labeling, food and consumer product safety, and to financial reforms designed to prevent another global economic crisis. In a number of areas the TPP rolls back provisions that were included in Bush-era trade agreements.

The TPP’s biggest threat, its Investor-State Dispute Settlement (ISDS) provisions, strikes at the heart of our democracy. The ISDS mechanism allows foreign corporations to sue governments for lost anticipated future profits caused by laws and regulations. These suits, which will be binding on the countries that are part of the TPP, are heard by private tribunals staffed by private-sector lawyers who rotate between judging a case one day and being advocates for investors the next day. The ISDS lacks the standards for transparency, conflict of interest and due process that are common to the legal systems of most TPP countries, and there is no appeal mechanism. It is hugely expensive for a government to defend itself in an ISDS case — $8 million of legal costs on average.

In our work with communities in El Salvador, PICA, or Power in Community Alliances, has seen a Canadian mining company use the ISDS provisions of the Central American Free Trade Agreement to sue El Salvador for hundreds of millions of dollars over that country’s efforts to prevent environmental devastation by regulating mining. Canada is not a party to CAFTA, so the Pacific Rim Corporation opened an office in Reno, Nevada, for the express purpose of being able to sue under the CAFTA provisions.

The TPP more than doubles the number of corporations that could sue the U.S., while expanding the range of issues over which they could sue. And it’s easy to imagine ways in which many more companies from non-TPP countries could get in on the action — say, a Chinese company opening a subsidiary in Vietnam or Malaysia (both part of the TPP) — to stymie our own regulations.

Think about having Maine’s efforts to craft our own strong mining regulations taken out of our hands. This is not the way democracy is supposed to work.

Sens. Susan Collins and Angus King and Reps. Chellie Pingree and Bruce Poliquin should vote no on the TPP. Let’s start over with an open process.

To quote radio commentator Jim Hightower, “If you’re not at the table, you’re on the menu.”

Jonathan Falk lives in Carmel and is a volunteer with Bangor-based PICA — Power in Community Alliances.

 


Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like