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The Trans Pacific Partnership: 5 Problems

By   Follow Me on Twitter     Message Bob Burnett       (Page 1 of 1 pages)     Permalink

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Since 2010, the United States has been negotiating a secret trade deal, the Trans Pacific Partnership.  If approved by Congress, this pact between the U.S. and 11 or 12 of America's Pacific Rim trade-partners would govern 40 percent of US imports and exports.  So far, the negotiations are being conducted under tight security; for good reason, as there are big problems with TPP.

1. US trade negotiators want TPP to get special, "fast-track" treatment from Congress.  While Congress has the legal duty to oversee trade agreements, in the past it has given up some of that responsibility to the President.  Under a fast-track arrangement, trade agreements such as TPP, would simply get an up or down vote without Congress delving into the details.  The previous fast-track authorization lapsed in 2007 and now the Obama Administration wants Congress to restore it so that TPP will be approved with a minimum of fuss.

Interestingly, most Republicans are willing to give "fast-track" trade authority to President Obama even though they don't trust him on other issues.  That's because powerful transnational corporations want the Trans-Pacific Partnership to be approved.  The US Chamber of Commerce stated, "Completing the TPP would pay huge dividends for the United States. The agreement would significantly improve U.S. companies' access to the Asia-Pacific region, which is projected to import nearly $10 trillion worth of goods in 2020." 

2. TPP doesn't include China.  The TPP partners are Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam, and potentially Korea.  But the Economic Policy Institute reported that since 2001, "the U.S. has lost 2.7 million jobs" due to growing trade deficits with China."  The  American Manufacturing website noted that approximately 40 percent of the US trade deficit is due to China, which "maintains numerous policies, including state-sponsored subsidies" [that] have a direct role in increasing the US-China trade imbalance."

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Recently, United Steelworkers president Leo Gerard observed that a key problem with TPP is the definition of "domestic product:"  "We're supposed to compete with countries that are getting their parts from China" and exporting materials to here, when if they have 35% of material from their country they're called "a domestic product'."  In other words, a country such as Vietnam could get the majority of their material from China, assemble it in Hanoi, and then ship it to the US as as a "domestic product" -- even when most of the content came from China.

3. Free-trade agreements, such as TPP, haven't protected US jobs.  Public Citizen reported that since 1994, "the [freed-trade agreement] deficit surge implies the loss of nearly one million American jobs."  Public Citizen said wherever there were free-trade agreements US trade deficits increased and in the countries not covered by free-trade agreements our deficits decreased.

Recently, Campaign for America's Future revisited the US trade agreement with Mexico -- NAFTA:

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In 1993, the broadest assurance by those selling this model -- including almost all Republicans and President Clinton -- was that it would create U.S. jobs by expanding the trade surplus the U.S. then enjoyed with Mexico" Now the U.S. suffers chronic $60 billion-$70 billion annual trade deficits with Mexico and by this summer the accumulated U.S. current account losses with Mexico under NAFTA will pass $1 trillion. 

The Economic Policy Institute says the US lost an estimated 700,000 jobs due to NAFTA.

4. If TPP were to be approved, most of the benefit would go to corporations and the rich.  Public Citizen reported, "the TPP would mean wage losses for all but the richest 10% of U.S. workers."

 5. There are a wide variety of serious issues that need to be discussed by Congress and the American public.  For example, the Washington Post reported

The United States is proposing a number of provisions designed to strengthen and extend brand-name pharmaceutical companies' monopoly privileges. For example, several provisions would support the pharmaceutical firms' practice of "ever-greening" in which a firm will hold a patent on drug "x' in tablet form, then later obtain a patent on drug "x' in a gel cap, and later still obtain another patent on the same drug in capsule form. This extends patent life on a known substance, despite no new medical efficacy; thus it delays generic competition.

As another example,

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[TPP] includes provisions similar to those of the failed Stop Online Piracy Act (SOPA), and Protect Intellectual Property Act (PIPA), and the Anti-Counterfeiting Trade Agreement (ACTA) that the European Parliament ultimately rejected. The United States appears to be using the non-transparent Trans-Pacific Partnership negotiations as a deliberate end run around Congress on intellectual property, to achieve a presumably unpopular set of policy goals.

The obvious first step is to ask Congress to deny the White House fast-track authority so that the Trans Pacific Partnership can be fully vetted and the public made aware of all the details of the labyrinthian agreement.


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Bob Burnett is a Berkeley writer. In a previous life he was one of the executive founders of Cisco Systems.

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