The Negative Impact of the Trans-Pacific Partnership – January 2014

Question: What’s So Bad about the Trans-Pacific Partnership?

Publication Month: January 2014

I have long opposed so-called “free trade.” There are two reasons. First, I believe that the direction modernity has taken in general has weakened human communities and damaged the natural environment. We have rightly celebrated individual persons, their rights, and their freedom, but we have falsely supposed that the flourishing of persons can occur best without the context of community life. The dominant economic theory has embodied and furthered this self-destructive individualism, and it is on the basis of this error that it supports “free trade.”

Second, the supporters of international free trade find their support in the writings of Ricardo. They generally ignore the fact that Ricardo would not support “free trade” in today’s world. Ricardo explicitly stated that free trade between countries increases efficiency and leads to the benefit of both of the trading partners only when capital remains immobile. That means that U. S. investors would invest only in the United States, Chinese investors, only in China, and German investors, only in Germany. At the time Ricardo wrote, it may have been that most investments were at home. Today, of course, this is far from the case. In these changed circumstances, there is no basis in Ricardo’s economic thinking to suppose that “free trade” between nations benefits the people of both.

Some of us remember that when NAFTA was enacted, we were assured that the increased economic wellbeing of Mexico would reduce the pressure of Mexicans seeking to cross the border to find work. A genuine free trade agreement might have had some such effects, although there is no guarantee. But NAFTA was not really designed with the economists’ ideal of free trade in mind. It was designed to end the protection of small farmers in Mexico from competition with corn grown by U.S. agribusiness and highly subsidized by Washington. It was also designed to undercut U.S. industrial labor unions by allowing U.S. corporations to produce for the U.S. market with Mexican labor in factories just across the Rio Grande. In addition, it was designed to enable United States investors to buy businesses in Mexico that previously had to have majority ownership by Mexicans.

Put broadly, under the positive sounding rubric of “free trade” NAFTA destroyed much of Mexico’s peasant agriculture, weakened American labor unions, and opened up Mexican business to U.S. control. Sadly, many idealists in the United States, including professors of Christian ethics, supported NAFTA under the illusion that poor Mexicans would benefit. Unfortunately, also, the economics profession as a whole is so committed to increasing market activity as the one undoubted “good” that this and subsequent “free trade” agreements have had its blessing.

A simple analysis will show who is “free” under these agreements. Corporations are freed to produce where labor is cheap and where there is little concern for the environment. Who is bound? The ability of governments to protect their people and their land is severely restricted. Speaking very broadly, these agreements transfer power from governments to transnational corporations. The most powerful of the latter are now the banks. Since it is national governments that are disempowering themselves by these agreements, it is clear that these governments no longer represent their people. They are instruments of the corporations and now, especially, of the banks.

When NAFTA was enacted, the chief opponents were labor unions and environmentalists. Clinton mollified them by enacting “side agreements” that supposedly dealt with labor and the environment. This window dressing sufficed to overcome the opposition to NAFTA of many people of good will. However, NAFTA was the last trade agreement to be discussed widely in the press and by the people and to seek the consent of the people. Subsequently the obviousness of who benefits and who loses has made it necessary to ram the agreements through without serious public discussion.

The Trans-Pacific Partnership illustrates how this is done. Over a period of several years, it has been negotiated in secret. Those at the table have been corporate and financial interests. The “public” has no chance to participate. Although a number of people have known that negotiations are going on, the existence of such negotiations has been kept out of the public media. Americans pride themselves on a free press, but the silence of our popular media is one of many indications that they are tightly controlled. Even mentioning that such an agreement was in the offing invited condescending comments (or worse) from those liberals who are sure that their favorite liberal commentators would tell them if any such threat existed. To note that Democratic administrations are as committed to the service of transnational corporations as Republican ones is regarded by liberal Democrats as disloyal radicalism. But the fact remains that liberals cooperate with conservatives in concealing the most important truths about what is going on in our world.

If the details of the agreement were publicly discussed, there would be enormous objection by many sectors of the American public, liberals and conservatives alike. Hence, the time between the release of the information to the public and the Congressional action must be short. That means the agreement will be rushed to Congress. It contains hundreds of pages of detail. Probably no representatives or senators will read it all, and only a few aides. Most important, it will be placed on “fast-track.” This means that it cannot be amended and that action on it will have priority over everything else. Most of our politicians are indebted to some of the corporations who stand to benefit and will be under pressure to vote without detailed discussion. The administration will pull out all the stops. The media will continue to cooperate in keeping the discussion of the topic low keyed. A few of us “radicals” and “conspiracy theorists” will complain around the edges.

This whole process is very different from what the writers of the Constitution envisaged. These authors assumed that important international agreements were “treaties,” and they made the adoption of a treaty quite difficult. Hence, the constitutionality of the current treatment of these international agreements depends on labeling them in a different way. It is assumed that a different label frees them from the requirement of public discussion and serious debate in the Senate, even though, like treaties, its provisions trump existing laws. Indeed, enacting these agreements requires special procedures that simplify the process even in comparison with normal legislation. I doubt that any of those who created the Constitution would have thought that our democratic processes could be circumvented and abrogated so easily by international agreements. That this can go forward with very little protest is another sign of the subservience of our government and our media to corporations.

Thus far I have talked about “trade agreements” in general, with TPP simply illustrating how they are negotiated secretly and then rammed through Congress. I oppose them all, both for their content and for the wholly undemocratic process by which they change our laws. The recognition of what they really are has grown despite the support given them by the media. Now we should also note that each successive agreement carries the domination of corporations over governments further. Clearly, the corporate world now wants to do away with the last vestiges of popular control over the life of the people.

There is growing concern in this country about the rich getting richer and the poor, poorer. There is also growing concern about how we are inducing climate change that will prove utterly disastrous for our descendants. These concerns play a very minor role at the national level, but they are slowly gaining strength in many localities and, in some instances, at the level of the states. Now suppose that TPP is enacted and that the Japanese build a factory in California. Suppose that we raise the minimum wage or enact new restrictions on pollution. If the Japanese corporation judges that this state legislation reduces its profits, it can sue. It will not sue in California or U.S. courts, but in a special courts set up by TPP to judge such matters. These courts are intended to protect the corporation from such political infringement on its profits; so there is little doubt that the corporation will win.

This kind of arrangement exists in many “free trade” agreements already. For example, Philip Morris successfully sued Australia for lost profits as a result of Australia’s efforts to discourage smoking. To put it mildly, efforts to benefit workers or improve the environment through legislation will be severely discouraged.

Wikileaks has just released the ninety-five pages of the TPP agreement dealing with intellectual property rights. This alone will have a major effect on civil rights and access to medicines, among other things. I understand that the TPP will make it more difficult for foreign doctors to practice in the United States—a significant twist on “free trade.”

Is this next step in the reversal of democracy simply our inescapable fate? I am not optimistic about blocking it, but it is not impossible. In 1997 the public administered a defeat to the proposal of a Multinational Agreement on Investments by persuading Congress not to give it fast-track status. Without that special status, agreements of this kind have little chance. Serious public discussion will make it impossible for many of our senators and representatives to vote for it. So our slogan should be “no fast-track.” It is very late to organize in defense of the people, but fortunately there is some structure of opposition to these “free trade” agreements already in place. Opposition can quickly get off to a running start.

Before long we will be confronted by still another trade agreement, this time between the U.S. and European Union. This is called TTIP, the Trans-Atlantic Trade and Investment Partnership. Since the provisions of these trade agreements supersede national laws and even constitutional provisions, little of importance will be left to the political process or even to the national and state courts. Apparently, Europeans are so upset to find that we are systematically spying on them, that TTIP negotiations may break down. However, moneyed interests usually find a way around these blockages.

I am in no way an authority on the TPP. Without knowing most of the specifics, I believe there are still other reasons to oppose it. This seems to be part of the U.S. effort to “contain” China. By binding Pacific Rim countries into the U.S.-dominated economic system, and by systematically excluding China, it will work in the same direction as the refocusing our imperial designs from the “Middle East” to the “Far East.” China’s amazing economic success is thought by imperial strategists to constitute a threat to our global hegemony. For being such a threat, even if unintentionally, China must be punished. May that “punishment” stop short of war! But, if you hear that the Chinese have engaged in some heinous act which our honor requires us to punish, remember the long history of false-flag operations before you let yourself be taken in by another one.