The Trans-Pacific Partnership has been a hot topic in the 2016 presidential election. President Obama has been actively promoting the TPP, hailing it as a progressive trade deal that would create jobs and protect the environment. Progressive leaders, Bernie Sanders, Elizabeth Warren and Keith Ellison, are not convinced and have rallied vigorously against it, warning that it would hurt jobs and would initiate a race to the bottom.
Most people will not review the 6,000 pages of the trade deal, let alone understand all its intricacies and implications. I fear that many won’t pay enough attention to the significance of this deal. I hope to present in this column a simple but compelling argument demonstrating why the TPP should be defeated.
The Obama administration declares that the TPP would lead to “more higher-paying American jobs,” and would even “support American manufacturing jobs.” In the President’s effort to promote the deal, he appeared on Jimmy Fallon’s show and humorously “slow jammed the news,” arguing that the TPP would create jobs:
Look, Jimmy! The TPP allows American businesses to sell their products both at home and abroad. The more we sell abroad, the more higher-paying jobs we provide here at home. It’s that simple.
This sounds very familiar. Let’s go back in time to 1993 when Bill Clinton signed the North American Free Trade Agreement (NAFTA.) President Clinton asserted (emphasis mine):
We will make our case as hard and as well as we can. And, though the fight will be difficult, I deeply believe we will win. And I’d like to tell you why. First of all, because NAFTA means jobs. American jobs, and good-paying American jobs. If I didn’t believe that, I wouldn’t support this agreement.
Bill Clinton contended that NAFTA would “create 200,000 American jobs in the first two years of its effect,” and would increase to “a million jobs in the first five years of its impact.”
Critics, led by the AFL-CIO, disagreed. They warned against NAFTA, arguing that it would “cost America 500,000 jobs.” It turned out that these critics were
wrong; the outcome was even worse than what they predicted. A study by Economic Policy Institute shows that NAFTA has contributed to the loss of 682,900 American jobs by 2010, mostly from manufacturing jobs.
Who’s Behind the TPP?
The TPP is supported by corporations, lobbyists, and special interests. The most influential group pushing for the passage of the deal, the US Business Coalition for TPP, is supported by large corporations like Exxon Mobil, Toyota, JPMorgan Chase, Verizon, Hewlett-Packard, Apple, etc. The TPP is also endorsed by anti-union organizations such as the Koch brothers-backed American Legislative Exchange Council, the Business Roundtable, and the National Association of Manufacturers.
In the first quarter of 2015 alone, the corporate members of the US Business Coalition for TPP contributed to each US senator who voted to fast track the deal. A total of $1,148,971 was contributed. The special interest group gave most to Democratic holdouts, Ron Wyden, Michael Bennet, and Patty Murray, who were facing re-election in 2016.
Labor unions and environmentalists opposed the TPP, calling it “NAFTA on steroids.” The AFL-CIO has warned that the TPP would “ship jobs overseas,” and would “undermine U.S. job creation efforts.”
Over 450 environmental groups signed a letter calling for the opposition to the trade deal and are concerned that fossil fuel companies would benefit greatly from the deal.
This is not very different than what happened over twenty years ago when the NAFTA trade deal was also fast-tracked, eliminating the ability for Congressmen and Congresswomen to debate the deal or request amendments. Big businesses spent millions on advertisements in support of NAFTA and contributed financially to pro-NAFTA Democrats and Republicans. “It’s a no-brainer. If we say yes to NAFTA, we say yes to jobs,” one ad claimed.
Research in Economic Policy Institute shows that:
Among pro-NAFTA Democrats, the dominance of business PAC money is quite striking (33.2 percent versus 12.1 percent from labor PACs). Thus, if anyone was voting his or her PAC money, it was pro-NAFTA Democrats, not anti-NAFTA Democrats. (It is also worth noting that pro-NAFTA Republicans received the highest proportion of all of business PAC money — 34.7 percent).
Corporations didn’t stop there; the Associated Press reports:
In the battle over NAFTA, some companies are wooing potential supporters with offers that might be difficult to refuse. Corporate titans such as the Big Three automakers, Wal-Mart and TRW are soliciting backing from employees, suppliers and even shareholders for passage of the North American Free Trade Agreement.
But Doesn’t the TPP Establish Labor and Environmental Standards?
The Obama administration called the Trans-Pacific Partnership “the gold standard of trade agreements,” promising that it establishes labor and environmental standards.
But this was promised before. In his presidential campaign in 1992, President Clinton supported NAFTA but promised to establish side agreements to address its shortcomings. These side agreements: “North American Agreement on Labor Cooperation” and “North American Agreement on Environmental Cooperation” were intended to protect workers and the environment. But as John MacArthur explains in his book “The Selling of ‘Free Trade’: NAFTA, Washington, and the Subversion of American Democracy,” these provisions “were worth very little more than the paper they were written on.”
Corporations Will Sue the Government
These trade deals give corporations the power to challenge laws and regulations of any country involved in the trade deal. The investor-state dispute settlement (ISDS) cases would be decided not by judges, but by lawyers who typically represent corporations. Sierra Club reports that “these “investor-state dispute settlement” (ISDS) cases would be decided not by judges, but by lawyers who typically represent corporations,” with 63 percent of tribunal judges in existing cases being full-time private lawyers.
Just recently, TransCanada sued the United States, under the NAFTA agreement, for rejecting the controversial Keystone Pipeline, demanding $15 billion in costs and damages.
But Corporations can go further. The tobacco giant Phillip Morris sued three countries: Australia, Norway, and Uruguay for implementing plain packaging and anti-smoking campaigns to educate the public about the harms of tobacco. John Oliver describes it best:
The Simple Argument
The simple argument against the TPP boils down to this: The TPP, just like the NAFTA, is supported by Republicans and opposed by progressives; it gives corporations the power to challenge laws and was sold as a job creator. Most importantly, both trade deals were supported by lobbyists, corporations, and special interests and opposed by labor unions and environmentalists.
Time proved that labor unions and environmentalists were the ones who were right all along about NAFTA. The government promises of more jobs were simply… just promises. Thanks to NAFTA, the United States lost around 700,000 good paying jobs to Mexico, and income inequality soared. Corporations, on the other hand, got what they hoped for and benefited greatly from the deal. Now the same groups are trying to convince you that the TPP will create good paying jobs and that the concerns by labor unions and environmentalists are unfounded.
There’s a saying: The definition of insanity is doing the same thing, but expecting different results.
Yes! It’s insane to believe that the TPP will be a job creator.