The Republicans are up to it again. Once again, they are trying to further devastate the Middle Class. Under the guise of a popular idea, international trade, they have built a monstrous bill that they hope to run by the American Public, secretly inserting segments that will further reduce the power of average citizens. The Trans Pacific Partnership (TPP) a bill to create free trade between the U.S. and Asian countries is loaded with amendments that are designed to damage the lives of Americans on behalf, once again, of global corporations.
The Republicans want to “fast track” this bill, which, in this case, means to slip it past the American public whom they feel is too stupid and too lazy to stop anything that corporations do to us. Huge numbers of Americans, as well as the Democrats in Congress have already recognized the poison pills embedded in this bill and need support to defeat it. It has the same characteristics that every Koch Brothers-sponsored, Right Wing Republican, small-business bankrupting, Middle Class impoverishing bill has that passes through the many Republican state legislatures now, written by corporations, and passed on through ALEC-bribed legislatures.
For example, oil companies would have the right to export natural gas–that Americans think is for domestic use—without government approval. Fracking companies get the right to sue the government for damages if Congress tries to enforce protections for air or water. Drug companies can extend their patents for years, thus denying generic drugs for much longer to the poor and middle-class elderly on fixed incomes. Rules involving the mandated purchase by government of American products would be undone.
So these are some of the poison pills introduced into the TPP. But let’s suppose that those provisions could be removed. Is the bill itself worthwhile or does it damage U.S. Workers? Well, previous trade bills have been said to already damage U. S. workers. But is that completely true?
If we suppose that an Asian country hits American products with a high tariff on the importation of American products, what has been the result? The result often was that the U.S. company gleefully fired its U.S. workers and moved a plant to that Asian country, which negotiation resulted in the sales that the corporation wanted without any penalties from anyone. Eliminating tariffs does not hurt American workers as much as Asian workers. Here’s why. Without a free trade treaty, these Asian countries, who have roughly similar wage rates have no need for tariffs, so they deal back and forth, with China and India as big beneficiaries, but other Asian countries as well. But what about the U.S. market? We’ve basically tried to use our market as an incentive to get our products into Asian countries. So Asian products have a gen-in-free card to most of the U.S. market already!
Now the provision called ISDS, which says that international courts may decide disputes between the American government and a foreign manufacturer must be stripped out. That is essential, as is the removal of all other pro-corporate provisions that damage American workers. Let us suppose that a foreign country violates a U.S. law on toxicity of a product. They could go before an international arbitration panel, sue the U.S. for not allowing that product into the U.S. and this panel, made up not of U.S. judges but corporate lawyers could end up costing American citizens billions of dollars in damages to foreign corporations who might be grievously violating U.S. laws. And getting big payouts on top of it. But here is something even worse. If a U.S. corporation has a problem, they have to go to the foreign country and make their case in the courts there. This is a rigged provision, set up by a panel of very large corporations to intimidate and short-circuit medium sized U.S. manufacturers from entering the world markets.
Dr. Larry Summers, former Secretary of the Treasury, former President of Harvard, is right that we need free trade because it is better than what we have now. And we need it more now because Asian wage rates are already becoming more favorable to U.S. workers. We need to begin doing more manufacturing here. Eliminating tariffs by treaty, which is the solid way of assuring that they stick, is the best course of action, of a number of relatively poor options. On the other hand, we need to be assured that any treaties are not imposed on the American people by secretive agendas of global corporations with headquarters here in the U.S. but manufacturing locations everywhere else.
After all, Americans have the right to be cautious. Former trade agreements have been responsible for the loss of millions of American jobs. Treaties that have promoted the relocation of facilities and jobs abroad have helped to bring about the huge decline in U.S. manufacturing, resulting in lower incomes and lower standards of living. Many Asian countries now have wages higher than those in the U.S. as a result of our shipping jobs from here to there. So why would they not ship jobs back? Because those manufacturing facilities are now selling products there and shipping products here, where we have become the free export market. Two thirds of American workers laid off as a result of our own trade policies with countries like Mexico and China never recovered their incomes. They now work for salaries that are 20% less and far less secure.
Let’s not take this treaty. Let’s go back to the original treaty on this sort of thing, the North American Free Trade Agreement of 1994. Referred to as NAFTA, (or as “Shaft-a” by Thom Hartmann) this treaty, according to Robert Zoellick, who was part of the first Bush Administration’s effort to push NAFTA on the public, goes on poetically of the closer ties with the U.S. by Canada and Mexico and talks of the many delights of our friendly ties, even quoting Bismarck to make a point about his vision of the future of Canadian-Mexican-American trade relationships. But, of course, as the international sales manager of any large corporation can tell you, for the past 100 years at least, our primary trading partners have been, normally, Canada and then Mexico, or vice versa.
Here’s what has changed since NAFTA—the trade balances between the U.S and Canada/Mexico. The total volume of traffic between the three countries now exceeds $1 trillion a year. But the more important number is that our trade deficits with those countries have gone from $27 billion in 1993 (before NAFTA) to $181 billion in 2012. Do you think that cost U.S. jobs? You’re damned right it did.
The fact is that even a really good trade bill, one not done in secret, as the TPP has been done, in order to keep from the American public, the corruption and the corporate involvement, would not create jobs here in the U.S. as the liars in the Republican Congress would have you believe. With those who are creating these secretive trade policies behind the scenes, pulling the strings, there is no way that TPP can benefit American workers or even American citizens who have incomes under the top 95%. What we know for sure is that these agreements have helped to enrich the already rich and add a substantial amount to income inequality.
Must we eliminate trade agreements altogether? No. As Dr. Summers says, global trade is here to stay. But as he also says, we have been giving away our markets and at the same time sending our jobs to Asia where products were returned here to be sold to those whose jobs had been sent to Asia. It makes no sense as it is currently being handled. But there are solutions.
European countries have strong trading relationships and their worker’s wages do not go down. Europe’s economic problems are financial, though much of their financial problem, created by the trillions of fraudulent securities sold by U.S. Wall Street firms, is now behind them. Their trading policies, as for example, Germany’s, take into consideration the stakeholders as well as the stockholders. European trade policies insure that the workers will not be left out in the cold when treaties are made. In Germany, for example, “codetermination” is a standard policy, with over 700 large corporations involved in this kind of organization. In such a system, boards of directors are composed half of stockholder and half of workers. Despite this organization, Germany exports far more as a percentage of GDP than the U.S., has corporations that are far more profitable, and has a much higher wage and living standard than the U.S. So Dr. Summers is not wrong. It is our corporate organization, in which boards of directors do not take into consideration any aspects of the consequences of free trade on workers that causes the problem.
Finally, we have many options with which to fight the effects of free trade on our economy and on our Middle Class. In addition cooperation between corporations and workers, we have a very simple way of attracting a far higher level of production, leading to better, more profitable products and higher wages. A surcharge on all products made by American companies in plants outside the United States but returned to the United States for sale to American citizens, in the vast and profitable American consumer market—the largest and most profitable in the world—would generate enough revenue to create an entirely new investment community for hi-tech manufacturing and job training.
This would not be a tariff on specific products but a flat percentage on all such products sold in American retail stores or through Internet outlets. A two percent surcharge on such products would generate a fund of some $20 billion or more that could be used to support venture capital efforts at alternative energy, new forms of transportation, batteries, solar panels, computer hardware and software and a variety of other products.
Free trade is important, especially as many countries in Asia, Europe and South America are gaining parity with American wages. Now the trade is indeed a free transfer of goods and services that complement each country’s skills with products from others. But be aware that the TPP, the Trans-Pacific Partnership is not that agreement. Not until all the Anti-American, anti-Middle Class, anti-American worker provisions have been stripped from the bill and new provisions created by advocates for America have inserted in their place.