The Obama administration is currently negotiating two trade agreements, the Trans-Pacific Partnership (TPP) with 11 other nations and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union. The substance of these emerging agreements, negotiated largely in secret, appears to be an embarrassing mess of new powers for corporations with little to no enforcement mechanisms for environmental and labor standards. And the White House can’t seem to explain why the benefits of these deals are worth the cost.
So far, the administration and outside corporate supporters have just stuck to anodyne talk about jobs and exports, floated theoretical estimates of the economic impact generated by pro-trade organizations, and talked obscurely about enforcement standards. Here’s the United States Trade Representative, Ambassador Michael Froman, addressing mayors about global trade pacts:
[T]he Trans-Pacific Partnership (TPP)…will grow the export of Made-in-America goods to eleven countries in the Asia-Pacific region, supporting jobs here at home while strengthening environmental protections and improving working conditions throughout the Pacific Rim. And the second is the Transatlantic Trade and Investment Partnership (TTIP) that would decrease remaining barriers in an already robust relationship, streamlining regulations for U.S. workers and firms.
The collective economic potential of these partnerships is compelling. Combined with existing agreements, these partnerships would allow American businesses to sell more products to 1.5 billion consumers globally who represent two-thirds of the world’s GDP. The addition of T-TIP and TPP to our collection of free trade agreements means at least 28 states would have exceeded $10 billion in annual exports based on the most recent economic data.
And here’s the latest release from the Office of the United States Trade Representative on “Environmental Protections in the TPP”:
U.S. negotiators have made clear where we don’t agree with weaker TPP proposals on environmental provisions, and just how serious we are about making sure that the obligations in the environmental chapter are subject to the same enforcement processes as obligations elsewhere in the TPP, including recourse to trade sanctions.
It’s true that U.S. negotiators are fighting alone on some of these issues -– but that’s exactly what they’re doing: pressing harder, not retreating.
All of this sounds pretty vague. And for good reason: the concrete proposals and enforcement mechanisms in TPP and TTIP are often terrible. When environmental leaders looked into the actual current draft of TPP’s environment chapter, recently obtained and posted by WikiLeaks, Michael Brune, the executive director of the Sierra Club, lost it. “If the environment chapter is finalized as written in this leaked document, President Obama’s environmental trade record would be worse than George W. Bush’s,” he said. “This draft chapter falls flat on every single one of our issues — oceans, fish, wildlife, and forest protections — and in fact, rolls back on the progress made in past free trade pacts.”
His complaints are eminently reasonable: among other things, TPP lacks legally enforceable environmental provisions in critical areas to counteract the enormous latitude it gives to global polluters.
But the environment is hardly the only issue area where the White House is dodging the ugly particulars. Take provisions in both treaties expanding the scope of “investor-state dispute settlements.” This inoffensive-sounding provision essentially gives corporations sovereign status to fight domestic governmental regulations that they deem harmful to their profits in a binding international tribunal.
For example, pharmaceutical giant Eli Lilly is using NAFTA’s dispute settlement provision to sue the Canadian government for $500 million over court rulings that invalidated its patents for not meeting patient needs or advancing medical science. A Canadian mining giant, Pacific Rim, is suing the Salvadorian government for a theoretical loss of profits after a potential mining deal was rejected because of opposition from the local population concerned about contaminated water supplies. This is the future of expanded corporate sovereignty in trade deals — companies suing governments all over the world to “recover” profits real or imagined that have been affected by public interest regulations.
If the president believes that foreign companies should be able to appeal U.S. environmental, labor, and other regulations to an international tribunal, then he should say so. If not, then what is his administration doing to improve the deal?
As it stands, the White House is adrift. The president and his team talk abstractly about the theoretical gains of increased trade — a potential increase in exports and jobs and higher living standards for those in other countries, which are obviously important gains if real — without engaging much on whether these specific deals are good ideas. This is a head-scratching political position for the Obama administration, and it will likely win the president few converts on his own side or among the American public.
Given this justifiable skepticism, he should probably thank Senate Majority Leader Harry Reid (D-NV) for quashing his request for fast-track trade authority, which would have allowed TPP and TTIP to dodge the amendment process in Congress. It will save the president a big political headache and force a more open debate about what is in these documents — and perhaps actually lead to solid trade agreements worthy of the White House’s support.