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Kim writes: "All this trade talk can seem an impenetrable thicket of arcane economics and alphabet soup. Here we provide answers to some basic questions."

President Barack Obama speaks while Japanese prime minister Shinzo Abe listens during a news conference. (photo: Mark Wilson/Getty)
President Barack Obama speaks while Japanese prime minister Shinzo Abe listens during a news conference. (photo: Mark Wilson/Getty)

Nine Things You Might Want to Know About the Massive Pacific Trade Deal

By E. Tammy Kim, Al Jazeera America

30 April 15


apan’s Prime Minister Shinzo Abe arrived in Washington Monday amid unrest and anxiety in a deeply segregated Baltimore. But Abe and President Barack Obama met to quell anxieties of a national kind: economic and strategic, provoked by fears of a rising China.

Two topics are on the agenda — the Japan-U.S. Security Treaty, which Abe hopes to strengthen as part of a broader push toward militarization; and the Trans-Pacific Partnership (TPP), a trade deal of unprecedented scale and part of Obama’s long promised pivot toward Asia.

The TPP aims to establish the world’s largest free-trade zone, affecting an estimated 40 percent of global commerce. Japan and the U.S. are the biggest players in this 12-country agreement, nearly a decade in the works, but their citizens still know little of the agreement’s contents. Now, in the U.S. a fast-track bill moving through the Senate could accelerate the process for making the TPP binding.

All this trade talk can seem an impenetrable thicket of arcane economics and alphabet soup. Here we provide answers to some basic questions: Are accords like the TPP still necessary in our Internet-enabled, globalized world? What makes trade more or less free? And what does it all mean for workaday people in the U.S. and the other TPP nations?

A new template for business

Trade between nations is an ancient reality. Yet it wasn’t until after World War II that a large number of countries agreed to rules for international exchange. Since the 1990s, the World Trade Organization (WTO) has overseen tariffs and industry-specific rules on exports and imports, and helped resolve disputes — for example, between the U.S. and China on automotive tires. Most trade economists now agree that the WTO, which operates by consensus, is too large and unwieldy to keep up with a fast-changing economy

More and more, countries have negotiated bilateral and plurilateral free-trade agreements, and multinational corporations do business in dozens of countries at a time. The plurilateral TPP, for better or worse, could supplant the WTO and provide a new blueprint for international trade.

So much more than tariffs

The TPP goes well beyond reducing import fees and other barriers to international commerce: It could set rules for intellectual property, food safety, fisheries management, carbon emissions, labor conditions and the rights of private investors.

Why so secretive?

As with the controversial North American Free Trade Agreement (NAFTA) in 1993, the TPP has been written behind closed doors. Participating governments say this is necessary, given the complexity of the text and the back-and-forth nature of negotiation. In the U.S., this logic has supported fast-tracking trade since the 1970s, and Congress is attempting to do the same now.

Republican leaders in Congress, uncharacteristically aligned with Obama, have attempted to reassure the public that their Trade Promotion Authority (TPA) bill does not sacrifice transparency. If passed, the TPA would do away with normal debate — Congress would only vote yea or nay — but the public would have at least 60 days to examine the full text of the TPP. Free-trade detractors and those in favor of open government — including WikiLeaks, which obtained and released draft sections of the TPP — believe such a massive deal should be negotiated in public and voted on according to regular congressional procedures.

Winners and losers

An official draft of the TPP isn’t available, but the Obama administration has offered favorable numbers to make its case, and nongovernmental proponents and opponents have weighed in with calculations of their own. Boosters say the TPP could add $77 billion per year in income benefits to the U.S. economy. Critics such as the AFL-CIO, the largest union confederation in the country, say the TPP will put Americans out of work

The tradeoffs of “free trade”

In each of the 12 countries involved, some will win big; others will lose profoundly.

Agriculture, environment and food safety: The deal will likely give a boost to U.S. crop growers — and meat producers in the U.S., Australia, Canada and New Zealand — by giving (mostly corporate) farms increased access to Japan. This worries Japanese farmers, who anticipate a flood of cheap imports, and American environmentalists who foresee increased use of scarce water supplies by the agriculture industry.

Vietnam’s seafood industry is counting on the TPP to give it new export opportunities in the West — causing concern among fishers and aquaculturists in the U.S. American food safety advocates are also wary: It is unclear what kinds of inspection and phytosanitary guidelines (PDF) the TPP will impose.

The TPP could also be a disaster for the climate, says the Sierra Club and other environmental groups. Developing nations in the pact — including Peru, Malaysia and Vietnam — have opposed limits on fossil fuel subsidies, and the TPP may incentivize exports of fracking-obtained liquefied natural gas.

Medicines and free speech: Obama has talked about exporting “innovation and tech,” “the best products in the world.” What he means, it seems from the leaked draft of TPP’s intellectual property chapter, is that copyrights and patents would be strengthened. Human rights activists say this will deny consumers access to HIV/AIDS, tuberculosis and cancer drugs and limit governments from mandat[ing] lower drug prices for low-income patients. In Japan, Internet-freedom advocates have condemned U.S. demands for an ill-conceived copyright term extension and copyright prosecutions that could chill fair use

Manufacturing and service work: The Obama administration says the TPP will give domestic automakers new access to the Japanese market and raise working conditions in developing member states. At the same time, they acknowledge that many workers will lose their jobs: Labor Secretary Thomas Perez promised to advocate for $575 million in annual trade adjustment assistance to compensate the newly unemployed.

American unions oppose the TPP, pointing to 700,000 in job losses from NAFTA and predicting that manufacturing and legal and clerical services will be shipped abroad. Indeed, Vietnamese and Malaysian companies — making clothes and electronics — hope this will be the case.

Transnational corporations and wealthy investors: It is telling, say Sen. Elizabeth Warren, D-Mass., and other critics, that tech companies, banks, Big Ag, pharmaceutical giants and Hollywood are united in their support of free trade. In addition to new business opportunities the pact affords, corporations and individual investors would also be given the right to sue any TPP state over perceived takings — including lost profits, according to some observers. Advocacy group Public Citizen argues that this would put the world’s 1 percent on the same footing as nations and cost millions in taxpayer dollars (PDF).

Competing with China: China is not a member of the TPP. The Obama administration has made clear that the deal is, at least in part, a response to Chinese power: a way of ensuring that China does not set up rules that advantage Chinese workers and Chinese businesses. TPP detractors, including prominent Democrats and the AFL-CIO, accuse Obama of conflating foreign policy and trade your social media marketing partner


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+48 # RnR 2015-04-30 18:53
Uh...if O and Co want to prevent China from setting up rules advantageous to China why not just make it illegal.

I don't buy it. I'm sorry the history of this government (no matter which party has been in office since the JFK assassination) has been to chip away at the american people to the benefit of themselves and their coporate gods.
+47 # Texas Aggie 2015-04-30 22:21
There are a bunch of issues here deleterious to the interests of ordinary Americans, but the one that sticks out is the one that gives corporations, via their lawyers and lobbyists who sit in judgment, the right to penalize governments at all levels for interfering with corporate profits. NAFTA has shown us that in action and this one will be even worse.

Then there is the one where farmed sea food from Southeast Asia will be sent over with no restrictions as to drugs that are used to prevent diseases in the shrimp or spoilage from poor refrigeration. At the moment the USDA inspects less than 5% of imported food, and when they do catch spoiled or contaminated sea food and send it back to Southeast Asia, the corporations just relabel it and send it through the system again. Regulating those things would be considered an interference in free trade. Also, restrictions on financial institutions would be removed because they restrict "free trade" and profits. It would be like Romney's fund that bought up businesses, sucked them dry, and then let them die, only it would apply to whole countries.
+32 # Jayceecool 2015-04-30 22:43
They won't let us see it first; what are they hiding?
+51 # MarthaA 2015-04-30 22:59
As a general rule, anytime a Republican or a Conservative is ok with legislation, it is because the legislation is not in the best interest of the majority populace of the USA.
+31 # MarthaA 2015-04-30 23:01
And, it is apparent that like Clinton, Obama is also a good Republican, just in the wrong political party.
+26 # RLF 2015-05-01 06:00
The problem is, Martha, that most of the most destructive trade deals have been completed under democrats. Maybe we need to face the fact, like Nader said, that there is only one party...the corporate party.
+26 # MarthaA 2015-04-30 23:04
Along with the Clintons, that makes Obama a DINO. There are too many DINOS in the Democratic Party, since there are only two political parties.
+24 # 47scooter 2015-04-30 23:13
Part 1 - In similar negotiations with the European Union on the TTIP (TransAtlantic Trade and Investment Partnership), Matthias Fekl, France's Secretary of State for Foreign Trade, has made it clear that France will not support the inclusion of the Investor State Dispute Settlement mechanism (ISDS) in a potential TTIP agreement.

“France did not want the ISDS to be included in the negotiation mandate,” Matthias Fekl told the French Senate. “We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,” he added.

Then this disputable claim from that same article:

“...‘Investor State Dispute Settlements have never been, and will not be, a way for businesses to challenge legislation they do not agree with,’ an American negotiator said in Paris.”
+27 # 47scooter 2015-04-30 23:14
With facts proving otherwise, an article from the Washington Post:

“The use of ISDS is on the rise around the globe. From 1959 to 2002, there were fewer than 100 ISDS claims worldwide. But in 2012 alone, there were 58 cases. Recent cases include a French company that sued Egypt because Egypt raised its minimum wage, a Swedish company that sued Germany because Germany decided to phase out nuclear power after Japan’s Fukushima disaster, and a Dutch company that sued the Czech Republic because the Czechs didn’t bail out a bank that the company partially owned. U.S. corporations have also gotten in on the action: Philip Morris is trying to use ISDS to stop Uruguay from implementing new tobacco regulations intended to cut smoking rates.”

Also, then in September 2013, under the ISDS provision in NAFTA, Lone Pine Resources sued the Province of Alberta, Canada for $250million because Quebec placed a moratorium on fracking for natural gas under the St. Lawrence River.

An unusual aspect of that case is that Lone Pine is a Calgary-based firm and would not have had standing as a foreign entity to sue Canada under NAFTA, but company president Tim Granger said it can do so because it is registered in Delaware.
+1 # Jim Young 2015-05-03 22:53
Quoting 47scooter:
...Then this disputable claim from that same article:

“...‘Investor State Dispute Settlements have never been, and will not be, a way for businesses to challenge legislation they do not agree with,’ an American negotiator said in Paris.”...

That's like Hayden emphatically saying no NSA personnel invited into the [PRISM] program [implying it covered everything] expressed anything but extreme enthusiastic support for it (conveniently leaving out at least 5 very senior persons the public would expectto be among those to have been "invited" in but weren't. Some of the uninvited, like Thomas Drake, became whistle blowers they tried frame.

To put it another way, in this TPP snow job, they are trying to bluff us with their Luntz-speak type talking points, into thinking all the laws they will leave untouched will have any meaningful protections for us. They won't because the treaty gives them an end run around any applications of those laws they claim threaten their potential profits.

Doesn't it seem their leveraged buy out of our government threatens the "profits" of the 99% of real people? Shouldn't we have 99 times the opportunity to sue them instead?
+23 # RLF 2015-05-01 05:56
$77 billion a year income for the US! Big whoop! What they are not telling you is that 76.9% will go to the richest .1% and the working people of the country will get s#*t!
+18 # fredboy 2015-05-01 07:54
The latest plan has it that the empty shipping containers returning to Asia will contain the future of our kids, grandkids, and their kids.
+7 # Helen Marshall 2015-05-01 12:38
OH, well said.
+18 # Trish42 2015-05-01 08:45
I agree with Krugman that the demise of the economic future of this country can be seen in the export of manufacturing. We import nearly everything now. Now there's TPP that will open even more doors and increase job losses even further. And the ISDS will ensure that the government protects private corporations. How can any decent Democrat vote to fast-track this monstrosity??
+4 # Vegan_Girl 2015-05-03 15:04
It's not JUST manufacturing shipped out. It is also the corporations and rich refusing to pay taxes, and our government refusing to invest in our infrastructure.

I am not sure about 'decent' democrats. You mean those with spine who did not sell out to corporations? That's just a handful of them. Kucinich was removed by the elimination of his district, Grayson was kicked out but he is back in, and the best Democrat, bernie Sanders is not even a democrat.
+9 # Helen Marshall 2015-05-01 12:41
The fact that Tom "Take This And Suck On It" Friedman is in favor of this TPP really should be all we need to know. Is there anything that he opines on that is not to benefit the billionaire class to which he belongs?
+10 # ChrisCurrie 2015-05-01 15:25
The TPP will enable the desire of multinational corporations to "maximize profits" to "trump" any law or regulation passed by any of our three levels of government. It amounts to a TOTAL abdication of the fundamental principles embodied in the United States Constitution to greedy whims of multi-national corporate CEOs. EVERY member of Congress (and the President of the United States) will be VIOLATING THEIR OATH OF OFFICE (an impeachable offense) if they vote in favor of implementing the TPP and/or other so-called "trade agreement treaties" like it!
+9 # reiverpacific 2015-05-02 08:51
There is only ONE thing we need to know about the TPP -and any thinking person with even a tiny sense of history-memory already knows it.
That we the people will get screwed yet again, multinational corporate behemoths and their puppets in the halls of power will make out like the Bandits they are, and the Fragmented States will move ever-closer towards becoming like one of the many Banana Republics it established, armed and supported globally.
+7 # ahollman 2015-05-02 16:00
There’s much wrong with the TPP in the details. But some basic principles that also justify opposition to the TPP are being ignored.

1) Uniformity of any set of laws or rules be a virtue or a defect, depending on the case. We want uniformity of rules among competitors in a game as a matter of basic fairness. Many Republicans espouse “states’ rights” over federal rules as a constitutional issue; historically, states’ rights has allowed states to deny civil rights to some of their inhabitants. “Local control” is the mantra for school funding, even though it leads to gross inequality among the public school systems of wealthy and poor municipalities. Many Republicans also support TPP; their ostensible with “fairness”, is really support for what’s good for large businesses, even when it’s bad for the citizens of the nations involved.

Nations vary so greatly, far more than than among towns or states of the US, that what is reasonable for one nation is not reasonable for another.

2) The rationale for international trade, like all trade, that two parties trade when doing so leaves both better off, is often untrue, or may be true among nations, but not their citizens. That is especially so regarding resource extraction. The rulers of Saudi Arabia may be better off for Saudi oil sales; its people arguably are not. Ditto the inhabitants of areas where resource extraction occurs, e.g. the residents of Nigeria’s oil delta, or of Appalachian coal regions in the US.
0 # jpmarat 2015-05-03 14:43
Pro TPP, pro Bankster, pro KKK Kops need to be primaried by real democrats. If Hillary refuses to oppose TPP, she should be DUMPED ASAP. Virtual unknowns with very little money, but lots of chutzpah, can defeat incumbents, or force them to support democratic options.

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