The Tricks of the Trade - the Confusing Trans Pacific Partnership and its two other Parts Orlean Koehle, State President Eagle Forum of California
In case you were wondering, as I was, what exactly was being voted on Friday, June 12, in the House of Representatives concerning the TPP, I discovered there was a trick going on “used repeatedly to advance distasteful policies.” An unpopular bill is divided up into parts, and each side gets to vote on the parts they like. The unpopular bill in this case was the controversial Trans Pacific Partnership (TPP) that had two additional parts to it: Trade Adjustment Assistance (TAA) and Trade Promotion Authority (TPA). 1) The TAA appears to be very charitable and appealing on the surface and promises to give assistance to those poor unfortunate souls who have lost their jobs because of prior trade agreements. The assistance would come in income support, health insurance and modest job training. 2) The TPA would “fast track” the bill meaning Congress would agree to pass this trade agreement without any amendments or filibusters, and temporary powers would be granted to the president, which he would need to advance the TPP overseas with the other 11 nations involved who all have part of their shores touching the Pacific Ocean. What nations are they? Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico, and Brunei Darussalam.
When the Senate first voted on the TAA and the TPA, they lumped both measures together, making it necessary for the House to do the same thing – vote on them concurrently. This is how it has been since the Trade Act of 1974 that the TAA and fast track have been voted on and passed together. This is a Washington game where Democrats get to vote for TAA so Republicans don’t have to. Republicans don’t favor TAA because they see it as welfare, and Democrats can look good pretending to vote for the downtrodden, working class.
TAA Voted Down: Surprisingly, in the June 12 vote House Democrats and a few Republicans responded by saying they wouldn’t play the game anymore and voted down the TAA 302-126. The President had gone early to Capitol Hill to tell Democrats to “play it straight” on the vote – meaning to vote for both TAA and TPA. “But voting for TAA as a sweetener for a policy most Democrats don’t support is the opposite of playing it straight. It’s a stupid game, and progressives finally decided not to play.”
When Nancy Pelosi made her rambling speech on the House floor, finally saying that she would not vote for TAA, she was getting out in front of a caucus that already told her they weren’t going along. Pelosi said specifically she was voting to “slow down” fast track, meaning that she could be persuaded down the road to bring this home. But today, TAA fell 126-302, with only 39 Democrats supporting.
TPA (Fast Track) Passed as a “Show Vote”: After defeating TAA, the House passed fast track, TPA, the vote that gives the President the ability to negotiate trade deals and bring them back for a guaranteed up-or-down vote without the possibility of filibuster or amendment. But, supposedly, without both fast track and TAA passing together, the bill cannot go to the President for his signature.
The TPP Vote has Stalled: Each day that fast track doesn’t get to move forward, stalls the eventual vote on the really big Trans-Pacific Partnership (TPP). Once fast track passes, then negotiators can finalize the deal with 12 nations, sign it, then start the 90-day legislative clock before it gets a final vote in Congress. That puts us deep into the winter and maybe right around the Iowa caucuses.
The Longer it takes, the More Difficult It is to Pass a Trade Deal: “Trent Lott used to say that you can’t pass trade deals in even-numbered years, when the public actually might be paying attention. That’s what is likely to happen with more delays. So the clock is the ally of those who oppose the trade deals, and the more they draw it out, the more difficult the climb becomes.” Writer David Dayen calls it “insanity” – “getting to pass the parts of a bill you like and having them smushed together Frankenstein-monster style” which “makes it impossible to hold anyone responsible for the ultimate outcome. Democrats should be proud of opting out of that charade.” However, the vote is probably going to come up again, so please continue to call your Congressmen and tell them to vote no. Perhaps the following talking points can help:
- The TPP has been shrouded in secrecy. The agreement is over 800 pages long, in a locked room where Congressmen have to go to read it. It cannot be removed, nor are Congressmen to repeat or distribute details of what is in the agreement. Any notes taken must be surrendered upon exiting the locked room. Obama says these precautions are necessary so we don’t "announce our bottom lines...to the other side of the table." Who is on the other side of the table? Could that be the American people? Should we not know how this enormous trade agreement is going to affect us and our jobs, our taxes, and our economy? The few congressmen who have taken the time to go to the locked room and do their research are appalled at what they are finding out. One of those is Senator Jeff Sessions, Republican from Alabama. He is speaking out on many radio shows on his findings. He gives many of the following reasons why he is opposed to fast track (TPA) and the TPP. Other statements are coming from sources such as Democrat Senator Elizabeth Warren of Massachusetts, The Electronic Frontier Foundation of California, who are alarmed at the control the TPP will exercise over the internet and free speech rights. Breitbart reports (June 10) that the health care section is “clearly intended to cater to the interests of the pharmaceutical companies.”
- The TPA Limits Congressional Responsibility to do its duty: Senator Sessions states that “it is the responsibility of Congress to ensure that any international trade agreement entered into by the United States must serve the national interest, not merely the interests of those crafting the proposal in secret. It must improve the quality of life, the earnings, and the per-capita wealth of everyday working Americans.” The TPA limits the ability of Congress to fulfill their responsibility granted to them by the Constitution over trade and immigration.
- The TPA Consolidates too Much Power in the Executive Branch: “TPA eliminates Congress’ ability to amend or debate trade implementing legislation and guarantees an up-or-down vote on a far-reaching international agreement before that agreement has received any public review.” Congress will be giving up the 67-vote threshold for a treaty and the 60-vote threshold for important legislation, but also the opportunity for amendments and the committee review process that both ensure member participation. This will apply not only to the Trans-Pacific Partnership (TPP) but all international trade agreements during the life of the TPA.
- No Real Check on the Expiration of Fast-track Authority: “ If Congress does not affirmatively refuse to reauthorize TPA at the end of the defined authorization (2018), the authority is automatically renewed for an additional three years so long as the President requests the extension.” Since the exit ramp to remove any trade deal (not just TPP) is under the exclusive control of the “Revenue and Rules Committee,” it is very difficult for lawmakers to seek legislative redress or get rid of a bad trade deal.
- No real Check on the Accuracy of the President’s Report to Congress: Senator Sessions states, “The President is required to submit a report to Congress on the terms of a trade agreement at least 60 days before submitting implementing legislation, but the President can classify or otherwise redact information from this report, limiting its value to Congress.”
- Increased Trade Imbalances, Deficits and Job Loss. We can learn from prior free trade agreements such as NAFTA, CAFTA, and KORUS, (with South Korea), that none of them have been good for our country and for our jobs, especially manufacturing. According to an Economic Policy Institute report titled, "Heading South, US-Mexico Trade and Job Displacement After NAFTA," as the result of the 1994 trade agreement, the US lost a total of 682,900 net jobs and continues to lose more every year. Over 60% of the job losses were in manufacturing. According to labor economist Clyde Prestowitz, 60 percent of the 5.7 million manufacturing jobs lost in our nation over the last decade were because of import-driven trade imbalances. Reuters writes of a former chief executive officer at AT&T who stated:
Since the [NAFTA and South Korea free trade] pacts were implemented, U.S. trade deficits, which drag down economic growth, have soared more than 430 % with our free-trade partners. In the same period, they’ve declined 11 % with countries that are not free-trade partners…Obama’s 2011 trade deal with South Korea, which serves as the template for the new Trans-Pacific Partnership, has resulted in a 50 % jump in the U.S. trade deficit with South Korea in its first two years. This equates to 50,000 U.S. jobs lost.
- A Bigger Strain on the American Economy and Increased Welfare: Job loss means reduced consumer demand, less tax revenue and greater reliance on government assistance programs.
- The TPP is a “Living Agreement” which Means it can be Easily Changed and Enlarged without Congressional Approval: “The President could update the agreement “as appropriate to address trade issues that emerge in the future as well as new issues that arise with the expansion of the agreement to include new countries.” Also participating nations could both add countries to the TPP (like China), and could also change any of the terms of the agreement, including in controversial areas such as the entry of foreign workers and foreign employees. Again, these changes would not be subject to congressional approval.
- Ceding Sovereignty to International Powers: The Congressional Research Service reports that “if the United States signs on to an international trade agreement, the implementing legislation of that trade agreement (as a law passed later in time) would supersede conflicting federal, state, and local laws. When this occurs, U.S. workers may be subject to a sudden change in tariffs, regulations, or dispute resolution proceedings in international tribunals outside the U.S.”
- Currency Manipulation with no Protections against It. Some Countries have learned to play certain tricks to take advantage of trade with the U.S. They devalue their currencies to artificially lower the price of their exports while artificially raising the price of U.S. exports coming into their countries. The result has been a massive bleeding of U.S. domestic manufacturing wealth and a surge of underpriced foreign imports coming into the U.S. “A 2014 biannual report from the Treasury Department concluded that the yuan, or renminbi, remained significantly undervalued, yet the Treasury Department failed to designate China as a ‘currency manipulator.’” The Obama Administration, like those before it, does not stand up to the improper currency practices, and there are no currency protections written into the TPA, indicating, again, that those involved in pushing these trade deals do not wish to see any currency abuses corrected. President Obama’s longstanding resistance to meaningful currency legislation is proof he intends to take no action.
- 11. Immigration Increases. The language of TPA clearly provides avenues for the Executive Branch and their trading partners to facilitate the expanded movement of foreign workers into the U.S.—including “intracompany transfers” and visitor visas that are used as worker visas, again without Congressional oversight. Already we have visas such as the H-1B, B-1, E-1, and L-1 that are allowing foreign nationals a pathway to a green card and thus citizenship. In 2011, the United States entered into an agreement with South Korea—never brought before Congress—to increase the duration of L-1 visas (a visa that affords no protections for U.S. workers). The language in the TPA reads: (emphasis added)
The principal negotiating objective of the United States regarding trade in services is to expand competitive market opportunities for United States services and to obtain fairer and more open conditions of trade, including through utilization of global value chains, by reducing or eliminating barriers to international trade in services… Recognizing that expansion of trade in services generates benefits for all sectors of the economy and facilitates trade. (Obama would just have to say that the movement of large numbers of foreign workers into the U.S. constitutes “trade in services.”)
Even though the statement has been made that “TPP contains no change to immigration law,” that is just semantics rather than a factual argument, since language already present in both TPA and TPP provides the basis for admitting more foreign workers, and for longer periods of time. Language could also be added later to TPP or any future trade deal to further expand immigration.
- “Temporary Entry” Creates a Separate Negotiating Group that could be Changed and Expanded - again without Congressional Approval: The TPP includes an entire chapter on “Temporary Entry” that applies to all parties and that affects U.S. immigration law. The chapter creates a separate negotiating group, contemplating that the parties to the TPP will revisit temporary entry at some point in the future for the specific purpose of making changes to this chapter—after Congress would have already approved the TPP. This possibility grows more acute given that TPP is a “living agreement” that cannot be altered by Congress.
- “A Hand out to Large International Corporations” and to Special Interest Groups who will benefit from lower Wages and by Bypassing U.S. Laws and Going to International Boards: Senator Elizabeth Warren (D-MA) read sections of the agreement and concludes that the TPP is a “handout to large international corporations” who will benefit by not having to have minimum wage laws or being subject to other U.S. laws. Under the agreement, if a multi-national corporation is in violation of US law, they can bypass our judicial system and take their case to an international board of arbiters. Not only does this undermine the US rule of law, the conflict of interest is staggering. Many of the board judges are the same corporate lawyers representing the companies they are to judge. Since only large international investors, not small businesses can use this court; the TPP is inherently unfair.
- The Promised Benefits of TPA and the Creation of 650,000 new Jobs are Unfounded and False: Just as the promised increases in jobs and improved exports with NAFTA never materialized, the same was also true with KORUS, the U.S.-Korea Free Trade Agreement, signed in 2007, which predicted a $4-5 billion improvement in our trade balance with South Korea. Instead, domestic exports decreased by $3.5 billion in the agreement's first year alone. By 2012 KORUS had cost the US 40,000 jobs. “We now know that the administration fabricated the 650,000 new jobs claim by manipulating the data in a policy analysis from the Peterson Institute for International Economics. It is unlikely the TPP will create any net new jobs. Peter Petri, one of the report’s authors explained, trade agreements barely affect new jobs at all.”
- The Uber Control of the TPP over Vast Segments of American Lives: TPP authorizes control over the information internet service providers must collect, the healthcare system, the privatization of hospitals, and even control of banking institutions. What does any of these have to do with international trade? The Electronic Frontier Foundation is a California-based non-profit firm that “protects civil rights in the digital domain.” They promoted President Obama’s Net Neutrality, (at least until they voiced serious reservations about the wording after the regulation passed,) and have generally supported the president’s initiatives. After reading the leaked TPP Intellectual Property chapter, the group was outraged at the extensive control the agreement exercises over freedom of speech, right to privacy and limitations on due process. EFF notes, “The entire process has shut out multi-stakeholder participation and is shrouded in secrecy.” The group concludes that “…innovation, the future of the Internet’s global infrastructure, and the right of sovereign nations to develop policies and laws that best meet their domestic priorities” are all placed at risk under this secretive agreement.
- An Entirely New Regulatory Structure Created Above US Laws in Treaty Form: Julian Assange, founder of WikiLeaks, wrote of the Investment Chapter, that the TPP constructs an entirely new regulatory structure above US laws and places it in treaty form. “By putting it in a treaty form, there are 12 countries involved, that means it is very hard to overturn. So, if there is a desire, a democratic desire to do it on a different path…you can’t easily change the TPP treaty because you have to go back to the other nations involved.”
- The TPP Environment chapter is “Toothless without any Enforcement Mechanism:” Even the environmental groups that usually support all leftist programs, do not like the TPP. While the administration presented the TPP as an “ambitious 21st century trade agreement,” upon reading the chapter on the Environment in the TPP section, the Natural Resources Defense Council, the Sierra Club and the World Wildlife Fund all agreed, “the TPP Environment Chapter text does not meet that goal.” Assange remarked, "Today's WikiLeaks release shows that the public sweetener in the TPP is just media sugar water. The fabled TPP environmental chapter turns out to be a toothless public relations exercise with no enforcement mechanism."
- The TPP would be Creating a Large Union of Nations that would be Similar to a European Union. Roger Hedgecock, who was filling in for Rush Limbaugh on his radio program when the vote on the TAA was heard, June 12, stated that Obama’s real objective all along was to create an agreement or partnership that could eventually morph into something much larger - a union that would have its own set of laws and a judiciary system that would weaken the sovereignty of the nations that belong to it.
CONCLUSION: TPA proponents must answer these simple question: will your plan shrink the trade deficit or will it grow it even wider? Is TPA designed to protect congressional responsibilities, or to limit Congress’ ability to do its duty? In spite of the false claims and promises, the TPP will not serve the national interest. It will do just the opposite as it sucks hundreds of thousands of jobs away from our country just as NAFTA did.
Let us get back to believing in and supporting a government that supports the legitimate interests of American workers and American manufacturing here in our own nation. We can no longer suffer the loss of a single job as a result of a poor trade agreement.
Fortunately, the public has grown increasingly skeptical of elaborate proposals and promises, “stitched together in secret, and rushed to passage on the solemn promises of their promoters.” We have watched and learned from other “free” trade agreements, that they are not free but have cost us dearly and have caused enormous loss of jobs, economy, and prosperity in our own nation.
Our job is to raise our own standard of living here in America, not to lower it to achieve greater parity with the rest of the world. If we want an international trade deal that advances the interests of our own people, then we don’t need a “fast-track” but a regular track: where the President sends us a proposal he deems worthy and Congress and the people can review it openly (not secretly) on its own merits.
If Congress can withstand the pressure to vote for the TAA, TPA, and the TPP that will be laid on them not only by Obama, but by big corporations and special interest groups, then hopefully the trade agreement will be derailed. It would be good if we could also end the games and the “tricks of the trade” such as the “split-vote gambit,” where opponents are actually helping the victors.