Trade agreements require that all domestic regulations undergo “trade impact” or cost-benefit analyses before implementation to demonstrate that they are “least trade restrictive” and “necessary” to protect public and environmental health, worker safety and other public interest objectives. United Nations human rights advocates have responded by proposing that all trade agreements include provisions for “human rights impact” studies before and after implementation.
As the United States attempts to finalize the terms of the Trans-Pacific Partnership (TPP) agreement, a human rights requirement in the Fast Track Trade Promotion Authority (TPA) bill signed by President Barack Obama on June 29 may reduce the TPP members by at least one, despite White House claims that fast track TPA protects human rights. The human rights debate over trade has heated up in Washington and Geneva, the home of the UN Human Rights Council (UNHRC).
“What is your chlorine chicken?” was the question, midway through our five-day, nonstop tour of seven European cities to talk about the Transatlantic Trade and Investment Partnership (TTIP), the largest bilateral trade agreement in history, currently being negotiated between the United States and the European Union. The very public European rallying cry “no chlorine chicken” not only sums up fundamentally different food safety and agricultural practices in the EU and U.S., but also the possibility that TTIP will dilute the precautionary principle that guides EU environmental and health policies, ultimately compromising small-scale farms and diminishing quality of life.
It was a good question and worth some thought. Is there an issue or catch-phrase that sums up American views on TTIP? After all, I was in Europe on a TTIP speaking tour (organized by the Greens and European Free Alliance of the European Parliament), along with Thea Lee, AFL-CIO economist and deputy chief staff, and Melinda St. Louis, Director of International Campaigns for Public Citizen’s Global Trade Watch, to talk specifically about the American point of view.
Note: The following blog was submitted as a commentary in mid-June to the Minneapolis Star Tribune, which declined to print it.
Peter Orszag’s attempt to discredit Senator Elizabeth Warren’s leadership of the movement against fast-track Trade Promotion Authority and the Trans-Pacific Partnership (TPP) agreement neglects to disclose his financial interest in TPP and to accurately characterize the TPP (“So trade with Asia is OK if it benefits your own port?” Star Tribune, June 15, 2015).
Orszag identifies himself accurately as the former Director of the Office of Management and Budget under President Obama. But he left the Obama administration in 2009 to become Vice Chairman of Investment Banking and Corporate Strategy and Chairman of the Financial Strategy and Solutions Group at Citigroup. Citigroup received more than $2.6 trillion in ultra-low interest Federal Reserve Bank loans from 2007 to 2010 to save it from bankruptcy (according to a Levy Institute study by James Felkerson).
In May, the banking group pled guilty to a felony for price-fixing billions of dollars of trades in foreign exchange rates. However, the Securities and Exchange Commission voted to waive felony penalties to allow Citigroup and other felon banks to continue to do business as usual. Neither Orszag nor any Citigroup executive was personally charged with a crime, but his strategic role in defending Citigroup drives the underhanded animus of this screed.
For the past year, IATP has been working with partners Europe and the U.S. in a project to consider the potential impacts of TTIP on the rest of the world. As part of those efforts, we participated in a meeting in Brussels on TTIP and the Caribbean-Latin American region (CELAC). The title of the project working paper, “TTIP: why the world should beware,” indicates the general tenor of the Brussels meeting, which took place during the EU CELAC Summit and a tempestuous European Parliament debate about TTIP.
U.S. Trade Representative Michael Froman has characterized TTIP as a ‘high standards’ 21st century trade agreement that non-TTIP countries will want to join if they want access to the U.S. and EU member state markets. However, nobody asked the non-TTIP governments if they will now agree to new trade policies that they successfully have resisted at the World Trade Organization. According to the Brussels meeting participants, TTIP, the Trans Pacific Partnership (TPP) and the Trade In Services Agreement (TISA) would force the “rest of the world” to trade, invest and develop their national economies according to rules decided by U.S. and European Union negotiators.
When fast track trade authority squeezed through the House of Representatives last week by 10 votes, big corporate donors breathed a sigh of relief. They had heavily invested in political donations and K Street lobbying power to advance their trade agenda—and expected a return on investment.
And it has been quite an investment. According to Maplight, corporate interests supporting Fast Track contributed more than nine times as much money to House members ($197 million), compared to interests opposing Fast Track ($23 million).
Now, the Fast Track fight returns to the Senate where the flood of corporate money flows just as rapidly. The Guardian, analyzing Federal Election Commission data, reported that corporate members of the U.S. Business Coalition for TPP contributed $1,148,971 to U.S. Senate campaigns between January and March 2015—an average of $17,676.48 was donated to each of the 65 “yea” votes in a previous Fast Track vote in May.
Fast Track approval of highly secretive trade agreements that will threaten local food procurement programs across the U.S. and give corporations the standing to sue governments for lost profits passed the U.S. House of Representatives by a slim margin of ten votes yesterday. It was a nasty battle, with House proponents succeeding only through cynical political and procedural brinksmanship. The same strategies will be on display next week in the U.S. Senate. Fast Track (officially called Trade Promotion Authority, or TPA) now requires additional approval in the U.S. Senate. Expect more brinksmanship, less honesty and certainly less democracy.
Supporters of Fast Track authority -- many of whom took their few minutes on the floor of the House debate to claim (disingenuously) that the behind-the-scenes, corporate-led trade negotiation process (and abdication of congressional responsibility when it comes to trade agreements) -- is really very democratic have decided that the American way forward is to make the process even more undemocratic. And that means getting Fast Track approved as fast as they can by burying important pieces of the Fast Track package here and there in other popular pieces of legislation. Nothing up my sleeve. Presto.
Institutions purchasing and serving regionally produced food has gained momentum in recent years, largely driven by the exponentially successful farm to school movement. But this practice has reached a critical transition point in the growth process: how to move from a good idea that is supported by end users to an economically sustainable one with wide appeal for those at the beginning of the supply chain—particularly the farmer that provide the fruits, vegetables and other products for the cafeteria tray.
In the newly released report “Building Minnesota’s Farm to Institution Markets: A Producer Survey,” the Institute for Agriculture and Trade Policy— along with project partners the Sustainable Farming Association and Renewing the Countryside—summarize the findings of a recently completed survey that identifies some of the key “next steps” that farmers feel are needed to ensure the state’s emerging farm to institution markets work for them. With over 75 percent of survey respondents interested in selling to these markets in the future, it make sense to develop a deeper understanding of how to make them as accessible and successful as possible.
For much of our history, trade agreements were considered treaties. According to the Constitution they had to be ratified by a two-thirds vote of the Senate. The House does not participate in ratification of treaties (Article II, Section 2).
By the late 19th century Congress realized it was far too cumbersome to require a Congressional vote to change individual tariffs, so they delegated to the President the authority to use tariffs as a flexible tool in the exercise of foreign policy.
In the 1970s trade agreements stopped focusing on tariffs and began addressing an increasingly broad group of rules (e.g. procurement, copyrights and patents, product standards, subsidies, environmental standards) called non-tariff trade barriers. Modern multi-faceted trade pacts have more to do with pre-empting national, state and local rules that could favor communities or regional economies or domestic businesses or the environment than with lowering tariffs.
Article I, Section 10 of the Constitution gives Congress a little wiggle room by making a distinction between “treaties” and “agreements”. Congress can change the ratification process for agreements. But it is highly probable that the Constitution’s Framers would have expected Congress to do so only with respect to agreements of limited importance.
In 1974 Congress made clear it thought otherwise. That year Congress acquiesced to a dramatic reduction in its and by extension the citizenry’s authority over trade rules. Under the new procedure the President was allowed to unilaterally negotiate the final terms of a trade agreement. He would then present the final agreement to Congress, which would be unable to change it in any way and would have a limited time for debate. Instead of requiring ratification by a two-thirds vote of the Senate, trade pacts would require only a simple majority from both chambers.
In December, the world’s leaders will meet for two separate important global meetings. The global climate talks in Paris aim to chart a course for reducing greenhouse gas (GHG) emissions. The World Trade Organization ministerial in Kenya will advance global trade rules. Unfortunately, the two meetings will take place without acknowledging the inescapable connections between free trade rules and climate change.
Globalization – largely promoted through free trade agreements – has brought about more expansive and complex supply chains.1 Liberalized trade agreements, extending more rights to transnational corporations, have been linked to increased GHG emissions attributable to industrialization and the global transportation of goods and services.2 Though globalization has contributed to economic growth in some countries, there has been extensive documentation of how it has also brought increased fossil fuel consumption and environmental degradation.3,4,5
Many concerned with globalization’s effect on the environment advocate for more emphasis on localized systems. These localized systems emit fewer GHGs due to smaller supply chain networks. Nate Hagens, of the Post Carbon Institute, stated in a July 10, 2014 lecture, “A lower consumption, more local and regional future is not only needed [for reducing carbon emissions] but probably more desirable [for creating community].”
The congressional vote on Fast Track Trade Promotion Authority (TPA) has entered into a period of what appear to be rather convoluted twists and turns. Whether that path eventually leads to its approval—giving the President authority to negotiate trade deals in secret and then bring them to Congress for a yes or no vote, no amendments allowed—or to its defeat is simply impossible to predict at this point. The way this debate is playing out highlights several basic concerns, starting with transparency but extending to the content of the trade deals as well.
Fast Track is an extraordinary surrender of congressional authority to the President. It was first created during the Nixon administration, and has been granted for a total of only five years in the last two decades. It last expired in 2007. If approved, the current bill would cover the Transatlantic Trade and Investment Partnership (TTIP), Trans Pacific Partnership (TPP) and any other trade deal that could emerge in the next six years. Much of the focus in the media has been on TPP, since that agreement is closer to completion, but the proposed TPA is much broader than that, and extends into the completely unknown terrain of the next presidential administration.