Here’s Why You Need To Care About The Trans-Pacific Partnership Trade Deal
True story! There was once a time, back in the 90s, when my mother and I agreed with Pat Buchanan on a thing. I know, scary, right? Last person on earth we’d ever expect to agree with on anything. But we did–because that thing was NAFTA. It was a bad idea then, and it’s a freaking disaster now.
Once again, I find myself agreeing with Pat Buchanan. In fact, I also find myself agreeing with Mike Huckabee. But, let it be said–I’m in good company, too: Elizabeth Warren, Bernie Sanders and Noam Chomsky, Robert Reich, Ralph Nader, the AFL-CIO and most Congressional Democrats also agree that Obama’s Trans-Pacific Partnership is a fucking nightmare.
In an interview this Saturday, Obama dissed Sen. Warren, suggesting that she was “absolutely wrong” about this trade deal. I am here to tell you that she is not. It’s really, really, really bad. It’s also really dry, which is why it’s not an especially fun topic of discussion compared to some other political issues–but all the same, it’s something you need to know about, particularly since the Senate is about to vote this week on whether or not to fast track it.
What The Hell Is It?
The TPP is a proposed free trade agreement between (as of right now), The United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It has been described by some as “NAFTA on steroids.”
In favor of the deal is Obama and the majority of Congressional Republicans–specifically Paul Ryan and Orrin Hatch–as well as major corporations, bankers and lobbyists. Opposed? The majority of Congressional Democrats, trade unions, anti-globalization activists, plus, oddly, a few Tea Party Republicans. It’s a weird situation we have here, lots of strange bedfellows.
No One Is Allowed To Know What Is In It
In a speech at–I shit you not–Nike headquarters last week, President Obama announced that if people read the TPP for themselves, they would see that it is all fine and dandy. The problem? The whole thing is classified, and most of what we know comes from what has been released on Wikileaks.
The only people who have been allowed to weigh in on this agreement and actually see the whole thing so far are lobbyists and corporations.
President Obama will not allow the public to see what is in the agreement until Congress agrees to fast track it. Congress, also, is not allowed to see the full draft until they agree to fast track it. They will then have 60 days to review the agreement and revoke the fast track if they think it’s too messed up. However, because it’s fast tracked, that means Obama only needs 51 votes to pass it, rather than a majority. Does that make any sense at all to you? It sure doesn’t to me!
Fast tracking, by the way, means that President Obama gets to negotiate this trade deal himself and that Congress cannot adjust the deal in any way, whether by removing certain parts or adding amendments.
It Would Allow Corporations To Sue Entire Countries If Regulations Mess With Their Profits
One of the things we do know about the TPP is that it would include provisions for Investor-State Dispute Settlement courts, which are a frequent feature of free trade agreements.
The original purpose of these courts was to protect companies who invest in countries with unstable political situations–so that, say if a company spent a lot of money on a manufacturing plant in a country, and then that country were to elect a president who decided to kick that company out immediately, that the company could be reimbursed for the money they spent.
However, these courts are being used, increasingly, to sue countries for having labor regulations that mess with their profits.
Elizabeth Warren explained how this works in a Washington Post op-ed on the subject:
Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages.
Pretty messed up, right? To boot, the judges in these courts are not elected judges with no skin in the game. They are highly paid corporate lawyers who all take turns either representing these corporations or sitting in the judges seat.
If you’re thinking right now that this is speculation and might not even actually happen? It’s already happening in ISDS courts around the globe.
Elizabeth Warren, take the wheel!:
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.
It Means Your Prescription Could Cost A Lot More
One of the loudest voices opposing the TPP has been Doctors Without Borders–primarily because of the way it would change the way pharmaceutical patents work. Normally, the way things work in the pharmaceutical industry is that a company invents a drug, but only holds the patent on it for 20 years. Then, other companies are allowed to make cheaper, generic versions of that medication.
The TPP, however, would strengthen these patents, allowing pharmaceutical companies to extend them beyond 20 years–meaning that they can just go ahead and charge you whatever the hell they want, pretty much forever.
It Would Make It Even Cheaper To Use Sweatshop Labor
You know something is rotten in Denmark when the President of the United States is touting a trade deal at Nike headquarters–a company known for their fondness for child labor and sweatshops. A company that was basically built on the idea that lots of profit could be made by manufacturing goods overseas using cheap labor rather than American workers.
Under current laws, when Nike produces shoes in a sweatshop and then sells them over here, they have to pay a tariff. These tariffs are supposed to make it less monetarily appealing to use sweatshop labor and outsource labor to other countries rather than provide jobs to U.S. citizens.
Nike claims that if they are given relief from this tariff, they will be able to provide cheaper shoes to Americans, and that they will be able to spend their profits on new sneaker “technology and innovation” which, somehow, will bring 10,000 manufacturing jobs to the US.
This is a whole world of bullshit. First of all, Nike, like any other manufacturer, does not charge you any less than what you are willing to pay. It is not as if they use sweatshop labor and then pass the savings onto you, the consumer. The cheaper it is for them to produce sneakers, the more money their executives and shareholders make. It costs about $10 to make a pair of Nike shoes, and then they charge you over $100! Why? Because that is what you are willing to pay for them.
Second, this bringing jobs back to the US thing? Definitely not going to happen. The minimum wage in Vietnam is 56 cents an hour. Overseas labor is so cheap that it has been worth it to Nike to pay the shoe tariff all these years. In what world do you think they’re now just going to move manufacturing over to the US if they don’t have to pay that tariff? What sense does that even make?
It doesn’t make sense. At all. Which is why New Balance, the only remaining sneaker company that still manufactures all of its shoes in the United States says this trade deal will force them to move their manufacturing plants overseas, because otherwise they just won’t be able to compete.
To boot, while Nike is paying that shoe tariff, they are still not paying all their taxes, and are not the least bit ashamed of this. In fact, they named their tax havens after Nike shoe brands.
Nike reports that its cache of “permanently reinvested offshore profits” ballooned from $5.5 billion to $6.7 billion in the past year — meaning that the company moved $1.2 billion of its profits offshore. Nike also discloses that if it were to pay U.S. taxes on its offshore stash, its federal tax bill would be $2.2 billion, a tax rate of just under 33 percent. Since the federal income tax is 35 percent minus any taxes corporations have paid to foreign jurisdictions, it’s easy to deduce that Nike has paid virtually no tax on its offshore profit hoard.
Nike’s long list of offshore subsidiaries includes twelve shell companies in Bermuda alone, ten of which are named after one of Nike’s own shoes! To wit: Air Max Limited, Nike Cortez, Nike Flight, Nike Force, Nike Huarache, Nike Jump Ltd., Nike Lavadome, Nike Pegasus, Nike Tailwind and Nike Waffle!
We all have to pay taxes, but Nike, which raked in $28 billion dollars in profits last year, and whose founder is the 23rd richest person in America–did not have to pay all of theirs. And yet, still, they did not pass the savings onto you, the consumer.
Last year, these shoe tariffs cost Nike $2.7 billion–a relatively small fraction of their profits. And they still weren’t paying all of their regular taxes! If anything, I think these tariffs need to be raised to the point where it is simply not profitable to manufacture these products overseas–not only because sweatshops are pretty damned evil, but because there are Americans who need those jobs.
I realize there are way more interesting topics to sweat than a complicated trade deal we’re not even allowed to know all the details of. But this is really, really important and could effect not only our economy, but the world’s economy for years and years to come, so it’s kind of an important thing to know about. It’s yet another crap deal that is only going to make the rich richer and the poor poorer, and I’m sorry to say it but President Obama is 100 percent wrong on this.