TPP: Jim Himes (D-CT), Another Putting “Free Trade” Above National Sovereignty and Democracy
This is another in a series on Democratic Representatives who recently decided that pleasing their President, and their minority leader in the House, and protecting the expectations of potential profits of multinational corporations, was more important than protecting democracy, national, state, and local sovereignty, American Jobs, the environment, the climate, the capability to regulate corporate behavior for the public good, and net neutrality, among may other valuable things. In my previous posts I covered the statements of Don Beyer, Democrat of Virginia's 8th District and then Kathleen Rice, Democrat of New York's 4th.
This time the focus of my attention will be Jim Himes (D-CT) who represents the 4th Congressional District in Connecticut. I'll be doing a point-by-point critique of his reasons for announcing his support of the TPP.
Jim Himes thinks since every president has been granted fast-track authority since Richard Nixon, it would be almost unprecedented if we did not extend that authority to him. I say he makes no sense and also, even if it were true, so what?
TPA is a delegation of Congressional authority, and I take all such delegations very seriously. However, this is not a new idea. It has been granted to every president, with the exception of Richard Nixon, for the past 50 years. The most recent iteration of this authority expired in 2007, and President Obama has now requested that Congress grant a renewal. It would be almost historically unprecedented if we did not extend that to him.
This is among the most empty talking point justifications for the TPP that has ever been put forward, and clearly plays on the idea that if we don't give the President the same authority to downgrade the role of Congress in trade agreements that others have had we are somehow dissing this President.
Never mind that for 181 years before the Nixon Administration no President was granted fast-track authority. Never mind that each presidency is different and that the background conditions for a grant of such authority are always very different. Never mind that we now have a long history of so-called “free trade” agreements that have clearly resulted in our losing industries and jobs here while encouraging the migration of capital from the US to other nations. Never mind that extremely low wages in other nations have had a very large role in depressing wages and in contributing to the development of extreme inequality in our country. And never mind that “fast-track” from Nixon to Obama has always been a way of by-passing the need to go through the procedure outlined in the Constitution that requires treaties to be confirmed by 2/3 of the Senate.
The point is that we've been there and done that when it comes to fast-track authority, and a majority of people in our nation think that the trade deals that were passed through its use, such as NAFTA, CAFTA, and KORUS have by and large not benefited people here who work for a living, whether they're middle class or working class. So, since fast-track has produced poor results why would we want to do fast-track again, whether or not it has been practiced for 50 years?
What these years have shown us is that a large Congressional role in treaties is a check on the Executive negotiating trade agreements that are not in the interests of the American people, so I think the lesson is that we should not do fast-track again, but instead should return to the old way of getting the President and 2/3 of the Senate to agree we have an agreement.
Doing the same thing again and again without success is one definition of insanity. So, why wouldn't we want to stop the insanity? Are we so confused by “free trade” propaganda that we, including Congressman Himes, cannot recognize that it is just propaganda?
But apart from the lack of success of the agreements negotiated under “fast-track,” Congressman Jim Himes is ignoring the unprecedented scale of the agreements the President wants to negotiate. The TPP is a 12 nation agreement, the Transatlantic Trade and Investment Partnership (TTIP) is a 28 nation agreement, and the Trade in Services Agreement (TiSA) is a 51 nation agreement. The scale of these agreements isn't remotely similar to anything done before, and that means that these trade agreements are much more risky than anything we've attempted before.
That is the most important reason they should not be “fast-tracked.” We must be as sure as can be that no mistakes are made in these agreements, since the possible costs could be catastrophic for the United States and our way of life. The risks involved are most importantly highlighted by risks in the Investor State Dispute Settlement (ISDS) arbitration mechanism, which is reportedly included in all three.
These provision of ISDS say that multinational corporations will be able to sue governments at all levels and win large judgments against them, in what are basically corporation-run supra-national tribunals.
According to ISDS, there is no appeal to national authorities from decisions of these tribunals. So in agreeing to abide by their decisions, governments are giving up their sovereignty and the sovereignty of the people in their democracies to tribunals that are in no way accountable to the public.
Congressman Himes, has no right to participate in considering such ISDS arrangements nor even to contemplate legislating them, since he has taken an oath of office to defend the Constitution of the United States. Where does it say, or where is it implied in the Constitution that he has the authority to vote to comply with the decisions of supra-national institutions that are unaccountable to the American people under that Constitution? Supporting the TPP's ISDS provisions and those of TTIP and TiSA is a violation of his oath of office. He ought to stop stop any support for these agreements immediately.
And make no mistake about it, in supporting “fast-track” he is, according to all sources, both pro-TPP and anti-TPP increasing the chances that the TPP and the other agreements will pass even, if he decides later down the line to vote “no” on these agreements. So, in increasing the chances that the agreements complete ISDS provisions will pass he is working against US sovereignty and democracy.
If Congressman Himes favors TPP-like arrangements, then he is free to follow proper procedures to try amending the US Constitution in order to allow a gift of quasi-legislative powers to multinational corporations through ISDS-like provisions. That is the proper way to go about passing something like the ISDS.
But to try to get ISDS provisions passed as part of a Congressional-Executive Agreement, negotiated in secret, and confirmed or defeated through an up or down vote in the Congress, authorized by fast-track, is simply beyond the legitimate authority of the Congressman and other TPP supporters. The result of these efforts, if successful, will be an agreement that has no legitimacy with the American people and that will never be willingly accepted by them.
What will the Congressman do, when an ISDS tribunal delivers a $20 Billion judgment against the US government, and Paul Ryan or some of his colleagues insist that the award must be paid for by cutting spending for the unemployed, or for social security recipients, or for Medicare and Medicaid recipients? How will he deal with that?
Will he tell us it wasn't his fault? It was the evil Republicans! Or will he own up to the consequences of his contemplated action in supporting fast-tack/TPP and say that it was partly his fault for enabling passage of TPP and the other agreements with his mistaken support for fast-track?
Congressman Himes has the chance to eliminate the possibility that something like this will ever happen. He should take that opportunity! Beat fast-track now, and kill these agreements.
And before anyone says that such awards will never happen, please keep in mind that little Ecuador has already sustained a $2.3 Billion judgment on behalf of Occidental Petroleum in an ISDS dispute over “expected lost profits” authorized by the bilateral “free trade” agreement between Ecuador and the United States. An award against the United States of similar proportions given the size of our economy compared to Ecuador's, would be $340 Billion.
How would Congressman Himes handle an award of this size if given to a multinational trading in the United States? How would he pay for it? Does he think he could do that by raising the $340 Billion through taxing the wealthy? If not whose hide would he take the award out of? Ir seems to me he should be asked questions like this sometime before he takes that decisive vote for fast-track.
Congressman Himes says that he's read both the TPA bill, and the TPP legislation it would enable. But, in spite of this, he apparently cannot recognize that subjecting our governments to fines from a supra-national authority with no recourse by our governments to their decisions, however unjust, is, in fact, a turnover of our sovereignty, as well as a violation of separation of powers?
And, by the way, as long as we're on the subject of sovereignty, how is it that he thinks that Congress has the right to subject the legislative authority of the American States in the spheres reserved for them by the Constitution (the tenth amendment) to international bodies like the ISDS tribunals?
How can Congress give away the rights of States to govern solely in certain spheres when the Constitution did not grant authority over these rights to Congress itself? Has Congressman Himes, who once again is sworn to defend the Constitution, given any thought to this Federalism issue in the context of ISDS provisions?
How can Congressman Himes, without forthrightly facing up to all the above problems with these agreements, through a more detailed analysis spelling out just how the benefits of the TPP and the other agreements are so great that they justify taking the risks suggested by the host of likely and possible problems with it, even begin to suggest that he is fulfilling his oath of office by supporting fast-track? I hope he spends some time thinking over the answer to this question before he votes.
In particular, for Congressman Himes to propose through the TPP and its ISDS provisions, that the United States ought to compromise National, State, and local sovereignty, consent of the governed, our Constitution, the sovereignty of the American people over multinational corporations doing business within our borders, and our democracy, is particularly egregious. If the Congressman continues to support the TPP with its outrageous ISDS provisions, then how can anyone help but think that his support for fast-track, along with the three trade agreements, is a violation of his oath of office and his duties to his constituents and to the American people?
How can anyone draw any other conclusion than that one when the ISDS is a mechanism to subject US Governments at all levels to decisions made by foreign tribunals unaccountable to our Government or to the American people? How can Congressman Himes advocate for and vote for a fast-track to one or more trade agreements giving foreign entities that kind of power over the US and still claim that he is defending our laws and our constitution?
Congressman Himes evidently believes that TPA (fast-track) is necessary to open the door to consideration of the TPP in Congress and also that TPP has the potential for many export jobs and opportunities, while also potentially protecting the improvement of environmental and labor standards
I have closely reviewed the TPA legislation and read the current draft of the Trans-Pacific Partnership (TPP). TPA opens the door to consideration of the TPP, a potential agreement between 12 Pacific Rim countries representing 40% of global GDP. The TPP offers the potential for rich export opportunities and many more high-paying export jobs. It can also require the improvement of environmental and labor standards in countries where those do not exist. If TPP does those things, I’ll support it. If not, I won’t.
The TPA doesn't open the door to consideration of the TPP by Congress, because that door is open right now without the TPA. The TPP can be introduced easily right now by both Republican leaders in each House of Congress, no TPA is necessary for that.
Also, TPA does a lot more than “open the door to consideration of the TPP,” and it is somewhat disingenuous to frame what TPA does as a mere door-opener. In fact, it makes it hard to defeat the TPP and the other trade agreements, by short-circuiting many methods for doing that in the House and the Senate. In addition, by not allowing any amendments, it doesn't allow Congress any role in the negotiation of terms and in crafting an agreement that it is happy with. Its required up or down vote offers a procedure that does not allow any compromises between the Executive's negotiating product and what Congress might prefer.
On the issue of TPP's potential for leading to high-paying export jobs and opportunities and for strengthening environmental and labor standards in other nations, I have to say that anyone can claim that these potentials exist. But what about the potential for TPP leading to the destruction of high paying domestic and export jobs moved to foreign factories. Isn't there a greater risk that more jobs will be lost than gained as was the case in other key trade agreements? In addition, how can we enforce higher environmental and labor standards through the TPP. What exactly are the mechanisms for doing that? And why should they work.
Our enforcement mechanisms have thus far worked poorly in other agreements, partly because we have never pursued enforcement. So why would this time be different? Why hasn't Jim Himes addressed that question? Could it be that the President has little to say about that except for providing empty general assurances?
I think that Americans are way beyond empty words about trade agreements. We need to see the TPP drafts for ourselves in order to evaluate whether Congressman Himes and the President are telling us the truth about the TPP.
But, if he's read the TPP, then why doesn't he already know whether its provisions will do the things he says they will do. Could it be that he hasn't read it?
Or could it be that he has, but knows very well that it won't do these things, but he doesn't want us to know that until “fast-track” has already greased the skids for TPP, and prevented his constituents from pressuring him to amend it in a way that the President would not like?
Himes thinks that Connecticut is an export economy and that growing trade will strengthen the middle class, but he's not very explicit about the causal chain from trade to that result
Make no mistake, Connecticut is an export economy, and growing global trade and markets will help strengthen our middle class. In 2013 there were $16.4 billion in Connecticut exports. $11.9 billion, or 67.5%, of that came from the Congressional District I represent.
Making an argument like this is just like someone who went to a football game and later said to their friends that their team had a wonderful performance because it scored 31 points in the game, without telling them that the other team scored 42 points and won the game. That is, there are two sides of trade flows: exports and imports. Connecticut's foreign exports may have been $16.4 Billion in 2013, but its foreign imports http://www.census.gov/foreign-trade/statistics/state/data/imports/ct.html were $21.6 billion, so relative to its direct trade with foreign nations, Connecticut enjoyed a substantial trade deficit.
That's good for getting more real wealth than you give. But given that the Federal Government doesn't create full employment in Connecticut by funding a Federal job guarantee at a living wage, it sure does suck for high levels of employment at good wages.
So, does Congressman Himes know what he's talking about when he says that growing global trade will strengthen Connecticut's middle class? In the past, global trade hasn't supported a trade surplus that created jobs in Connecticut. Instead, trade has resulted in quite a large deficit. Doesn't Congressman Himes know that, or is it just that he wants to keep this a secret from his constituents?
Congressman Himes believes in American workers outcompeting others and that we ought to set the rules and not China. To him the world is us vs. them. To me it's multi-polar.
I believe in the ability of the American worker to outcompete and succeed, and that we, instead of China, should set standards and establish values. In my opinion, it is more likely that we’ll be able to achieve this goal through engagement than by walking away. TPA allows the President the opportunity to make this happen.
First, this is not about whether the American worker can outcompete other workers around the world. Rather it's about whether businesses operating here with our structures of capital, labor costs, tax structures, and social welfare institutions, can compete with businesses in other nations with theirs, and its also about what we want to do to enable our businesses to compete. We most definitely don't want to drive wages in America down to the level of Vietnam or China in order to “compete and succeed”.
Nor do we have to do that. If other nations can produce certain things we value more cheaply than we can, then what we need to do is to accept trade deficits with them and start new industries and new areas of business activity here where the businesses of other nations will not or cannot compete.
Until we get those going there are all kinds of things that need doing at the non-profit community level that we can fund with living wage jobs carrying good fringe benefits.
Meanwhile, that will create the aggregate demand we need to support the development of new business areas and new industries where we don't have to compete with businesses in other nations. The bottom line is that we don't have to participate in any race to the bottom with foreign nations whose living standards are much lower than our own. We can do things another way and we ought to do so.
Second, it is a red herring to claim that either we or the Chinese must set the rules and establish our values. Other nations will negotiate trade deals with both China and ourselves that are advantageous to them. China cannot force other nations into trade deals on its own arbitrary terms. It does not have the power to set rules for international trade. So, this whole idea about the Chinese vs. us is just nonsense. It's not about “free trade.” It's about “political trade!” If Congressman Himes wants to make a “political trade” deal, he ought to debate and justify TPP on that basis, but don't pretend that it is a “free trade” deal.
There are many large and important nations in the world right now, and we have neither the need nor the capability nor the reason to continue to write the trading and international financial rules and impose our values on everyone else. We do not face a contest between ourselves and the Chinese in the area of trade. Both we and the Chinese can conclude trade agreements with other partners and each other that are beneficial to all concerned. Trade is not a zero sum game and we ought not to try to make it so.
The Chinese will write some rules, We will write some rules. The Indians will write some rules. The Japanese will write some rule. The Russians will write some rules. The Brazilians will write some rules. The Europeans will write some rules. And I dare say that even the Iranians and the Saudis will write some rules. This is a multi-polar world and we need to quit pretending that it is a uni-polar world with the United States as the only super power.
Nor am I suggesting that we just walk away from trade. I'm all for trade that is of benefit to us and we should seek that and conclude treaties that are advantageous to us in supplying us with things that we want and need. But we should not conclude trade deals for political or military purposes and call them “free trade” deals. Or deals that necessarily are concluded for economic purposes. They are alliances and they should be negotiated and justified that way.
Other issues not mentioned by the Congressman but in the background
First the TPP, TTIP, and TiSA deals are being sold as “free trade” agreements, delivering free trade benefits. That is not true, and only signifies that we've been inhabiting a fantasy world. It is not the world we live in. Simon Johnson and Andrei Levchenko have shown how the TPP may very likely depart from the principles of free trade that theoretically would benefit all parties to trade.
Also, Joe Stieglitz has called the TPP “managed trade” and not “free trade.” In addition, the leaked provisions of the TPP and other “trade agreements” have shown that these agreements are far more about corporate control over the laws national, state and local governments may implement and sustain, than they are about international trade that is in the public interest. This is clear from the leaked provisions of the Investor State Dispute Settlement (ISDS) portion of the TPP.
Second, many observers of the politics of fast-track/TPP have noticed that Malaysia is being included in the TPP despite its involvement in “human trafficking” – the slave trade. How can the slave trade be about “free trade”?
Clearly, either it can't, or if it can, then that is a very good reason why we ought not to support “absolute free trade”, which is what the Administration seems to be advocating, while it carefully negotiates managed trade. So, for example it's obvious to everyone watching, that including Malaysia in the agreement is about the US Navy commanding the Straits of Malacca, one of the choke points for world shipping.
It is very questionable morally whether the US tacitly supporting the slave trade in Malaysia is worth approaching this military goal. But apart from this, including Malaysia in this agreement isn't about free trade that will enhance the economic well-being of Americans under some far-fetched 19th century economic theory that involves gross over-simplifications of reality. Instead, it is about national security. So we ought to acknowledge that and frankly debate it along with the TPP.
Third, Congressman Himes implies, in some of his statement, his expectation that the trade agreements will be beneficial for Connecticut and his district in particular. But he and the partisans of these managed trade deals should be clear that publicly available projections of the impact of TPP and not optimistic. In fact, if economic projections of likely gains from the TPP are anywhere near the mark. These gains are projected to be so low by 2025 that they are attributable to rounding error in projections.
So, let us be clear about what Congressman Himes is doing in supporting fast track and tacitly the TPP and the other trade agreements the President is negotiating. He is proposing that we assume all the risks of harm to democracy, national, state, and local sovereignty, the environment, the climate, health care, education, developing new energy foundations, the financial system and others emerging from these agreements just on the chance that the gains to employment over the next decade from the TPP will be minimal at best?
Does that make sense to you? It certainly doesn't to me. So, where is the pay-off for Congressman Himes in doing this?
(Cross-posted from New Economic Perspectives.)