TPP: Kathleen Rice (D-NY) Is the Latest to Put “Free Trade” Above National Sovereignty and Democracy
I blogged a critique of Don Beyer, Democratic Representative in the Virginia 8th Congressional District to protest his announcement of support for the Trade Promotion Authority (TPA) bill followed by the Trans-Pacific Partnership (TPP) legislation. This past Saturday, Kathleen Rice (D-NY, 4th Congressional District) became the latest to join President Obama's effort to elevate corporations above the people through the TPA, followed by the TPP legislation, and, he hopes the passage later on of the Transatlantic Trade and Investment Partnership (TTIP), and the Trade in Services Agreement (TISA). This post is my reply to Congressman Rice's justification, in talking point/response format, for joining the pro- fast track-TPP forces.
Kathleen Rice's very good reasons for initially opposing “fast-track” and TPP
In January, I was asked to sign a letter to President Barack Obama expressing deep concern with the prospect of fast-track trade authority. Allowing the President to strike sweeping trade deals outside of the congressional amendment process is an almost unfettered power that in too many instances has led to the exploitation of the American worker. In signing the letter, I stood as an opponent of a fast-tracked, up-or-down House vote on an upcoming trade deal that I wasn’t confident would protect my district’s working families.
A perfectly reasonable position, but fast-track/TPP isn't just about protecting working families or harming them further. It is about a whole range of issues, some even more important than whether the TPP will have a positive or negative effect on working families. For example, Kathleen Rice doesn't mention the sovereignty and democracy impacts of the Investor-State Dispute Settlement (ISDS) provisions in the TPP, provisions insisted upon by the US Trade Representative, not forced on us by other nations negotiating “free trade” agreements.
These provisions 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.
In my view, Congressman Rice, has no right to participate in such arrangements or even to contemplate legislating them, since she 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 she 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 is a violation of her oath of office. She ought to stop it, immediately.
What will she 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 Congressman Rice deal with that? Will she tell us it wasn't her fault? It was the evil Republicans!
Congressman Rice has the chance to eliminate the possibility that something like the above awards will ever happen to the United States. Take that opportunity! Beat fast-track now, and kill these agreements!
And before she or others say that such awards will never happen here, 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.
So how would Congressman Rice handle an award of this size if given to a multinational trading in the United States? How would she “pay for it”? Would she do that by raising the $340 Billion through taxing the wealthy? If not, then whose hide would she take the award out of?
Change in Congressman Rice's position to support TPP
After more than five months of trade briefings, reviews of classified trade documents, and extensive conversations with those brokering a potential Trans-Pacific Partnership, my confidence has changed.
In talking to working families, small business owners, organized labor leaders and our President, I believe that both sides of the fast-track and TPP debate seek the same thing: a fair opportunity for American workers to compete and an expanded marketplace for the goods they produce. These conversations have given me confidence – for the first time – that our President and his negotiating team will demand that any trade deal accomplish these goals without sacrificing the worker and environmental protections that have shamefully eluded past accords.
I think this really oversimplifies the conflict in a number of ways. First, in my view, both sides of the debate don't have the same goals. Many of the pro-TPA forces don't care whether the trade playing field is fair for American workers and provides an opportunity for them to compete in an expanded market. If they did care then they would write into the TPP hard guarantees providing for no-nonsense immediate and automatic expulsion of any nations that used anti-competitive business practices.
But where are such guarantees in the agreement along with the institutional mechanism providing for their enforcement? The answer is that they are nowhere to be found. All that one sees is pretty language about such competition being an objective of the agreement. Put simply, the question for the pro-TPP group on this issue is “Forget the pretty words, where is the beef?”
Congressman Rice says that conversations with the President have raised her confidence that our negotiators will demand concrete worker and environmental protections. I'm glad she has increased her confidence and that she's willing to bet her seat on this increase. But why is there a need for “confidence”? Why can't the Congressman just read the current TPP draft which is said to be nearly final, in order to see that the protections are there? And why can't she disclose the TPP drafts to the rest of us by reading them into the Congressional Record so we can all see for ourselves whether the protections are there?
Second, nor is it clear, whether the anti-TPP forces subscribe to Congressman's Rice's objective of a fair and competitive marketplace for workers. I think anti-TPP people have in mind many objectives, and that these are not about establishing some process of free trade.
Instead, I think we are concerned about the TPP: producing more jobs paying a living wage than it destroys; safeguarding the environment and the climate, protecting national, state, and local sovereignty; subordinating the will of multinational corporations to the will of the people of each signator nation, safeguarding the future of US economic life by protecting its capabilities, skill, and knowledge base, and protecting the United States and other nations from the rise of global plutocracy, and national, state, and local level rule by large multinational corporations and the wealthy taking over the political system (otherwise known as fascism).
These goals are about the outcomes of trade agreements. They are not about a fair “process of international competition,” unless such a process would serve these ends. However, there is no guarantee that the fair competitive process that is the Congressman's objective would result in the outcomes we seek, especially since the “free market” she wants would never maintain itself for very long without world political governance institutions that can ensure maintenance of the goal of a free and fair market.
And where are those new governance institutions in the TPP? And why would anybody assume that they would be effective in maintaining a free and fair market, even if one could be achieved in the first place?
Congressman Rice's ruminations about the process.
I am not one to close my mind to competing arguments – even after I’ve adopted my own. There’s nothing heroic about stridence in the face of reason. When it comes to advocating for working families, there isn’t anything courageous about intransigence in the face of fact.
Politics in Washington too frequently muddles these truths when conveniently lining up the sides of a debate. Even if I bear the political cost of it, I’d rather battle than abet that unfortunate reality.
Far too many things are getting lost in an important debate that has listed wildly between public policy, theatre, and threat. But a few things to me have become crystal clear, and these are what I’m going to let guide my vote when fast track hits the House floor in the coming weeks.
This is all meta-commentary about things she regrets in the political debate thus far. But none of it provides substantive reasons why her initial assessment of TPA and TPP was wrong, and needed to be changed. Nothing in these ruminations explains why she now supports fast-track/TPP.
The record of trade deals.
There is no question that past trade deals have failed to pay off for most American workers. Rather than grow our economy by boosting exports and giving American businesses entry into new markets, trade agreements have too often led to an influx of cheap imports and the outsourcing of American jobs to countries lacking enforceable labor protections and environmental regulations. Past trade deals have tilted the competitive floor away from our workers.
Very true. But where are the reasons why the Congressman now thinks that this time things will be different, so that she ought to vote to TPA and TPP? She talks about “stridence in the face of reason” and “intransigence in the face of fact.” But where is her reasoning and where are the facts supporting her switch to the neoliberal side of this struggle.
Congressman Rice mistakenly thinks that the only path to renewed growth, prosperity and greater employment is to increase exports
We cannot grow our economy and restore a prosperous American middle class without increasing American exports. Economic isolation is not a path to broad-based opportunity when more than 95 percent of the world’s customers live in other countries. We must find a way to ensure that more middle-class customers around the world are buying more products made by middle-class American workers.
Growing our economy isn't about increasing our exports. A growing economy, growing economic activity over time, is measured by growth in GDP, and growth in the labor participation rate of people working for a living wage with good fringe benefits. We can create that growth by decreasing our trade deficit, but we can also create it by greater production fueled by greater consumption leading to increased sales and increased employment. Where will that greater consumption power come from initially, if not from a smaller trade deficit or trade surplus. The answer is that it can come from from growing government deficit spending targeted on creating high quality and high wage jobs to fuel the economic expansion.
Such growth in GDP may even occur along with a growing trade deficit, if the continuing government deficit spending is sufficiently greater than the trade deficit to create and maintain full employment in the labor force. That way of producing full employment is much to be preferred to the alternative of having large trade surpluses. Why? Because, in international trade, exports are real costs, and imports are real benefits.
This truth of international macro-economics doesn't seem to be one that Congressman Rice understands. She ought to remember that there is a distinction between the accumulation of real value and the accumulation of nominal wealth. Money accumulation is the accumulation of nominal wealth. Increasing trade surpluses allow us to increase nominal wealth. Increasing trade deficits allow us to accumulate real value (wealth) in goods and services.
So, the truth is that trade deficits are to be preferred over trade surpluses if we're concerned about increasing real wealth. However, they're only to be preferred if they don't result 1) in decreased consumption, sales, and increasing unemployment in our nation, and 2) the loss of, or failure to produce, work, capabilities and skills, that will safeguard the future full functioning of the economic system, and the other systems within our society that it provides valued goods and services for.
So, the bottom line here is that opponents of the TPP are not advocating isolation, or reduced trade. We welcome all trade that sends us valued goods and services in return for the electronic bits of information we create out of thin air and call dollars these days. The idea that we are not in favor of trade is just not true. It is a canard offered by people who don't want to debate the real issue of fair trade that is consistent other pressing needs such as reducing inequality, healing the environment, stopping climate change, creating full employment, creating health care security for everyone, transitioning entirely to renewable sources of energy, and others.
And it also isn't true that “We cannot grow our economy and restore a prosperous American middle class without increasing American exports.” Of course we can, we simply have to use the monopoly power of government to issue its own fiat currency to create the continuing consumption power necessary to create sales and jobs creating full employment.
In addition, it is not true that: '”We must find a way to ensure that more middle-class customers around the world are buying more products made by middle-class American workers.” That's because if they prefer not to buy American products then it is only necessary that our 99% are buying enough products made by ourselves to create and maintain full employment.
Congressman Rice thinks that TPA/TPP could be “. . . the signature economic accomplishment of an inarguably worker-friendly president.”
Several labor unions have made it their priority to kill fast-track authority and any potential trade deal that would follow its lead. Stung by the crippling effects of NAFTA and trade deals that have only exacerbated the plight of the American worker, these labor leaders have voiced nearly unprecedented opposition to what could be the signature economic accomplishment of an inarguably worker-friendly president.
Well, she has it right about why labor unions are opposing fast-track/TPP. But the idea that TPA/TPP will be the President's signature economic achievement is exactly what is in dispute here; while the characterization of this President as “inarguably worker-friendly” is on its face ridiculous.
Fast-track/TPP gives every promise of being a catastrophe that this President will never live down if he is successful in passing it. That's because, first, there are no projections from economists suggesting that the TPP, if passed, will produce very many net new jobs over the next ten years. On the contrary TPP projections are underwhelming even when optimistic. And second, because the ISDS provisions promise to result in large financial judgments against American local, and state governments, as well as the Federal government for destroying “expectations of potential profits” of multinational firms.
In a short time, such judgments will paralyze our governments and destroy the political likelihood that any legislation interfering with the course multinationals set for themselves will be passed barring withdrawal from the Trade treaties passed under fast-track themselves. Before that eventually happens, and I believe that it will, millions will suffer under the further austerity and increasing inequality that the paralysis of government resulting from the TPP and other trade treaties, will create.
Congressman Rice echos Administration claims about unprecedented protections, but provides no facts or reasoning to support these claims.
Lost in the ensuing dust-up is that the fast-track legislation recently passed by the Senate outlines unprecedented requirements to address the worker-protection problems of NAFTA. It sets high labor and environmental standards, and ensures that trade sanctions can be imposed on any country that fails to meet these marks. It requires the U.S. Trade Representative to keep members of Congress informed throughout the negotiations, and for the first time ever it creates a way for either the House or the Senate to revoke the power if we determine that a trade agreement is not meeting the negotiating objectives outlined in fast-track legislation.
In view of all the past trade deals and the claims made for these, and the general lack of attempts to enforce the objectives of trade agreements, I'll have to insist that the Congressman must be more clear, precise, and specific about what's in the agreement if she wants people to accept that she's not handing them a propaganda line from the White House, which is what this statement sounds like.
What are these requirements written into fast-track exactly? How do they protect workers against unfair foreign competition, for example, against Vietnam's $.60 per hour labor force and the cheap goods for export that force will produce? How can we be sure that the sanctions for violating labor and environmental standards WILL be imposed? And what makes you so sure they can be imposed? What is written in TPP to ensure this?
Also, Congressman Rice's claim that fast-track can be revoked by either House, doesn't fully disclose how difficult that would be to accomplish. If a majority of the House and Senate wanted to revoke fast track, the fast-track bill says that a bill to do so must be approved by both the Republican-controlled Senate Finance and the Republican-controlled House Ways and Means committees, and then must be passed by both chambers within 60 days. So, it's not very easy at all to reclaim Congress's constitutional prerogatives to provide advice and consent on trade deals once FTA is passed.
Finally, I think the Congressman needs to understand and own up to the reality that the previous record of Congress's and presidents when it comes to trade deals doesn't inspire the confidence of the public. Congress's approval rating is around 10% right now and the President's isn't in the stratosphere either. The fact is that people don't trust politicians at this stage of American history, having been burned too many times after being asked to take things on faith. Everybody is from Missouri, when it comes to believing White House claims and Congress's statements about them.
Many of us feel that it's time for Congresspeople and the Administration to trust us, before we trust them again. It's time to do that by making public the current drafts of the TPP, and the other trade agreements that will be governed by fast-track. We need to see for ourselves what the proposed agreements say and to ensure ourselves that these agreements don't turn over our governments at all levels to the multinational corporations that will be running the ISDS tribunals.
We need to know that these agreements will not elevate multinationals' “expectations of profits” above every other important value that our governments ought to defend and realize over time. Until we know for sure that the language of the TPP and other agreements doesn't establish this catastrophe for our nation, we will never support fast-track/TPP.
So, I have to say, we cannot accept empty words, assuring us that we are protected by these agreements, anymore. Show us!
The Congressman claims that TPA reaches a balance, but the real question is whether it destroys the constitutional balance.
Importantly, the legislation reaches a balance between presidential power and congressional oversight that won’t forever cripple our nation’s ability to broker good deals for our workers with foreign countries.
Balance between presidential and Congressional powers? What a crock! A constitutional balance was already established between the two branches of government by the founders. Now the issue is whether that balance will be respected or whether it will undermined by a new balance specified in the fast-track legislation. From where I sit that new balance is illegitimate and could only become so through the process of constitutional amendment. Barring that “fast-track” is just a power grab by global elites working through the President, enabled by venal or frightened Congresspeople who will sell their authority in return for campaign donations and the hope of cushy jobs after they leave Congress.
Also, I'm afraid I don't see why the need for a president to go back to Congress to get its advice and consent for a trade agreement is a barrier to getting a good deal for our workers. In fact, from where I sit, it is a stronger guarantee than our presidents having total freedom of action. When presidents have to return to the Congress to get its consent and foreign governments know that an agreement has this hurdle to clear, it is more likely, rather than less likely, that a good deal for our workers will be secured.
But beyond this, Congressman Rice's justification thus far, seems to concern itself mostly with questionable claims about GDP growth and protections on the jobs front. However, there are over-riding issues of sovereignty: national, state, and local, in relation to the ISDS tribunals that make it imperative that TPA be rejected until Congress sees what is in this whole agreement and is able to evaluate whether its own sovereign powers under the Constitution are given away in the TPP drafts. This is Congress's constitutional duty. It cannot do that duty without voting down the TPA.
Without TPA/TPP, big, bad China will make the rules
Defeating fast-track authority would strip the long-held power of the President to expand the marketplace for our workers. It would give China the opportunity to set the ground rules for the global marketplace. It would leave in place the weak worker protection and environmental standards of previous agreements.
First, it's obvious from what you said earlier, that this “long-held power of the President,” which by the way doesn't exist now, has produced less expansion of the marketplace for our workers than it has for workers in the other nations we have agreements with. That's why we've had trade deficits for decades now. So perhaps, the President never having fast-track power again is a good thing.
Second, this is a red herring, meant to scare us. 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 argument is just nonsense. It's not about “free trade.” It's about “political trade!” If the Congressman wants to make a “political trade” deal, she ought to debate and justify TPP on that basis, but don't pretend that is a “free trade” deal.
Third, the weak worker and environmental protections in NAFTA and other previous deals are ineffective and never enforced anyway. So, the proper thing isn't to replace with even more comprehensive agreements capable of doing greater damage, but to re-negotiate these deals and get them right, making it clear that if other nations will not re-negotiate them, then we will withdraw from the objectionable trade agreements. This way of doing things should be especially effective against nations we have large trade deficits with for obvious reasons.
Congressman Rice offers us double-talk and double-think, says “black is white.”
I have always supported organized labor and always will. From prosecuting labor law violators, to advocating for a minimum wage increase to fighting outsourcing and erosions of their power to bargain collectively, I’m proud to be an advocate for the working families and union members that form the backbone of our workforce.
But when it comes to trade in an increasingly competitive global marketplace, those of us who truly care about American workers have to modernize our thinking and objectively evaluate deals outside of the shadow of past failures. Killing fast track and TPP won’t kill NAFTA any more than handing President Obama a setback would hand one to Bill Clinton.
I'm sorry, but please spare us the cant. In supporting the TPP you are not supporting organized labor. They're against the TPA and the TPP, you are for it, so you are undercutting organized labor's position on this; and your claim that you are supporting and will always support unions is self-refuting and immediately provides you with a credibility gap. It's one thing to say that you disagree with labor unions on this, but it is entirely another to say that you support them now and forever, when you're opposing every union in the nation on TPA/TPP.
Also, your remarks about “modernizing our thinking” and evaluating this deal outside of the shadow of previous failures is patronizing and insulting. The past always provides experience with which we evaluate the present. We should not ignore it. We should never return to the President's “Look Forward; not Backward,” because that maxim has, in his hands, proven to be a supreme tool of moral hazard and was the front slogan used to enable his failing to enforce the law against our above the law criminals in the FIRE sector.
Certainly we ought to “modernize our thinking” but what does this mean? Is it “modern thinking” to ignore what has happened in the past, and to put aside lessons learned? We need to know that this deal will be different from past deals in ways which will make the outcomes of trade under TPP different from trade under NAFTA and in line with our most important values. That is the kind of “modern thinking” we need in relation to this “trade deal.”
Furthermore how can we evaluate that for ourselves unless we are able to see and debate the TPP deal? That's why it is patronizing to suggest that we need to evaluate this current deal before we reject TPA. This is a chicken-egg problem. If the Congressman is serious about TPP opponents evaluating the deal, then this evaluation must come first before giving the Administration the authority to railroad this and other trade deals through the Congress. That is the meaning of democracy and advise and consent in the American context, and it is not “modernizing our thinking” to abandon these safeguards against arbitrary authority and tyranny, as she proposes.
Congressman Rice's silence on slavery
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 another very good reason why we ought not to support “absolute free trade” in the TPP.
But Congressman Rice, for her part, is just mum about Malaysia and slavery. So, she is complicit in supporting it by getting Malaysia included in the agreement, even though this would implicate the United States in supporting a slave trading nation economically.
Another case of the President's “compelling case” that “this time will be different.”
The President has made a compelling case for why the Trans-Pacific Partnership will be different than prior trade deals and why fast-track authority is necessary to getting it done. I’ve done my homework and I agree with him.
Huh? Where are the President's facts and reasoning making this “compelling case”? What arguments does he use? What facts does he cite for us? How does he show that the current text of the TPP will lead to achievement of his goals? The answer is that he doesn't do any of these things, because he can't possibly do them unless, at a minimum, he makes the TPP drafts public. And, of course, he steadfastly refuses to do that.
Next, if the Congressman's claim to have done her homework is really true, then why is it that she 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 Congressman Rice 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 Rice given any thought to this Federalism issue in the context of ISDS provisions?
In particular, for her to propose, through favoring ISDS within TPP 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. Her new-found support for the TPP with its outrageous ISDS provisions is a violation of her oath of office and her duties to her constituents and to the American people.
What other conclusion can we draw when Congressman Rice is willing to negotiate an agreement that subjects US Governments at all levels to decisions made by foreign tribunals unaccountable to our Government or to the American people. How can she advocate for and vote for a trade agreement giving foreign entities that kind of power over the US and still claim that she is defending our laws and our constitution?
That is a question Congressman Rice ought to ponder while she waits for her final vote on the TPA and any possible upcoming votes on the TPP. Her future in public service may well depend on the answer she arrives at.
(Cross-posted from New Economic Perspectives.)