November 15, 2014

The scary place where Obama and the GOP meet

David Dayen, Fiscal Times - I'd be surprised if a single voter cast their ballot so multinational corporations could exempt themselves from national laws. I don’t remember one TV ad framing the election as a chance to raise prescription drug prices in poor countries, or to stop the government from buying American-made goods. Maybe I missed the cable news chatter about muting the legislative branch’s power to define regulatory boundaries.

However, those could be the biggest results of this week’s GOP takeover of the Senate. Every election post-mortem looking for areas of potential cooperation between the Republican Congress and President Obama starts with “free trade.” Because the Washington elite’s hearts go a-flutter whenever they hear the term “free trade,” they see the deals as just the kind of bipartisan solution they think the country has yearned for. But the deals being readied by the Obama Administration actually don’t have much to do with trade at all; they’re about corporate power.

For years, the White House has been quietly negotiating two pacts with countries in Europe and Asia that comprise the vast majority of the world’s economy. It’s hard to give a comprehensive update on these talks because we know so little about the details. Talks on the first, the Trans-Pacific Partnership, have been conducted behind closed doors, with few if any updates. We do know the countries involved: the U.S., Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, South Korea, and Vietnam.

One striking feature here is that we already have formal trade agreements in place with most of these countries. Everyone knows NAFTA, the trade deal with Canada and Mexico. The South Korea Free Trade Agreement was negotiated by George W. Bush and signed by President Obama in 2011. We have binding free-trade deals with Australia, Chile, Peru, Singapore, and Vietnam, and it’s not like there are insurmountable barriers with the rest. As Paul Krugman points out, high trade tariffs are almost non-existent these days. With globalization firmly in place, claims that more “free trade” will increase exports or create jobs are extremely dubious.

In fact, TPP has a lot of protectionism in it; only this time, the goal is to protect corporate profits, rather than workers or citizens. Supporters argue that TPP would merely “harmonize” regulations, to smooth commerce across countries. In this telling, it’s just too hard for corporations to adhere to so many different national standards, so just having one benchmark, preferably set extremely low, would spur some sort of trade revolution.

In reality — at least as far as we know from leaked texts — TPP would limit government policies on everything from financial services to the environment to food safety. Initiatives like “buy American” laws, which mandate government purchases with domestic producers, would be tossed out under TPP, to name just one example.

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