The future of President Obama’s biggest trade deal, the Trans-Pacific Partnership, seems tenable at best. The European Union is facing its biggest existential threat following Britain’s Brexit vote. Donald Trump, running for president under the party that has historically rallied around free trade, is threatening to rip up the North American Free Trade Agreement and renegotiate the deal.
Regardless of who wins the election, trade policy in the United States is at a crossroads. There have always been critics of increased globalization due to trade, but the populist surge against these deals seems to be at unprecedented heights.
What does this mean for the United States’ role in leading the global economy? In the post- “major trade deal” era — which we will almost certainly enter if the TPP fails — what should be the next president’s model for how the United States approaches international trade?
Lori Wallach is the director of Public Citizen’s Global Trade Watch.
Why do polls show that Americans support “free trade” but oppose our trade agreements? Consider the Trans-Pacific Partnership: A 2014 Post infographic reveals that more than 500 official U.S. trade advisers representing corporate interests had special access to TPP negotiators and texts while the public, press and Congress were shut out.
This secretive, exclusive trade policymaking process has resulted in two untenable outcomes: 1) the failure to implement a strong China trade policy because U.S. firms operating in China fear retaliation, and 2) a U.S. “trade” agreement model packed with protectionist terms that harm workers and consumers. The bipartisan revolt against our trade policies demonstrates that the next president must develop a new approach to the issue — one that is not controlled by corporate interests.
Only nine of the TPP’s 30 chapters cover trade matters like cutting tariffs. Much of the rest is a smorgasbord of corporate goodies, such as the requirement that signatory countries protect pharmaceutical companies from having to compete with generic medicines, thereby raising consumer prices.
Another key provision grants new rights to thousands of multinational corporations to sue the U.S. government before a panel of three corporate lawyers. These corporations need only convince the lawyers that a U.S. law, regulation or court ruling violates the new privileges TPP grants them, and the lawyers can award the corporations unlimited sums to be paid by America’s taxpayers — including for the loss of expected future profits. The decisions are not subject to appeal.
The TPP is the most extreme example of trade pact hijack, but starting with the North American Free Trade Agreement, these deals have been used as a backdoor delivery mechanism for the corporate-favored-versions of non-trade policies. In fact, the reason many free traders oppose the TPP is because of its terms regarding medicine pricing, food labeling, financial regulation, limits on Internet governance and “Buy America” requirements in infrastructure spending.
Industry capture also means that the trade terms we really need are traded away. To get the protections for pharma and the corporate tribunals most other TPP nations opposed, U.S. negotiators conceded to demands to roll back certain environmental standards and to exclude penalties for currency manipulation. Plus, the influence of U.S. corporations which have relocated production to China (or simply fear retaliation from Beijing) has kept both Democratic and Republican administrations from acting against China’s currency cheating and other unfair trade practices.
To get our trade policy redirected back onto trade — that is, to get rid of the protectionist baggage and develop trade terms that benefit U.S. workers and consumers — a new president will need to eliminate the special interest advisory system and greatly increase transparency. We need a new trade pact negotiation and approval process to replace the Nixon-era “Fast Track” regime that sets criteria for appropriate trade partner countries and what must and must not be in agreements. And, unlike our current system, Congress must approve agreements’ contents before they can be signed, making negotiators more accountable to congressional directives.
Such reforms, which have been demanded for decades, would separate those of us who are for trade expansion and the protectionist special interests that use “trade” agreements to implement their agendas.