Category Archives: Trade

Who wrote the rules for the Trans-Pacific Partnership?

Source: Todd Allee, Andrew Lugg, Research & Politics, Vol. 3 no. 3, July-September 2016

From the abstract:
Twelve governments recently signed the much-anticipated Trans-Pacific Partnership (TPP), sparking heated debate about its merits. As a primary motivation for this first “mega-regional” agreement, US President Barack Obama argues that the TPP is a way for the USA, and not China or someone else, to write the global trade rules of the future. This begs some important questions, namely which country or countries really did write most of the TPP and thus whose agenda for 21st century trade might it advance? To answer these questions, we compare the recently-released text of the TPP to the language in the 74 previous trade agreements that TPP members signed since 1995. Our text-as-data analyses reveal that the contents of the TPP are taken disproportionately from earlier US trade agreements. The ten preferential trade agreements (PTAs) that most closely match the TPP are all US PTAs. Moreover, the contents of controversial chapters, such as the one on investment, are drawn even more heavily from past US treaty language. Our study and findings apply power-based accounts of international institutions to a landmark new agreement, and portray a more active, template-based process of international diffusion.

ISDS: Expanding Corporate Power to Attack Laws in Every State

Source: Public Citizen, Global Trade Watch, September 2016

At the heart of the Trans-Pacific Partnership (TPP) are new rights for thousands of multinational corporations to sue the U.S. government before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums, including for lost future expected profits, to be paid by America’s taxpayers. The corporations need only convince the lawyers that a U.S. federal or state law, court ruling or regulatory decision violates the extraordinary new rights the TPP would grant them. The decisions are not subject to appeal. This shocking process, called “investor-state dispute settlement” (ISDS), empowers multinational corporations to attack the laws we rely on for a clean environment, financial stability, affordable medicines, safe food and decent jobs.

The United States has largely avoided ISDS attacks because past treaties were with nations that did not have many investors here. But the TPP and a similar deal with European nations, called the Transatlantic Trade and Investment Partnership (TTIP), would change that. Under existing U.S. treaties, other countries have paid nearly $3 billion to corporations for toxics bans, water and timber policies, land-use rules regulatory permits, and more. Another $70 billion in claims are now pending against climate and energy laws, medicine pricing policies, pollution cleanup orders and other public interest policies.

Nationwide, the TPP would roughly double U.S. exposure to ISDS attacks and a TTIP would quadruple the exposure, spelling an unprecedented increase in U.S. ISDS liability. Under all existing ISDS-enforced pacts, the total number of firms that can currently launch ISDS cases against the U.S. government is about 4,100 foreign corporations that own about 9,829 U.S. subsidiaries. The TPP would newly empower more than 3,682 additional corporations in TPP countries that own more than 10,085 subsidiaries here, to launch cases against the U.S. government. The TTIP would newly empower more than 12,100 European Union parent corporations that own more than 26,961 U.S. subsidiaries, to go to the panels of corporate lawyers and demand U.S. taxpayer compensation.

How could your state be threatened? Click the map above to find out.
Related:
Trans-Pacific Partnership (TPP): Expanded Corporate Power, Lower Wages, Unsafe Food Imports

Frustrated with Democrats, white working-class voters turn to Trump

Source: Emily Mills, Jimmy Miller, Lian Bunny, Center for Public Integrity, August 25, 2016

….In economically struggling communities like Mahoning County – where most steel mills have closed – many white, working-class Democrats are voting for Trump, registration records and 2016 presidential primary results show….

…..In Tennessee, after a clothing factory outsourced jobs and operations to Mexico, a county that voted Democratic in the 2000 and 2004 presidential elections went Republican in both 2008 and 2012.
In Mahoning County, Ohio, as its county seat Youngstown labors under the loss of the steel industry, more than 6,000 voters have switched from Democrat to Republican this year.

Similarly, frustration over closing steel mills and rising health care costs has swayed nearly 5,400 voters to switch parties in Westmoreland County, Pennsylvania.

And in one Kentucky county where residents frustrated with the demise of the coal industry voted about 31 percent Republican in the 2000 presidential election, they voted more than 72 percent Republican in 2012, even though a majority of its voters remain registered Democrats…..

…..In the March 2008 primary, just under 14 percent of registered voters in Mahoning County – where Youngstown is located – voted Republican. During this year’s state primary in March, more than 48 percent of the county’s registered voters cast a Republican ballot, and poll workers had to print additional Republican ballots. More than 6,000 voters then switched from Democratic to Republican this year…..
Related:
Trump a Working-Class Hero? A Blue-Collar Town Debates His Credentials
Source: Richard Fausset, New York Times, August 26, 2016

The talk gets heated in Youngstown, Ohio, when residents discuss whether a New York billionaire’s ideas can revitalize a struggling Rust Belt town.

Human Trafficking and Forced Labor: Trends in Import Restrictions

Source: Liana W. Rosen, M. Angeles Villarreal, Ashley Feng, Congressional Research Service, CRS Insight, IN10541, July 29, 2016

More than 85 years ago, Congress passed a provision against forced labor in the Tariff Act of 1930 (19 U.S.C. 1307), which prohibited from import into the United States “all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor or/and indentured labor under penal sanctions” (Section 307 of the Act)…..According to human rights and anti-human trafficking awareness and advocacy groups, the use of Section 307 has been limited. In the over 85 years since the Tariff Act was enacted, U.S. authorities applied this provision to relatively few specific goods and manufactures. Some observers pointed to the so-called “consumptive demand” clause for the limited effect of this import prohibition. This clause excluded Section 307’s application to any imports that were not made “in such quantities in the United States to meet the consumptive demands of the United States.” In February 2016, the 114th Congress passed the Trade Facilitation and Trade Enforcement Act of 2015, known also as the Customs Reauthorization bill (P.L. 114-125). The bill was signed into law on February 24, 2016. Section 910 of the Act repeals the “consumptive demand” exception, effective 15 days after enactment, or March 16, 2016…..

The Trans-Pacific Partnership (TPP): Analysis of Economic Studies

Source: James K. Jackson, Congressional Research Service, CRS Report, R44551, June 30, 2016

…This report analyses some studies of the economic impact of TPP that are playing an important role in affecting the public policy debate, including the following:
• U.S. International Trade Commission (USITC): estimated the TPP would increase annual U.S. GDP by 0.15%, and trade by 1.0% by 2032; U.S. annual employment would be higher by 128,000.
• Peter A. Petri and Michael G. Plummer (Peterson Institute for International Economics) estimated that the TPP would increase annual GDP by 0.5% and increase U.S. exports by 9.0% by 2030.
• World Bank: estimated the TPP would increase U.S. GDP by 0.5% by 2030.
• Tufts University, Global Development and Environment Institute study by Jeronim Capaldo and Alex Izurieta: estimated that all TPP participants would lose 770,000 jobs and non-TPP developing economies would lose 4.5 million jobs.
• Other studies that use such proxy indicators as trade balances and jobs associated with exports to assess the impact of the TPP….

The High Health Costs of TPP’s “Free Trade”

Source: Joseph Stiglitz, Public Citizen, Global Trade Watch, 2016

Despite protests from industry lobbyists who are upset that they did not get everything they wanted, big pharmaceutical companies are some of the biggest winners in the Trans-Pacific Partnership (TPP). This supposed “free trade” agreement between the United States and 11 countries in the Americas and Asia would enshrine expansive monopoly protections for intellectual properties that shield drug makers from competition and provide them with new powers to challenge government decisions aimed at managing health care costs. A win for Big Pharma here will leave virtually everyone else worse off, with their higher profits coming at the expense of higher health care costs for consumers and taxpayers, avoidable deaths and suffering, and health innovations being brought to market at a slower pace….

It’s Tax Not Trade (Stupid)

Source: Edward J. McCaffery, USC Gould School of Law, USC CLASS Research Papers Series No. CLASS16-20, USC Law Legal Studies Paper No. 16-22, July 19, 2016

….The simple fact is that globalization and free trade are good for economies, as Adam Smith taught us in 1776 and as a decent high school economics class can prove today. The trouble in America is that the gains from trade are not being shared. The rich who can live off their capital or wealth rather than by the sweat of their brows are the big winners from globalization; workers are the big losers.

Spreading the wealth from those who benefit most from social changes to those who are harmed by them is the responsibility of our tax system. Yet tax has failed miserably in this role. In fact, tax as it now stands is not even designed to collect from the wealthy. And no candidate — on the right, left, or middle — has any serious plan to change this fact. Indeed, Trump and his fellow Republicans continually vow to cut taxes on the wealthiest, further benefitting globalization’s winners while adding to the pain of its losers.

In sum, tax not trade is what ought to be changing, and rich Americans, not workers worldwide, ought to be paying more to help their fellow citizens…..

The Surprisingly Swift Decline of US Manufacturing Employment

Source: Justin R. Pierce and Peter K. Schott, American Economic Review, Vol. 106, no. 7, July 2016
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From the abstract:
This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change.

Who’s responsible for child slavery?

Source: Al Jazeera, Inside Story, June 12, 2016

Almost one in 10 children wakes up each morning and goes to work. These children slave away in factories and fields, and as maids and sex workers. United Nations declarations specifically guarantee the rights of a child to be protected from economic exploitation. But vague laws, or sometimes a complete lack of legislation, mean that millions of children find themselves at work when they should be at school – often in hazardous conditions. At least 168 million children around the world work, with more than half of them in dangerous conditions, according to the International Labour Organization. Almost 80 million children are working in the Asia-Pacific region. That’s equivalent to the entire population of Turkey. And one in five children in Sub-Saharan Africa has a job. That’s almost 60 million children. The agriculture business is the biggest employer. Sixty percent of child labourers – nearly 100 million children – tend to farms and animals. But a lot of children, around 66 million, are also working in the service and industry sectors. What does it take to end child slavery?