Notwithstanding President Barack Obama’s best efforts to sell the Trans-Pacific Partnership (TPP) Agreement to Congress and the public on economic grounds, presidential and congressional candidates are shunning the TPP as a winning campaign issue. Even Senator Rob Portman, a former U.S. trade representative, doesn’t mention the TPP in his electoral “Jobs and Growth” agenda. The economic forecasting arguments for TPP are very weak—even according to the “heroic assumptions” of proponents, such as no change in the U.S. trade balance or net employment as a result of the TPP. So, what arguments do the TPP proponents have left?
When Congress returns to Washington after the November 8 elections, its members, particularly the defeated or retiring legislators, will be pressured to vote for the TPP in large part on national security grounds. What these grounds are, just like the draft TPP texts themselves, will remain a closely guarded secret.
Representative Ron Kind (D-WI) told Inside U.S. Trade that following a classified national security briefing about the TPP, “It’s a very powerful argument; it’s not just trade, it’s an important tool in our diplomatic and national security arsenal.” He could not reveal the details of the “very powerful argument” without violating his security clearance. After the elections, Kind said, military leaders (presumably retired, since active duty officers are not allowed to lobby) would be deployed to lobby Congress to vote for the TPP. There will be more classified briefings for members of Congress, followed by more press conferences about the “very powerful argument” whose reasons the Peoples’ Representatives cannot reveal publicly without serious legal repercussions. Justifying one’s TPP vote on opaque national security grounds will surely be easier than trying to justify the vote on economic grounds, as Kind’s own situation illustrates.
Representative Kind’s plan for aiding economically distressed Wisconsin dairy family farms in his district involves removing export barriers and legalizing the immigrant work force that is the labor backbone of mega-dairy Confined Animal Feed Operations (CAFOs). Although Kind is a leading Democratic TPP supporter, the plan does not mention the TPP, as one of his aides noted. If it were to mention the TPP, Representative Kind would have to answer questions about the impact of increased TPP dairy ingredient imports on low and plummeting U.S. raw milk prices. He would have to answer, as IATP did recently, why TPP supporters want to increase dairy ingredient imports when U.S. dairy processors are pouring U.S. farmers’ raw milk into high-tech sewers. Since the main beneficiaries of this dairy import scheme are convicted U.S. raw milk price fixers, such as the Dairy Farmers of America and Dean Foods, the better part of valor dictates that Representative Kind justify his vote for the TPP on the basis of classified national security briefings.
On September 28, Secretary of State John Kerry asked, as if representing the TPP’s other 11 prospective members, “If America won’t enter into partnership with us on economic matters, why should we look to Washington for guidance on political or security matters?” Secretary Kerry’s ventriloquized question makes sense if you believe that the United States has geopolitical and military security influence only to the extent that it can use trade policy as a “soft power” tool to reward or punish countries in President Obama’s “pivot to Asia.”
But consider just some of the sources of that influence. The U.S. military budget is larger than the next seven military budgets combined (not counting the military budgets of U.S. intelligence agencies). The National Security Agency is authorized to spy on 193 countries and 20 international organizations, as well as to report on the activities of foreign corporations. Doesn’t the United States already control sufficient sources of influence in political and security matters so that prospective TPP “partners” would seek U.S. “guidance” regardless of whether or not Congress approves the TPP? President Obama and his successors will hardly need the TPP to order the intelligence agencies to determine whether foreign corporate activities pose a present and imminent danger to the United States or are stealing U.S. intellectual property. Nevertheless, would-be foreign policy realists (ignoring the prospective Latin American members of the TPP) contend that a successful “pivot to Asia” turns on the approval of the TPP.
the pivot’s legacy ultimately will be determined by ratification of the TPP. The 12-member free-trade pact, the first to include the world’s second- and third-largest economies, is not just important for business. As a high-standards agreement it has the potential to affect more than just tariffs, reaching deep into member countries to create conformity on labor, the environment, food safety, intellectual property, cybersecurity, the digital economy, development, and other standards. If China were to join the TPP, conformity with these clauses would have a transformative strategic effect on the nature of the Chinese state. Though a distant outcome at the moment, it is not implausible.
This kind of argument, however appealing to foreign policy hawks in its idealism, is thoroughly implausible on a number of grounds. We outline just three here.
- The TPP is not a “high standards agreement.” For example, the TPP standard of scientific data and studies to be used in risk assessments of food and agricultural products—“reasonably available and relevant”—allows for a continuation of the widespread use of Confidential Business Information claims to shield corporate science from the higher standard of public and peer-scientific review.
- The TPP proponents of “removing regulatory irritants to trade,” such as the U.S. Chamber of Commerce, are also attacking a broad array of U.S. regulatory agency budgets and mandates through their congressional allies. For example, Congress has refused to fund the Food Safety Modernization Act adequately to implement its “higher standards,” including those applying to imported food and agriculture products. Industry has strongly opposed regulatory service user fees to compensate for the federal budget shortfall. If the United States is not willing to budget to implement and enforce standards, should we assume that other TPP governments will do so?
- China has no economic or strategic need to join the TPP and cannot be geopolitically “contained” by its standards. The United States has been negotiating a bilateral investment treaty with China since 2008 and may conclude negotiations in 2017, so China will not need to comply with TPP investment provisions. The United States has allowed Chinese state owned companies to buy majority shares of the meat-processing mammoth Smithfield, and the agricultural seeds and chemical company Syngenta, following national security reviews and with no “transformative strategic effects” resulting from the Chinese takeovers. China is Australia’s number-one trading partner; New Zealand has had a free trade agreement with China since 2008; Canada has announced its intention to start FTA negotiations with China; Peru, Vietnam, and Chile are seeking Chinese investment. None of these facts points to a China that will comply with TPP rules that it has not negotiated.
In a rebuttal to Secretary Kerry’s geopolitical argument for passing the TPP, Representative Sander Levin, the top Democrat on trade and investment issues in the House of Representatives, said “An agreement that is not in our economic interest cannot be in our national security interest because our national security depends on our economic strength, including in manufacturing.” He warned the Obama administration not to try to pass the TPP during the lame duck session. To do so would intensify citizen opposition to what he called a “mindless approach that assumes more trade is always better, no matter what its terms.”
Among the issues Levin wants the next administration to re-negotiate is the Investor State Dispute Settlement (ISDS) Mechanism, which allows corporations and other investors, such as hedge funds, to sue governments over regulatory actions perceived to impair anticipated investor profits. The ISDS, which IATP opposes, is a one-way private tribunal that provides governments with no recourse to sue investors for cross-border regulatory evasion and harm to public, worker, and environmental health caused by investor activities.
It’s important to detail exactly how U.S. trade and investment policy substance and process should change, something IATP and many others are developing now. But to give Levin’s proposals and those of others a chance to become part of U.S. trade and investment policy, policy space for them must be created by defeating the TPP.