Suppose a Taiwanese company wanted to open a factory in California to make clothing. They propose importing workers who would accept a daily wage of $10, would not spend any money in the plant to meet U.S. occupational health and safety regulations, and would be rabid in opposing workers’ attempts to meet collectively to discuss their grievances or to bargain collectively with management.
Now suppose the same Taiwanese entrepreneur builds the plant in Vietnam, where he can hire workers for much less than $10 per day and easily implement the health, safety, and labor relations conditions mentioned above, while exporting the clothes to the U.S. market.
What is the difference between these two scenarios? The second case, in addition to being more likely, hides worker exploitation from American citizens and consumers. While we might react strongly to a factory fire or news about workers being beaten if it happened in our community, our reaction is not so strong when it happens half way round the world.
The economic effect is the same though: driving down labor standards and reducing purchasing power for the majority of people. And, of course, raising incomes for our Taiwanese entrepreneur and his investors.
The Obama administration wants to make it much easier for the Taiwanese entrepreneur to do this. Under the proposed Trans-Pacific Partnership (TPP), tariffs will be reduced between countries on the Pacific Rim, including Vietnam. Corporations will be given enhanced powers to sue governments if they believe those governments are interfering with the corporations’ profit making activities. These disputes will be decided in private tribunals outside the normal justice system of the countries involved.
That few people have heard of TPP is part of the strategy for getting it enacted. There has been almost no discussion of the proposal in Congress although negotiations have been underway since 2008. While hundreds of corporate lobbyists have easy access to the proposed trade agreement from the comfort of their home or office computers, our elected representatives in Congress can only see it if they physically go to the Office of the U.S. Trade Representative and examine the document on a “read and retain” basis – without expert staff, no notes, and no ability to make copies.
It is likely that the legislation will be submitted to Congress under “Fast Track” rules, which means it will have to be voted up or down without any possibility of amendments. There is no way that our elected representatives or even their staff experts will be able to comprehend a document that will be hundreds of pages long, without proper vetting beforehand.
Trade can be a good thing if it reduces costs, allows countries to specialize in what they do relatively well, and increases consumer choice. But TPP and other recent trade agreements are more about expanding the freedom of corporations than they are about trade, including the freedom to exploit labor under conditions that the vast majority of Americans find unacceptable.
The stealth with which TPP is being developed is a sure sign that the Office of the U.S. Trade Representative knows that the American people would oppose the agreement if they knew about it. Given the decline in tariff barriers over the last generation, being sure that the gains from trade go to the people who need them most is more important than further tariff reduction. Even readers of the generally pro-corporate globalization magazine The Economist now agree that making trade fairer is more important than making it freer.
Fairness in trade agreements requires that all citizens have a chance to affect the agreement through open and public discussion. Given the dramatic increase in inequality since the 1980s it is sensible to believe that fairness in trade requires particular attention to the weakest and most vulnerable members of society. Fair trade would prioritize the ability of the 99% to make a living rather than that of the 1% to accumulate unlimited wealth.
In 2008 candidate Obama promised to use trade negotiations to create enforceable labor and environmental standards, to promote human rights, to alleviate poverty, and to combat climate change. President Obama’s Office of the U.S. Trade Representative seems more interested in expanding corporate property rights.
~ Richard McIntyre is U.S. Trade Representative in the Economy Branch of the Green Shadow Cabinet. This statement is one of over a dozen issued in support of the Green Shadow Cabinet's June 17th call for action against the TPP.