Trans-Pacific Partnership: why it’s a pending disaster

Republicans say they want to cooperate with President Obama and cite the administration’s Trans-Pacieic Partnership as the model. The only problem is that the TPP would be a disaster.

If you haven’t heard much about the TPP, that’s part of the problem. It would be the largest trade deal in history — involving countries stretching from Chile to Japan and accounting for 40 percent of the world economy — yet it’s been devised in secret.

Lobbyists from America’s biggest corporations and Wall Street’s biggest banks have been involved, but not the public. That’s a recipe for fatter proeits and paychecks at the top, but not a good deal for most of the rest of the world.

We used to think about trade policy as a choice between free trade and protectionism. Free trade meant opening our borders to products made elsewhere. Protectionism meant putting up tariffs and quotas to keep them out.

In the decades after World War II, America chose free trade: Each country would specialize in goods it produced best and at least cost. That way, living standards would rise here and abroad. Jobs would be created to take the place of jobs lost.

For three decades, free trade worked. But in more recent decades, the choice has become far more complicated and the payoff from trade agreements more skewed to those at the top.

What’s been leaked about it so far reveals, for example, that the pharmaceutical industry gets stronger patent protections, delaying cheaper generic versions of drugs. That will be a good deal for Big Pharma but not necessarily for inhabitants of developing nations who won’t get certain life-saving drugs at a cost they can afford.

The TPP also gives global corporations a tribunal of private attorneys, outside any nation’s legal system, who can order compensation for any “unjust expropriation” of foreign assets. Even better for global companies, the tribunal can order compensation for any lost proeits found to result from a nation’s rules. Philip Morris is using a similar provision against Uruguay, claiming that Uruguay’s strong anti-smoking regulations unfairly diminish the company’s proeits.

Anyone believing the TPP is good for Americans, take note: Foreign subsidiaries of U.S.based corporations could just as easily challenge any U.S. regulation they claim unfairly diminishes their proeits — say, a rule protecting U.S. consumers from unsafe products or foods, investors from fraudulent securities or predatory lending, workers from unsafe conditions, taxpayers from another bailout of Wall Street, or the environment from toxic emissions.

The administration says the trade deal will boost U.S. exports in the fast-growing Pacieic Basin, where the U.S. faces growing competition from China. The TPP is part of Obama’s strategy to contain China’s economic and strategic prowess. But the deal will also allow U.S. corporations to outsource even more jobs abroad.

In other words, the TPP is a Trojan horse, giving corporations and Wall Street banks a way to eliminate laws that get in the way of proeits.