Protectionism

[Gob]

Barack Obama’s ambitions to pass sweeping new free trade agreements with Asia and Europe fell at the first hurdle on Tuesday as Senate Democrats put concerns about US manufacturing jobs ahead of arguments that the deals would boost global economic growth.

A vote to push through the bill failed as 45 senators voted against it, to 52 in favor. Obama needed 60 out of the 100 votes for it to pass.

Failure to secure so-called “fast track” negotiating authority from Congress leaves the president’s top legislative priority in tatters.

It may also prove the high-water mark in decades of steady trade liberalisation that has fuelled globalisation but is blamed for exacerbating economic inequality within many developed economies with the outsourcing of manufacturing jobs. Internet activists had said the deal would curb freedom of speech, while other critics charged it would enshrine currency manipulation.

Drama over the landmark trade negotiations has been escalating for weeks, propelling Obama into a public feud with Democrats – going so far as to accuse opposing members within his party of lying about the fast-track bill. The vote marked a rare moment in which Republicans lined up to support the president’s agenda, even as GOP leadership pointed to Obama’s failure to rally his own party in favor of the legislation.

“Really it’s a question of does the president of the United States have enough clout with members of his own political party to produce enough votes to get this bill debated and ultimately passed,” Texas senator John Cornyn, the No 2 Republican in the Senate, told reporters on Capitol Hill.

White House officials dismissed the Senate vote against fast tracking as a “procedural snafu” but without this crucial agreement from lawmakers to give the administration negotiating freedom, it is seen as highly unlikely that international diplomats can complete either of the two giant trade deals currently in negotiation: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

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The Senate fast-track legislation, known as Trade Promotion Authority or TPA, was facing even tougher opposition in the US House of Representatives.

Opponents have been emboldened by the growing influence of liberal senators Elizabeth Warren and Bernie Sanders and were joined by all but one Senate Democrat in voting against moving forward with TPA.

Even Hillary Clinton, the Democratic frontrunner for the 2016 presidential race and historically a supporter of free trade, has been cautious amid growing concern over the effect of globalisation on middle-class jobs, warning against “trade for trade’s sake”.

But the failure to persuade even the half-dozen Democrats needed to join Republicans in the Senate is a shock reversal from earlier consensus in the finance committee, which had included an agreement to soften the impact on US jobs with Trade Adjustment Assistance (TAA). The committee had passed a package of four separate bills related to trade, including one to prevent currency manipulation by China.

The refusal on the part of GOP leadership to bring all four bills to the floor led Oregon senator Ron Wyden, who had led Democrat efforts to find a compromise with Republicans on the committee, to withdraw his support for advancing fast-track authority.

Harry Reid, the Senate Democratic leader, said the “simple pathway forward” to break the impasse would be to put the entire package that passed the committee on the floor.

But White House trade negotiators fear that provisions in the currency bill would prove impossible to introduce into trade talks at this late stage and Republicans have dismissed the issue as a wrecking tactic by Democrats.

“What they basically want to do is get in a room and craft a final bill, then get on it, shut everybody else out and tell the Senate take it or leave it,” Kentucky Republican Mitch McConnell, the Senate majority leader, told reporters.

When reporters pointed out that the chamber has, on many occasions, pushed through backroom deals, McConnell argued that this was different because the bill had already been openly debated and passed by the relevant committee.

Democratic critics of the broader trade policy heralded the vote as a breakthrough moment.

“We need to fundamentally renegotiate American trade agreements so that our largest export doesn’t become decent-paying American jobs,” said Sanders.

Business leaders expressed disappointment in the vote. The Business Roundtable, Washington’s top business lobby group, had urged the Senate to pass TPA “without delay” arguing the trade pact would support US jobs and spur economic growth.

Tom Linebarger, chairman of the Business Roundtable international engagement committee, said: “We are disappointed with the outcome of today’s vote that would have started Senate debate on TPA legislation. TPA is critical to getting the best possible outcomes in trade negotiations.

“Expanding trade opportunities for America’s businesses and farmers is key to supporting well-paying jobs and delivering much-needed economic growth. We encourage the Senate to act as quickly as possible to consider and pass this bipartisan legislation.”

Last week Obama chose Nike’s headquarters to call for Congress to support the deal. Nike chief executive Mark Parker has claimed the deal would allow it to create 10,000 new jobs in the US. Republicans said it would now be up to Obama to salvage the bill if he wanted to see his trade agenda through.

“This is one of the most important issues that will come before the Congress for business in America, particularly exports,” Arizona senator John McCain told the Guardian after the vote. “They’re going to have to galvanize the business community to put pressure on the Democrats to at least allow votes.”

McConnell acknowledged that Obama had been “working hard” to convince Democrats and expressed hope that the issue would eventually be resolved, but conceded he did not know what would come next.

“We hope to put this in the win column for the country on a bipartisan basis sometime soon,” McConnell said. “This issue’s not over.”

[Lord Jim]

Fast-Track Trade Bill Clears Key Senate Hurdle

WASHINGTON—A measure to give President Barack Obama the power to ease trade pacts through Congress survived its first test on Thursday, clearing a procedural hurdle in the Senate and touching off a fight over trade policy that will loom large in the 2016 elections and beyond.

The vote was 65-33 on taking up a fast-track bill that would also renew a program that helps workers hurt by trade deals. Republicans joined forces with protrade Democrats to advance the bill, overcoming opposition from liberals who want to block new trade deals, especially an emerging pact with 11 nations around the Pacific, the Trans-Pacific Partnership. Sixty votes were needed for the bill to clear this first procedural hurdle.

The vote sets in motion a lengthy, contentious fight that will touch nearly every industry, from car factories and steel companies to shoe manufacturers and drug companies. Democrats are already fighting with each other over the wisdom of granting the president fast-track authority, which is the power to submit trade deals to Congress for an up-or-down vote without amendments. The final Senate vote on trade promotion authority and renewing the Trade Adjustment Assistance program is expected next week.

http://www.wsj.com/articles/fast-track- ... 1431629562

[Gob]

Damn!!

[Econoline]

The 10 biggest lies you’ve been told about the Trans-Pacific Partnership.

1. 40 PERCENT: The President and his team have repeatedly described TPP as a deal involving nearly 40 percent of global GDP. This tells only part of the story. First of all, the U.S. by itself represents 22 percent of global GDP; a bill naming a post office would involve that much. Second, we already have free trade agreements with six TPP partners – Canada, Mexico, Australia, Singapore, Chile and Peru – and between them and us, that’s 80 percent of the total GDP in this deal. The vast majority of the rest is represented by Japan, where the average applied tariff is a skinny 1.2 percent, per the World Bank.

You can see this paragraph in graphic form here. The point is that saying TPP is about “40 percent of GDP” intimates that it would massively change the ability to export without tariffs. In reality it would have virtually no significance in opening new markets. To the extent that there’s a barrier in global trade today, it comes from currency manipulation by countries wanting to keep their exports cheap. The TPP has no currency provisions.

2. JOB CREATION: Saying, as the White House has, that the deal would support “an additional 650,000 jobs” is not true. This figure came from a hypothetical calculation of a report by the Peterson Institute for International Economics, which the Institute itself said was an incorrect way to use their data. “We don’t believe that trade agreements change the labor force in the long run,” said Peter Petri, author of the report, in a fact check of the claim.

The deal is actually more about building up barriers than taking them down. Much of TPP is devoted to increasing copyright and patent protections for prescription drugs and Hollywood media content. As economist Dean Baker notes, this is protectionist, and will raise prices for drugs, movies and music here and abroad.

3. EXPORTS ONLY: The Administration constantly discusses trade as solely a question of U.S. exports. A recent Council of Economic Advisors report touts: Exporters pay higher wages, and export industry growth translates into higher average earnings. But the Economic Policy Institute points out that this ignores imports, and therefore the ballooning trade deficit, which weighs down economic growth and wages. Talking about trade without discussing both imports and exports is like relaying the score of a ballgame by saying “Dodgers 4.” It is literally a half-truth. Recent trade deals have in fact increased the trade deficit, such as the agreement with South Korea. Senator Sherrod Brown notes that the deal has only increased exports by $1 billion since 2011, while increasing imports by $12 billion, costing America 75,000 jobs.

4. MOST PROGRESSIVE: Obama has called TPP “the most progressive trade deal in history.” First of all, so did Bill Clinton and Al Gore, when talking about NAFTA in 1993. Second, there’s reason to believe TPP doesn’t even clear a low bar for progressive trade deals. The Sierra Club, based on a leaked TPP environmental chapter, said that the deal is weaker than the landmark “May 10 agreement” for deals with Peru, Panama and Colombia, struck in 2007. Key Democrats who devised labor and environmental standards for those agreements, like Rep. Sander Levin, believe that TPP falls short. Even if the chapters were up to par, consistent lack of enforcement of the rules makes them ineffective. The U.S. Trade Representative has actually claimed the Colombia free trade agreement is positive because only one trade unionist in the country is being murdered every other week. Labor groups can only ask the White House to enforce labor rights violations, and for the past several years, the Administration simply hasn’t. So when Obama says violators of TPP will face “meaningful consequences,” based on the Administration’s prior enforcement, he’s lying.

5. CHANGING LAWS: On the controversial topic of Investor-State Dispute Settlement (ISDS), where corporations can sue sovereign governments for monetary damages for violating trade agreements that hurt the company’s “expected future profits,” the White House has engaged in a shell game. They say, “No trade agreement is going to force us to change our laws.” But the point of a corporation suing the United States or any trade partner is to put enough financial pressure on a government to force them to alter the law themselves. So ISDS doesn’t “cause” a change in law only in the narrowest sense. Even third-party countries have curtailed regulations in reaction to ISDS rulings, as New Zealand did with their cigarette packaging law, awaiting the outcome of a dispute between the tobacco industry and Australia (a suit that continues despite an initial victory for Australia).

6. NEVER LOST: The White House assumes that the only thing America cares about with ISDS is the upsetting of our own laws. So they’ve stressed that the U.S. has never lost an ISDS case. This is irrelevant. What ISDS does is offer bailout insurance policy to multinational corporations. If they run into discrimination or regulatory squeezing by a foreign government, they can use an extra-judicial process to recoup their investment. Workers screwed over by trade agreements have no ability to sue governments; only corporations get this privilege.

The United States attracts businesses through our relative rule of law. When that insurance is granted to countries like Vietnam and Malaysia, it weakens our competitive advantage, and makes it simple for countries to outsource their operations. Their investment is protected, as is their ability to exploit cheap labor. This makes it impossible for America to compete.

7. WEAKENING DODD-FRANK: Obama reacted strongly to Senator Warren’s charge that a future President could overturn financial regulations or other rules through trade deals. “I’d have to be pretty stupid,” Obama told Yahoo News, to “sign a provision that would unravel” signature achievements like Dodd-Frank. I suppose he is, then, because modern trade agreements often seek to “harmonize” regulations, effectively setting a regulatory ceiling. This harmonization could, as Warren says, “punch holes in Dodd-Frank without directly repealing it,” by forcing regulators to roll back capital or leverage requirements.

European negotiators want a trade agreement with the U.S. called the Trans-Atlantic Trade and Investment Partnership (TTIP) to include a chapter “harmonizing” financial regulations. So far the Obama Administration has rejected this, while admitting the potential for regulatory harm. Treasury Secretary Jack Lew told Congress in December 2013, “Normally in a trade agreement, the pressure is to lower standards” on regulations, “and that’s something that we just think is not acceptable.” A future President might find it acceptable, and today’s vote on “fast-track” authority would give trade deals an expedited process, with no amendments or filibusters by Congress, for six years, outlasting the current Administration. Scott Walker or Jeb Bush may decide it’s perfectly appropriate to undermine regulations in trade deals.

8. STOPPING CHINA: President Obama frequently casts TPP as a way to “contain” China. “If we don’t write the rules for trade around the world, guess what, China will,” he said on Friday. This is so facile as to be totally meaningless. China is a major Pacific Rim economy, and will have a presence regardless of our actions. As former Clinton Defense Department official Chas Freeman writes, “China has been and will remain an inseparable part of China’s success story.” Plus, as I’ve written in Salon, weak “rule of origin” guidelines could allow China to import goods into TPP member countries without any tariffs, while freed from following any TPP regulations.

9. SECRET DEAL: Obama has angrily dismissed the notion that TPP is a “secret” deal, saying that everyone will have public access to the TPP text for at least 60 days before a final vote. This is not the point opponents are making. The vote on fast track would severely limit Congressional input into the deal. And right now, members of Congress can only see the text in a secure room, without being able to bring staffers or take notes, or even talk about specifics in public. That makes the deal effectively secret during the fast track vote. “The president has only committed to letting the public see this deal after Congress votes to authorize fast track,” Warren told Greg Sargent. The President wants to filibuster-proof the bill in secret, then employ pretend transparency on TPP after that.

10. JUST A POLITICIAN: This idea from Obama that everybody opposing fast-track is acting like a mere “politician,” aside from demonizing the concept of representing constituents, neglects the fact that he’s a politician too. His interest in building a legacy, when practically nothing else has the potential to pass Congress the next two years, is a political interest. His possible interest in rewarding campaign contributors who would benefit from TPP is also political, or his desire to earn the respect of the Very Serious People who always support trade deals. Since Obama has a large platform and will not publicly debate any opponent on trade, he can float above it all, acting like a principled soul only wanting to better the country rather than a transactional ward heeler. This may be the biggest lie, that Obama’s somehow superior to everyone else in this debate.

[Lord Jim]

Yeah, if it's on Salon.com, it must be true...

One thing I find funny is the way I see so many of the very same liberal pundits and politicos who were engaging in self-righteous chest thumping about how wrong it was for members of Congress to demand to be informed about what Obama is agreeing to in the Iran Nuclear negociations before the deal is finalized, (they called that called "meddling" and "tying the President's hands" ) and how wrong it would be to insist on Congress having the right to amend the agreement, (they called that ""trying to sabotage an agreement")...

Now demanding the exact same things when it comes to this trade deal...

It's not called "meddling" anymore; now it's called "transparency"...

Well, the negociating process may not be transparent, but they sure are...

[Lord Jim]

Another thing I find amusing about this is the position of Oregon Democratic Senator Ron Wyden...

Ordinarily, Wyden can be found reliably in the leftie Warren/Sanders/Sherrod Brown "working man's hero" eat-the-rich, class envy demagogue faction of the Senate Democrats...

But curiously, not on the Asian trade pact...He's a big supporter...

I found somebody else with an Oregon address that might explain this seeming incongruity:

NIKE, Inc.
1 Bowerman Dr
Beaverton, OR 97005

But I'm probably just being my usual cynical self...

I'm sure that's just sheer coincidence...

[BoSoxGal]

I find the process of reviewing this bill to be outrageous - do our elected officials even know what they're voting for???

Just heard this piece on NPR that is well worth listening to - but I've also posted the text.

http://www.npr.org/sections/itsallpolit ... maybe-none

Senate leaders were all smiles Wednesday after they broke a 24-hour impasse and announced they had reached a deal on how to move forward on a fast-track trade negotiating bill. That legislation would give the president expedited authority to enter into a trade agreement with Pacific Rim countries, otherwise known as the Trans-Pacific Partnership, or TPP.

But how senators will vote on this bill depends largely on how they feel about TPP. And there's one problem.

"I bet that none of my colleagues have read the entire document. I would bet that most of them haven't even spent a couple hours looking at it," said Democratic Sen. Sherrod Brown of Ohio, who has acknowledged he has yet to read every single page of the trade agreement.

Because, as Brown explained, even if a member of Congress were to hunker down and pore over a draft trade agreement hundreds of pages long, filled with technical jargon and confusing cross-references –- what good would it do? Just sitting down and reading the agreement isn't going to make its content sink in.

Sen. Sherrod Brown, seen here speaking about the trade bill Tuesday, told NPR "I bet that none of my colleagues have read the entire document. I would bet that most of them haven't even spent a couple hours looking at it." Brown acknowledged he has yet to read every single page of the trade agreement.

For any senator who wants to study the draft TPP language, it has been made available in the basement of the Capitol, inside a secure, soundproof room. There, lawmakers surrender their cellphones and other mobile devices. Any notes taken inside the room must be left in the room.

Only aides with high-level security clearances can accompany lawmakers. Members of Congress can't ask outside industry experts or lawyers to analyze the language. They can't talk to the public about what they read. And Brown says there's no computer inside the secret room to look something up when there's confusion. You just consult the USTR official.

"There is more access in most cases to CIA and Defense Department and Iran sanctions documents — better access to congressional staff and others — than for this trade agreement," said Brown.

The White House says it has sent representatives to the Hill for more than 1,700 meetings over the past few years to help members of Congress and staffers understand the terms of the draft agreement.

And the administration defends the security restrictions, pointing out that 12 countries are still negotiating a sensitive trade agreement and publicizing trade terms before they're finalized could make bargaining more awkward.

It's a reasonable point, says Robert Mnookin, who heads the negotiation program at Harvard Law School.

"The representatives of the parties have to be able to explore a variety of options just to see what might be feasible before they ultimately make a deal. That kind of exploration becomes next to impossible if you have to do it in public," said Mnookin. "In private, people can explore and tentatively make concessions, which if they publicly made, would get shot down before you really had a chance to explore what you might be given in return for some compromise."

The White House points out the final TPP language will be made public 60 days before the president signs the agreement. But by then, negotiations will be over and changes to the language can't be made. And the Senate is set to vote very soon on a bill that forces lawmakers to give up their rights to amend the agreement.

There's a long-running truth on Capitol Hill that lawmakers rarely read the bills they vote on. But Brown says this is different. The White House is making it considerably harder for lawmakers to discuss or analyze a trade agreement that is key to how they will vote on the fast-track bill.

"That's why people are so troubled about this agreement. It really begs the question — the secrecy begs the question — what's in this agreement that we don't really understand or know about?" Brown said.

The Secret Hallway

I asked Brown to show me where inside the Capitol the secret TPP room was and he led me down a spiral staircase to metal double doors in the basement, each emblazoned with a sign that read "No public or media beyond this point."

Then he dashed off to a meeting, and I stood there, fighting the temptation to yank one of the doors open.

Within seconds, the doors abruptly parted on their own. A baffled-looking man with gray hair and spectacles poked his head out. A camera was slung around his neck. I saw Capitol Hill press credentials on his chest.

A member of the media had made it into the Secret Hallway!

"How did you get in there?" I asked. "It says no public or media beyond this point!"

Turns out he had wandered into the hallway by way of a back hallway that is totally accessible to the public.

What? After all this secrecy fuss, it's that easy? I wondered how close I could get to this so-called secret TPP language.

We rounded the corner, and he led me through a carpeted hallway, past Senate meeting rooms and staffers, all the way to a nondescript door marked "Exit." I pushed open the door and found myself in a long, long hallway that looked nothing like the rest of the Capitol. No marble floors. No paintings. No plush carpets. Just fluorescent light, bright white walls and a low ceiling.

But sorry, that's as far as I got — before an officer who heard my heels clicking on the floor kindly asked me to leave.

[Lord Jim]

Once the negotiations are complete and Obama signs an agreement and submits it to the Senate the TPP will become public, every member will get a copy, and then they and the press will be free to tear it apart to their hearts content...

There's nothing at all unusual about negotiations on international agreements being held in private. In fact I'm hard put to think of a single major international agreement on anything, (trade, arms control, even global warming) where the primary terms of the agreement were made public while the negociations were ongoing.

Even at the UN Security Council, the main negociations on major resolutions take place in private. The public sessions where the final votes are taken are mainly for show.

I would ask anyone who thinks the proposed terms of the TPP should be made public while the negotiations are taking place if they feel the same way about the Iran nuke negociations.

[Econoline]

One real problem? "Trade and Trust":

I’m getting increasingly unhappy with the way the Obama administration is handling the dispute over TPP. I understand the case for the deal, and while I still lean negative I’m not one of those who believes that it would be an utter disaster.

But the administration — and the president himself — don’t help their position by being dismissive of the complaints and lecturing the critics (Elizabeth Warren in particular) about how they just have no idea what they’re talking about. That would not be a smart strategy even if the administration had its facts completely straight — and it doesn’t. Instead, assurances about what is and isn’t in the deal keep turning out to be untrue. We were assured that the dispute settlement procedure couldn’t be used to force changes in domestic laws; actually, it apparently could. We were told that TPP couldn’t be used to undermine financial reform; again, it appears that it could.

How important are these concerns? It’s hard to judge. But the administration is in effect saying trust us, then repeatedly bobbling questions about the deal in a way that undermines that very trust.

[Lord Jim]

But the administration is in effect saying trust us, then repeatedly bobbling questions about the deal in a way that undermines that very trust.

Gee, that's exactly how I feel about the Iran negotiations...

I wonder if Paul does? I'm guessing not....