Who Will Benefit From the Trans-Pacific Partnership?

President Obama is so keen on passing the Trans-Pacific Partnership (TPP) that he’s asking Congress for fast-track approval. What that means is that Congress would only have the right to vote up or down on the agreement, without making any changes to it. In actuality, the president can approve the bill without Congress, but he would like Congressional approval for obvious political reasons. Supporters of the free-trade bill say it will help boost economy, and I don’t doubt that the president believes that to be true. Whether he’s right about that is the subject of vigorous debate among economists.

For example, MIT economics professor David Autor and his co-authors in a Washington Post editorial, concede that “there is indeed substantial evidence that import competition from low-wage countries has contributed to the momentous decline in U.S. manufacturing employment in the last two decades.” But, they argue, “manufacturing jobs are not coming back” anyway. Why bother closing the barn door now that the horse has already run away?

They like TPP, however, because they say it “would promote trade in knowledge-intensive services in which U.S. companies exert a strong comparative advantage” because of the intellectual property provisions contained within the bill. If, in fact, the bill would lead to better enforcement and less infringement in the form of copycat products, that could be a big deal. Whether or not those provisions would be airtight is hard to know in advance.

We have seen enormous changes in the U.S. patent system over the past two decades, mostly done in the name of “harmonization,” an effort to make our system, once the envy of the world, more like that of the Japanese and the Europeans. What that translates into is more favorable terms for big companies, and more roadblocks for small inventors trying to assert their patent rights.

This kind of protection of privilege seems to be a theme that runs through this agreement as well as its notorious predecessor, NAFTA.

TPP: "NAFTA on steroids"

Twenty-two years after its passage, scholars and pundits are still debating whether NAFTA was a good thing or a bad thing. Most agree that many American jobs were lost as work was shifted to Mexico. At the same time, the export of subsidized corn and other agricultural products into Mexico has led to a flood of illegal immigration as thousands of small family farms were wiped out. Less visible is the fact that the agreement has undermined regulations.  For example, under NAFTA an energy company, Lone Pine Resources, was able to sue the Quebec government for $250 million because its fracking ban threatened the company’s profits. Likewise, Canadian drug-maker Apotex is seeking damages from U.S. taxpayers, as NAFTA allows, because the FDA restricted imports of its product as the result of sub-standard manufacturing practices.

What’s common between both agreements seems to be the fact that they were written by and for corporations and investors, behind closed doors, with no transparency and with little, if any, input from under-represented elements of our society, including the environment.

Progressive Congressman Keith Ellison (D-Minn.) calls TPP “NAFTA on steroids.” The agreement has actually been in the works since 2010. When I wrote about it in 2012, responding to a leaked draft, I had the following concerns:

1. It will severely limit the regulation of foreign corporations operating within U.S. boundaries, enough to give them greater rights than domestic firms.


2. It will extend incentives for U.S. firms to move investments and jobs to lower-wage countries.


3. It will establish an alternative legal system that gives foreign corporations and investors new rights that can circumvent U.S. courts and laws.


4. And it will allow these foreign companies to sue U.S. taxpayers before foreign tribunals to demand compensation for lost revenue due to U.S. laws they claim undermine their TPP privileges or their investment “expectations.”

Since few details are available, it’s hard to say to what extent these concerns have been addressed.

The TPP website makes the following claims:

1. The TPP will support Made-in-America exports


2. The TPP will enforce fundamental labor rights


3. The TPP will promote strong environmental protection


4. The TPP will help American small businesses benefit from trade

Yves Smith calls TPP and others like it “Trojan horses to erode or eliminate national regulations.”

Who does the agreement really benefit?

Another essential point is that China, the obvious elephant in the room, is not included in the agreement. There is an implicit hope that it will create a monolithic entity that can stand up to China, though it’s not at all clear how monolithic it actually will be. Supporters seem to be closing their eyes and hoping that China will be swept along in the spirit of the agreement, much as the less fortunate Americans benefited from Ronald Reagan’s trickle-down economics.

Indeed, the spirit of Ronald Reagan is alive and well in this agreement. Dean Baker, founder of the Center for Economic and Policy Research, refers to TPP as a corrupt attempt to “secure regulatory gains for major corporate interests” at the expense of “those without the money and power to be part of the game.”

I don’t think there can be any question that an agreement of this magnitude will usher in many changes that will affect millions of people -- some anticipated, others not. The fact that the agreement was done in secret, dominated by the investment community and those held close by them, tells me that the anticipated changes will directly benefit them. The fact that all constituencies, including the under-represented and the environment, did not have their concerns addressed, violates both democratic principles and the sacred trust that the American people have placed in our government to fairly balance the interests of the wealthy and mighty with those of the weak and voiceless.

Image credit: rexpo: Flickr Creative Commons

RP Siegel, PE, is an author, inventor and consultant. He has written for numerous publications ranging from Huffington Post to Mechanical Engineering. He and Roger Saillant co-wrote the successful eco-thriller Vapor Trails. RP, who is a regular contributor to Triple Pundit and Justmeans, sees it as his mission to help articulate and clarify the problems and challenges confronting our planet at this time, as well as the steadily emerging list of proposed solutions. His uniquely combined engineering and humanities background help to bring both global perspective and analytical detail to bear on the questions at hand. RP recently returned from Abu Dhabi where he attended the World Future Energy Summit as the winner of the Abu Dhabi blogging competition.

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