Friday, July 05, 2013

Stiglitz on the TPP and TTIP neoliberal trade treaties under negotiation

There are two major trade treaties the US is currently negotiating, both under the high level of secrecy that is a dubious but clear distinction of the Obama Administration approach to governance, the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).

EU Commission President José Manuel Barroso discusses the TTIP negotiations this past February, European Union and United States will launch negotiations for transatlantic free trade agreement 02/13/2013. It all sounds wonderful for all parties concerned in his version, of course:

In The Free-Trade Charade Project Syndicate 07/04/2013, Joseph Stiglitz discusses some of the problems with the TPP in particular. But this warning also applies to the TTIP, as well:

If negotiators created a genuine free-trade regime that put the public interest first, with the views of ordinary citizens given at least as much weight as those of corporate lobbyists, I might be optimistic that what would emerge would strengthen the economy and improve social well-being. The reality, however, is that we have a managed trade regime that puts corporate interests first, and a process of negotiations that is undemocratic and non-transparent.

The likelihood that what emerges from the coming talks will serve ordinary Americans’ interests is low; the outlook for ordinary citizens in other countries is even bleaker.
He mentions several key issues in the TPP/TTIP negotiations: capital controls; business regulations; agricultural subsidies; intellectual property; protections for socially valuable considerations, e.g., the French film industry; the role of China in the Asian supply chain; and, the appalling lack of transparency by the Administration in the negotiations with both TTP and TTIP.

Prohibiting capital controls is still a favorite neoliberal notion because it gives the overgrown financial industries lots of opportunities for speculation against local currencies. Stiglitz writes, "Other trade agreements have insisted on financial liberalization and deregulation as well, even though the 2008 crisis should have taught us that the absence of good regulation can jeopardize economic prosperity."

And he's putting it mildly there!

He says this about agricultural subsidies:

The Doha Round was torpedoed by the United States' refusal to eliminate agricultural subsidies – a sine qua non for any true development round, given that 70% of those in the developing world depend on agriculture directly or indirectly. The US position was truly breathtaking, given that the WTO had already judged that America’s cotton subsidies – paid to fewer than 25,000 rich farmers – were illegal. America's response was to bribe Brazil, which had brought the complaint, not to pursue the matter further, leaving in the lurch millions of poor cotton farmers in Sub-Saharan Africa and India, who suffer from depressed prices because of America’s largesse to its wealthy farmers.
US trade policy also undermined the promise of both the last major immigration reform and one of the key promised benefits of the NAFTA treaty, as Dave Neiwert explains in Remember the Minutemen Salon 06/29/2013:

We should recall how we got here in the first place: After the North American Free Trade Agreement was ratified in 1994 by the United States, Mexico, and Canada, the Clinton administration began a series of crackdown operations at key ports of entry along the Mexico border. The treaty, which in creating a trilateral trade bloc opened up the ability of investment capital to cross borders freely, was sold to the American public as, among other things, an essential component in controlling immigration.
But as we know, the undocumented immigrants kept coming across the Mexican border:

The numbers kept growing because the tide of immigrants had swollen to a tsunami – in large part because of NAFTA and its effects on the Mexican and American economies. When Mexico approved NAFTA in 1992, President Salinas abolished a provision in the Mexican constitution that protected the traditional small Mexican farmers from competition with corporate agribusiness, particularly American corporations. Cheap American corn put over a million Mexican farmers out of business, and that was just the beginning. With the economy collapsing around them, scores of manufacturers who specialized in clothing, toys, footwear and leather goods all went out of business. The only upside to NAFTA for Mexico – the arrival of new manufacturing jobs, including auto-building plants, as they departed the United States for cheaper shores, and of a fresh wave of maquiladora, the plants where various manufacturers would outsource their labor to Mexico – proved illusory: by 2000, many of those jobs had been taken to even cheaper labor sources in Asia, and the bleeding only grew worse from there.

In the meantime, the American economy – riding along first on a technology bubble, and then on a housing bubble – was bustling, creating in the process in excess of 500,000 unskilled-labor jobs every year, the vast majority of which American workers either would not or could not perform. Yet the antiquated American immigration system only issued 5,000 green cards annually to cover them.

The result was a massive demand for immigrant labor in the United States, and an eager supply in Mexico seeking work – but at the border where a rational transaction should have been taking place, there was instead a xenophobic crackdown aimed at keeping Mexican labor in Mexico, with predictably limited success. [my emphasis]
Trade policy matters. A lot. In today's neo-Gilded Age, it sounds almost utopian for Stiglitz to say that we need "a genuine free-trade regime that put the public interest first, with the views of ordinary citizens given at least as much weight as those of corporate lobbyists," it really is immediately necessary. Otherwise, the TTP and TTIP will do more harm to ordinary Americans and the people in the other countries involved in them. We don't need yet another gimmick that benefits the One Percenters of the world at the expense of everyone else. We have too many of those already.

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