Trump foreign policy and the strategic position of the US

Alfred McCoy takes a snapshot of US foreign policy after a year of Donald Trump as President with a Secretary of State committed to a systematic dismantling of his own department in The World According to Trump TomDispatch 01/16/2018:

... American leaders have been on top of the world for so long that they no longer remember how they got there. Few among Washington’s foreign policy elite seem to fully grasp the complex system that made U.S. global power what it now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he’s inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of a ruined building standing starkly above the smoking rubble.

The architecture of the world order that Washington built after World War II was not only formidable but, as Trump is teaching us almost daily, surprisingly fragile. At its core, that global system rested upon a delicate duality: an idealistic community of sovereign nations equal under the rule of international law joined tensely, even tenuously, to an American imperium grounded in the realpolitik of its military and economic power.

And he suggests that we could "think of this duality as the State Department versus the Pentagon."

In a real sense, US power has been on the decline since the end of the Second World War. The US ended the war in overall great shape, militarily and economically, despite the large number of American lives lost in the war. The USSR was also victorious and constituted a major opposing pole of political orientation and a fundamentally different economic system. But it has also been devastated in the war.

And the "bipolar" confrontation between the two systems continued to reduce the relative strength of the United States, especially after the victory of the Chinese Revolution in 1949.

Adherents of the "realist" perspective in foreign policy argue that among nations there is a continuing shifting in balances of power, with each nation calculating its moves based on its own national self-interest. Self-interest isn't a constant factor, nor a simple one, nor one that is independent of the judgments and ideologies of the decision-makers. But some things, like an adversary power building up military bases on the border, are elements that any decision-maker about foreign policy in a country would regard as a potentially threatening factor that had to be taken into full account.

The end of the Cold War and the collapse of the Soviet Union increased the relative strength of the US in the world system, because its largest competitor for world power had exited the historical stage. This gave rise to a triumphal attitude by American policymakers and politicians and, in the tendency that the realists recognized, led to arrogant and incautious actions. Prior to his death in 2005, the leading realist thinker, George Kennan, was warning that expanding NATO closer and closer to Russian borders would lead to offsetting reactions by Russia.

Ebbs and flows of influence will continue. But the longterm trend of US power and influence has been in decline since the end of World War II. That's not good or bad in itself. The British Empire fell apart after the Second World War, but Britain itself has remained one of the richest countries in the world and has basically only been involved in wars by its own choice, e.g., the Iraq War, the Libyan intervention. There are costs of various kinds to trying to maintain overwhelming military dominance in all parts of the world. Not least of which is the damage to democratic institutions and personal freedoms in the United States that comes from a condition of permanent war.

But it's one thing to pull back from overly costly or excessively risky commitments in other countries, military and otherwise. It's another to just blunder along without coherent or sensible political leadership McCoy:

If all great empires require skilled leadership at their epicenter to maintain what is always a fragile global equilibrium, then the Trump administration has failed spectacularly. As the State Department is eviscerated and Secretary of State Rex Tillerson discredited, Trump has -- uniquely for an American president -- taken sole control of foreign policy (with the generals he appointed to key civilian posts in tow).

McCoy gives this impressive list of examples of shifts occurring due to Trump's nationalistic "American First" policies:

All you have to do is note headlines in the daily media over the past year to grasp that Washington’s world dominion is crumbling, thanks to the sorts of cascading setbacks that often accompany imperial decline. Consider the first seven days of December, when the New York Times reported (without connecting the dots) that nation after nation was pulling away from Washington. First, there was Egypt, a country which had received $70 billion in U.S. aid over the previous 40 years and was now opening its military bases to Russian jet fighters; then, despite President Obama’s assiduous courtship of the country, Myanmar was evidently moving ever closer to Beijing; meanwhile, Australia, America’s stalwart ally for the last 100 years, was reported to be adapting its diplomacy, however reluctantly, to accommodate China’s increasingly dominant power in Asia; and finally, there was the foreign minister of Germany, that American bastion in Europe since 1945, pointing oh-so-publicly to a widening divide with Washington on key policy issues and insisting that clashes will be inevitable and relations “will never be the same.”

And that’s just to scratch the surface of one week’s news without even touching on the kinds of ruptures with allies regularly being ignited or emphasized by the president’s daily tweets. Just three examples from many will do: President Peña Nieto’s cancelation of a state visit after a tweet that Mexico had to pay for Trump’s prospective “big, fat, beautiful wall” on the border between the two countries; outrage from British leaders sparked by the president’s retweet of racist anti-Muslim videos posted on a Twitter account by the deputy leader of a neo-Nazi political group in that country, followed by his rebuke of British Prime Minister Theresa May for criticizing him over it; or his New Year’s Day blast accusing Pakistan of “nothing but lies & deceit” as a prelude to cutting off U.S. aid to that country. Considering all the diplomatic damage, you could say that Trump is tweeting while Rome burns.

Like many accounts of Trump's diplomacy, McCoy also points to the pullback from trade treaties like TPP also represents a ceding of diplomatic and strategic advantage to others, especially China in the case of TPP.

You don't have to think that TPP style "trade" treaties, which are primarily corporate deregulation treaties that have become an important tool to lock in Herbert Hooverish neoliberal economic policies, are good in themselves to also recognize that Trump's approach has been a one-sided yielding of diplmatic and strategic power. A more progressive approach to trade treaties would have the potential to restore some of that influence but on a basis that would benefit ordinary people more substantially. Obviously, that's not the approach Trump is taking.

Progressives' worries about a new Clinton Administration

I always try to be cautious about the proverbial unhatched chickens.

But Donald Trump's Presidential campaign has been such a disaster so far that I'm going on the assumption that President Hillary Clinton will be inaugurated in January 2017.

And that means that the most consequential debates over practical policy have already taken place. In the context of the Sanders/Clinton nomination contest.

For progressives, there's good reason to assume we'll have plenty to criticize about a new Clinton Administration.

Memories of the Clinton I Administration

Jake Johnson recalls some the policies of the first 8-year Clinton Administration that were definitely not on the progressive political agenda in Leftists Against Clintonism Common Dreams 08/11/2016:

With their championing of welfare reform, NAFTA, and the omnibus crime bill in the 1990's, along with their continued support for interventionist wars abroad and pro-business "trade" agreements, Democrats have moved rightward along with the Republicans, who, as Noam Chomsky often observes, have gone completely off the political spectrum.

But one need not look back in time to find reasons to reject Clintonism: In 2016, Hillary is actively courting the favor of conservative billionaires and, according to recent reports, the contemptible Henry Kissinger, who she touts as a personal friend. Despite purporting to be in favor of campaign finance reform, she has accepted millions in donations from Wall Street and hedge funds. And, having also received a significant sum of campaign cash from the insurance industry, she has turned her back on what was previously a key plank of the Democratic agenda, single-payer health care.

Her decision to choose a running mate who has in the past been hostile to labor and whose most notable claim to fame is his ability to woo corporate donors is just icing.

Clinton's record, in short, betrays a series of rightward sprints on matters of extreme consequence, sprints that were often accompanied by the crass, reactionary, and hostile rhetoric that has come to characterize the anti-poor, fanatically pro-business Republican Party. And though in 2016 Clinton has put forward a new image, the substance of her politics remains fundamentally unaltered.

In a separate article, Johnson reminds us of how hostile the Democratic establishment actually is to progressive reforms, and to the people who advocate them (Liberal Elites Hate the Left Common Dreams 06/23/2016):

Liberalism has become a political framework that, as Emmett Rensin has written, "insists it has no ideology at all, only facts. No moral convictions, only charts, the kind that keep them from 'imposing their morals' like the bad guys do."

Since the presidency of Bill Clinton, Democrats have become increasingly anti-ideological (in word), opting instead for an approach cloaked in the garb of objectivity and pragmatism: No longer, for instance, would liberals favor, in principle, labor over business.

Simultaneously, however, despite liberals' professed disdain for political doctrines, a new ideology arose in the place of the New Deal tradition, an ideology that would ultimately come to infect both of America's major political parties: Neoliberalism.

And with the rise of neoliberalism came an aversion to the politics and projects of the left, including its persistent support for the working class, its focus on rising income inequality, and its opposition to the entrenched free market consensus.

Foreign policy and war

Hillary Clinton's well-known hawkish inclinations are a huge worry for progressives.

Elizabeth Schulte writes in Hillary Clinton, Secretary of War Jacobin Aug 2016 (accessed 08/19/2016):

On most foreign policy decisions — including Libya, after the US turned against sometime-ally, sometime-enemy Muammar Qaddafi — Clinton was in favor of equally aggressive action, if not more so, than former Bush appointee [and Obama's Republican Secretary of Defense Robert] Gates. But Clinton and Obama got away with hawkish policies Bush never would have because they stuck to the language of “humanitarian intervention” and “liberation.”

In Libya, Clinton argued for intervention against the backdrop of a popular uprising against a dictator. But the end game for the US was little different from the Bush Doctrine of unilateral regime change across the Middle East. Clinton helped assert the “right” of the US government to intervene in any country of its choosing, using the most brutal means possible to achieve its ends.

I'm not sure I would agree that the Bush Administration would not have gotten away with such things. Since, you know, it got away with invading Iraq - with Sen. Hillary Clinton's support.

Campaign Marketing and the Chance for a Mandate

Alex Wagner writes about the Clinton-Kaine campaign's worries about turnout in How Scared Do Clinton Voters Really Need to Be? The Atlantic 08/18/2016:

But behind closed doors, there is a shared, quiet paranoia among Democratic strategists and voters alike: don’t get too publicly confident… or voters won’t show up in November. The thinking is that if too many Democrats believe the Trump threat has been neutralized, they won’t turnout for Clinton. Democratic voters, after all, are not as reliable as Republicans — a point proven every mid-term election.

And the importance of oppositional threat as motivating factor would seem to be historic this year in particular, given how much of this season’s Democratic enthusiasm is built on the indignation, fear, and shame around a Trump administration, rather than a particular enthusiasm for a Clinton presidency.

The reference to "every mid-term election" can only apply to a period shorter than ten years. Because in 2006, as a result of the Cheney-Bush Administration unpopularity and, very importantly, DNC Chair Howard Dean's aggressive "50 state strategy" in recruiting Congressional candidates and focusing on midterm turnout.

Unfortunately, those "behind closed doors" concerns about turnout carry another message. I'm not current on the details of the get-out-the-vote and voter-registration campaigns going on. But if the Clinton campaign is worried about turnout, it suggests that their view of voter registration is more Vote Against Trump than Vote Against the Republican Party Down The Line. What we don't hear about in Wagner's article is any plan by the campaign or the Democratic Party to mount a massive get-out-the-vote campaign comparable to the Obama For America mobilization in 2008.

Which in turn means that Clinton's campaign is not trying to build a Democratic mandate but is rather sticking to her At Least She's Not Trump emphasis. This has consequences for how fights over policy starting in 2017 could play out. Very high on the list of those consequences is likely to be that such an approach will not maximize the potential of reducing the Republicans majorities in the House and the Senate.

And the more Clinton campaign argues that Trump is not a real Republicans, that he's somehow hijacked a Party whose values and policies are drastically different from his, it could cripple the campaign's ability to frame issues like campaign financing, bank regulation and minimum wage increases in specifically Democratic terms.

Molly Ball in The Republican Party in Exile The Atlantic 08/18/2016 promotes the more than dubious notion that somehow the real Republican Party is teeming with diversity and moderation.

... Republicans don’t have anything they agree on anymore, as the conservative columnist Matt Continetti recently noted. There are Republicans who favor more foreign adventurism and those who favor less of it; those who would drastically shrink the government and those who would consider raising taxes; those who favor gay marriage and those who oppose it. (President Hoover’s great-granddaughter, Margaret Hoover, is a pro-gay-marriage activist.) Nonpartisan analyses of Trump’s tax proposals say it would explode the deficit, something of great concern to budget hawks like Cogan. "But, judging by the candidates’ proposals, I’m not sure there’s agreement that a problem exists," he said mournfully.

Be that as it may, I see no reason to assume at this point that the Republicans in the House and Senate in 2017 are going to be any less obstructionist to a Clinton Administration than they have been with an Obama Administration.

At least one Clinton primary supporter, Steve M at No More Mister Nice Blog, seems to be pooh-poohing the whole idea that there can be any such thing as a Democratic mandate (Democrats Don't Get Mandates 08/15/2016):

I'm not going to worry about whether the strategy is going to deprive her of a mandate. I know Democrats don't get to have mandates ...

Republicans faced with a Democratic president invariably find a reason to be the Party of No. It's always something.

This scans to me as a way of saying: It's silly to expect that a Democratic President can actually get anything done; the best we can hope for is some decent Supreme Court appointees and a few decent Executive orders. I suppose it sets the bar for a Hillary Clinton Administration so low that, in those terms, it's virtually guaranteed to be a Success!

But I'm on the same page with Steve M on this, "As president, she's going to be a mix of centrist and progressive, and we have to influence the mix."

Clinton's Transition Team

Policy concerns are not just a concern for campaign marketing. Clinton's recently-announced transition team doesn't point toward a new New Deal, to put it mildly. (Amanda Becker and Luciana Lopez, Clinton names close confidants, Obama veterans to transition team Reuters 08/17/2016)

Bill Black discusses it in Few (If Any) Progressives on Clinton's Transition Team The Real News 08/17/2016:

Fortunately, the news is not all bad for progressives on the transition team. Jennifer Granholm, for instance, is part of the transition team. Clinton Campaign Announces Heads of Transition Team NBC News 08/16/2016.

The Young Turks also take a dim view of the transition team, headed by ConservaDem Ken Salazar, Hillary’s New Hire Reveals Her Pro-Corporate Priorities 08/17/2016:

That report also talks about the Trans Pacific Partnership (TPP) corporate-deregulation "trade" treaty.

Trans Pacific Partnership (TPP)

Corporate-dergulation treaties like TPP are now so unpopular with so much of the public and the Democratic base than even a corporate Democrat like Clinton would prefer not to have to go to bat for it. But corporate Democrat Barack Obama is willing to do so. (Adam Behsudi, Obama puts Congress on notice: TPP is coming Politico 08/12/2016)

Joe Stiglitz earlier this year explained how damaging the deregulation provisions of the TPP would be to democratic government and to health-and-safety and environmental regulations (In 2016, let's hope for better trade agreements - and the death of TPP Guardian 01/10/2016):

The problem is not so much with the agreement’s trade provisions, but with the “investment” chapter, which severely constrains environmental, health, and safety regulation, and even financial regulations with significant macroeconomic impacts.

In particular, the chapter gives foreign investors the right to sue governments in private international tribunals when they believe government regulations contravene the TPP’s terms (inscribed on more than 6,000 pages). In the past, such tribunals have interpreted the requirement that foreign investors receive “fair and equitable treatment” as grounds for striking down new government regulations – even if they are non-discriminatory and are adopted simply to protect citizens from newly discovered egregious harms.

While the language is complex – inviting costly lawsuits pitting powerful corporations against poorly financed governments – even regulations protecting the planet from greenhouse gas emissions are vulnerable. The only regulations that appear safe are those involving cigarettes (lawsuits filed against Uruguay and Australia for requiring modest labeling about health hazards had drawn too much negative attention). But there remain a host of questions about the possibility of lawsuits in myriad other areas.

Furthermore, a “most favoured nation” provision ensures that corporations can claim the best treatment offered in any of a host country’s treaties. That sets up a race to the bottom – exactly the opposite of what US President Barack Obama promised.

Cenk Uygur looks at this move, Obama Pushing TPP So Hillary Won’t Have To The Young Turks 08/18/2016:

Robert Reich broke down why TPP is a bad thing for the American people in Robert Reich takes on the Trans-Pacific Partnership MoveOn 01/29/2015:

Hillary Clinton and "mainstream" foreign policy

"Hillary Clinton ... fits squarely within the foreign policy mainstream. But many in the Democratic Party do not." - Richard Haass

For a solid foreign policy Establishment figure like Haass, this is a good thing that Clinton is "mainstream." As he explains in The Isolationist Temptation Wall Street Journal 08/05/2016.

His column is a good example of the habit that Andrew Bacevich has been criticizing for years. Which is to use "isolationism" as a perennial bogeyman. Because except among slivers of the paleo-conservative far right, there is essentially no one in American politics that advocates anything like real isolation for the US, or calls for some kind of autarky.

But Haass does call attention to the ways in which so-called humanitarian hawkery in practice works in practice the same way as frankly imperialist neoconservatism:

The George H.W. Bush administration, with its mostly realist approach to foreign policy, was content with forcing Saddam Hussein out of Kuwait [in the Gulf War of 1991], restoring that country’s sovereignty and reducing the threat posed by Iraq to the region. For others, this wasn’t enough. They were disappointed that U.S. forces didn’t march on to Baghdad and oust Saddam Hussein when he was on his heels.

Realism won out in this case, but the debate was hardly settled. Idealists were right to argue that a search for stability alone would never be enough to capture the imagination of the American people and that U.S. foreign policy needed to be premised on principles as well as interests. But after Bill Clinton’s defeat of President Bush in 1992, the new Democratic administration found it hard to reconcile its desire to do good with the difficulty of doing good. That tension helps to explain the Clinton administration’s limited and inconsistent responses to civil conflicts in the former Yugoslavia, Somalia, Haiti and Rwanda.

But the only important debate which Haass sees underway in the approach to foreign policy is one "between a besieged traditional internationalism and an energized new isolationism."

He has this idea how the former can improve their standing, which is to improve their marketing pitches for corporate-deregulation "trade" treaties like TTIP and PTT:

What will it take for internationalists to advance their cause in today’s bitter debate? A start would be to rebuild a consensus in favor of free trade. Trade has multiple benefits. It contributes to economic growth and to well-paying export-oriented jobs. It can fuel development, thereby reducing the number of weak or failed states that host terrorists, pirates and drug cartels. It can strengthen allies. And it can enmesh potential adversaries in a network of mutually beneficial ties that make the option of disrupting them through war less attractive.

Winning the debate, though, will take more than marshaling facts. Those who lose their jobs because of trade deserve assistance, both to tide them over and to train them for new jobs. Trade partners must be held to high standards when it comes to labor conditions, the environment and manipulation of currencies. The playing field must be level.

Trade adjustment assistance is one of stock scams of the deregulation treaties. Somehow, it never emerges in any significant amounts. The harms for which they are intended to compensate, though, reliably appear.

Obama campaigns for the TPP corporate deregulation treaty

Digby says of Obama's speech Friday in support of the corporate-deregulation TPP treaty, "It was the ugliest, most condescending speech he's ever given." (Sherrod Brown says "Just (Don't) Do It" Hullabaloo 05/09/2015)

The text of Obama's speech is here, Remarks by the President on Trade [at] Nike, Inc. [i]n Beaverton, Oregon White House Press Office 05/08/2015.

His rhetoric was stock "free trade" hype, jobs for everybody, small bitnesses really benefit, blah, blah, blah. Presenting this treaty as though it mainly has to do with "trade" is part of the marketing spin. The key function of the treaty, so far as we know the terms of its still-secret text, seems to be the establishment of business-controlled tribunals that have the authority to overturn national legislation on wages, pensions, working conditions, safety regulations, environmental laws and probably anything else some corporation decides it dislikes. And as a ratified treaty, TPP would be the law of the land on a level with the Constitution, and overruling previous legislation or Constitutional provisions.

Obama denies this: "critics warn that parts of this deal would undermine American regulation -- food safety, worker safety, even financial regulations. They’re making this stuff up. (Applause.) This is just not true. No trade agreement is going to force us to change our laws. This agreement would make sure our companies aren’t discriminated against in other countries."

Then what are those tribunals for? He promises to post the text of the finalized TPP before its's approved. So it's hard for anyone not privy to the currently classified documents to say for sure he's wrong on this. But I don't believe him.

This is probably one of the lines Digby had in mind, "Some folks think we should just withdraw and not even try to engage in trade with these countries. I disagree."

Of course, even the most hardcore Bircher-style rightwing isolationists want to "engage in trade" with foreign countries, no matter how much they may hate those countries and their people. That is a frivolous and condescending claim.

And there's the usual boilerplate claims for the neoliberal deregulation treaties that we've heward since NAFTA, claims that somehow never seem to come to pass in any substantial way: "It’s got strong, enforceable provisions for workers, preventing things like child labor. It's got strong, enforceable provisions on the environment, helping us to do things that haven’t been done before, to prevent wildlife trafficking, or deforestation, or dealing with our oceans. And these are enforceable in the agreement."

Here's another sneer:

So the fact is, some folks are just opposed to trade deals out of principle, a reflexive principle. And what I tell them is, you know what, if you're opposed to these smart, progressive trade deals, then that means you must be satisfied with the status quo. And the status quo hasn’t been working for our workers. It hasn’t been working for our businesses. And there are people here who will tell you why.

And as he enters his closing portion, he repeats his warning against the nonexistent isolationists: "So, yes, we should be mindful of the past, but we can’t ignore the realities of the new economy. We can’t stand on the beaches and stop the global economy at our shores. We’ve got to harness it on our terms. This century is built for us."

Digby comments, "I take Obama supporters at their word that he has finally been freed to do what he really wanted to do. This appears to be one of the things he really wanted to do."

TTP and Obama getting angry for real

One very immediate irony about President Obama's comedy routine Saturday night around his coolness at expressing anger is that he is expressing real anger and bringing heavy pressure to bear on Democrats over the Trans-Pacific Partnership (TPP) treaty to get "fast-track" treatment for it. And going against the Democratic base to do it. This is the same kind of trashing his own base to make a bipartisan deal with Republicans as we say in his fortunately failed efforts at a Grand Bargain to cut benefits on Social Security, Medicare, Medicaid and veterans' benefits.

And he's putting on the hard sell, as Michael McAuliff and Laura Barron-Lopez report in Democrats' Frustration With Obama Boils Over As Trade Bills Advance Huffington Post 04/23/2015:

Calling it "maddening," Sen. Sherrod Brown (D-Ohio) told reporters that the Obama administration was putting on a full-court press unlike anything Democrats have ever seen in his presidency in order to win the authority to fast track enormous trade deals.

"I think if you could get my colleagues to be honest, on the Democratic side, with you -- and I think you can mostly -- they will say they've been talked to, approached, lobbied and maybe cajoled by more cabinet members on this issue than any issue since Barack Obama's been president," Brown said.

"That's just sad," he added. [my emphasis]

The Young Turks covered this in a segment last week, Obama Moves Forward With TPP Despite Democratic Objections 04/24/2015:

Joan Walsh has more on this dispute and Obama's hostile tone toward the Democratic base in Democrats’ free trade war is getting ugly, and Obama is bending the truth Salon 04/27/2015.

But international corporate-deregulation agreements like TPP are "trade" agreements now only in a propaganda sense. Paul Krugman makes that point in This Is Not A Trade Agreement 04/26/2015:

One thing that should be totally obvious, however, is that it’s off-point and insulting to offer an off-the-shelf lecture on how trade is good because of comparative advantage, and protectionists are dumb. For this is not a trade agreement. It’s about intellectual property and dispute settlement; the big beneficiaries are likely to be pharma companies and firms that want to sue governments.

Those are the issues that need to be argued. David Ricardo is irrelevant.

David Ricardo (1772-1823) was one of the leading classical economists, known among other things for his theories and speeches in the British Parliament on free trade.

Cenk Uygur on the Trans-Pacific Partnership (TPP)

Cenk Uygur of The Young Turks does a little rant here about the corporatist political corruption involved in the Trans-Pacific Partnership (TPP) being negotiated, Trans-Pacific Partnership = Government Corruption At It's Finest 02/22/2014 (f-word used):

Tags: neoliberalism, trans-pacific partnership, tpp

Decoding the neoliberal economics vocabulary

Joshua Kurlantzick, Senior Fellow for Southeast Asia at the Council on Foreign Relations, has written a lament for the prospects of further neoliberal trade development, Farewell To the Age of Free Trade Bloomberg Businessweek.

"Major potential trade deals, such as the proposed Transatlantic Trade and Investment Partnership between Europe and North America, are at risk of falling through," he writes. "As of early December," he reports, the TTIP negotiations "have resumed, but the prospects for a
deal remain highly uncertain."

That sounds like a cause for celebration to me, based on what we've heard is being cooked up for us in the secret negotiations over the TTIP and its evil twin, the Trans-Pacific Partnership (TPP).

I was thinking as I read Kurlantzick's piece that the current vocabulary of neoliberalism that has become so widely embedded in writing and discussion about international trade because center-left parties in the US and Europe have happily adopted it rather than challenging it, can actually be pretty arcane to readers assigning more common-sense meanings to words.

Here are some examples from Kurlantzick's piece:

Protectionism: People generally have a sense of what that is, barriers to products or money coming in from other countries put up to protect some domestic constituency. In the language of neoliberalism, though, "protectionism" is the worst cuss word. Even capital controls to prevent the fabled "bond vigilantes" from wrecking your country's currency or economy count as "protectionism" in this conceptual world, and therefore are evil by definition.

State capitalism: Almost as much of a cuss word as "protectionism." This is when a country owns a company as public property, as with Gazprom in Russia, PDvSA in Venezuela or, as of this year, YPF in Argentina. Protecting national sovereignty, preventing irresponsible practices by private corporations, revenue for other kinds of development: in the neoliberal worldview, none of them remotely justify the evil of "state capitalism."

Giant state-owned companies: Another way to use the "state capitalism" cuss word adding a little dramatic emphasis

Free trade: Equals goodness. Means removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point)

Economic integration: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point)

Globalization: also equals goodness; requires removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point) to maximize goodness

Giant state-owned companies: Another way to use the "state capitalism" cuss word adding a little dramatic emphasis

Political leadership: Doing what international corporations want. Also has variations, such as strong leadership, responsible leadership, etc.

Populism: Not doing what international corporations want. Also a cuss word.

The global trade agenda: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point)

Credibility on trade: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point). See also: political leadership.

Dynamic: What an economy becomes when it removes barriers to capital flows across borders, lowers wages, gets rid of unions, overrides national laws on consumer and environmental protections and lowers taxes on corporations and the wealthy (preferably to the vanishing point).

Fostering interdependence: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point).

As you see, there are some redundancies in meaning among these words and phrases.

Kurlantzick gets several of these words loaded with occult meaning into one notable paragraph:

Far from creating a long tail, globalization and the Internet have instead made economies of scale more important to companies’ survival. That has prompted consolidation in industries from telecommunications to oil to mining, allowing many of these industries to become dominated by giant state-owned companies from countries such as China, Russia, and Brazil. These state-owned enterprises are hardly forces for free trade: They often crush entrepreneurs in their own societies, and they often push for protectionist barriers, not against them. [my emphasis]

When you translate into more everyday language, you get:

Far from creating a long tail, Goodness and the Internet have instead made economies of scale more important to companies’ survival. That has prompted consolidation in industries from telecommunications to oil to mining, allowing many of these industries to become dominated by the Evil Ones from countries such as China, Russia, and Brazil. These Evil Ones are hardly forces for Goodness: They often crush the Good Ones in their own societies, and they often push for Evil Things, not against them.

Who says economics isn't a morality play?

The kinds of trouble neoliberal trade treaties can cause is illustrated in this New York Times report by Sabrina Tavernise, Tobacco Firms’ Strategy Limits Poorer Nations’ Smoking Laws 12/13/2013. Tobacco consumption has been falling in wealthier nations, so the tobacco companies want to sell more cigarettes in less developed countries. And when some countries try to restrict smoking, the companies have started to use the option they have under so-called "free" trade treaties to deter them. "The industry is warning countries that their tobacco laws violate an expanding web of trade and investment treaties, raising the prospect of costly, prolonged legal battles, health advocates and officials said."

... tobacco opponents say the strategy is intimidating low- and middle-income countries from tackling one of the gravest health threats facing them: smoking. They also say the legal tactics are undermining the world’s largest global public health treaty, the W.H.O. Framework Convention on Tobacco Control, which aims to reduce smoking by encouraging limits on advertising, packaging and sale of tobacco products. More than 170 countries have signed it since it took effect in 2005.

More than five million people die annually of smoking-related causes, more than from AIDS, malaria and tuberculosis combined, according to the World Health Organization.

Alarmed about rising smoking rates among young women, Namibia, in southern Africa, passed a tobacco control law in 2010 but quickly found itself bombarded with stern warnings from the tobacco industry that the new statute violated the country’s obligations under trade treaties.

“We have bundles and bundles of letters from them,” said Namibia’s health minister, Dr. Richard Kamwi.

Three years later, the government, fearful of a punishingly expensive legal battle, has yet to carry out a single major provision of the law, like limiting advertising or placing large health warnings on cigarette packaging.

Treaties approved by the Senate have a legal force equal to the Constitution itself in the US; they even override the text of the Constitution, i.e., they have the force of Constitutional Amendments. So we should expect our elected officials from the President on down to take the part of the general public and not business lobbyists in considering trade agreements like TTIP and TPP. (Yes, I know how otherworldly that sounds!)

Kurlantzick makes an intriguing argument that I've not seen put this way before about the immediate future of international trade:

The belief that trade flows would inevitably increase was based on two assumptions: Emerging markets still had huge space to expand, and new technologies would make businesses more interconnected. These ideas still power reports such as HSBC’s forecast. But they appear to be wrong. Today’s technological advances don’t necessarily lead to economic integration. The latest breakthrough in manufacturing, 3D printing, makes it easier for companies to keep their design and initial production work in-house and cut out suppliers—which reduces trade, because it removes incentives to outsource later rounds of manufacturing overseas. The coming breakthrough in many science-based industries — such as synthetic biology, in which living forms are created from strands of DNA — will similarly create pressure for companies to keep operations in-house. Already, many corporations are coming home: Cross-border investment inflows fell by 18 percent in 2012 and probably will drop again in 2013.

I don't know how well-founded that may be, but it's made me curious about the argument.

This, on the other hand, apparently relies on a code I haven't cracked yet:

Over the past 60 years, at least one major economy was able to take the lead in advancing the global trade agenda. Today, however, every prominent trading economy is too consumed by problems at home. Weakened by the shaky rollout of health-care reform, President Obama faces a hostile Congress that has little inclination to support either the administration’s proposed free-trade agreement with Asia, called the Trans-Pacific Partnership (TPP), or a U.S.-European trade pact. China's top leaders are still trying to consolidate power and address domestic challenges such as land reform. Britain is consumed with austerity, Japan is embarking on contentious economic reforms, and Germany is constrained by its history and Berlin’s consensual politics. Reports of U.S. spying on top European leaders have caused politicians across the European Union — already skeptical of a trans-Atlantic trade zone because of concerns that many European industries would be swamped — to call for trade negotiations with the U.S. to be cut off. [my emphasis]

This reads weird to me. In this case, "one major economy" presumably means the United States, so why not just say that?

Is there a clear majority in either House of Congress against the TTIP and TPP already? I seriously doubt it. I doubt even more how firm that theoretical opposition will remain when and if the things are signed and business lobbyists go to work on the Congress about the virtues of corporate buccaneering Goodness free trade.

China's leaders don't have time to pay attention to international trade? Seriously?

And however much "Germany is constrained by its history and Berlin's consensual politics," that hasn't prevent Chancellor Angela Merkel from imposing a ruinous austerity policy on several of her eurozone partners that benefits Germany at the expense of imposing prolonged depression conditions on those partners. That should be a reason for other countries to distrust Germany on economic matters. But shyness due to its "its history and Berlin's consensual politics" hardly seem to be serious concerns in that regard.

All of that may just be Kurlantzick's way of saying that the US so far hasn't been able to get its way on either treaty, both of which are still under negotiation. But why the strange circumlocutions if that is the real point?

Tags: angela merkel, austerity economics, eu, euro, european union, neoliberalism, tafta, tafta, trans-atlantic free trade agreement, trans-atlantic trade and investment partnership, trans-pacific partnership, tpp, ttip

The neoliberal side of the Obama Administration

I know I'm jaded about Obama. But this is why.

After a new push for renewable energy, a re-energized affirmative defense of the ACA and a progressive speech on economic inequality in America, here's a new report that in the Trans-Pacific Partnership (TPP) negotiations, the Obama Administration is pushing to "grant radical new political powers to corporations, increase the cost of prescription medications and restrict bank regulation." (Zach Carter, Obama Faces Backlash Over New Corporate Powers In Secret Trade Deal Huffington Post 12/08/2013)

And, of course, treaties when approved by the Senate are equal in legal force to the Constitution.

The good news in Carter's article: "The Obama administration appears to have almost no international support" for those measures.

This is the Barack Obama we've seen most often the last five years on economic policy. The corporate Democrat who pushes the neoliberal agenda aggressively. Yes, he's still NABATR (Not As Bad As The Republicans). But that's faint praise indeed!

How bad could the TPP be? Here's a sample:

One of the most controversial provisions in the talks includes new corporate empowerment language insisted upon by the U.S. government, which would allow foreign companies to challenge laws or regulations in a privately run international court. Under World Trade Organization treaties, this political power to contest government law is reserved for sovereign nations. The U.S. has endorsed some corporate political powers in prior trade agreements, including the North American Free Trade Agreement, but the scope of what laws can be challenged appears to be much broader in TPP negotiations.

"The United States, as in previous rounds, has shown no flexibility on its proposal, being one of the most significant barriers to closing the chapter, since under the concept of Investment Agreement nearly all significant contracts that can be made between a state and a foreign investor are included," the memo reads. "Only the U.S. and Japan support the proposal."

Under NAFTA, companies including Exxon Mobil, Dow Chemical and Eli Lilly have attempted to overrule Canadian regulations on offshore oil drilling, fracking, pesticides, drug patents and other issues. Companies could challenge an even broader array of rules under the TPP language. [my emphasis]

This cartoon from Public Citizen illustrates the relationship of such courts to justice:

And it sounds like the Administration is carrying water for Big Pharma in the TPP negotiations: "The Obama administration is insisting on mandating new intellectual property rules in the treaty that would grant pharmaceutical companies long-term monopolies on new medications. As a result, companies can charge high prices without regard to competition from generic providers."

And since we all know that the fine folk who run giant banks would never set up a new financial crisis like 2007-8, why should the following worry us?

The U.S. is also facing major resistance on bank regulation standards. The Obama administration is seeking to curtail the use of "capital controls" by foreign governments. These can include an extremely broad variety of financial tools, from restricting lending in overheated markets to denying mass international outflows of currency during a financial panic. The loss of these tools would dramatically limit the ability of governments to prevent and stem banking crises.

The last thing we need is this kind of neoliberal trade treaty to further cripple consumer protections and let corporate bandits run wild.

And let's not forget that the same Obama Administration is simultaneously negotiating a neoliberal Transatlantic Trade and Investment Partnership (TTIP), aka, Trans-Atlantic Free Trade Agreement (TAFTA).

Tags: neoliberalism, neoliberalism,obama adminstration, tafta, trans-atlantic free trade agreement, trans-pacific partnership, tpp, ttip

The austerity plague

Paul Krugman gets shrill on the austerians again in his blog post, PREs, VSPs, and the ECB 12/04/2013. I don't recall seeing "PRE" before; it may be a Krugman invention. It evidently stands for Perfectly Reasonable Economist. He's discussing a speech by European Central Bank chief economist Peter Praet, which offers a reasonable diagnosis of European policy but pulls back from its implications for policy recommendations:

As a result, his underlying framework for thinking about European problems seems essentially indistinguishable from mine; as ECB watchers says, it’s a framework that sees a useful role for moderate inflation, both to avoid the zero lower bound and to ease the path of internal devaluation. And you do have to wonder what calculation leads to the notion that a target of "close to but less than 2%" is appropriate, as opposed to, say, 3 or 4 percent.

But actually you don’t have to wonder. Whatever Praet may privately think, he and his boss have to deal with Europe’s Very Serious People — people who believe in austerity regardless of circumstances, and who also say things like this, from the Bundesbank’s Jens Weidmann, declaring that “the money printer is definitely not the way to solve [Europe's problems]“. This is stated as if it is a self-evident truth — even though any PRE can easily make the case (as Praet does) that the money printer is, in fact, something that can offer a great deal of help in solving Europe’s problems.

The sad and remarkable thing that we've learned over the past year or so is how little intellectual debate matters. On both fiscal austerity and monetary policy, the PREs have completely blow the VSPs out of the water — the inflationistas, the expansionary austerians, the 90-percent threshold of doom people have all seen their claims collapse in the face of evidence. Yet policy barely changes, and the VSPs continue to talk as if they are in possession of The Truth.

Anatole Kaletsky worries that Japan may be turning away from a promising course of economic stimulation (Japan's economy risks backsliding New Straits Times 12/01/2013). The news from the expansionary policy pursued by the conservative government of Shinzo Abe has been pretty good:

Japan is the world's third-biggest economy, with national output roughly equal to France, Italy, Spain, Portugal and Greece combined. This year, Japan has become, very unusually, a leader in terms of financial prosperity and economic growth.

According to the latest International Monetary Fund (IMF) forecasts, Japan's two per cent growth rate this year will be the fastest among the G7 developed countries, easily outpacing the next strongest economies, Canada and the US, each with 1.6 per cent growth.

Japan's stock market has gained 70 per cent since last December, far exceeding the 25 per cent bull market on Wall Street, and Japan's corporate profits are projected to increase by 17 per cent, according to Consensus Economics, compared with paltry gains of three to four per cent in Germany and US.

It certainly sounds better than the death-grip of Angie-nomics in the eurozone!

But not all is well. Abe's government seems to be turning in the Angela Merkel direction on fiscal policy:

The reasons for pessimism follow directly from the main driving forces of Japan's new economic programme, the so-called "three arrows" of Abenomics -- fiscal stimulus, monetary expansion and structural reform.
The second of these arrows -- monetary expansion -- is flying as fast as ever. But the first, fiscal, arrow is about to turn into a boomerang that could kill Japan's economic recovery stone dead.

In April, an increase in consumption tax from five to eight per cent, along with some cutbacks in public spending, will produce a narrowing of the structural budget deficit worth 2.5 per cent of gross domestic product, according to IMF.

This massive fiscal tightening, which happens to be exactly equivalent to the US fiscal tightening this year, to Italy's last year and to Britain's in 2011, is a very big risk to take with the Japanese economy's still-tentative recovery.

What Kaletsky calls "structural reforms" for Japan seems to mean pretty much what it always does in the neoliberal vocabulary: weakening workers' security and lowering their incomes. But what Kaletsky sees as bad news in that regard seems like good news to me:

Finally, the third arrow of Abenomics, structural reform, has turned out to be more like a straw. Most of the reform programmes that were eagerly anticipated after July's Upper House election have been quietly forgotten.

Labour market and wage liberalisation, tax restructuring, nuclear power restoration, changes in corporate governance, service industry deregulation and pension fund asset re-allocation have either been abandoned or repeatedly postponed.

Admittedly, some trade reforms are under active consideration because of the Trans-Pacific Partnership talks with the US. But these changes will mainly involve agriculture and are unlikely to stimulate economic activity significantly in the next year or two. [my emphasis]

Our old "friend," the Trans-Pacific Partnership (TPP), another neoliberal dark cloud on the Japanese and US horizon.

I have very little faith in monetarist solutions to stimulate economic growth, though usurious interest rates can certainly impede economic activity. Kaletsky is more qualified in his caution about that, stressing as Krugman has been doing in this context the particular conditions of interest rates at the zero lower bound:

The recent experiences of the US, Britain and Europe all suggest that monetary expansion tends to be less powerful than fiscal tightening when interest rates are near zero and, therefore, cannot be reduced any further. In these conditions, monetary policy can only work indirectly by boosting asset prices and creating wealth effects. And the scope for quantitative easing to boost bond prices is even more limited in Japan than it has been in the US and Britain. [my emphasis]

Tags: angela merkel, austerity economics, eu, euro, european union, japan, tpp, trans-pacific partnership

The menace of the Trans-Pacific Parnership (TPP)

Wenonah Hauter of the Food & Water Watch harshes on the Trans-Pacific Parnership, one of the two major neoliberal trade treaties the Obama Administration is currently negotiating under the high secrecy to which it is addicted (The Un-American Way Other Words 08/21/2013):

This controversial agreement is called the Trans-Pacific Partnership (TPP). It’s comprised of the United States plus 11 other nations that border the Pacific Ocean. The TPP would boost liquefied natural gas exports and food imports. This increases the real dangers posed by reckless fracking for natural gas and the growth of imported food from several countries whose safety standards fall far short of our own.

The TPP could become the biggest corporate power grab in U.S. history. This deal would establish a regime under which corporations would acquire an equal status to countries, allowing them to take legal action against governments both at the national and local levels.

With this power, multinational corporations — especially energy companies — could overturn laws enacted to protect the public and the environment if they were to deem that those protections violated the profit-based terms of this trade agreement. ...

The TPP would encourage increasing the amount of seafood we take in without requiring the trading partners to ban the use of illegal chemicals.

The closing line from which the title comes is, "Undermining laws that U.S. citizens voted to put in place isn't the American way."

I don't like that formulation. Because it is part of the Constitution that ratified treaties are just as much a part of the law of the land as the text of Constitution itself.

But the way the TPP is shaping up, it will become a vehicle for overturning important laws that need to stay in force.

The TPP and its equally malign twin, the Transatlantic Trade and Investment Partnership (TTIP), are both really bad ideas in the form in which they are currently conceived: neoliberal treaties designed to benefit multinational corporations at the expense of the vast majority of workers.

Tags: tpp, transatlantic trade and investment partnership, trans-pacific partnership, ttip

TTIP talks move forward

So far the threatened EU postponement of the EU-US talks on the Transatlantic Trade and Investment Partnership (TTIP) hasn't materialized. Not a surprise. But it doesn't change the fact that the NSA surveillance revelations have made the EU nations more cautious about the treaty prospect.

Historic trade talks get underway in Washington Euronews 07/08/2013:

Sara Miller Llana in Will US-EU trade talks spur growth - or show globalization's limits? 07/08/2013 frames the TTIP negotiations in a useful way:

With tariffs already low, this deal will focus more on business barriers such as safety standards or inspection procedures. The issues might seem pedestrian, but are some of the trickiest to negotiate, going to the very heart of the way people live their lives: the way chicken is cleaned, or the assumptions people make when they walk into a pharmacy or get into a car.

Miller Llana's report suggests that a failure of the TTIP to come to fruition would be a major setback for the neoliberal trade project, a prospect that some of us find less unpleasant than the business lobbies do:

Yet even if it fails – and there are plenty who think that the obstacles such as agriculture and, most recently, data privacy are insurmountable – a failure would be pivotal, showing that tariffs can be dropped but non-tariff barriers, which are often more cultural in nature, remain stubborn. A failure, says Fredrik Erixon, the director of the European Center for International Political Economy (ECIPE) in Brussels, "could lead to a larger standstill in efforts to address 21st century trade barriers."

The agricultural subsidies, French concerns over their film industry and European concerns over privacy rights with the Obama Administration's extreme surveillance policies all look to be big issues in the TTIP talks.

What should be big issues are the continued effects of the neoliberal trade treaties in undermining wages and salaries for ordinary workers, driving regulatory standards toward a lowest common denominator, weakening unions and boosting the risky, destructive financialization of economies.

Supporters of the TTIP concept in the US hope it will be an easy sell to the Congress:

So far TTIP has not generated widespread controversy in the US. That might be because it's still early days. But it's also because of the nature of the deal, says Charles Kupchan, a transatlantic expert at the Council on Foreign Relations in Washington. "Since trade is relatively free and since [the US] and the EU are at similar stages of development, this is not a deal that is going to cause major dislocation," he says. "This is an easier sell politically."

The Monitor editorializes in favor of the TTIP concept without worrying much about the destructive effects. And they are also hoping US citizens won't notice what's happening (Why EU-US trade talks should be about more than trade 07/08/2013):

An agreement would create the largest free-trade zone ever – one that would dwarf NAFTA by encompassing 820 million people. The world needs such an economic jolt. Last year, trade expanded at a slower rate than the growth in domestic economies, reversing a trend that had helped create rising prosperity after World War II.

The days when trade talks could spark mass protests – such as those in Seattle in 1999 – are probably over. Trade itself has slowly knitted bonds and common interests across borders and redefined the identities of many people. The world now Googles together, eats sushi, or watches "Downton Abbey."

Not every country will get what it wants or avoid what it fears. Trade involves trade-offs. But more than that, it also leads to an enlarged sense of community. Trade deals are not only mutual back-scratching. They might also lead to an embrace of the other as one’s own. [my emphasis]

The TTIP, and the Trans-Pacific Partnership (TTP) also being prepared, certainly need to provoke debate and protest in the US and in Europe, too.

Andrew Gavin Marshall characterizes the TTIP as follows (Large Corporations Seek U.S.–European 'Free Trade Agreement' to Further Global Dominance Alternet 05/10/2013):

The Transatlantic Trade and Investment Partnership (TTIP) is the latest corporate-driven agenda in what is commonly called a "free trade agreement," but which really amounts to 'cosmopolitical corporate consolidation': large corporations dictating and directing the policies of states – both nationally and internationally – into constructing structures which facilitate regional and global consolidation of financial, economic, and political power into the hands of relatively few large corporations.

Such agreements have little to do with actual 'trade,' and everything to do with expanding the rights and powers of large corporations. Corporations have become powerful economic and political entities – competing in size and wealth with the world’s largest national economies – and thus have taken on a distinctly 'cosmopolitical' nature. Acting through industry associations, lobby groups, think tanks and foundations, cosmopolitical corporations are engineering large projects aimed at transnational economic and political consolidation of power... into their hands. [ellipsis in original] With the construction of "a European-American free-trade zone" as "an ambitious project," we are witnessing the advancement of a new and unprecedented global project of transatlantic corporate colonization. [my emphasis]

Tags: neoliberalism, transatlantic trade and investment partnership, trans-pacific partnership, tpp, ttip

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.

Tags: neoliberalism, transatlantic trade and investment partnership, trans-pacific partnership, tpp, ttip

Neoliberalism: the secret Trans-Pacific Partnership (TPP) draft trade treaty

Sen. Elizabeth Warren is criticizing the Obama Administration's unprecedented level of secrecy over the neoliberal Trans-Pacific Partnership (TPP) trade treaty to further deregulate business and reduced the incomes of American workers (Sen. Warren's Floor Speech in Opposition to Michael Froman's Nomination for U.S. Trade Representative 06/19/2013):

Trade agreements affect access to foreign markets and our level of imports and exports. They also affect a wide variety of public policy issues - everything from wages, jobs, the environment, and the Internet -- to monetary policy, pharmaceuticals, and financial services.

Many people are deeply interested in tracking the trajectory of trade negotiations, but if they do not have reasonable access to see the terms of the agreements under negotiation, then they can't have real input. Without transparency, the benefits from an open marketplaces of ideas are reduced enormously.

I am deeply concerned about the transparency record of the US Trade Representative and with one ongoing trade agreement in particular -- the Trans-Pacific Partnership.

For months, the Trade Representative who negotiates on our behalf has been unwilling to provide any public access to the composite bracketed text relating to the negotiations. The composite bracketed text includes proposed language from the United States and also other countries, and it serves as the focal point for negotiations. The Trade Representative has allowed Members of Congress to access the text, and I appreciate that. But that is no substitute for public transparency.

I have heard the argument that transparency would undermine the Trade Representative's policy to complete the trade agreement because public opposition would be significant. In other words, if people knew what was going on, they would stop it. This argument is exactly backwards. If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the United States. ...

The American people have the right to know more about the negotiations that will have dramatic impact on the future of the American economy. And that will have a dramatic impact on our working men and women, on the environment, on the Internet.

We should have a serious conversation about our trade policies, because these issues matter. But it all starts with transparency from the U.S. Trade Representative. [my emphasis]

The Real News reported on the TPP in Everyone but China TPP Trade Deal Threatens Sovereignty and Public Ownership 03/30/23013:

Lori Wallach and Ben Beachy of Public Citizen's Global Trade Watch also write about the secrecy issue in Obama'’s Covert Trade Deal New York Times 06/02/2013:

The agreement, under negotiation since 2008, would set new rules for everything from food safety and financial markets to medicine prices and Internet freedom. It would include at least 12 of the countries bordering the Pacific and be open for more to join. President Obama has said he wants to sign it by October. ...

While the agreement could rewrite broad sections of nontrade policies affecting Americans’ daily lives, the administration also has rejected demands by outside groups that the nearly complete text be publicly released. Even the George W. Bush administration, hardly a paragon of transparency, published online the draft text of the last similarly sweeping agreement, called the Free Trade Area of the Americas, in 2001.

There is one exception to this wall of secrecy: a group of some 600 trade "advisers," dominated by representatives of big businesses, who enjoy privileged access to draft texts and negotiators. ...

From another leak, we know the pact would also take aim at policies to control the cost of medicine. Pharmaceutical companies, which are among those enjoying access to negotiators as “advisers,” have long lobbied against government efforts to keep the cost of medicines down. Under the agreement, these companies could challenge such measures by claiming that they undermined their new rights granted by the deal.

And yet another leak revealed that the deal would include even more expansive incentives to relocate domestic manufacturing offshore than were included in Nafta — a deal that drained millions of manufacturing jobs from the American economy.

The agreement would also be a boon for Wall Street and its campaign to water down regulations put in place after the 2008 financial crisis. Among other things, it would practically forbid bans on risky financial products, including the toxic derivatives that helped cause the crisis in the first place. [my emphasis]

This is yet another area affected by the Obama Administration poisonous addiction to excessive secrecy that further undermines democracy in the US, and this on an issue that has major implications for our economic well-being, as well.

Tags: neoliberalism, tpp, trans-pacific partnership

We need to reduce American jobs ... to protect ourselves against China? (!?!)

"Es geht um Absatzmärkte, Arbeitsplätze und Wachstum" ("It's about foreign markets, jobs and growth"), writes Felix Lill in an article supporting the Trans-Pazifik-Partnerschaft (TPP) and US-EU free trade negotiations. (Demokratien verbünden sich gegen Chinas Macht 10.04.2013)

Indeed it is.

Jeff Faux writes in Where's the Change? American Prospect Online 04/09/2013:

The president has no intention of changing the trade policies that have been undercutting U.S. jobs and wages for more than 30 years. In fact, with the support of congressional Republicans, he wants yet another trade deal—this one with 11 Pacific Rim countries—that will once again bargain away the interests of American workers in favor of the interests of American corporate investors.

Lill uses China as a foil, an enemy against which the EU, the US and Japan need to unite by establishing these two trade treaties to further enforce the anti-labor neoliberal order of financial buccaneering, casino capitalism and low wages.

That same unite-against-China theme appears in Anthony Fensom's article, EU-US Free Trade Agreement: End of the Asian Century? The Diplomat 02/20/2013:

"I'm not very optimistic about the prospects of a Japan-China-Korea FTA given the chilly political relations of those countries lately. FTAs are political and those countries need to listen to domestic public opinion," Devin Stewart, Senior Fellow at the Carnegie Council, told The Diplomat.

Stewart was more optimistic on agreements being reached between the traditional Northern Hemisphere allies from both the transatlantic and Asia-Pacific regions.

"Both the EU transatlantic agreement and the TPP come from thinking about how to set and promote liberal values through economic activity. Both would serve to set high standards for economic integration as well as encourage non-entrants to adopt higher standards," he said.

He continued, "In that sense, they are aimed in part to balance against China's influence and its state capitalism. These initiatives may serve as a peaceful strategy to promote liberal values ... as long as they do not spark something like another Cold War." [my emphasis]

Tags: neoliberalism, tpp, trans-pacific partnership

Neoliberalism in action: Trans-Pacific Partnership (TPP) edition

One of the hallmarks of the economic doctrine of neoliberalism has come to dominate the major parties in the US and the EU, the doctrine that is currently laying waste the economies of Greece, Ireland, Italy, Spain and Portugal, is the "free trade" agreement. NAFTA, negotiated under Old Man Bush's Administration, concluded and approved under the Clinton Administration, has been the prototype for American trade deals ever since.

There are many problems with the "free trade" agreements from the viewpoint of American workers as well as the less-developed countries who are often the partners on the other side. One of the most disturbing is that corporate lobbyists have been trying to use such treaties as backdoor mechanisms for undermining national regulations to protect workers and consumers.

Alyona Minkowski on her Alyona Show of 05/25/2012 addressed some important aspects of the Trans-Pacific Partnership agreement currently under negotiation, included the selective secrecy of the negotiations. Democratic Sen. Ron Wyden has objected to the fact that Congress is receiving little information about the terms being offered by the United States. Representatives of Chevron, Comcast, Halliburton, and the Motion Picture Association of America, on the other hand, seem to have generous access to that information. As The Alyona Show's summary at the YouTube video site reports (Fireside: Trans-Pacific Partnership, No Transparency):

Senator Wyden is also the Chair of the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness. And it would make sense that someone with that title would have access to details surrounding trade agreements that our government is making, right? Well, turns out the Obama administration, isn't granting that access. This is all surrounding the Trans-Pacific Partnership, an international trade agreement between nine nations about which we know very little.

The American Prospect recently ran a special report section on trade agreements, with special focus on the TPP. In one of the articles, Clyde Prestowitz describes the foreign policy context of the TPP negotiations (The Pacific Pivot 03/13/2012). He warns that our experience with such agreements should make us all skeptical of the claimed benefits for American workers, something that is always part of the marketing campaign for such agreements:

Between 1960 and today, there have been four full-fledged rounds of global negotiations under the aegis first of the General Agreement on Tariffs and Trade (GATT) and then of the WTO that engaged the United States and the Asia-Pacific countries. In addition, there was a continuing series of talks with Japan under rubrics such as the Market Oriented Sector Specific Initiative (MOSS, ridiculed as More of the Same Stuff), the Semiconductor Negotiations, the Nippon Telegraph and Telephone talks, and more. There was the creation of the Asia-Pacific Economic Cooperation association, founded in the early 1990s to spread liberal democratic ideals within the Pacific Rim through trade and investment. There were the negotiations both to bring China into the WTO and for America to grant it permanent "most favored nation" treatment. The North American Free Trade Agreement and bilateral free-trade agreements with Peru, Chile, Singapore, Australia, and Korea are also part of this saga of trade deals that only widened trade imbalances.

Each of these projects had its causes, purposes, and dynamics, but certain critical patterns repeated. The premise was that all participants embraced the same free-trade philosophy and rules and that if the rules were set properly, the results would automatically be satisfactory for all. The fundamental difference in philosophy between laissez-faire, free-trade America and export-driven Asia was never directly confronted. One reason for this was that free trade was a kind of religion of U.S. policymakers, for whom any management of results was original sin. Another was that America was long considered economically invulnerable. Yet another was that the purpose of the deals was usually more to cultivate geopolitical allies, to stimulate development of struggling neighbors, or to facilitate U.S. investment abroad. But the agreements were always sold to the U.S. Congress and public as arrangements that would increase U.S. exports, reduce trade deficits, and create jobs.

They never did. Rather, the trade deficit relentlessly rose, offshoring of U.S.–based production and jobs accelerated, and trade became a drag on growth of U.S. gross domestic product as well as a cause of rising income inequality. As economic strategy, the trade deals and their logic were unsuccessful, or irrelevant, or both. [my emphasis]

The current US foreign policy of global dominance (as über-Realist Stephen Walt calls it) has been an overriding factor in the American negotiating position, Prestowitz argues, and it has been the major influence in making these agreements disadvantageous economically for the US - or at least for US workers:

There are, however, two clear purposes that all the deals have served. The first is the geopolitical grand strategy objectives of the United States. By making the United States the market of last resort, the trade agreements have helped persuade allies to accept U.S. hegemony. The second purpose served is that of U.S. businesses that profit immensely from outsourcing and offshoring to Asia but that need the security provided by Uncle Sam to do so. These realities reveal the flaws in U.S. trade efforts—misplaced priorities, a false doctrine, and false assumptions.

Most misplaced has been the geopolitical priority with its subordination of long-term economic interests to short-term political/military objectives. Washington continually makes concessions, refrains from insisting on application of the GATT/WTO rules, or backs away from taking actions to counter mercantilism on national--security grounds. In the 1980s, the Reagan administration declined to invoke GATT rules against European subsidization of the Airbus, because Secretary of State George Shultz said doing so would shatter the North Atlantic Treaty Organization. Today, Washington declines to respond to China's blatant currency manipulation. Why? It thinks it needs the Chinese to help with problems like Iran and North Korea. It doesn’t understand that erosion of U.S. wealth-producing capacity is the most important national--security threat. [my emphasis]

Prestowitz makes the case that the Obama Administration sees the TPP is an tool in an ill-conceived approach to China policy.

Another trade agreement that facilitates corporate job export out of the United States is not what we need. I was struck in this connection by Prestowitz' comment quoted above, "One reason for this was that free trade was a kind of religion of U.S. policymakers, for whom any management of results was original sin."

This is the dogmatic obsession to which I'm referring when I talk about the theology of the Great God Free Market. For the Republican Party, and for way too many Democrats, the Free Market has become a dogma every bit as rigid and abstracted from reality as the worst of Cold War dogmatism. And it persists even in the face of facts and real-time experience that contradict its claims. It often functions much like a religion, a faith in which the Free Market becomes an end in itself and the results are blessed as optimal, whether or not more people are hurt than helped by the actual results.

Tags: neoliberalism, tpp, trans-pacific partnership