Time To Rethink Approach To Trade Agreements

Trade agreements have become politically toxic. President Obama has three trade deals he has been pursuing, the Trans Pacific Partnership (TPP), the TransAtlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA). They all need to be stopped. The administration has used secrecy as their key tool. Their view is the less people know, the more likely an agreement is to become law. Why? Becuase these agreements are unpopular. They are written by and for transnational corporations and not for the protection of people and the planet. During the 2016 election we have seen how these agreements have become politically toxic. Obama hopes to get the TPP through a lame duck session of Congress, a time when many members of Congress are in their last session because they are retiting or lost re-election. He knows he could not get the TPP through Congress at any other time this year.

We need to stop these agreements and then demand a total rethinking of how trade proceeds. We can create trade agreements that serve the economy but also serve the interests of the people in safe good and services, living wages and safe conditions for workers, as well as aid the world in dealing with climate change and protecting the environment. Below are two portions of articles from Politico’s Morning Trade that move us in the direction of fixing unpopular corporate trade agreements.

Dutch Trade Minister Calls For New Approach To Trade

The world needs a new approach to trade policy, and this is the time to do it, says Dutch Trade Minister Lilianne Ploumen.

Political angst over trade exists on both sides of the Atlantic that may force officials to re-examine an official mandate EU member states set out for what they wanted out of the TTIP. It may also force a “pause” on the more than three-year-old trade talks.

Under Ploumen’s proposal, trade must include global goals such as increasing sustainable growth, reducing inequality or fulfilling the Paris climate agreement, the minister writes. This also means that not only investors should be protected, but also citizens’ rights “or the environment when it is harmed as a result of increased trade.” Secondly, Ploumen demands increased transparency and a deeper dialogue with the society, including TTIP advisory groups not only at EU but every member state’s level. Third, people should be “empowered and protected” by laying out a safety net for those who might lose their job under new trade deals, while also putting a stronger focus on consumer protection.

Ploumen, who leads trade policy efforts for one of the major shipping points in Europe, spoke about her vision and more on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Washington. During her visit, she said she shared her proposal with White House chief economist Jason Furman and sent a copy to U.S. Trade Representative Michael Froman, who was in Cuba during her visit. She also discussed with POLITICO her hopes for trade’s future.

COOL RECEPTION FOR ‘PROGRESSIVE’ TRADE POLICY PAPER: A new paper outlining “A Progressive Approach to Globalization” got a polite but cool reception on Thursday at the Peterson Institute for International Economics. Fred Bergsten, senior fellow at the pro-trade think tank, said he agreed the U.S. model for negotiating free-trade agreements could be improved, and he praised Jared Bernstein, former chief economist to Vice President Joe Biden, and Lori Wallach, director of Public Citizen’s Global Trade Watch, for laying out their ideas.

But he criticized the paper for challenging the widely accepted conclusion that trade liberalization provides large net gains for the United States without offering any evidence to support their position. In addition, “even if you buy their analysis that there’s a problem for a large percentage of the country, I find it hard to believe their policy proposals would do very much about it,” Bergsten added.

In presenting the paper, Bernstein argued the U.S. model for trade agreements need to be “recrafted to put workers and consumers and the environment more at the core of the agreement versus the desires and privileges of investors and corporations, and we think if we take out some bad stuff and put in some good stuff, we can help to achieve that goal.”

The “bad stuff” Bernstein and Wallach want to take out includes investor-state dispute settlement provisions, patent and copyright protections, constraints on food safety and consumer protections, and the secretive nature of negotiations. The “good stuff” they want to add includes rules against currency manipulation, tighter “rules of origin” for autos and requirements that other countries meet certain benchmarks on workers’ rights and environmental protection before the United States cuts tariffs on their goods.

Daniel Griswold, co-director of the American economy and globalization program at George Mason University’s Mercatus Center, said it was hard to understand how fighting currency manipulation is a progressive issue. American consumers benefit in the form of lower prices when other countries undervalue their currency. Forcing them to strengthen their currency and effectively weaken the dollar would help U.S. exports, but boost the cost of many imported goods like food, clothing and shoes, falling hardest on the poor, Griswold said.

Read the paper:

The New Rules of the Road: A Proressive Approach to Globalization.

Video of the presentation at the Peterson Institute