Fast Track Push for Trans-Pacific Partnership Implies it’s a Raw Deal

New Year’s Day 2015 marked the 20th anniversary of NAFTA’s implementation. The North American Free Trade Agreement became infamous when independent presidential candidate Ross Perot remarked in 1992 that the passage of NAFTA would create a “giant sucking sound” of American jobs lost to Canada and Mexico. NAFTA, however, is hardly in history’s rear-view mirror. It has been augmented all these years by more of the same, and now the Obama administration is about to enact the biggest so-called free trade agreement yet. The Trans-Pacific Trade Partnership represents the most far-reaching agreement in a generation, yet has only recently begun to garner widespread attention.

In spite of over a decade’s worth of negotiations mainstream media has left the Trans-Pacific Trade Agreement largely untouched — in part because negotiations have not been open to the public. Few of our elected representatives have been clued in either, however. Why? Because the TPP flies in the face of the self-determination principles this country was founded upon. It takes the economic aspects of governance of the people, by the people and for the people and hands it over to international authorities on all manner of issue pertinent to our health, welfare and safety — from finance to food. Because the trade agreement has spawned opposition from all sides of the political spectrum, the TPP has been negotiated behind closed doors. Only in these latter stages are the provisions supposed to undergo open debate. The problem? President Obama wants to “fast track” the TPP so that little congressional debate is possible.

Media Matters has this to say:

Congress Is Currently Debating A Bill That Would Grant The President Expedited Trade Promotion Authority (TPA).

According to a January 30 Reuters article, President Obama is at odds with Democratic and Republican lawmakers in both houses of Congress concerning reauthorizing a procedure called the “trade promotion authority” (TPA). The TPA is a formal legal authority granted to the president by Congress, which allows the White House to fast-track international treaty negotiations with foreign partners, bypassing most congressional review: A bill before the House and Senate would grant the White House power to submit free trade deals to Congress for an up-or-down vote without amendments, something that would give trading partners peace of mind but that raises hackles among some lawmakers.

Recall the financial crisis of 2007~2009? What you might not know is that Canada was among the least scathed by Great Recession fallout because, in part, unlike the U.S. Canadian lawmakers did not strip their financial regulatory laws off the books — that is to deregulate their financial system to the extent the U.S. and others did in the 1980s and ’90s. That could change if and when the TPP is finalized. The TPP sets the stage for international banks, among other transnational corporations, to sue trade partners (nations) for lost revenue (damages) in the event of an attempt to influence their activities.

Remember the pet food scare of 2007 during which time cats and dogs succumbed to melamine contamination linked to Chinese manufacturers? Earlier this month, Petco and Petsmart announced a decision to remove all Chinese-manufactured pet treats from their shelves because of ongoing safety concerns. The TPP opens the door to a country whose revenues are threatened by such an action to sue for damages (lost revenue). This, in turn, may make it difficult for U.S. retailers such as Petsmart and Petco to “discriminate” against imports deemed harmful to their customers! Pet owners aren’t the only ones with cause for concern, however. Doctors without Borders have a bone to pick with the TPP, too. It could make the cost of prescription drugs — medications used to control HIV in the Third World, to cite an example — too costly to obtain.

The TPP, in conjunction with an even broader agreement known as the Transatlantic Trade and Investment Partnership (TTIP), empowers transnational corporations to sue governments, leaked documents suggest, for attempts to reform markets in a manner perceived to limit not just actual (current) profits but future (unrealized) profits. For all those who have pushed for TORT reform out of concern that insurance premiums, health care costs and other consumer expenses have been driven unnecessarily high by the overly litigious, trade lawsuits waged by even deeper pockets at international tribunals may do far worse to consumer prices. Such agreements give transnational corporations incentive to protect their market dominance with an armada of lawyers, costs that taxpayers and consumers will ultimately foot. Whether it’s pet food, groceries or prescription drugs, notions of consumer independence will be swept out the back door with the fast-track passage of the TPP:

Both the TPP and TTIP will go well beyond the WTO in terms of coverage, addressing such matters as foreign direct investment policies, protection of intellectual property, trade in services, behaviour of state-owned enterprises, opening up of government procurement, and reducing the trade-impeding effects of different product standards. — Europe’s World

The TPP, and agreements like it, challenge the authority of legislators and voters, placing unelected international authorities into the driver’s seat. While this effort is certainly nothing new, what is new some 20 years post NAFTA is the social-media connected world in which we live — a level of digital interconnectedness that did not exist in the late 1980s and 1990s when presidents H.W. Bush and Clinton did their parts to pave the way for the World Trade Organization. The TPP erodes national sovereignty in the sense that we will become wedded, as it were, into a polygamous marriage consisting of the U.S., Canada and 10 pacific rim nations, which collectively account for ~40% of global economic activity (gross domestic product). The fact that the free trade agreements of recent years have put us at a $180B U.S. goods trade deficit — bushwhacked by trade partners a fraction of our size — matters little. We are at the stage where Congress would normally debate the provisions with the option to amend the more damaging elements. Instead, President Obama has petitioned members of Congress to bypass open debate by reviving a fast-track trade authority provision dating to the Nixon era.

At the face of it, the TPP sounds so antithetical to the notion of self-governance that it may be difficult to imagine how such an agreement could possibly come to pass — to get off the ground in the first place. But it’s not so outlandish in view of the Supreme Court decision, Citzens United, which affirms that corporations are “people” with a First Amendment right to speak out (monetarily) in support of politicians and political objectives without giving “rise to corruption or the appearance of corruption”. The Court’s 2010 decision opened the floodgates to unfettered corporate finance of political campaigns, spawning the so-called super-PACs. Because of the high cost of running for elected office, just about every politician from every party who has ever risen to the national level owes his/her success to corporate-backed donors and the lobbyists these larger-than-life “people” hire. So how does an agreement like the TPP come to fruition even as it puts taxpayers on the hook for trade lawsuits that threaten to obliterate the right to set our own internal health and safety standards?

Follow the money.

If there was ever a time to exercise your option as a citizen — to make your thoughts on the TPP fast-track proposal known to your elected representatives — that time is now.



Trans-Pacific Partnership: Fast Track to Job Losses | Huffington Post

Regional Scheme for the Pacific Rim | The New American

Fact-Checking Obama’s Top Trade Official: Ten Tall Tales on Trade | counterpunch

Exporting Financial Instability | The American Prospect

The Trans-Pacific Partnership: Warnings from NAFTA | Huffington Post

WTO Protesters Were Right | Seattle Times

Rethinking Globalism: Why We Need a Cell-Based Economy

When you listen to the pundits and economic experts, you come away with a mixed bag of blame for the economic woes the United States, and by turn the global economy, presently faces.

At first blush, it’s middle class “Annie” with her subprime mortgage, too ignorant or materialistic to admit that she can’t afford the McMansion she lives in.

At second glance, it is the greedy, not-my-problem mortgage broker who knows banks routinely sell off homeowners’ loans to Wall Street investors who will be left holding the bag when homeowners default.

Looking at it from another perspective, deregulation of the telecommunications, energy and financial markets — under the premise that free markets are self-policing and never irrational —  has been blamed for everything from the collapse of WorldCom and Enron, to the subprime mortgage crisis that has spiraled into the credit crunch we see today. And the chief instigator, critics point out, is none other than Sen. Phil Gramm, Sen. John McCain’s economic adviser. Is it possible that an adviser who perceives no harm in unchecked deregulation may be at a loss for words, leaving McCain’s presidential campaign with little choice but to run distraction — personal attacks — at a time when the rest of the nation is galvanized around the economic harm striking ever closer to home?

Flashing back to September 11, 2001, a few may trace the problem to President Bush’s not so subtle suggestion to grow the economy in support of the War on Terror. The President admonished consumers to go on spending, and thanks to what amounted to an eight-year Wall Street “stimulus” consisting of interest rate cuts and easy credit presided over by presidential appointee and former Federal Reserve Chairman Alan Greenspan, Wall Street enjoyed what some economists have described as a once-in-a-generation bull market. The bear had to make his appearance eventually.

Tracing the issue back a step further, another camp of blame-gamers pinpoints the Clinton Administration, which in 1999 “openly urged the Federal National Mortgage Association (aka “Fannie Mae”) to reduce down payment and credit requirements for ‘at risk’ borrowers in an attempt to increase home ownership rates among minorities and low-income consumers,” the Visalia-Times Delta reports.

To watch “IOUSA“, a recent documentary film following former Comptroller General David Walker, who in 2005 launched a “Fiscal Wake-Up Tour“, our present problems are tied not so much to who occupies office — for both parties suffer from what Walker calls a “leadership deficit” — but to a financial system that is leveraged as much as 30 to 1. Simply put, that means that for every dollar a bank has in reserve, it can borrow 30 more. Artificial money props up an artificial bubble. And to these Perfect Economic Storm clouds, we add Walker’s dire warning that the U.S. is headed toward bankruptcy. Unfunded liabilities for Medicare and Social Security, not to mention a deficit approaching $11 trillion, threaten to sink our Ship of State as it is.

Will the recently passed $700 billion bailout help?

The Dow Jones Industrial Average was already on its way to an 80-year low on September 29 when the original bailout package failed. All the while, the media elite insisted that without a bailout the hurt would hit Main Street. Yet when Friday, October 3rd’s second bailout passed the House, NASDAQ and the Standard & Poor’s 500 Index fell yet again even as bank-to-bank lending rates hit new highs. Why would Wall Street react as if the bail out were bad news when virtually everything we’ve heard in the mainstream media holds otherwise?

For one, $700+ billion — which if dollar bills were laid end-to-end would reach the moon and back 138 times over — simply isn’t enough. Speculative figures run as a high as $1 trillion. For another, it came too late. The subprime crisis started over a year ago, yet only in recent weeks has President Bush acknowledged that Wall Street is grappling with a “house of cards“. Unemployment rates, meanwhile, have surged to 6.1 percent nationally. Make no mistake, however: The hurt at home doesn’t mean taxpayers won’t be called upon to write Treasury Secretary Henry Paulson yet another blank check. Worse, the bailout plan might just make the problem worse, critics allege, by heaping inflation on an already shaky financial services sector.

In the midst of all the madness, perhaps there is a greater lesson here that we risk missing. That picture begins to emerge when we contemplate the notion “too big to fail”.

What does that have to do with the human body, you ask?


Call it nature or God, but every living creature is a multiple-cell organism. In fact, we have billions of tiny cells, each working in tandem to make our bodies function.

In bygone days, economies were less like machines and more akin to living organisms. Geographically rooted, they grew their own food, lent money to their own community members, put out their own fires and built their own homes with supplies they sourced within the region.

Planes, trains and automobiles have changed all that.

Today we have multinational corporations, increasingly, whose failures threaten to resonate throughout the global economy not like a handful of harmless 3.0 earthquakes on the Richter scale, but more akin to a life-altering 10.0 “Big One”.

When globetrotting Gulliver begins to teeter as the ground beneath him sways, the little people won’t pillage him, they’ll be called upon to prop him up.

That’s the New World Economy for you. This bailout isn’t the first and it will hardly be the last.

What’s wrong with this picture?

Globalism produces unprecedented potential for gain, but it also puts us at proportional risk. Socialist or Capitalist, the role governments undeniably play is this: underwriters of corporate risk. We need to stop right there and think long and hard about whether this is the road we want to go down.

One of the core problems, which is so taken for granted that it hasn’t even received a second look in the mainstream media, is that an efficient market rests upon a surprisingly delicate underpinning. Sure there are trillions of dollars trading hands, and when all goes well it is a sight to behold. But what happens when the economic body gets sick? Can 10,000 or so massive cells do the work of millions that preceded them?

Probably not.

If our bodies were designed or evolved in the manner modern economies are structured, a simple cold, let alone heart disease or cancer, could take us out. A couple of sick cells would be sufficient to bring the entire body to its knees, a far cry from a massive, systemic infection attacking billions of cellular citizens.

The problem with conventional global economic thinking is that it operates on the assumption that the Titanic is impossible to sink. But what if we reverse that assumption and ask ourselves what we can do to protect ourselves should the unthinkable take place?

To borrow a phrase from so-called tree huggers, what we need is sustainability. Only this time, we’re not talking ecosystems. We’re talking financial systems.

There’s a lot of buzz about “going Green”. But greening our economy isn’t just about clean energy. It’s about local control. Self sufficiency. The type of accountability no regulatory system can substitute for: neighbors, coworkers, bankers and business owners who know each other by name, who rely on each other and help keep one another honest. When you see the consequences of your actions played out not on some abstract global financial stage but in your own backyard, that’s what economists call an incentive: an incentive not to play poker with your neighbor’s hard-earned money.

You might call this concept a CELL-BASED ECONOMY. It’s modeled after the only sustainable concept evolution has taught us: A cosmos filled not with a few thousand Jupiter-sized bodies with a disproportionate gravitational pull, but blanketed as far into the depths of space as an astrophysicist can see. The human and animal organism, likewise, populated not by the few and irreplaceable but the many and regenerative, whose power lies in numbers, not reach. Until economies restore a sense of “place” within the larger economic body, markets will again and again prove in need of oversight (regulation) to reign in the masterminds of greed who exploit nameless victims, which the current globalized modus operandi all but encourages.

We’ll know we’ve become active stake holders in this Cell-Based Economy the day we refer to economic participants as people, not too-big-to-fail multinational “entities” that can make or break economies in a few short months or years. Under this scenario, loan originators would not abdicate responsibility. For only when risk is no longer another investor’s problem, will much of the temptation to approve hasty, house-of-cards loans fall by the wayside.

Going back to a Main Street economy might just save us from ourselves. Why? Because the more impenetrable the global economy grows, the more difficult it becomes for would-be entrepreneurs to elbow their way in to the feeding trough otherwise known as the American Dream. President Woodrow Wilson, as far back as 1913 in a book titled “The New Freedom”, bemoaned the fact that we have a “system of credit” that all but precludes the little guy. We pay more taxes yet become, essentially, debtors, producing very little. Indeed, that is what the United States has become: Not the proud productivity-based economy of yesteryear, but a middle class-squeezing, downwardly mobile “consumer economy” whose very survival is dependent on the goodwill of global benefactors (investors). So when former Comptroller General David Walker talks about an $800 billion annual trade deficit with China in the chilling financial exposé “IOUSA”, this is the kind of leverage we’re giving away. Equally disturbing, it all but hog ties us where foreign policy is concerned. We can ill afford to anger nations who prop us up financially by opposing the actions of their Axis of Evil allies — i.e. it saber-rattling nationalists in Iran or Russia.

The fact that so many Americans have poor credit, little or no rainy day savings, and are defaulting in such vast numbers paints an unsustainable economic picture. But it isn’t just the little guy who is struggling. If nothing more, this debacle has proven that Big Business is more vulnerable than we thought. Looking back a year or so ago when the first rumblings on Wall Street were shaping up, sovereign Mid East wealth funds came to the rescue. Yet NASDAQ Chief Executive Bob Greifeld praised the 20 percent stake Arabs stood to gain in the exchange as “a good transaction for the U.S. capital markets system … it will make sure that NASDAQ is a key player in the global consolidation.” If “global consolidation”, arguably a euphemism for economic contraction, is what market bellwethers foresee, what does that say about the long-term solvency of the U.S. economy?

“Last week, just by coincidence, our national debt exceeded the $10 trillion mark, and a lot of that money is owed to foreigners. The tide of money that washed away any sense of proportion or ethics on Wall Street also comes, in part, from overseas. When critics of the $700 billion bailout complain that it was passed just to keep foreign banks happy, there’s some truth to that. It’s a chilling sign of just how much national sovereignty we’ve signed away in return for overseas capital,” writes Atlanta Journal-Constitution columnist Jay Bookman.

From a foreign investment standpoint, American assets may resemble a smorgasbord — fodder for a fire sale in the event the meltdown continues despite the bailout. In one possible scenario, financial assets may go the way the U.S. steel and auto industries did in the 1980s and ’90s — outsourcing investments the way manufacturers outsourced production. Do those of us who call Main Street USA home wish to owe Asia and the Mid East our mortgages and 401Ks? When the dust settles, will the U.S. financial services sector have an American face?

If you bring the issue out of the abstract and closer to home, the global business model has brought us to a point where critical vaccines and medications may be manufactured by a single source. A pandemic, economic, political or natural disaster threaten to precipitate mass shortages or an over-reliance upon risky, untested foreign sources. One day, what if those shortages included food? What if a severe economic crisis combined with even higher fuel prices means that truckers are temporarily, even, unable to receive a paycheck? Will every grocery chain and retail store from one end of the country to the other face the prospect of bare shelves because the handful of transportation companies to survive globalization’s push toward consolidation are idling down due to strike or disaster, manmade or otherwise?

In an efficient, mechanistic economic system there are fewer and fewer redundancies. This leaves fewer players in place to go on conducting “business as usual” in the event of a crisis. The result is that problems that formerly hit one community — not unlike the recent gasoline shortages in the Southeast following Hurricane Ike — may transform from regional problems, to national shortages, to global crisis.

There is something to be said for the idea that local communities should be self sustaining to whatever degree possible. This means that each region of the country should develop or retain capacity to produce food and energy using locally sourced suppliers, and to maintain manufacturing capacity. That community model may seem unrealistic for now, but it should be a long-term national security priority.

It was once believed with near religious devotion that the world was flat. And later, infamously, that the Titanic was too sophisticated to sink. If there’s one thing this economic crisis has taught us, it’s never say never.

It would be foolhardy to manufacture a rope with only one thread, for at best it could be described as a string. Yet with each multinational merger, each death of a competitor, each transformation of a local economy into a consumer economy, we’re taking a rope of many threads and reducing it, cut by cut, to just one cord. That sort of efficiency may reduce waste and redundancy, but it’s also the source of our global economy’s potential unraveling.

Perhaps it’s time to rethink basic assumptions.

The prospect of global recession is an inevitable byproduct of an economy that has become overly enmeshed. Like a pair of young lovers joined at the hip, this is a relationship that might look ideal at first glance, but is psychologically dysfunctional. None of this is to say that international business ought to become a thing of the past. National and international trade brings commodities that are overabundant in one region to areas of the world where they are in great demand. That form of commerce cannot and should not be stopped. Rather, it is a long-overdue reminder that global business should not come at the expense of local productiveness (sustainability).

Reviving an economic system that promotes multiple supply chains with emphasis on local distribution and long-term sustainability as a hedge against instability elsewhere in the world flies in the face of what started out as a giddy 20th Century globalization experiment.

But if and when the Titanic sinks, nobody will be laughing — except, perhaps, the World Federalists.



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