President Obama’s Legacy and the TPP

by Coralie Pryde, DelCOG Board Member

President Obama’s State of the Union address included mention of the Trans-Pacific Partnership (TPP): “… a Trans-Pacific Partnership to open markets, protect workers and the environment, and advance American leadership in Asia. It cuts 18,000 taxes on products made in America and supports more good jobs.”

Even this brief quote perpetuates fallacies about the TPP. The U.S. has made little attempt in the past to enforce worker protections in countries we trade with, and under TPP, worker protections may actually be weaker than under NAFTA. Allowing Malaysia, with its horrific record of forced-labor abuses, to be a part of TPP doesn’t bode well for future enforcement.

Cutting taxes on American-made products brings corresponding reductions in U.S. tariffs on imports. Because of cheaper labor abroad, and no mechanism to prevent currency manipulation, the reduction in tariffs is expected to bring an increase in our trade deficit.

Most predictions are that adoption of the TPP will result in a net economic loss for most countries. Some 448,000 jobs will be lost in the U.S. according to a Tufts University study. Delawareans are altogether too familiar with outsourcing of manufacturing jobs. Worldwide, the pay level of most workers (the bottom 90 percent in the U.S) is expected to decrease, exacerbating widening economic disparities.

Foreign corporations setting up shop here will not be required to hire qualified Americans. Instead, visas must be granted to everyone these companies want to bring. Such insourcing could cost American workers more jobs than outsourcing.

The TPP will allow banks to roll back regulations passed under Dodd-Frank. Expanded patent protections on pharmaceuticals will limit competition and make drugs more expensive, contrary to the president’s pledge to make them more affordable.

President Obama claims that the TPP’s environment chapter is the most far-reaching ever in a trade agreement. Analysis by leading environmental organizations finds the environmental protection clauses weaker than NAFTA’s and weaker than in any treaty signed by President George W. Bush.

Even more disturbing is the potential effect of expanding the Investor State Dispute Settlement (ISDS) laws to new countries. Under ISDS, corporations that believe environmental laws (or wage, safety, financial or other rules) are reducing their potential profit can sue a sovereign government. The case is heard in secret arbitration in which two of the three lawyers serving as “judges” are likely to have worked with the corporation. Already, Canada and Mexico have lost several cases. The $15 billion case by Keystone XL could be the first the U.S. loses under ISDS.

Senators Carper and Coons and Representative Carney say the TPP will enhance Delaware’s poultry exports, but exports from other major producers are growing faster. Should these uncertain gains outweigh the vast negative effects of the TPP?

In a globalized world we need trade treaties that benefit our economies and workers and protect the environment. The TPP benefits only international corporations and threatens our ability to curb global warming. It is not the legacy President Obama should be leaving. Delaware’s congressional delegates need to recognize this.

Published in The News Journal January 27, 2016

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