In his visit to the G20 in Brisbane, President Barack Obama sought to promote his ambitious Pacific Rim trade agreement — the Trans-Pacific Partnership. He told an audience at the University of Queensland:
We’ll keep leading the effort to realize the Trans-Pacific Partnership to lower barriers, open markets, export goods, and create good jobs for our people. But with the 12 countries of the TPP making up nearly 40 percent of the global economy, this is also about something bigger. It is our chance to put in place new, high standards for trade in the 21st century that uphold our values. So, for example, we are pushing new standards in this trade agreement, requiring countries that participate to protect their workers better and to protect the environment better, and protect intellectual property that unleashes innovation, and baseline standards to ensure transparency and rule of law.
Obama insisted: ‘It’s about a future where instead of being dependent on a single market, countries integrate their economies so they’re innovating and growing together.’ He maintained that the trade deal would be a historic achievement: ‘That’s why I believe so strongly that we need to get it done — not just for our countries, but for the world.’ The President recognised that the TPP would have stringent regulatory demands, and require ‘big transitions for a lot of these countries, including for the United States’.
The Obama administration, though, has not had the support of Democrats in the United States Congress. Senior Democrat Representative Sander Levin has expressed reservations about the process and the substance of the TPP. Senator Elizabeth Warren has worried about how the TPP will affect financial regulation of Wall Street. Other Democrats have additional reservations about the TPP. Senator Ron Wyden is of the view that the fast-track regime needs to be overhauled and modernised. Three House of Representatives Democrats — Reps. Rosa DeLauro (Conn.), Louise Slaughter (N.Y.) and Alan Grayson (Fla.) — maintained that there are insufficient votes in the House to pass trade promotion authority to secure the approval of the 12-nation TPP. De Lauro commented: ‘Fast-track doesn’t have support in the current Congress and won’t have support in the next Congress’. She declared: ‘The votes are not there.’
Nonetheless, President Barack Obama has said that he is willing to defy United States Congressional Democrats on his support of the TPP, and work with Republicans if need be. However, there are significant divisions within the Republicans over the TPP. There could well be insufficient support within the United States Congress for a trade promotion authority.
Congressman Sander Levin
Ways and Means Committee Ranking Democrat, Congressman Sander Levin, was an interested spectator at the Sydney talks for the TPP.
In September 2014, Levin presented a Report to the Council on Foreign Relations reviewing the areas of debate and conflict in the TPP negotiations.
First, Levin emphasized that the Obama administration must respect the 10 May 2007 agreement on trade agreements negotiated between the US Congress and the Bush administration. This deal sought to protect workers’ rights, environmental protections, access to medicines, and human rights. The US Congressional Democrats have been aggrieved that Obama and his trade representatives have not honoured this deal: ‘That agreement is — and must remain — a bedrock principle within trade agreements.’
Second, Levin called for reciprocity in the TPP. He observed: ‘The TPP presents an enormously important opportunity to transform the trading relationship between the United States and those partners from something that in some cases looks like a one-way street to a fully reciprocal one with healthy flows that go both ways and create opportunities for everyone — the way trade is supposed to.’ Levin highlighted concerns about market access for agriculture, automobiles, currency manipulation, and state-owned enterprises.
Third, Levin stressed that there was a need to protect national sovereignty in the TPP, and the right to regulate. He commented: ‘Reaching for a high bar to increase standards of living, improve worker rights and strengthen environmental protections, and ensure that trade opportunities are reciprocal does not mean the United States gives up its right to regulate in all of the vitally important areas that affect our interests’. Levin was particularly interested in defending food safety rules, and tobacco control measures. He was also alarmed by the abuse of investor-state dispute settlement: ‘Investor-state disputes have proliferated in recent years and involve increasingly novel and costly challenges to public welfare and environmental regulations.’
Levin reaffirmed the key role of Congress in overseeing trade agreements: ‘”Fast Track,” or Trade Promotion Authority, is traditionally designed to be in place from the start of negotiations — to ideally give Congress a role in picking negotiating partners, to set out negotiating objectives, to establish full transparency, to provide an active role for Congress throughout the negotiations, to judge if the objectives have been achieved, and then to set procedures for legislative consideration’. He said: ‘No matter one’s view of the status of the TPP negotiations, whether in their “end game” or with much work remaining (as I believe), after four years, these negotiations clearly are not at the beginning.’
Levin put a sober press release at the end of the Ministerial talks on the TPP in Sydney. He observed: ‘With substantial work having been done, going forward there needs to be a sharp focus on the what, not the when’. In his view, ‘It is the substance of a TPP agreement that matters.’
Levin commented: ‘While the text must reflect these principles, the devil will be in the details of the text, in the annexes and the ‘non-conforming measures,’ and in the implementation of the obligations’. He stressed that ‘That is true in critical areas, including the environment, state-owned enterprises, labor rights, and a broad range of market access issues.’ Levin observed that, while ‘the quantity of increased trade is important’, ‘in this new era of globalization, the most important test is its quality, its potential impact on the lives of people’. Echoing the concerns of the economist Joseph Stiglitz about the TPP benefitting corporate elites — the 1% — he stressed: ‘The goal must be to ensure that the potential benefits of trade are spread broadly to the many, not just the few.’
Levin maintained that there was a need to ensure that the TPP contained appropriate safeguards in respect of labor rights, the environment, and public health. He recalled: ‘The May 10 structure, which I helped negotiate, was a major breakthrough on the rights of workers, environmental protections, and access to medicines, and it is vital that TPP build on them, not weaken them.’
Levin emphasized that there should be greater open and transparent democratic debate about the TPP: ‘We need more public input and debate on all of the mentioned issues, as well as intellectual property, food safety and investment.’
Levin was also conscious of tensions between the United States, and its trading partners: ‘TPP therefore presents a special opportunity and special challenges’. He noted: ‘Vietnam and Malaysia, for example, have very different structures from our own.’ Moreover, Levin insisted: ‘We must confront Japan’s longstanding and persistent exclusions of agricultural and automotive products from its markets.’
Senator Elizabeth Warren
Senator Elizabeth Warren has been a rising star in the progressive caucus in the Democrats in the United States Congress. She has been encouraged by a number of Democrats to make a run for the Presidency.
Warren has shown a strong interest in the TPP. She has warned: ‘From what I hear, Wall Street, pharmaceuticals, telecom, big polluters, and outsourcers are all salivating at the chance to rig the upcoming trade deals in their favour … I believe that if people would be opposed to a particular trade agreement, then that trade agreement should not happen.’
In a November 2014 piece, Senator Elizabeth Warren discussed the need to ‘work on America’s agenda.’ She expressed her concerns about corporate influence over law-making and trade deals:
Before leaders in Congress and the president get caught up in proving they can pass some new laws, everyone should take a skeptical look at whom those new laws will serve. At this very minute, lobbyists and lawyers are lining up by the thousands to push for new laws — laws that will help their rich and powerful clients get richer and more powerful. Hoping to catch a wave of dealmaking, these lobbyists and lawyers — and their well-heeled clients — are looking for the chance to rig the game just a little more.
Warren observed: ‘Americans are deeply suspicious of trade deals negotiated in secret, with chief executives invited into the room while the workers whose jobs are on the line are locked outside’. She noted that voters are ‘appalled by Wall Street banks that got taxpayer bailouts and now whine that the laws are too tough, even as they rake in billions in profits’. Warren commented: ‘If cutting deals means helping big corporations, Wall Street banks and the already-powerful, that isn’t a victory for the American people — it’s just another round of the same old rigged game.’
On the 17 December 2014, Senator Elizabeth Warren and a number of her colleagues, Tammy Baldwin and Ed Markey, wrote to the White House, outlining a number of concerns in respect of the TPP. Warren commented: ‘We are concerned that the Trans-Pacific Partnership (TPP) could make it harder for Congress and regulatory agencies to prevent future financial crisis.’ She observed, with her colleagues: ‘With millions of families still struggling to recover from the last financial crisis and the Great Recession that followed, we cannot afford a trade deal that undermines the government’s ability to protect the American economy.’
Warren, Baldwin, and Markey highlighted concerns with
three specific provisions that could be part of the TPP. First, the Democrat politicians raised concerns about the investor-state dispute settlement process: ‘Including such provisions in the TPP could expose American taxpayers to billions of dollars in losses and dissuade the government from establishing or enforcing financial rules that impact foreign banks.’ Warren and her colleagues warned: ‘The consequence would be to strip our regulators of the tools they need to prevent the next crisis.’
Second, Senator Elizabeth Warren and her colleagues were concerned about including provisions in the TPP that would commit the American financial sector to ‘market access’ rules. She observed: ‘Such rules could be interpreted by international panels to prohibit basic, non-discriminatory restrictions on predatory or toxic financial products — such as particularly risky forms of derivatives — because those restrictions deny access to the U.S. financial markets.’ Warren and her colleagues observed: ‘To protect consumers and to address sources of systemic financial risk, Congress must maintain flexibility to impose restrictions on harmful financial products and on the conduct or structure of financial firms.’
Third, Warren and the other Democrat politicians were concerned about the inclusion of terms in the TPP that could limit the ability of the government to use capital controls: ‘If the TPP were to include provisions from past pacts that required unrestricted capital transfers, it could limit Congress’ prerogative to enact not only capital controls, but basic reform measures like a financial transactions tax.’