“Fast Track” For Race To The Bottom


When Bill Clinton signed the North American and Central American Free Trade Agreement (NAFTA and CAFTA), it opened a new era of neoliberal policies which removed much of existing trade, environmental and labor protection barriers and allowed the American corporations to more cheaply, more freely and more profitably operate in those countries that signed the agreements. The result was off-shoring of jobs and lower wages and benefits, including of healthcare and retirement. At the same time, many environmental and health and safety regulations were also lifted from American companies. And finally, came the lowering of taxes for them. The result was a huge boon for one side of the equation: giant multinational corporations, and lower wages, benefits and protections for the other: American working class (including what’s often referred to as the middle class), which came to be known as “the race to the bottom”.

Meanwhile, these “neoliberal” policies and the so-called Free Trade Agreements, which were mostly imposed on, rather than agreed by, already poor nations, made them even poorer, as they struggled to repay the loans extended to them so they could provide the necessary market for US corporations and purchase US weapons and equipment. To repay the loans, these governments were directed or forced to impose austerity measures on their already impoverished populations, pushing them further into poverty.

I’d be remiss not to mention that while all this was happening, the police departments of major US cities, such as New York and Los Angeles, were sending their experienced officers to these and other countries to train their police force in crowd control to prevent revolts. Turns out, they needed their crowd control forces, complete with their personnel carriers, tear gas, rubber bullets, pepper spray, clubs, horses, dogs and Robocop gear, right here at home, as resistance to these policies grew and gripped many large cities of the US and European countries. The high point of these street battles was “the battle of Seattle” in 1999. A few months later, in Spring of 2000, at a demonstration in Washington, 800 people were arrested. I barely managed to avoid getting arrested. We thought protesting was legal in this country. That all changed, of course, with the terrorist attacks of 9/11. Neoliberal policies had a new corollary: open ended and multiple wars for Empire.

Reagan’s pro-rich and anti-working class policies were known as “trickle-down economics” which, by the time Clinton was inaugurated after 12 years of Reagan-Bush presidency, had resulted in much wider gap between the rich and the poor. So, the Democrats, under the presidency of Clinton, didn’t try to defend the “trickle down” theory and, on the contrary, criticized it. They couldn’t do otherwise; the results were glaringly clear. But, their policies picked up where Reagan’s and Bush’s left off and continued the trend.

By the time Obama took the office, neoliberal policies and the Free Trade Agreements under Clinton and George W. Bush, too, had done their job for US corporations, and like the “trickle down” before, had gained infamy; so once again, the Democrats were ready to abandon and criticize it – not its substance, mind you, but its name.

Democrats did that with Bush’s wars and other policies, too, including Obama himself who opposed the Iraq war when he was a Senator, but continued it when became president, and withdrew troops only when the Iraqi government, under pressure from its people, refused to grant immunity to US soldiers, and when financially, militarily and politically, keeping the same level of troops there was not beneficial or feasible. In Afghanistan, not only did he not end the war, he tripled the troop size. He also renewed Bush’s Patriot Act and went a step further and signed the NDAA into law. While he was criticizing Bush’s Guantanamo Bay prison camp before becoming president, he’s now planning, according to New York Times, to spend close to $200 million, to expand and renovate it, making it a permanent prison camp, on Cuban soil, without the consent of the Cuban Government. In government secrecy, too, he outdid Bush, as did in warrantless wiretaps and eavesdropping on US citizens. His Administration requested and obtained more cell phone, email and internet activity records on citizens than Bush did. He also went after whistle blowers like Bradley Manning, among others. While Democrats were criticizing Bush and Cheney for overstepping the Constitution and due process, Obama went much farther. Not only did he go to war without Congressional approval (Libya), he now reserves the right to order anyone assassinated and is even keeping a “kill list”. His Justice Department has even opened the door to the possibility of the government using drones to kill US citizens on US soil, to go along with the indefinite detention by the military, legalized by the NDAA. In short, Democrats often criticize Republicans for things they themselves commit – and even outdo – when they take over, sometimes under a different name and sometimes not. In the case of Bush’s “war on terror”, they have not found a reason to rename it, yet.

As for the Free Trade Agreements, it should come as no surprise that Obama continued that, too. In the case of Colombia, some Democrats, under pressure from unions, had requested that the trade agreements contain provision for reducing assassination of Colombian labor activists and leaders; it doesn’t reflect too well on the US to have a trading partner which ranks number one in the world in number of assassinations of their union leaders. As did Bush before him, Obama too signed the trade agreements, without those provisions in them. That should tell you all you need to know.

But, there’s more: it’s called the Trans-Pacific Partnership (TPP), and if, by now, you’re suspecting it can’t be anything good for working people, you’ve read the trend correctly. The TPP, which is a new and wide set of trade policies which the Obama administration is quietly developing with the help of large corporations, and without any input or feedback from consumer and environmental protection organizations or worker unions, goes a step further than the FTA in empowering transnational corporations and circumventing protections for health care, wages, labor and consumer rights and the environment, and will decrease regulation of banks and their risky investment practices.

The administration knows that once people learn about it, they’re going to see it’s the same old policies – on steroids, I might add – that resulted in lower wages and benefits for wage earners and more profits and rights for corporations. They also know these trade agreements are detrimental to consumers and the environment. That’s why they’re keeping quiet about it and are not consulting with these groups. And it’s also why they’re trying to circumvent the normal process of congressional debate and approval and checks and balances.

Since the Executive Branch doesn’t have the open debate and voting process built into it as does Congress, and can therefore be influenced and controlled more easily by special Interests, the Constitution gives Congress the authority to decide on major issues affecting the society, such as war and trade. But, right wing and corporatist presidents of the past few decades, including Nixon, Reagan, Bush Sr., Clinton, Bush Jr. and Obama, have tried to reduce the role of Congress and transfer its authority to the President’s office, both in starting wars and signing trade agreements. (If you think it’s not fair to group Obama with Reagan and Bush Jr., you may be right; he’s more right-wing than they were). Not surprisingly, members of Congress, themselves under same corporate influence, have routinely acquiesced to such abrogation of congressional authority and oversight. In 1973, Nixon introduced “Fast Track” that enables the President to negotiate and sign trade agreements with any nation he chooses, or rather, the corporations choose and on terms they dictate, before Congress gets a chance to debate and vote on it. It requires a mandatory vote within a set number of days with limited amount of debate in either chamber and with all amendments forbidden and regular committee processes waived. President Clinton made good use of Fast Track for implementing his (i.e.: corporations’) free trade agreements, including in creating the World Trade Organization (WTO). President Obama is hoping to do the same with his TPP.

When these trade bills that are authored by the Executive Branch, with the help of large transnational corporations and without input from civil society and their representatives, contradict US laws, it’s the laws that have to conform to the trade agreement, rather than the other way around. For example, Glass-Steagall had to be repealed under President Clinton to conform to the WTO.

Just as they do with other unpopular things, Obama and other politicians prefer to not call Fast Track by its name. Instead, they’re now calling it “Trade Promotion Authority” (TPA). Regardless of what they’re called, Fast Track or TPA, FTA or TPP, the results are the same: more rights and profits for corporations and lower wages, benefits and protections for workers, as well as, less consumer and environmental protections.

Margaret Flowers and Kevin Zeese, writing for Truthout under the title of “TransPacific Partnership Will Undermine Democracy, Empower Transnational Corporations”,
Wednesday, 27 March 2013:
Ontario, Canada employed a renewable energy program that requires energy generators to source solar cells and wind turbines from local businesses resulting in the generation of 4,600 megawatts of renewable energy and 20,000 green jobs. But, the WTO ruled that this violated WTO rules and had to stop. In another case, a US company, Lone Pine Resources, is suing the Canadian government under NAFTA for more than $250 million due to lost profits from Quebec’s moratorium on fracking, which prevents Lone Pine from fracking under the St. Lawrence River.

“This is not an isolated incident”, continues the Truthout article:
corporations such as Chevron, Exxon Mobil, Dow Chemical, and Cargill have launched 450 lawsuits against 89 governments, including the United States. Over $700 million has been paid to corporations under US free trade agreements, about 70 percent of which are from challenges to using green energy. Multinational grain-trading and food-processing firms have made enormous profits, while farmers on both ends have been hurt. The results are that hunger is projected to increase, along with illicit drug cultivation. There is a race to the bottom in every sense, including reducing food safety and inspection standards.

According to leaked documents and reported in the same Truthout article, the TPP contains provisions that protect investors by providing them with compensation for loss of “expected future profits” from health, labor, environmental and other laws. The effect is clear: nations will not pass laws that threaten corporate profits in order to avoid lawsuits and heavy fines. Court cases in which corporations are suing governments over laws and regulations that cause loss of expected profit will be tried before a trade tribunal of three judges which can include corporate lawyers on temporary leave from their corporate job while they serve as judges. Global Trade Watch reports that under previous trade agreements, “Over $3 billion has been paid to foreign investors under US trade and investment pacts, while over $14 billion in claims are pending under such deals, primarily targeting environmental, energy, and public health policies.” The right to sue governments will create a hurdle for governments considering actions to protect workers, consumers, health and the environment.

The article goes on:
Leaked documents show that Obama’s designated Trade Representative who’s negotiating the TPP on behalf of the US government is pressuring TPP member countries to expand pharmaceutical monopoly protections, which essentially denies them access to medicines. In a recent letter, Doctors Without Borders wrote that the TPP will be “the most harmful trade deal ever for access to medicines in developing countries.” The TPP does this damage by inflating pharmaceutical prices through lengthy patent protections, as Doctors Without Borders writes:
One proposed TPP provision would require governments to grant new 20-year patents for modifications of existing medicines, such as new forms, uses or methods, even without improvement of therapeutic efficacy for patients. Another provision would make it more expensive and cumbersome to challenge undeserved or invalid patents; and yet another would add additional years to a patent term to compensate for administrative processes. Taken together, these and other provisions will add up to more years of high-priced medicines at the expense of people needing treatment waiting longer for access to affordable generics.

There is also concern that the TPP will force public health systems to open up their medication programs to pharmaceutical corporations giving them greater access and greater control over the price of medications, effectively taking away the ability of the public health system to negotiate for a low price. The same may occur in the US with Medicare, Medicaid, Tricare and the Veterans Health Administration, making medications more expensive and potentially out of reach for their patient populations. In addition, countries that provide health care through a national public health program, rather than a market-based system dominated by for-profit insurance, are threatened by provisions that oppose state-owned enterprises. Corporations view state provision of services as unfair competition and therefore a violation of free trade. This will make it more difficult for the United States to adopt a single-payer health system, and it will make it more difficult for countries with such systems to protect them from privatization and health insurance domination.

These same provisions about state-owned enterprises will affect public banking too. Public banks, though rare in US, are used to hold taxes that are collected, administer payroll for public employees and provide loans for public projects. The advantage is that all public dollars are managed in a public institution rather than having to pay fees and interest to a private bank. But the TPP would consider public banks to have unfair advantages and therefore violate free trade.

Trade agreements also protect big finance by (1) preventing regulation of the finance industry; and (2) allowing capital to move in and out of countries without restrictions, goes on the above-mentioned report.

Thus, the TPP and other corporate trade agreements will undermine the ability of governments to regulate health, safety, labor, environment and finance. The 600 corporate advisers to the TPP see this as an opportunity to do an end-run around laws and policies that they have been unable to put into effect through the normal democratic process. This is why the TPP is being called a global corporate coup that makes corporations more powerful than governments.

Poverty, hunger, malnutrition and homelessness in the world, including in the US, is at the highest level it’s ever been, higher than when we were protesting in Seattle, Washington and elsewhere. This is when corporate profits are at their highest level. Instead of addressing these pressing issues, Obama is pushing for more of the same: more corporate friendly trade laws, more deregulation, more rights and power for transnational corporations and more austerity and lower wages and protections for workers and disregard for food safety, environment and people’s health and wellbeing, exactly the sort of policies that have gotten us here, in the first place.


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