Politics of Poverty

The great trade debate – it’s “us” vs. “them”: so who really benefits?

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A Doctors Without Borders Access to Medicines Campaign poster on the Washington D.C. metro taken on May 22, 2015. Photo: Stephanie Burgos/Oxfam America

In the case of the TPP, as in US trade deals before it, the rules are written to benefit special interests over the public interest

Stephanie Burgos is Oxfam America’s Economic Justice Policy Manager.

The only thing that everyone seems to have in common on all sides of the current trade debate is that this is a battle of “us” against “them”.  So who really are the “us” and “them” that each side is referring to?

Going by the news coverage, proponents such as the Obama Administration are making this out to be the United States vs. other countries (particularly China). As Secretary Kerry just reminded us, 95 percent of the world’s consumers live beyond the US borders (probably the most repeated statistic by such proponents over the last few decades). “When we increase what America sells overseas, our payrolls get larger, our paychecks get fatter,” he said.

I doubt the US Trade Representative has been using that line with any success at the negotiating table with the other 11 countries engaged in the Trans-Pacific Partnership (TPP) negotiations.  Anyway, that line of thinking is so very 20th century.

In today’s world, the winners and losers from these trade agreements – the real “us” and “them” – are divided not along national lines, but rather along economic lines.  That is in large part because the trade agreements of today have little to do with tariffs or cross-border trade.  The reason they are so controversial is that they set in stone the economic rules of the game, creating an “enabling environment” for corporations to do their business globally, unencumbered by pesky national regulations designed with the public interest rather than shareholder interest in mind.

Yet the growing inequality in this country and around the world is a factor that policymakers ignore at their own peril. Those who insist that “the Law of Comparative Advantage has held up nicely for 198 years” have failed to notice that the world has changed, and that US free trade agreements serve to lock in far-reaching domestic regulations that adversely affect a wide range of public interests – including health care and food security – that David Ricardo never foresaw.

In reality, today’s big debate about trade agreements is actually not about trade itself – which will continue with or without more free trade agreements (FTAs). Instead, FTAs have become a euphemism for standardizing policy, regulatory and legal frameworks around the world that benefit and reduce risks for investors. Yet, high school civics classes teach that in representative democracies, determining national policies and regulations is the domain of elected officials in consultation with their constituencies.

So the unprecedented breadth of resistance to the current US trade agenda – and in particular the discontent, disapproval, criticism and downright opposition by well-respected economists and commentators – may not have been anticipated by policymakers, but should not come as a big surprise.

At Oxfam, we believe that trade can be an engine for poverty reduction and shared prosperity only if the rules of trade enable working families and people living in poverty to benefit. But in the case of the TPP, as in US trade deals before it, the rules are written to benefit special interests over the public interest. In essence, that means more for the “haves” and less for the “have nots” – in other countries as well as here at home.

So while the public debate has been focusing on the impacts of these free trade agreements in the United States, Oxfam and others have been raising alarm bells to underscore their adverse effects particularly in developing countries. Many others, including labor unions and environmentalists, have echoed our concerns, recognizing that the “us” in this debate does not mean the United States but instead the working families and people striving to overcome poverty and join the middle class everywhere.

We haven’t yet seen the rules in the TPP, as they have been negotiated in secret, except for a few leaks. But they have been seen – and influenced or even written – by hundreds of corporate leaders and lobbyists. And that should tell you something about who is likely to benefit.

The administration has billed the TPP as the most progressive trade agreement ever. But since the devil is in the details, and since the details are secret, they can call it what they want. They seem to believe that repeating the same talking points ad nauseum will magically turn their self-serving justifications into universal truths.

But a few Members of Congress, who have been given access to and taken the time to read the text, have been bold in refuting the administration’s rhetoricSenator Sherrod Brown and Representative Sander Levin convened an expert panel to discuss a range of concerns with the TPP – as the Senator jokingly said, they wanted to assemble a group of people “who make stuff up”, referring to President Obama’s dismissal of some fellow Democrats’ views on the trade agreement. And a number of Members of Congress have provided serious critiques of the TPP – in particular, Sandy Levin, Elizabeth Warren and Rosa DeLauro.

It also seems the public is not buying the administration’s rhetoric, and for good reason. To illustrate one key problem, the TPP would do more to undermine access to affordable medicines than any previous US trade agreement. Oxfam has joined with others to raise this serious public health concern for patients everywhere. Doctors Without Borders has been actively lobbying on the issue, which has also been highlighted by Nobel Laureate Joseph Stiglitz, whose statements seem to have upset the powers that be in Washington.

Thanks to Joe for speaking truth to power!  Stiglitz spent an hour speaking to negotiators from the 11 other countries involved in TPP negotiations about why they should reject the US-proposed intellectual property (IP) provisions affecting pharmaceuticals. He explained why those provisions aren’t appropriate for the US either. It’s not just a moral issue, he said, it’s about budgets – the cost for governments as well as for patients.

It is notable that the former chair of President Clinton’s Council of Economic Advisors is being ignored by President Obama’s advisors. But Stiglitz reminisced that things weren’t so different during his time in the White House 20 year ago, when the US Trade Representative (USTR), in the service of certain business interests, prevailed over his and other dissenting voices from the scientific and economic communities in negotiations over the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement as part of the Uruguay Round that established the World Trade Organization.

The problems with TPP and the FTA agenda are not limited to adverse impacts on public health. Stiglitz has also shown how the TPP could be disastrous for development and consumers everywhere by privileging the interests of foreign investors over the rights of local communities, limiting governments’ ability to regulate in the public interest. This gift to corporate lobbies has been criticized by prominent legal experts, academic institutions and the libertarian CATO institute, among others.

Furthermore, US free trade agreements continue to be a concern from the perspective of global food security. We saw last year how the USTR forced the government of El Salvador to revise part of its national food security program, saying that it ran afoul of government procurement rules in the US-Central America Free Trade Agreement (CAFTA). And new evidence from Colombia is beginning to show how the US FTA with that country is undermining the livelihoods of family farmers. A recent Oxfam study in Colombia outlines how in the two years after entry into force of its trade deal with the US, Colombia’s agricultural trade deficit increased by 300 percent, adversely affecting many small and medium-scale farmers. Interviews with farmers showed that many have had to resort to reducing their use of inputs, reducing household consumption or defaulting on debts. Overall, farmers’ incomes dropped, they reduced production and saw themselves facing an uncertain future.

The bottom line is that the TPP is bad for public health, bad for consumer protections, bad for poor farmers, and bad for our efforts to fight poverty. In other words, unless you are a corporate executive, this trade deal is bad for “us.”

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