On May 22, after years of pressure by President Obama and big business, the U.S. Senate passed Fast Track authority authorizing the president to negotiate trade agreements. Fast Track means that any such agreement would be brought to Congress for a vote but without any possibility of amendment or filibuster. The House of Representatives has to pass the same Fast Track authority for it to become law.
It goes without saying that neither the President nor Congress are fast tracking legislation for jobs and a real living wage. Nor are they fast tracking for housing the people can afford or to make health care free or to make the environment clean. None of them have proposed fast track legislation to put killer cops in prison or to make racism a crime.
So why is this being fast-tracked? The answer lies in profits and power.
“Free Trade” agreements mean freedom for banks, financial institutions, big corporations and capital in general to ignore all national boundaries in their drive for profit. They can ignore many national laws and regulations that have been won to protect workers and the environment.
On the other hand free trade means mass layoffs for workers. It means accelerating the drive to push wages, benefits and rights lower and lower as weaker standards are used as a battering ram against higher standards.
Over 700,000 workers lost their jobs in the U.S. in the wake of NAFTA. Millions in Mexico were displaced and driven deeper into poverty. Canadian workers also suffered. The one winner was big business and the financial institutions that control them. The same trends have been seen in the many other “free trade” agreements from Korea to Colombia.
This Fast Track legislation is designed to clear a road for two anticipated trade agreements: the Trans-Pacific Partnership Agreement and the Transatlantic Trade and Investment Partnership Agreement. Negotiations for both are being carried out in secret.
Secrecy and negotiations
The fact that the negotiations are secret is a clue that there isn’t anything good in the deal. And the negative consequences must be huge because these trade negotiations are more secret than any in the past.
The Obama administration says that the terms will be released 60 days before he signs the agreement. But by then the negotiations will be over and no Congressional action can amend the terms.
President Obama like every other president tries to paint trade agreements as acts which will create desperately needed jobs. But if that were really the case then the process would be open and transparent for all to see.
Democracy for the rich
Looking at the mechanics of how the government carries out the negotiations exposes the type of democracy that we have.
The United States is represented in these negotiations by the Office of the Trade Representative. President Obama appointed Michael Froman to head the agency. He came to that job from Citigroup where he was a CEO of one of the bank’s divisions and managed their investment/exploitation strategy for “emerging markets” aka Asia, Africa and Latin America.
Joining him in the top leadership is his deputy, Robert Holleyman. For the 13 years prior to his Trade Office appointment, he was the president and CEO of the trade group representing the biggest software companies like Microsoft, IBM and Oracle.
Should either of these two falter in pursing the interests of the capitalist class, there are over 500 advisers who have been appointed to keep them in line. Nearly all of them come from big business or serve as their representatives. Each as a committee assignment to oversee the interests of capital in particular industries.
Here is a representative list of industries and some of the many companies assigned to the committees
- Trade Policy: Chamber of Commerce
- Aerospace: Boeing and Lockheed
- Auto: Ford, GM and Navistar
- Telecom: Verizon
- Grain: Dow Ag
- Intellectual Property Rights: GE and J&J (Johnson and Johnson)
- Pharma and Chemicals: Abbott Labs, FMC and the
- Tobacco: Tobacco Associates
- Sweeteners: US Sugar Corp
- Energy: Haliburton and ADM
- Steel: US Steel and Nucor
- Trade and the Environment: U.S. Council for International Business
Also participating in every committee are the business associations. For example the American Chemistry Council, representing nearly every chemical corporation, is on the Pharmaceutical and Chemical committee.
There are a handful of unions represented among the over 500 “advisers” but their numbers show their insignificance. Further their participation is likely to be used as a cover for saying that workers were at the table, when the fact is that the table is hidden, the papers on it are secret and labor has no real power in that arena.
Currency wars and the origin of Fast Track
One of the issues in the Senate debates was whether the Senate should require the negotiators to ban “currency manipulation” by other countries. That is a little ironic because the U.S. frequently manipulates the value of the dollar compared to other currencies- and manipulation was a big part of what the U.S. was doing in the period when Fast Track was first created.
Fast Track authority first came into being in a bill introduced in the House of Representatives on October 3, 1973. This was a period when President Richard Nixon was asserting the need to keep White House tapes secret using logic similar to that used by Obama today but for a different purpose. The tapes would later reveal his role in the Watergate break-in. This was the same period when Vice President Spiro Agnew resigned after being exposed for his role in a kickback scheme. The Fast Track bill was eventually signed by the unelected President Gerald Ford in January 1974, several months after Nixon resigned.
These resignations were aspects of a larger political crisis for the ruling class. Mass mobilizations had shaken the system and various crises gave rise to plans by Nixon and others for eliminating many of the democratic rights that people were accustomed to. Those plans were not put into effect but they were a measure of how deep the crisis was. Among other things the mass protests forced the passage of a law limiting presidential power to go to war.
The political crisis was just one of several interrelated crises. Underlying the political crisis was a crisis in the economy, a crisis with significant roots in wars- military as well as trade and currency.
World War II ended with the major imperialist powers trying to figure out how they could avoid trade wars between them from escalating into military wars. Trade wars including the tactic of devaluing a currency to gain a temporary advantage had been a part of the history of class society for a long time. They came up with an agreement known as Bretton Woods which was meant to lessen the likelihood of an inter-imperialist war and which at the same time helped to consolidate the role of the United States as the supreme imperialist power.
Many rounds of trade negotiations took place after the war with no significant change until the Kennedy Round of General Trade GATT talks. The round was named after Senator Ted Kennedy because he had gotten Congress to pass a Trade Expansion Act which gave the president significantly wider negotiating authority than ever before. The U.S. and Britain, Japan and the European Community bargained over trade terms and finally came up with an agreement in 1967 just before the expiration of presidential authority. Congress passed the terms of the Trade Agreement but modified them. This was an embarrassment for the U.S. and in part gave rise to the Fast Track legislation in 1973.
The 1974 Trade Act was not just a “correction” meant to eliminate democratic procedures (like the ability to amend) for passing Trade Agreements.
The massive unproductive war expenditures from the Korean War and especially the Vietnam War, along other factors created stagflation- or an economy with very high inflation (especially in the necessities of life), very high unemployment and very low general economic growth.
Nixon and his class looked for a way to respond that would increase profits and give U.S. business owners an advantage. In August 1971, Nixon imposed a wage freeze that was not just a freeze on wages but was a wage cut given high inflation. It was also a cut in real terms. For example, when the port workers went on strike Nixon used the Taft Hartley Act to force them back to work and then used the Wage Board to cut a 72 cent increase that the companies agreed to- back to 32 cents. Nixon’s several phases of wage freezes lasted for years.
At the same time as the 1971 wage freeze, Nixon devalued the dollar against other currencies and took the U.S. off of the gold standard. The U.S. was experiencing its first trade deficit in 80 years. Nixon’s goal was to return to the days when everything was coming the way of the U.S., that is coming into the pockets of U.S. big business.
Other countries were outraged by this currency manipulation and demanded compensation and other actions. After months of tense negotiations, the U.S. was able to get the other powers to agree to a new set of rules based on the devalued U.S. dollar.
Manipulating currencies or clipping the value of coins is an old trick used to gain advantage over competitors. In the period of imperialism where trade and foreign investment are tied to the banks and to the military industrial complex, these actions have greater consequences.
With the quadrupling of oil prices in the fall of 1973, and the collapse of the Franklin National Bank of New York, with extremely high inflation and unemployment, big business wanted the executives of their government to have a freer hand in negotiating trade deals that would benefit them and at the same time limit any resistance to those deals. That is the origin of Fast Track.
Trade deals and corporate power
The many trade agreements that have been negotiated since WWII show a clear trend toward reducing the rights of workers and communities in every nation and increasing the power of multinational corporations. The agreements create incentives for “off shoring” of jobs.
Many people are familiar with the Supreme Court decision in Citizens United which made it possible for corporations to have all of the rights of people- in fact more rights than people.
These trade agreements give multinational corporations rights as if they were nations. They can file complaints as private corporations saying that their rights under a public treaty have been violated and that they should be compensated. Under these agreements, corporations claim that they don’t have to abide by the laws of nations. They say that they are above any national law and that they can use these trade agreements to batter down any national law that gets in their way.
If a corporation believes that a trade agreement has been violated, then they file a case with a tribunal staffed by private attorneys. These lawyers then have the power to order governments to pay the corporations if local/national labor or environmental laws violate their “rights” to exploit labor or the land anywhere covered by the trade agreement. This process already exists and will be used and likely expanded under the Trans-Pacific Trade Agreement that they are pressing for now.
As an example of what can happen, in 2009 Chevron sued the government of Ecuador to counter an Ecuador Court order that Chevron pay billions due to environmental damage and violations of Ecuadorian law. The Tribunal has been siding with Chevron and in 2013 even decided that its interpretation of the Ecuador constitution would hold versus the interpretation by Ecuador’s own high court.
Click here to see data on the the results of some of these Investor-State Disputes. The data show that corporations “have already won more than $3.6 billion in taxpayer money, with $38 billion still pending in claims, all of which relate to environmental, energy, financial regulation, public health, land use and/or transportation policies.”
Trade and the Asia Pivot–targeting China
President Obama tells the popular press that Fast Track and the Trade deals are about jobs. But his real message is that this is part of an economic war against China. He says that if “we” don’t write the trade rules, “then China will”.
Of course “we” are not writing those rules. They are being written in secret by the corporate enemies of workers. Even the “advisers” have long records of fighting against workers here in the U.S.
The President’s current push for this fast tracked trade deal is a part of a larger strategy. On November 17, 2011 Obama made a speech in Australia announcing a major military and economic strategic policy, referred to now as the “Asia pivot”.
He announced that within a few years most of the United States military would be re-positioned to target China and North Korea. On a military level changes took place quickly with military bases, joint military exercises, training, etc.
On the economic level the President acted quickly to implement this policy. In the previous month he had just signed the Korea, Panama and Colombia free trade agreements despite mass protests. But with that done, he then gathered other Asian leaders and announced a general outline for the Trans-Pacific Partnership which was clearly targeting China.
So much propaganda is used against China to create the image that Chinese workers are stealing U.S. jobs! But this is only a diversion. It is U.S. corporations that are outsourcing.
More importantly this argument is used as an excuse to pass trade agreements that vastly increase corporate power against workers and communities here in the U.S. and abroad.
President Obama’s military and economic war plans against China will do nothing to bring workers a decent living wage, or respect on the job and union representation. They will do nothing to bring jobs to oppressed communities. In part that is why much of the organized labor movement is opposing the Trans-Pacific Partnership Agreement. And it is certainly why all of us should be involved in mobilizing against it.