Will Liberals and Conservatives Unite to Defeat Fast Track and the TPP?
By Alison Rose Levy
In Ralph Nader’s recent book, “Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State,” the longtime labor- and consumer-rights activist predicts that shared agendas will forge new alliances between liberals and conservatives that could defeat crony corporatism.
An upcoming congressional vote on whether to give President Obama the power to secretly negotiate controversial international trade deals may have the potential to prove Nader right.
Obama has asked Congress to grant him trade promotion authority — also called “fast track” — over two deals. One of them, called the Trans-Pacific Partnership, or TPP, would be with a group of 11 other nations; the other, called the Trans-Atlantic Trade and Investment Partnership, or TTIP, would be with the European Union. The authority would allow him to negotiate and finalize the pacts without giving congressional lawmakers any input.
In fact, the specific provisions will not be revealed until after lawmakers have already voted on fast track. In addition, if the authority is granted, debate would be very limited, and members of Congress would not be able to amend the agreements; they could only vote yes or no on them.
Consequently, the fast track proposal is being opposed on both ends of the political spectrum — for different reasons.
For some on the left, the agreements themselves would “mean fewer jobs, lower wages and a declining middle class,” according to a letter signed by more than 60 labor unions, including United Steelworkers, the American Federation of Teachers and other members members of the AFL-CIO and Change to Win coalitions.
In an interview in January — aired on my radio show, “Connect the Dots,” on Progressive Radio Network — William Waren, a trade policy analyst at the environmental advocacy group Friends of the Earth, told me that the deals would supersede local, state and national regulations that protect health, food and the environment.
They would establish “a set of international rules that really work as what I would call a constitution for the world economy,” he said, “because what they do is limit the capacity of government to be proactive to deal with health problems, environmental problems or a whole variety of things.”
Others on the right, like the advocacy group Americans for Limited Government, have painted trade promotion authority as a power grab by President Obama. Though the authority has been granted to previous presidents, 23 conservative members of Congress signed a letter to Obama this month, saying it violates the Constitution, which gives “Congress exclusive authority to set the terms of trade.”
For more than five years, U.S. Trade Representative Michael Froman and multinational corporations have been working in unison to promote the trade agreements. This cozy relationship between corporations and government exemplifies Nader’s description of “crony corporatism”:
Corporatism is an operational political agenda, which basically says the country is better off if it is run by giant global corporations and their political allies in Washington or Albany or Boston or Sacramento. And it involves the merger of giant corporate power with government power, in order to turn government, essentially, into either an accounts receivable for corporations’ contracts, grants, giveaways, or a guarantor of giant corporate capitalism that becomes too big to fail. We have seen that with the big New York banks.
Froman himself comes from the very banks Nader mentions. During Obama’s 2008-9 transition, The New York Times described him as a “prodigious fund-raiser, especially among New York’s young finance crowd,” adding: “As a high-ranking Citigroup official, Mr. Froman is one of many potential appointees with ties to the troubles on Wall Street.”
In April 2009, the Times reported that “from January 2008 to when he joined the White House,” Froman received more than $7.4 million from Citigroup, “one of the largest recipients of taxpayer bailout money.”
Fortunately for the public, many provisions of the two deals have been leaked, and the provisions significantly deviate from the White House’s current reassurances.
Elizabeth Warren’s February op-ed in The Washington Post critiqued provisions that allow for something called Investor-State Dispute Settlement — which would grant foreign investors the right to sue the U.S. government if its laws or regulations would cause a “loss of future profits.” She wrote:
Agreeing to ISDS in this enormous new treaty would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty.
ISDS would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court. … Imagine that the United States bans a toxic chemical … because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with the ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages.
Jeffrey Zients, director of the National Economic Council, responded to Warren’s concerns on the White House website, writing that “ISDS does not undermine U.S. sovereignty, change U.S. law, nor grant any new substantive rights to multinational companies.” He added: “ISDS does not and cannot require countries to change any law or regulation.”
But soon after, Simon Lester, a trade policy analyst with the more conservative Cato Institute, a libertarian think tank, seconded Warren’s concerns and rebutted Zients’ assertions, saying:
All branches of government in the United States, at all levels, may be forced by an international tribunal to pay compensation as a result of their actions. Certainly that affects U.S. sovereignty.
[ISDS] can’t require governments to change laws or regulations, but it can make them pay compensation for their actions.
, the director of the Global Trade Watch division at the consumer-rights group Public Citizen, also responded to Zients’ comments in a piece for The Huffington Post, writing:
Zients … claims that the TPP will fix past ISDS problems … But thanks to a leak of the TPP investment text, we know it would do exactly the opposite: TPP’s ISDS rules could expand the types of domestic policies that foreign corporations could attack.
Already, according to William Waren of Friends of the Earth, the “number of suits brought before international investment tribunals under existing trade and investment agreements like NAFTA [or the North American Free Trade Agreement] is skyrocketing. … The evidence is clear,” he wrote in December, “government regulations related to the environment and finance are being targeted.”
Cases in point: Both New York state’s fracking ban and the president’s veto of a bill approving the Keystone XL pipeline could make taxpayers liable for compensatory damages. As of September 2014, TransCanada had invested $2.4 billion in Keystone. While it can now sue for compensation under NAFTA, if the trade deals pass, ISDS cases would be ruled on by a revolving door of elite corporate litigators who would alternate, on a case-by-case basis, between roles of prosecutor and judge. The opportunities for cronyism are boundless. So are the inducements for members of the Senate and the House to approve fast track.
The key factor is how Sen. Ron Wyden, D-Ore., the ranking member of the finance committee, decides to cast his vote. His stance on the proposal is not currently known, so it remains to be seen whether the “trans-partisan alliance” that Nader predicts — or the same old corporate cronyism — will prevail.