Twenty-five Silicon Valley firms are now lining up against the Trans Pacific Partnership (TPP) at a time when the secret trade agreement‘s tactics to eviscerate derivatives regulation is exposed.
The Trans Pacific Partnership is a “trade” agreement promoted by multinational corporations as a method to open Asian markets to US products, but is it really crony capitalism at its worst, as critics charge?
Market reformers look at the turn of the century as a period in history when derivatives legislation was rolled back, leading to the 2008 market crash. Some have said if they were aware of the generally lightly reported efforts in 1998 – 2001 they would have vocally opposed the powerful bank lobbying efforts that led to the abrupt dismissal of former CFTC Chairperson Brooksley Born and the repeal of common sense derivatives and banking legislation.
Is history repeating itself as the little-known trade agreements work their way through Congress? This agreement could literally turn back the clock on regulation of not just derivatives, but render ineffective food and drug labeling protections, reduce product safety regulations and empower high frequency trading — as well as restricting internet freedom, which is the concern of the Silicon Valley group.
As major corporations flex political power, the first Congressman to see the trade deal says “US Sovereignty is being handed to corporate interests”
Based on what is known and has been leaked to the public, major corporations with their powerful lobbying apparatus– pharmaceutical corporations, large banks, Agri business, high frequency trading concerns – have loaded the legislation with provisions that, under a cloak of secrecy, provide them special advantages that neuter regulators.
“The most alarming aspect of the Trans Pacific Partnership is that most of the pact has nothing to do with traditional trade,” said Ben Beachy, Research Director of Public Citizen’s Global Trade Watch. “Only five of the 29 proposed chapters of TPP actually pertain to trade matters. Many of the chapters, with binding rules, cover everything from monopoly patent protection, rules on financial regulations that directly contradict efforts designed to rein in Wall Street, environmental provisions, binding rules on copyright which threatens to revise some of the failed provisions of the Stop Online Piracy Act (SOPA), and binding provisions that would restrict domestic rules regarding food safety and inspections. These are rules one would not expect to be typically inserted into a so called ‘trade pact.’”
The trade agreement’s contents are secret and details cannot be disclosed, which is a problem for Congressman Alan Grayson (D-FL), who has seen the agreement and says “US Sovereignty is being handed to corporate interests,” he wrote. “Lobbyists are more familiar with the details than those in Congress, who are expected to vote on it without serious discussion.”
After reading the agreement, which could only be done by the Congressman and not his staff, Grayson was forbid from discussing the individual details for “national security reasons” but could express his broad opinion. “There is no national security purpose in keeping this text secret,” he wrote after reviewing the details.
What is clear is that if passed the agreement’s secret provisions would trump US laws and regulation. Instead, hard-fought US protections would be subject to the lowest common denominator of those countries in the agreement. For instance, under the guise of “lowering trade barriers,” if food labeling laws in Vietnam were weaker than those in the US, this new agreement would nullify US regulations in favor of laws in the more lightly regulated country. The nullification of US laws would occur not only in food labeling, but would also reduce internet freedoms and derivatives regulations, among other items. None of this is discussed in public, which is the concern. “The United States appears to be using the non-transparent Trans-Pacific Partnership negotiations as a deliberate end run around Congress on intellectual property, to achieve a presumably unpopular set of policy goals,” Susan Sell, a professor of political science at George Washington University, wrote in the Washington Post.
25 tech companies send letter to Senator asking him to oppose Trans Pacific Partnership “fast track”
Silicon Valley, which vigorously opposed the unsuccessful Stop Online Piracy Act (SOPA) campaign, is starting to publically hate on the agreement that activists have privately called a near “criminal” attempt to alter US laws and regulations without debate.
The component of the pact that would limit internet freedom through copyright restrictions, rolling back the SOPA debate, was released by Wikileaks in 2013 to little media attention. If passed, the Trans Pacific Partnership would enable user’s web sites to be shut down for “violations” of the Trans Pacific Partnership copyright provisions and would place an onus on Internet service providers to police web sites hosted on their servers.
“These highly secretive, supranational agreements are reported to include provisions that vastly expand on any reasonable definition of ‘trade,’ including provisions that impact patents, copyright, and privacy in ways that constrain legitimate online activity and innovation,” said a letter from the tech companies to Sen. Ron Wyden (D-OR), the new Senate Finance Committee Chairman.
Noting the trend for US government to increasingly operate as an arm of large multinational corporate interests, who benefit from trade agreements that enable them to offshore US jobs, Ron Yokubaitis, Co-CEO of Golden Frog and Data Foundry, was clear. “We strongly urge Senator Wyden to not bend to the narrow interests of a few large corporations,” he said. “Instead we hope he stands up for the small companies that continue to create innovation on the open Internet, but get left out when legislation is proposed that is not transparent and participatory.”
While backers of trade agreements point to the potential for US job gains, in fact in the decades that such trade agreements have been in place, high paying manufacturing jobs have been off shored, replaced by lower paying service jobs. Numerous academic studies have noted that trade partnerships have a statistical tendency to harm the US middle class. For instance, a US-Korea free trade agreement increased exports from Korea to the US while the US did not see a net gain in exports to Korea.
Trade pacts increase flow of trade — against the US
Perhaps the most notable trade pact was the North American Free Trade Agreement (NAFTA). What was the economic fallout? “The flow of goods has increased,” said Global Trade Watch Director Lori Wallach in an interview with Bill Moyers. “Unfortunately, that flow has been a huge surge of imports into the United States, from Mexico, and, interestingly, from Canada, so that we’ve seen the displacement of one million jobs on net because of the huge increase — a 450 percent increase — in our trade deficit in the 20 years since NAFTA went into effect. The year before NAFTA, the United States had a small trade deficit with Canada — about $20 billion dollars — and a slight surplus of $2 billion dollars with Mexico. Now, 20 years later, we have almost a $200 billion dollar trade deficit with those countries. So the surplus with Mexico turned into a huge, huge deficit, as all those companies relocated there to