Nobel Laureate economist Joseph Stiglitz has put up a big warning sign in the New York Times regarding the Trans Pacific Partnership (TPP, involving east Asian countries and the U.S.) trade negotiations now underway. For one thing, the negotiations are being conducted in secret. For another the spinmasters have come up with a word, harmonization, that sounds great but most likely represents a race to the bottom for citizens. From the Stiglitz article: Let’s tackle the history first. In general, trade deals today are markedly different from those made in the decades following World War II, when negotiations focused on lowering tariffs. As tariffs came down on all sides, trade expanded, and each country could develop the sectors in which it had strengths and as a result, standards of living would rise. Some jobs would be lost, but new jobs would be created. Today, the purpose of trade agreements is different. Tariffs around the world are already low. The focus has shifted to “nontariff barriers,” and the most important of these — for the corporate interests pushing agreements — are regulations. Huge multinational corporations complain that inconsistent regulations make business costly. But most of the regulations, even if they are imperfect, are there for a reason: to protect workers, consumers, the economy and the environment. What’s more, those regulations were often put in place by governments responding to the democratic demands of their citizens. Trade agreements’ new boosters euphemistically claim that they are simply after regulatory harmonization, a clean-sounding phrase that implies an innocent plan to promote efficiency. One could, of course, get regulatory harmonization by strengthening regulations to the highest standards everywhere. But when corporations call for harmonization, what they really mean is a race to the bottom. When agreements like the TPP govern international trade — when every country has agreed to similarly minimal regulations — multinational corporations can return to the practices that were common before the Clean Air and Clean Water Acts became law (in 1970 and 1972, respectively) and before the latest financial crisis hit. Corporations everywhere may well agree that getting rid of regulations would be good for corporate profits. Trade negotiators might be persuaded that these trade agreements would be good for trade and corporate profits. But there would be some big losers — namely, the rest of us. These high stakes are why it is especially risky to let trade negotiations proceed in secret. All over the world, trade ministries are captured by corporate and financial interests. And when negotiations are secret, there is no way that the democratic process can exert the checks and balances required to put limits on the negative effects of these agreements. In past posts Ive pointed out that the primary U.S. motivation for these agreements is to extend our patent laws overseas, thus negotiating huge royalty payments for our domestic multi-nationals. This protection of intellectual property is a huge impediment to trade, in fact. It diminishes trade volume. Yet the multi-nationals who gain this government negotiated profit stream, use fake paper corporations to dodge paying taxes. They form these corporations in countries that dont tax the revenue and thus they avoid taxes. Faced with being forced to pay these royalties, our trade partners need to extract something from us, and that something has turned out to be jobs. For the U.S. its been a race to the bottom for labor and the middle class. Stiglitz is spot on.
Posted on: Sun, 16 Mar 2014 11:40:23 +0000
Trending Topics
Recently Viewed Topics
© 2015