But “free trade” has little to do with the trade deal that President Obama hopes will be a high-water mark for his administration’s foreign policy: the Trans-Pacific Partnership talks, which now involve the U.S. and 11 Pacific Rim countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The pact — which has been under negotiation virtually since the turn of the century — is in trouble on Capitol Hill, where its enemies include conservatives and liberals. The overall problem may be that the TPP, as it’s known in shorthand, has become a symbol of everything that’s wrong with free trade agreements today.
The pact is being negotiated in secret, although U.S. trade negotiators have given big industries nice long looks behind the curtain. The White House is demanding “fast-track” approval from Congress, which limits the say lawmakers will have and requires them to ratify in haste. And public interest advocates say it could undermine rules and regulations governing the environment, health, intellectual property and financial markets (to name only a few topics).
“Most of these provisions have nothing to do with trade or jobs,” says liberal economist Joseph Stiglitz, a leading critic of the deal and the secrecy of the talks.
On the other side of the argument is the trade pact’s potential to foster economic growth and job creation — “650,000 jobs in the U.S. alone,” as Secretary of State John F. Kerry asserted last month. But that widely challenged figure is extrapolated from a 2012 report by the Peterson Institute of International Economics, which didn’t offer a jobs estimate. In fact, the report said the TPP might dislocate workers and drive older people out of the workforce — and that any benefits might be canceled out by the resulting costs to workers and society. Evidence from earlier trade pacts, including the North American Free Trade Agreement, suggests that the benefits for developing countries among the treaty signatories are similarly oversold.
“Trade liberalization on average has not brought economic growth for emerging economies,” Stiglitz said. “The idea that it’s necessarily mutually beneficial is just wrong.”
Doubts about the TPP fall into three main categories.
•Overreach. Domestic policies and regulations shouldn’t be treated as trade barriers subject to international negotiation, such as patent and copyright terms, wage and working conditions, even environmental regulations. But provisions in the TPP would protect brand-name pharmaceuticals from competition from generics in developing countries, forcing up the cost of healthcare, and would impose the overly strict copyright terms of the U.S., where copyright lasts 70 years after the death of a copyright holder, on signatory countries. Critics fear that bringing such issues into a trade pact will encourage a race to the bottom, favoring the most business-friendly regulations. “Some of these provisions roll back important public interest policies on issues like food safety, product safety and access to drugs,” says Lori Wallach, the global trade watchdog at the public interest organization Public Citizen. “This is diplomatic legislating on things that affect our day-to-day lives that have nothing to do with trade.”
Especially worrisome is a procedure allowing corporations to file claims in arbitration courts against sovereign countries over changes in their laws and regulations. As is the case in some previous trade agreements, commercial interests will be able to seek compensation for “injuries” from anything from minimum-wage increases to environmental and health regulations. Mexican truckers filed a $30-billion case objecting to safety and environmental rules on U.S. roads; Eli Lilly & Co. is seeking $481 millionfrom Canada for its invalidation of Lilly patents on several drugs; and Philip Morris has sued Australia because its rule requiring plain packaging for cigarettes deprives the company of its property rights in trademarks and logos.
Even conservatives who otherwise favor the TPP detest this provision. The Cato Institutehas urged that it be “purged” from the pact. By giving special privileges to corporations operating abroad, Cato said, the provision allows them to undermine domestic sovereignty and “effectively encourages outsourcing.”
•Secrecy. U.S. Trade Representative Michael Froman, who is conducting the talks, has been stingy with the text, critics say, out of fear of public nitpicking. Most of what the public knows of the TPP’s drafts and the U.S. negotiating position has come via Wikileaks. Froman told the House Ways and Means Committee last month that he has taken “unprecedented steps to increase transparency” by keeping Congress and the public in the loop, but most observers say disclosure has been nowhere near adequate. In 2012, Sen.Ron Wyden (D-Ore.) was so frustrated at being stonewalled by the USTR that he introduced a bill requiring that all lawmakers with oversight on trade policy be given access to key documents.
•”Fast-tracking.” Fast-tracking allows the administration to present Congress with a completed trade pact, which lawmakers must vote up or down within 90 days, without amendments and with limited debate and no filibustering in the Senate.
The White House argues that fast-tracking allows negotiators to reassure trade partners that “the administration and Congress are on the same page,” as Froman told the House Ways and Means Committee. The system “puts Congress in the driver’s seat,” he said, because the lawmakers can “define U.S. negotiating objectives and priorities.” But the opposite is true: The congressional directives aren’t binding, and the result can be jammed through the House and Senate.
GOP leaders such as Senate Majority Leader Mitch McConnell (R-Ky.) and House Ways and Means Committee Chairman Paul D. Ryan (R-Wis.) favor fast-tracking, but opposition is growing from conservative Republicans and progressive Democrats alike. Combined with secrecy, fast-tracking encourages the overreach that makes the TPP so much more than a trade pact, and so dangerous.
If fast-tracking is turned down, the TPP will have to be widely published and openly debated, says Public Citizen’s Wallach.
“That will bring out all the skunks that have been invited to the secret picnic,” she says. “Some of these things that should never have been in that agreement in the first place aren’t going to fare very well when they’re exposed to sunshine. And that’s good.”
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20150206-column.html#page=1
Not surprisingly, it appears that the agreement will promote the interests of giant, multinational corporations over the interests of labor, environmental, consumer, human rights, or other stakeholders in democracy, AND FURTHER CONCENTRATE OWNERSHIP OF THE NON-HUMAN PRODUCTIVE CAPITAL MEANS OF PRODUCTION!
The REAL STORY is a story about the collusion among a globally wealthy ownership class to further concentrate private sector ownership in ALL FUTURE wealth-creating, income-generating productive capital asset creation on a global scale. A sorta FREE TRADE ON STEROIDS!
This is a battle between two property system choices: economies such as China in which the productive capital assets are primarily state-owned or state-sponsored communism or socialism and economies such as the United States, Great Britain, Canada, Mexico, Australia, Japan, etc in which the productive capital assets are primarily privately owned, although also largely concentrated among less than 10 percent of the population so as to require massive earnings redistribution, and thus welfare support open and disguised.
But there is another alternative, a balanced Just Third Way (http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/), based on an understanding of binary economics, by which over time the economy’s productive capital assets will become almost entirely individually owned by 100 percent of the citizens. Such an economy would produce efficiencies of production fully using ever-advancing technologies of production that will fuel a greater growth of the world economies by eliminating the problematic condition of the exponential disassociation of production and consumption through ordinary citizens gaining access to FUTURE productive capital ownership to improve their economic well-being, without taking anything away from those who already own.
It is critical that private property ownership in productive capital be extended to ALL people because of the increasing power of productive capital to produce more and more of the wealth or products and services needed and wanted by society. Because productive capital––the non-human factor of production––is an independent productive power separate from human labor power, and represents an increasing role in creating wealth, the question to be addressed is: Who has the right to acquire ownership of productive capital?
While people have private property rights in their own labor, due to tectonic shifts in the technologies of production it is not enough for individual survival if people cannot get jobs, or if jobs, in reality are no longer doing a substantial part of the wealth creation. As exponential technology shifts destroy jobs and devalue the worth of labor, people need not only private property rights in their own labor, but also private property rights in the productive capital assets that are doing ever more of the work.
We as a nation, and other nations, can no longer limit people to personal rights while restricting ownership acquisition rights in wealth-creating, income-producing productive capital assets to those already well-capitalized. To be a just society, all individuals MUST have effective property rights not only in their labor and personal use possessions but also in FUTURE productive capital asset creation. Because of this imbalance, the result has been that the consumer populous is not able to get the money to buy the products and services produced increasingly by the non-human factor––physical productive capital––as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption.
Broadened, private sector individual ownership of FUTURE productive capital assets as a societal objective is the ONLY individual private property-rights approach that will provide solutions to income inequality, unemployment, underemployment and anemic GDP growth––all of which is rooted in the tectonic shift in the technologies of production and its concentrated ownership. This reality, as a practical matter, is destroying jobs and devaluing the worth of labor, widening the income gap between the rich and poor and struggling (each resentful and suspicious of the other), and resulting in our inability to achieve double-digit GDP growth in the United States and other countries.
To solve this challenge, several policies must be implemented in the United States:
1. Tax reform is needed to incentivize broadened individual ownership of corporations by their employees. As an incentive, provide a tax deduction to corporations for dividend payouts, which would tighten-up the right of each owner to his or her full share of profits, a basic and historic right of private property. It would eliminate double and triple taxes on corporate profits, shifting the burden of taxation to personal incomes after exempting initial incomes that would allow low and middle class citizens not to pay taxes on incomes needed to cover basic living expenses. It will also encourage corporations to finance their growth through the issuance of new full voting, full dividend payout shares for financing their productive capital growth needs through Employee Stock Ownership Plans (ESOPs) and Capital Homestead Accounts (CHAs). Politically we need to insist that politicians lift barriers to the democratization of future ownership opportunity based on sound principle, rather than redistributive taxation.
2. As increasingly more workers acquire ownership stakes in FUTURE corporate productive capital assets using ESOP financing mechanisms, workers will build second incomes to support their living expenses, which in turn means they will be better “customers with money” to support demand for the products and services that the economy is capable of producing. By reason of the higher marginal spending rate on the part of workers second incomes, more of the additional income earned by the new capitalists (who have many unsatisfied consumer needs and wants) will be spent on consumption than if the income had been earned by those capitalists who now have concentrated the ownership of productive capital exclusively, and who have few, if any, consumer needs and wants. Such broadened incremental consumption will fuel a demand for more consumer products and services, which in turn will provide incentive for greater productive capital investment.
3. For all Americans, the Federal Reverse needs to create an asset-backed currency that can enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets. The shares would be purchased using essentially interest-free credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and, if necessary, government reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares.
4. Reform the tax code such that the tax rate would be a single rate for all incomes from all sources above an established personal exemption level (for example, an exemption of $100,000 for a family of four to meet their ordinary living needs) so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt. The poor would pay the first dollar over their exemption levels as would the stock fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes.
5. As a substitute for inheritance and gift taxes, a transfer tax should be imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
6. Eliminate all tax loopholes and subsidies.
These polices would result in rapid and substantial economic growth with the GDP rate in double digits. As a result of the stimulus effect, more REAL, decent paying job opportunities and further technological advancement would be created while simultaneously broadening private, individual ownership of FUTURE wealth-creating, income-generating productive capital assets, which would support second and primary incomes for ALL Americans.
In this new FUTURE economy, a citizen would start to benefit financially at the time he or she enters the economic world as a labor worker, to become increasingly a capital owner, whose productive capital assets contribute as a non-human worker earning a second income, and at some point to retire as a labor worker and continue to participate in production and to earn income as a capital owner until the day you die.
As we ALL contribute to the building of a FUTURE economy that can support general affluence for EVERY man, woman and child, at some point as the technologies of production further advance there will be far less need for human workers and productive capital asset ownership will become the primary income source for most people. As general affluence becomes more widespread people will be free and economically secure to pursue their creative desires and pleasures, further contributing to the cultural and societal development of the country.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm. See the full Act at http://cesj.org/homestead/strategies/national/cha-full.pdf
See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
http://www.nationofchange.org/trans-pacific-partnership-trade-agreement-protectionists-1383056946
http://www.cnn.com/2015/03/11/politics/elizabeth-warren-obama-hillary-clinton-trade/index.html
