In 2010, I sat across the table from Assistant US Trade Representative Barbara Weisel, who was responsible for negotiating the Trans-Pacific Partnership (TPP), the mega-regional free-trade treaty among Vietnam, Malaysia, and 10 other Pacific Rim countries that President Barack Obama’s administration wants to conclude in the coming weeks. At the time, I was senior policy adviser for the US House of Representatives’ Committee on Education and Labor.
The purpose of the meeting was for Congress to understand what steps the Obama administration was taking to protect American workers from being forced into unfair competition with workers from low-wage trading partners. I asked Weisel what I thought was a simple question: “What is the White House’s position on democracy?” Weisel claimed not to understand, so I explained: A majority of Congressional Democrats supported the principle that the US should sign trade agreements only with countries that are democracies. But my explanation did not help.
Weisel stated that “we have no position” on democracy. I pressed her on how the White House planned to deal with, for example, Vietnam — a country where children as young as 14 are forced to work 12-hour days, and where there is no right to free speech, no right to protest, no right to strike, and no freedom of association. “Oh, you can have labor rights without democracy,” Weisel insisted. Part of international investors’ attraction to countries like Vietnam and China is not just that wages are low, but that the absence of democratic rights promises to lock in cheap labour for years to come.
The TPP is not really a “trade” treaty at all. Rather, it is a vehicle for corporate lobbyists to achieve what they have been unable to persuade legislators to support through normal means. For example, pharma companies have insisted that the TPP force all countries to grant 12-year patents on prescription drugs — increasing their profits while delaying competition from cheaper generic versions. Likewise, tobacco companies are seeking to use the TPP to prohibit developing countries — which represent the largest cigarette markets — from adopting new controls on their products. The TPP’s most controversial provision, if adopted, would allow private corporations to sue foreign governments for adopting policies that adversely affect their expected profits. For example, if Vietnam were to mandate six weeks of paid maternity leave for all employees, a foreign factory owner might sue the government, insisting that it either repeal the law or reimburse the company for the cost of providing this benefit. A private tribunal would hear cases and issue binding rulings, with no possibility of appeal to any court or other democratically accountable authority.
This, then, is the future that the TPP holds out: a kind of Potemkin democracy, in which citizens are free to choose their flags and holidays but cannot afford to enact any laws that might reduce international investors’ profits. Workers’ wages in the US, Canada, Japan, Australia, New Zealand, and other developed countries would be competed down toward those of lower-wage trading partners, while developing-country workers would find it increasingly difficult — even in nominal democracies — to improve their standard of living. The TPP is being negotiated in utmost secrecy, with even legislators unable to see the full text that is being negotiated, though corporate lobbyists have been treated as partners in the drafting process. This is not surprising:
In the US, where almost five million manufacturing jobs have disappeared since the adoption of the North American Free Trade Agreement, and where real wages have stagnated, a majority of voters are opposed to more such treaties.
The author is a professor at the Labor Education and Research Center at the University of Oregon. Project Syndicate.