The TPP: Another bad deal for workers at home and abroad

By Richard Mellor

Afscme Local 444, retired

In the intense global economic struggle the major capitalist nations have over cheap labor, raw materials, trade and profits, the Trans Pacific Partnership stands out.

The TPP is a free trade agreement that has caused global protests and is sowing deep divisions between the Obama Administration and members of Obama’s own party. Obama himself applauds the TPP and visited Nike headquarters May 8^th 2015 to push for the deal.  If passed, the TPP will reduce tariffs on imported shoes which he hopes will win Nike’s support. About 56% of Nike’s revenue came from outside the US in 2014 according to the Wall Street Journal.

We hear a lot from Democrats who are at war with Obama over the TPP but it’s not that they are against such a deal---- a sort of free trade pact.  What they are opposed to is Obama getting fast track rights on it, in other words, Congress will only be allowed an up or down vote, no amendments or changes.  Issues such as China and currency manipulation are a concern to some elements in the US as well.

But there is no such thing as free trade really.  Does anyone actually believe that the mighty US economic and military machine will be on par with Vietnam or Chile when it comes to negotiating about money and trade?  NAFTA, which cost many American jobs, also threw millions of Mexican farmers off the land, unable to compete with US agribusiness.  These farmers may have been relatively poor by US standards but they eked out an existence as subsistence farmers.  Even that has gone.

Both this idea of “free trade” and its opposite, protectionism, are capitalist solutions, (that solve nothing as far as workers are concerned) to the inherent crises of the market and the struggle for market share and profits.  The heads of organized labor in the US are also concerned as they should be, US capitalism does not enter such agreements or invest in Vietnam or Cambodia in order to increase living standards of workers there, just the opposite. It is the low wages and poor human rights record that attracts capital to these low waged economies. And wages and conditions have to sink even further in the US before we can have what the owners of capital refer to as a “Competitive edge”, which means workers in different nations competing with each other for who is the cheapest, most pliant, less restricted by union and safety regulations, in short, the most lucrative environment for profit and capital accumulation. This will not enamor union members to their organization as wages and conditions continue to worsen.

German protests

Another concern as Wikileaks pointed out in March is that “The accord would grant the power to global corporations to sue governments in tribunals organized by the World Bank or the United Nations to obtain taxpayer compensation for loss of expected future profits due to government actions.” http://en.wikipedia.org/wiki/Trans-Pacific_Partnership . That’s a nasty thought for the day.

Bernie Sanders, the liberal politician who is fond of reminding us of the inequality and wealth differentials in US society but offers no serious solution to the problem, is another voice of concern. In a letter to the US trade representative, Michael Froman Sanders’ writes: “It is incomprehensible to me that the leaders of major corporate interests who stand to gain enormous financial benefits from this agreement are actively involved in the writing of the TPP while, at the same time, the elected officials of this country, representing the American people, have little or no knowledge as to what is in it”

It should also be noted that the chief U S trade representative Michael Froman left Citibank to join the Obama Administration. He got a nice $4 million “exit payment” from Citi and a further $2 million for some investments he made. Stefan Selig, an investment banker with Bank of America who also joined the Obama Administration as Secretary for International Trade at the Department of Commerce received a handy $14 million in bonus and incentive pay on leaving BofA according to reports.

These are the people representing the US ruling elite and corporations in the trade talks.  They are not representing the American workers or middle class, and nor is Sanders as a member of one of the two Wall Street parties.

Along with Sanders, Elizabeth warren, another Democratic Party politician sent a letter to Froman, "With millions of families still struggling to recover from the last financial crisis and the Great Recession that followed, we cannot afford a trade deal that undermines the government's ability to protect the American economy.", she wrote, stressing that one of her major concerns is the right of corporations to sue governments or take governments to court as Exxon and other oil companies have done in order to stop legislation harmful to their interests.

As far as Hilary Clinton goes, she is being very wary as she will not want to hurt her chances of becoming the first female president of the US. She has said that that whatever agreement is reached needs to protect American workers and have appropriate safeguards which is the usual vague nonsense.  Like Obama and all of them, she will feel more comfortable telling the truth after she gets elected.

While Sander’s and others are correct in pointing out that corporate interests are involved in structuring the accord this writer for one would have to disagree with his implication that elected officials “representing the American people have little or no knowledge as to what is in it,"

European protests against TPP in April 2015

What we have here is a dispute between different wings of the ruling class and their respective political representatives in this country.  Sanders and his colleagues in the Democratic Party, particularly the populist Elizabeth Warren are concerned that unfettered corporate control, giving the more aggressive wing of the 1% too free a hand will exacerbate an already untenable wealth inequality in the country.  These representatives of the 1% are well aware of the anger beneath the surface of US society and the potential for social unrest that will arise as a consequence of aggressive policies that add fuel to the fire.

The US imported $1.71 billion in footwear from Vietnam alone last year according to the WSJ, “…generating income for shareholders of Nike and other firms, along with their designers, retailers, distributors and back-office employees. “ the paper concludes.

These massive profits that allow individuals like Nike’s Phil Knight accumulate more than $23 billion in personal wealth impose extreme hardship and misery on those whose labor power is the source of that wealth.  And all the talk of such agreements between the representatives of corporate power ensuring safe conditions, better wages and what one commentator call“American labor standards” is all phony.  For one thing, American labor standards are not so hot anymore as our living standards have been driven downward.

But, as I point out, owners of capital like Phil Knight don’t invest capital in order to improve people’s living standards.  They are not attracted to Vietnam or Cambodia for egalitarian reasons. These people, although Forbes describes the likes of Knight as “self made” are absolutely ruthless characters.

In an earlier post I commented on the situation in Cambodia where workers were shot for striking for higher pay.  Cambodia has lots of cheap labor, cheaper than China’s and Chinese capitalists are shifting production to places like Cambodia and Vietnam for a more lucrative profit-making environment.   Wages did rise a little after the Cambodian government murdered striking garment workers on behalf of the local manufacturers and global retailers like WalMart. That was not welcomed by the Cambodian capitalists or their powerful global allies in the west who, for all their talk about “labor standards” held up production in the event Cambodian workers’ efforts to improve their lot went too far and they'd have to shut up shop.

Ken Loo, the head of the Cambodian Garment Manufacturers Association defended the low wages they pay making it clear when he says that the garment industry, “migrates from one country to another, it moves around seeking out the country with the lowest labor cost.”  They speak the truth sometimes you see.  Investors will always will take this road until capital, and its allocation is taken out of private hands.

The TPP and so-called free trade is not good for US workers whether Bernie Sanders or other members of Congress get to vote on it or not.  The difference between the antagonists in this issue is one of degrees, not whether or not capitalist globalization is a bad thing.  On the need for free trade and US dominance of world markets and the super exploitation of workers in the weaker economies, they speak with one voice.