More Spin, No Substance on TPP from US Trade Representative

IMG_1446-M

Protestors at the hearing give U.S. Trade Representative Mike Froman the pinocchio treatment.

U.S. Trade Representative Mike Froman needs a fast track bill to get some important free trade agreements to the President’s desk for signature. But you wouldn’t necessarily know it after he testified about the administration’s trade policy agenda at a House Committee hearing on Thursday.

“Our focus is on the substance of the agreements,” he said. “I want to get a TPA built that has broad bipartisan support.” (TPA is Trade Promotion Authority, also known as fast track–a bill which empowers the executive to negotiate a trade agreement and limit Congress to an up-or-down vote without amendments.)

Thus Froman put the spin on his political strategy: to pretend he’s not avidly pursuing fast track while Republicans do the heavy lifting. Public opposition killed TPA earlier this year, and the U.S. Trade Rep will have to address numerous complaints about the trade agreements before fast track can get back on track. The question is, while he’s focusing on “the substance of the agreements,” will the remedies he offers be substantive, or just more spin?

Transparency is at the top of the list. Secrecy has shrouded negotiations of the Trans Pacific Partnership (TPP) in particular. Access to the TPP is still so restricted that even members of Congress have to go the reading room of the U.S. Trade Representative building just to look at it. When pressed, Froman ultimately dodged transparency concerns about the TPP, pivoting instead to the TTIP, the proposed trade agreement with Europe. He says that the USTR intends to release summaries of negotiating objectives for that treaty.

U.S. Trade Representative Mike Froman testifying before the House Ways and Means Committee

U.S. Trade Representative Mike Froman testifying before the House Ways and Means Committee

In his opening statement, Froman said, “Done right, trade policy promotes not only our interests, but also our values. And it gives us the tools to make sure others play by the same rules as we do.” But critics believe that free trade agreements don’t contain the necessary protections and force the U.S. to play by the rules of countries with lower standards.

Rep. John Lewis (D-GA) was just one Congressman who raised the possibility of a race to the bottom when it comes to workers’ rights. “How do you square this with a country like Vietnam?” he asked. “How can we trade with Vietnam? How can we go down this road? How can we get in bed with them?”

“We can’t transform a country through a trade agreement,” Froman said. “Human rights are very much part of our agenda.” In response to Rep. Lloyd Doggett’s pointed questioning on labor law and environmental protection, he said, “I can’t envisage concluding an agreement without binding, enforceable labor and environmental provisions.”

The TPP has been described as a “corporate coup d’etat” because it might exceed previous free trade agreements in empowering corporations to sue governments for lost compensation because of unfriendly legislation.

Corporations have been successful in using free trade agreement provisions to challenge regulations. Lone Pine Resources, for example, is using NAFTA’s investor protection clause to sue the Canadian government for $250 million because it can’t drill leased land under the Quebec fracking ban.

The European Union’s Trade Commissioner has come out against investor-state settlement dispute provisions, saying he wants the U.S. to “simply drop it” and annul all existing ones.

IMG_1475-M

Chairman Dave Camp (R-MI) and Ranking Member Carl Levin (D-MI) preside over the hearing.

Froman contends that the TPP’s dispute resolution mechanisms would protect investors without undermining “legitimate” government regulations. “It’s not a guarantee of profits, it’s a guarantee that if they’re expropriated without compensation, they’ve got recourse,” he said. But, he conceded, there are no separate appeals processes for about forty existing agreements.

A handful of protestors at the hearing wore T-shirts saying, “There’s No NAFTA Surplus, Froman!”–referring to USTR’s claim that NAFTA created a $28 billion surplus, when in fact it resulted in a trade deficit of $181 billion. One of the protestors, Sapphyre Miria of Louisa County, Virginia, said that as organic food producers, they believe the TPP threatens their interests while benefiting corporations like Monsanto. “The government is in bed with large agriculture,” she said. “We wanted to show that this man is just spin.”

So in the end, did Froman offer anything more than spin at this hearing?

Alisa Simmons of Global Trade Watch doesn’t think so. “Nothing about the current fast track legislation makes any substantive procedural changes,” she says. Negotiating objectives laid out by Congress in fast track legislation are not binding, and they have been ignored in the past. Simmons doesn’t think dispute settlement mechanisms would be improved under the TPP either. “Regardless of intent, the reality is, they are devastating the environment and undermining laws all across the world. That’s how it’s being used.”