Only a few years ago, analysts were warning that Mexico was at risk of becoming a “failed state.” These days, the Mexican government appears to be doing a much better PR job.
Despite the devastating and ongoing drug war, the story now goes that Mexico is poised to become a “middle-class” society. As establishment apostle Thomas Friedman put it in the New York Times, Mexico is now one of “the more dominant economic powers in the 21st century.”
But this spin is based on superficial assumptions. The small signs of economic recovery in Mexico are grounded largely on the return of maquiladora factories from China, where wages have been increasing as Mexican wages have stagnated. Under-cutting China on labor costs is hardly something to celebrate. This trend is nothing but the return of the same “free-trade” model that has failed the Mexican people for 20 years.
The North American Free Trade Agreement (NAFTA), which was ratified in 1993 and went into effect in 1994, was touted as the cure for Mexico’s economic “backwardness.” Promoters argued that the trilateral trade agreement would dig Mexico out of its economic rut and modernize it along the lines of its mighty neighbor, the United States.
Unless you subscribe to Public Citizen or the Kucinich Report (from retiring Congressman Dennis Kucinich), you won’t have heard of the secret trade negotiations related to the Transpacific Partnership (TTP), aka the Transpacific Partnership Agreement (TPPA). The TPP is a “free” trade agreement like NAFTA or GATT (the treaty which created the WTO) but much worse. A major goal of US multinational corporations for the TPP is to impose on trading partners a set of extreme foreign investor privileges and rights and their private enforcement through the notorious “investor-state” system. This system allows foreign corporations to challenge, at international tribunals, health, consumer safety, environmental, and other laws and regulations that potentially affect the profitability of both domestic and foreign companies. If a corporation “wins”, the taxpayers of the “losing” country must foot the bill. (See Investment rules harm public health). Thus TPP will virtually obliterate the right of member countries to protect labor rights, enforce environmental and food safety standards and otherwise protect their citizens from amoral and rapacious corporate profit-seeking.
RCEP stands for the Regional Comprehensive Economic Partnership. This is a newly proposed free trade treaty coming out of the Association of Southeast Asian Nations (ASEAN) at their recent summit in Phnom Penh (Cambodia). Negotiations on RCEP are expected to start in earnest in 2013 (see ASEAN leaders begin RCEP negotiations). Outside of the Asian and Australian press, the RCEP has been virtually invisible in the corporate media.
The most important difference between the two free trade treaties is that TPP excludes China, Japan and Korea. RCEP would include all fifteen Asia countries comprising ASEAN, plus China, India, Japan, South Korea, Australia and New Zealand and exclude the US (See post-US world born in Phnom Penh). In other words, half the world’s population.
Both Korea and Japan have been invited to join TPP but are waffling, owing to harsh TPP provisions that potentially undermine their sovereignty and their economies.
Obama has deliberately excluded China, the world’s second largest economy, from TPP. Why? Because the US is engaged in a trade war with China and doing everything possible to isolate China economically and militarily (see Trade war in the Pacific).
With many Asian countries, especially Korea, Japan and Thailand, showing a clear preference for the less restrictive RCEP, the President’s end run around China, Congress and the American public may have backfired. [continue]
I talked informally with a negotiator from New Zealand about balancing investor interests with the public interest. We share our approval of fundamental labor standards in America and New Zealand. But he looked at me and declared, ‘No country in the world would let the International Labor Organization tell them what their labor laws should be, would they?’ He said it so forcefully, that I immediately imagined a nest of unaccountable, faceless bureaucrats, with dubious backgrounds, writing minimum wage laws for Idaho. God no! What country would forfeit its sovereignty like that! My heart sank. Then he stopped for a moment, lowered his eyes, and said, ‘But, …. that’s exactly what we’re doing right now, for investor interests, aren’t we?’ Yes. That is exactly what he and the other negotiators were doing. They were giving authority to unaccountable tribunals to give investors the upper hand over public interest.We Don’t Know, Exactly, What the Trans-Pacific Partnership Is, But I’m Against It
Despite his campaign rhetoric, Obama has championed George W. Bush-negotiated ‘free-trade’ deals with labor-rights pariah Colombia, tax-haven Panama, and South Korea. Trade economist Robert Scott of the Economic Policy Institute (EPI) estimated that the South Korea deal alone will cost 159,000 U.S. workers their jobs. Union leaders also worry that the agreement will serve as a ‘funnel’ for component parts produced under near-slavery conditions in North Korea and China under a South Korean label, says Matt McKinnon, political director for the International Association fo Machinists and Aerospace Workers (IAMAW). Meanwhile, the Obama administration is hammering out the biggest, farthest-reaching, and most secretive ‘free trade’ deal ever, the Trans-Pacific Partnership (TPP). The TPP would include numerous nations on the Pacific Rim, including Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. U.S. Trade representatives have negotiated its terms under such an unusual level of secrecy, with only 600 corporate executives apprised of the content, that even pro-‘free trade’ members of Congress have complained about being excluded from the talks.Obama’s Double Game on Outsourcing
Secretary of State Hillary Clinton said Saturday that the United States would soon lift Cold War-era trade sanctions on Russia, in an example of how hostile Washington has been more than two decades later, although it was unclear whether the move has support in Congress.
Following Russia’s inclusion into the World Trade Organization, Clinton said the US should now normalize trade relations with Russia so that American businesses can benefit from trade with one of the world’s leading economies.
The sanctions have origins in a 1974 law known as Jackson-Vanik and are waived each year, but the fact that they’re still around shows how confrontational Washington still is long after the end of the Cold War. Legislation, once on the books, almost never goes away, especially when it can be used as leverage over other states.
Mitt Romney, and many Republicans in Congress, are pushing back against normalized trade relations with Russia – unless Congress passes legislation that punishes Russian officials accused of human rights abuses, as if that were Congress’s responsibility.
The urge to discipline misbehaving Russian officials in order to further America’s geopolitical hegemony is ill-served by discordant rhetoric and economic warfare.
As Clinton said, “We are grateful for this and other opportunities to work more closely with Russia on areas of common concern that will deliver benefits to the people of both our nations.” Instead, the US has chosen bellicosity, nearly two decades after the end of the Cold War.
The [TransPacific Partnership agreement] is likely serving many agendas. As we learn more, the motives behind the TPP will become clearer. From my perspective as an economist and former member of government, the problem with Ron Kirk’s TPP is that the agreement is constructed to serve private, not public interests. Kirk is a public official charged with serving and protecting the public interest. Yet, he has conspired in secret with private interests to produce a document that exempts private corporations from public accountability.
There is a paradox here. While financial corporations and now all corporations are being made independent of government, US citizens have lost the protection of law and are now subject to being detained indefinitely or murdered without due process of law. Corporations gain an unimaginable freedom while citizens lose all freedom and the rights that define their freedom. Similarly, foreign countries, which as members of TPP can be exempt from US law, are subject to “pre-emptive” US violation of their air space and borders by drones and troops sent in to assassinate some suspected terrorist, but which also kill citizens of those countries who are merely going about their normal business.
Perhaps one way to understand TPP is that the US government is now extending its own right to be lawless to corporations. Just as the US government today is only answerable to itself, the TPP makes corporations answerable only to themselves.
Obama’s trade policy grade was plummeting, but new information shows things to be even worse. In the past month the president has officially failed out of “fair trade” class. On June 13, Public Citizen released a leaked document showing that the TPP—a trade agreement being negotiated between the United States and eight Pacific countries under considerable secrecy—is shaping up to be as bad as NAFTA or worse.President Obama: Corporate Globalizer
It didn’t have to be this way. It was not preordained that President Obama would become Corporate-Globalizer-in-Chief. The base of the Democratic Party has aligned itself firmly against the ‘free trade’ agenda—so much so that both Obama and Clinton campaigned in 2008 against the NAFTA model and in favor of a ‘fair trade’ alternative. In fact, going into the 2012 elections, there’s evidence that Obama’s betrayal of earlier vows could be a significant liability among voters and a bitter pill for key constituencies the president needs if his campaign is going to overcome the enthusiasm gap between progressives and the Republican faithful.President Obama: Corporate Globalizer | Mark Engler
This argument requires some explanation. Here’s the backstory: As the Bush administration commenced in the early 2000s, many argued that his foreign policy represented a continuation of the Clinton-era approach to promoting “free trade” neoliberalism overseas. However, I contended that, especially after the launch of the Iraq war in 2003, the unilateralist bullying of the neocons represented a split from past practice.
No doubt, big arms and big oil had their needs met by the Bush agenda. But his administration was wary of multilateral institutions such as the World Trade Organization and the World Bank, which were central instruments of U.S. policy under Clinton. The Bush approach relied on our-way-or-the-highway, coalition-of-the-willing hard power. This made a significant portion of corporate America uncomfortable, especially businesses trying to navigate and expand in foreign markets. It also left the soft-power agenda of “free trade” in an uncertain state.
This was essentially the thesis of my 2008 book, How to Rule the World: The Coming Battle Over the Global Economy. Around the time the book came out, I wrote:
In October 2007…the Wall Street Journal reported that the [Republican] party could be facing a brand crisis as “[s]ome business leaders are drifting away from the party because of the war in Iraq, the growing federal debt and a conservative social agenda they don’t share.”
When it comes to corporate responses to [Bush’s] Global War on Terror, we mostly hear about the likes of Halliburton and Blackwater—companies directly implicated in the invasion and occupation of Iraq, and with the mentality of looters. Such firms have done their best to score quick profits from the military machine. However, there was always a faction of realist, business-oriented Republicans .who opposed the invasion from the start, in part because they believed it would negatively impact the U.S. economy. As the [Bush administration’s] adventure in Iraq has descended into the morass, the ranks of corporate complainers have only grown.
The “free trade” elite have become particularly upset about the administration’s focus on go-it-alone nationalism and its disregard for multilateral means of securing influence. This belligerent approach to foreign affairs, they believe, has thwarted the advance of corporate globalization. In an April 2006 column in the Washington Post, globalist cheerleader Sebastian Mallaby laid blame for “why globalization has stalled” at the feet of the Bush administration. The White House, Mallaby charged, was unwilling to invest any political capital in the IMF, the World Bank, or the WTO….Frustrated by Bush’s failures, many in the business elite want to return to the softer empire of corporate globalization and, increasingly, they are looking to the Democrats to navigate this return.
My concern back then was that a Democrat (either Obama or Hillary Clinton) would be elected to office and then abandon the overt militarism and “imperial globalization” of the Bush administration, but embrace a subtler, more multilateralist “free trade” neoliberalism—reclaiming the agenda of corporate globalization. I would have been pleased if this prediction had proved wrong. Sadly, Obama has provided irrefutable evidence that he has boarded the corporate globalist bandwagon. [READ]
A critical document from President Barack Obama’s free trade negotiations with eight Pacific nations was leaked online early Wednesday morning, revealing that the administration intends to bestow radical new political powers upon multinational corporations, contradicting prior promises.
The leaked document has been posted on the website of Public Citizen, a long-time critic of the administration’s trade objectives. The new leak follows substantial controversy surrounding the secrecy of the talks, in which some members of Congress have complained they are not being given the same access to trade documents that corporate officials receive.
Sen. Ron Wyden (D-Ore.) has been so incensed by the lack of access as to introduce legislation requiring further disclosure. House Oversight Committee Chairman Darrell Issa (R-Calif.) has gone so far as to leak a separate document from the talks on his website. Other Senators are considering writing a letter to Ron Kirk, the top trade negotiator under Obama, demanding more disclosure.
Under the agreement currently being advocated by the Obama administration, American corporations would continue to be subject to domestic laws and regulations on the environment, banking and other issues. Butforeign corporations operating within the U.S. would be permitted to appeal key American legal or regulatory rulings to an international tribunal. That international tribunal would be granted the power to overrule American law and impose trade sanctions on the United States for failing to abide by its rulings.
“We will not negotiate bilateral trade agreements that stop the government from protecting the environment, food safety, or the health of its citizens; give greater rights to foreign investors than to U.S. investors; require the privatization of our vital public services; or prevent developing country governments from adopting humanitarian licensing policies to improve access to life-saving medications,” reads the campaign document.
Yet nearly all of those vows are violated by the leaked Trans-Pacific document. The one that is not contravened in the present document — regarding access to life-saving medication — is in conflict with a previously leaked document on intellectual property (IP) standards.
“Bush was better than Obama on this,” said Judit Rius, U.S. manager of Doctors Without Borders Access to Medicines Campaign, referring to the medication rules. “It’s pathetic, but it is what it is. The world’s upside-down.”
We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t fixing it, Republicans aren’t stopping it — an entire integrated system, banking, trade and taxation, created by both parties over a period of two decades is at work decimating our entire country right now.