For the prospective Trans-Pacific Partnership to be successful, it cannot simply mirror past U.S. agreements, such as those negotiated with Peru, Colombia, Panama, and Korea. The Free Trade Agreements negotiated under the Bush Administration do not represent an acceptable trade agreement model. Not surprisingly, a majority of House Democrats voted against the FTA with Peru. However, a number of improvements made to those pacts’ terms in 2007 regarding labor, environmental standards, and patent rules related to medicines, are all good starting points for working toward more fair and equitable terms in free trade.
If the TPP seeks to represent a more balanced way to expand trade, and garner broad support from the public, labor, and civil society organizations, it must address the following core issues, which were also central to the TRADE Act:
Labor and Environmental Standards. The Peru FTA and the three leftover Bush FTAs require countries only to implement the vague terms set forth in the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, and they explicitly do not refer to the ILO Conventions, with their associated jurisprudence and protections. The labor standards of a prospective TPP agreement must require signatories to enforce the core ILO standards as set forth in the ILO Conventions. Requiring in the TPP that countries implement, in their domestic law, the ILO Convention standards would be a historic accomplishment for international worker rights. Indeed, all future U.S. trade agreements must include a requirement that countries implement, in their domestic law, the ILO Convention standards.
Enforcement. A TPP agreement must also include provisions stating that the failure to enforce, or the weakening of, such policies would constitute a violation of a trade pact provision, for which the consequences will be just as stringent as commercial violations. The record of implementation of the Peru FTA demonstrates why better enforcement of trade pact labor and environmental terms must be a goal of a prospective TPP. Despite inclusion of the 2007-revised labor and environmental language, the Peru FTA was implemented in 2009 without Peru fully implementing its labor commitments as required, and after its government rolled back existing environmental protections. Given the disconcerting labor rights records of Vietnam and Brunei, the issue of enforcement will be a critical one in the TPP negotiations.
Foreign-Investor Rights and Private Extra-judicial Investor-State Enforcement. The TPP must not include the same foreign investor terms included in NAFTA, CAFTA and the Bush FTAs that led many Democrats to oppose these pacts. These past rules afford foreign investors operating here with greater rights than those enjoyed by U.S. investors. The past FTA investment provisions also allow foreign investors and corporations to directly enforce their special FTA investor rights and privileges by suing governments in foreign tribunals to demand cash compensation. President Obama cited these investment rules as problematic during the campaign. The past FTAs’ investor rights terms create incentives for U.S. firms to offshore their U.S. production to foreign jurisdictions where they can operate under privileged FTA foreign investor status rather than be forced to deal with that country’s regulatory policy and courts. They also subject our domestic environmental, zoning, health, and other public interest policies to challenge by foreign investors in foreign tribunals.
Food and Product Safety. NAFTA, CAFTA and past FTAs contain language requiring the United States to accept imported food that does not meet our domestic safety standards and limiting import inspection of food and products. In all future U.S. trade pacts, the right to send food and products into the United States must be conditioned on meeting U.S. safety and inspection standards.
Procurement Provisions. Past FTA procurement rules subject many common federal and state procurement policies to challenge and directly forbid other common procurement policies. These procurement rules continue the NAFTA/CAFTA ban on anti-offshoring and many Buy America policies, and expose U.S. renewable-energy, recycled-content and other environmental safety requirements to challenge. These terms must be changed in the TPP to provide the policy space for exciting “Green Economy” proposals needed to get our economy back on track.
Service-sector deregulation. Future U.S. trade pacts must not limit domestic policy regarding the regulation of health, energy, and other essential services. As well, the financial crisis has shown the perils of locking in deregulation of banking, insurance, and other financial services, as has occurred in past pacts.
Agriculture Provisions. Past FTAs contain the NAFTA-style agriculture trade rules that have simultaneously undermined U.S. producers’ ability to earn a fair price for their crops at home and in the global marketplace. Multinational grain-trading and food-processing firms have made enormous profits, while farmers on both ends have been hurt. If this model is continued, hunger is projected to increase, along with illicit drug cultivation, and undocumented migration. Failure to establish new agriculture terms would intensify the race to the bottom in commodity prices, pitting farmer against farmer and nation against nation to see who can produce food the cheapest, regardless of labor, environment or food-safety standards.
Access to Medicines. While the most egregious, CAFTA-based terms limiting access to affordable medicines were removed from the last four Bush FTAs, the texts still include NAFTA-style terms that undermine the right to affordable medicines that were contained in the WTO’s Doha Declaration. The TPP negotiations must build on the 2007 reforms on medicine patents rules.
We look forward to working with President Obama to create a new American trade and globalization policy, starting with the process of reviewing our old trade agreement model and formulating a new approach which can be debuted in the context of the TPP process. It will be challenging to remedy the considerable damage that our past trade policies have wrought, however we are confident that working together, we can replace the failed trade policies of the past with those that deliver broadly shared benefits and thus earn broad support.