I start from the basic presumption that the president, and most of the people who work for him, are very, very smart people. So, when the president's point person on the Trans Pacific Partnership, U.S. Trade Representative Michael Froman, marches up to Capitol to testify on the TPP and gives false information, you can only conclude that he's lying and intentionally misleading Congress. That's the upshot of what happened on Tuesday.
Froman appeared before the Senate Finance Committee. The Senate has generally been the place where the really bad NAFTA-type trade deals get a warmer, bi-partisan reception; if a putrid deal passes the House, where Democratic opposition is much stronger, you can almost bet the deal will sail through the Senate. But, still, Froman felt necessary to lie or, at best, spread half-truths.
Using a very helpful and detailed analysis courtesy of Global Trade Watch, here are the 10 lies/half-truth:
Froman Lie #1 : “[Fast Track] puts Congress in the driver’s seat to define U.S. negotiating objectives and priorities for trade agreements.”
Truth: that's a laugher. "Fast track" explicitly takes the power away from Congress to shape any deal by handing the power over to the executive branch to cut a deal, put it before Congress and force an up-or-down vote with no amendments or changes.
Froman Lie #2: “You take all of our FTA partners as a whole, [and] we have a trade surplus. And that trade surplus has grown.”
Truth: that would be a really cool notion--except it's false. The actual numbers--in English, the facts--show that, per GTW, "the United States has a $180 billion U.S. goods trade deficit with all free trade agreement (FTA) partners (in 2013, the latest year on record). In manufactured goods, the United States has a $51 billion manufacturing trade deficit with all FTA partners."
As for the Korea Free Trade Deal, per GTW, "Contributing to our FTA deficit is the 50 percent surge in the U.S. goods trade deficit with Korea in just the first two years of the Korea FTA, which literally was used as the U.S. template for the TPP. This deficit increase, owing to a drop in exports and rise in imports, spells the loss of more than 50,000 American jobs in the FTA's first two years, according to the ratio used by the administration to claim the pact would create jobs. Froman tried to explain away the ballooning U.S. trade deficit under the Korea FTA as due to decreases in corn and fossil fuel exports. But even if discounting both corn and fossil fuels, U.S. annual exports to Korea still fell under the FTA, and the annual trade deficit with Korea still soared."
Froman Lie #3: “In negotiations, like TPP, we are working to ensure access to affordable life-saving medicines, including in the developing world, and create incentives for the development of new treatment and cures that benefit the world and which create the pipeline for generic drugs.”
Truth: this one is really pathetic since it literally means death and sickness for a lot of people (I'd say "shame on Froman" but I don't think shame registers). We already know, via leaks, that the TPP would give greater monopoly protection for drug companies--greater monopoly protection equals higher prices.
Even more so, the TPP's 12-year monopoly protection is in direct contradiction to what the president claims to be seeking. GTW:
President Obama’s budget proposes to reduce a special monopoly protection for pharmaceutical firms with regard to biologic medicines – drugs used to combat cancer and other diseases that cost approximately 22 times more than conventional medicines. To lower the exorbitant prices and the resulting burden on programs like Medicare and Medicaid, the Obama administration’s 2015 budget would reduce the period of Big Pharma's monopoly protection for biologics from 12 to seven years. The administration estimates this would save taxpayers more than $4.2 billion over the next decade just for federal programs. However, Froman suggested yesterday that USTR continues to push for the 12 years of corporate protection in the TPP, which would lock into place pharmaceutical firms’ lengthy monopolies here at home while effectively scrapping the administration’s own proposal to save billions in unnecessary healthcare costs.
Froman Lie #4: “15,600 firms export from Pennsylvania. Almost 90 percent of them are small and medium sized businesses. And the question is whether with these trade agreements we can create more opportunities for these kinds of businesses.”
Truth: this is a great example of using the math to lie and obscure truth. Most U.S. firms (500 workers or smaller) are considered small and medium operations. But, as a percentage of their overall output, what they export is pretty tiny, around 3 percent. Large firms account count on exports far more.
But, again, facts are a bitch. As GTW points out:
Under the Korea FTA, U.S. small businesses have seen their exports to Korea decline even more sharply than large firms (a 14 percent vs. 3 percent downfall in the first year of the FTA). And small firms’ exports to Mexico and Canada under NAFTA have grown more slowly than their exports to the rest of the world. Small businesses’ exports to all non-NAFTA countries grew over 50 percent more than their exports to Canada and Mexico (74 percent vs. 47 percent) during a 1996-2012 window of data availability. The sluggish export growth owes in part to the fact that small businesses’ exports grew less than half as much as large firms’ exports to NAFTA partners (47 percent vs. 97 percent from 1996-2012).
Forman Lie #5: “And to ensure these agreements are balanced, we seek a diversity of voices in America’s trade policy. The Administration has taken unprecedented steps to increase transparency… We have held public hearings soliciting the public’s input on the negotiations and suspended negotiating rounds to host first-of-a-kind stakeholder events so that the public can provide our negotiators with direct feedback on the negotiations.”
Truth: this one is a laugher. GTW:
“A diversity of voices” is an odd way to describe the more than 500 official trade advisors with privileged access to secretive U.S. trade texts and U.S. trade negotiators. About nine out of ten of these advisors explicitly represent industry interests. Just 10 of the more than 500 advisors (less than 2 percent) represent environmental, consumer, development, food safety, financial regulation, Internet freedom, or public health organizations. It’s little wonder that so many of these groups, excluded from setting the content of the TPP, have denounced leaked TPP texts as presenting threats to the public interest. And as for the claim of “unprecedented steps to increase transparency,” the reality is closer to the opposite. When the Bush administration negotiated the last similarly sweeping trade pact – the Free Trade Area of the Americas – USTR published the negotiating text online for anyone to see amid negotiations. In a step backwards from the degree of transparency exhibited by the Bush administration, the Obama administration has refused repeated calls from members of Congress and civil society organizations to release TPP texts. This secrecy limits the utility of the public hearings and stakeholder events that Froman touts, as it is difficult to opine on a text you are prohibited from seeing.
Uh, yeah, so it's a bad day when a Democratic Administration has less transparency than a deeply paranoid, reckless Bush Administration.
Froman Lie #6: “In 2015, the Obama Administration will continue to pursue trade policies aimed at supporting the growth of manufacturing and associated high-quality jobs here at home and maintaining American manufacturers’ competitive edge.”
Truth: this is the nonsense that gets peddled every time a NAFTA-type deal climbs out of the scum at the bottom of the pond. First, the government's own data confirms 845,000 permanent job losses from NAFTA--most of those are manufacturing jobs. Since NAFTA passed, the country has lost five million manufacturing jobs. To be sure, not all of those jobs were lost because of NAFTA--but it is pretty clear that when you make deals with countries, where workers make a lot less, corporate CEOs, always looking to fatten the bottom line and raise share prices (because their multi-million dollars paychecks and bonuses are tied to getting that share price up) are going to take a hike looking for the lowest wage possible.
It's no coincidence, then, that, per GTW:
The U.S. manufactured goods trade balance with Canada and Mexico in NAFTA’s first 20 years changed from a $5 billion surplus in 1993 to a $64.9 billion deficit in 2013...And under just two years of the Korea FTA, U.S. manufacturing exports to Korea have fallen. Overall, the United States has a $51 billion trade deficit in manufactured goods with its 20 FTA partners. Reviving manufacturing and reviving Fast Track for the NAFTA-expanding TPP are incompatible.
Froman Lie #7: “At a time when too many workers haven't seen their paychecks grow in much too long, these jobs typically pay up to 18% more on average than non-export related jobs.”
Truth: I suppose this could be considered a half-truth using obfuscation, creative math and a shell game. In the real world, it's pretty clear that bad trade deals have been a major factor in inequality growth and wage decline. This isn't rocket science: companies basically threaten, explicitly or implicitly, to close up plants if workers refuse to take wage cuts. And, once your lose a job, the job you find will pay less.
So, duh, trade deals hammered down wages--thus, paychecks didn't grow--and, now, people looking for new jobs can get jobs that are higher than the rock-bottom wages (minimum wage, in many cases) they have been forced to take.
And the point is, as GTW points out, the TPP will just repeat, at the end of the day, the same dynamic:
The TPP would not only replicate, but actually expand, NAFTA’s extraordinary privileges for firms that relocate abroad and eliminate many of the usual risks that make firms think twice about moving to low-wage countries like Vietnam – a TPP negotiating partner where minimum wages average less than 60 cents an hour, making the country a low-cost offshoring alternative to even China.
Froman Lie #8: "We will continue to support a free and open Internet that encourages the flow of information across the digital world."
Truth: that's bullshit. How else can you explain a fairly broad coalition of partners--Internet service providers, tech companies, and Internet freedom groups--writing that TPP copyright terms could “significantly constrain legitimate online activity and innovation.”
Froman Lie #9:“Our total exports have grown by nearly 50 percent and contributed nearly one-third of our economic growth since the second quarter of 2009. In 2013, the most recent year on record, American exports reached a record high of $2.3 trillion...” “By opening rapidly expanding markets with millions of new middle-class consumers in parts of the globe like the Asia-Pacific, our trade agreements will help our businesses and workers access overseas markets...”
Truth: This is stuff drafted for the White House by the Chamber of Commerce and it's just false/half-truths. GTW:
U.S. goods exports grew by a grand total of 0 percent in 2013. The year before that, they grew by 2 percent. As a result, the administration utterly failed to reach President Obama’s stated goal to double U.S. exports from 2009 to 2014. Most of the export growth Froman cites – which is less than half of the administration’s stated objective – came early in Obama’s tenure as a predictable rebound from the global recession that followed the 2007-2008 financial crisis. At the abysmal export growth rate seen since then, we will not reach Obama’s stated goal to double 2009’s exports until 2054, 40 years behind schedule.
Froman Lie #10 (yes, I'm glad this is it for now): “I think the President has made clear that as we pursue a new trade policy, we need to learn from the experiences of the past and that’s certainly what we’re doing through TPP and the rest of our agenda. For example, when he was running for President, he said we ought to renegotiate NAFTA. What that meant was to make labor and environment not side issues that weren’t enforceable, but to bring labor and environment in the core of the agreement and make them enforceable just like any other provision of the trade agreement consistent with what Congress and the previous administration worked out in the so-called May 10th agreement.”
Truth: oh, please. This is just more of the same. TPP gives companies NAFTA-type incentivesto move offshore, will do nothing to curb labor rights violations and does nothing to make them a core part of a trade deal (how about four TPP countries using child and/or forced labor?), and just give huge investor powers that will override local laws.
These lies just add on to the evidence that the TPP, as I wrote, entirely contradicts the rhetoric coming from the president about his desire to fight inequality.
Fact is, they can only sell this shit by lying.
1:09 PM PT: Btw what is really crazy and scary is I'm now getting ads at the top of this diary advocating for fast track!!!!! As "essential to job and economic growth"... Anyone else getting that?