Should our trade policy ensure greed trumps good?
// Written by Brad Walker, Rivers Director December 17, 2013
A new trade agreement that has been negotiated in secret for seven years called the Trans Pacific Partnership or TPP began to emerge out of the shadows last month. The few, leaked portions of the TPP have enraged citizens across the planet because of the power it removes from citizens and their governments and gives to private corporations.
Trade negotiators representing more than 600 corporations have also pushed for “fast track” authority which would gut Congress’ ability to read the provisions of the agreement – and force them to vote on it without knowing its contents.
The TPP may appear to be a topic far-a-field from the rivers I normally focus on, however, many connections link global trade, the rivers and overseas shipping. The grain and energy shippers use the rivers to transport a large portion of their commodities abroad. Some of these shippers are transnational corporations that have subsidiaries in other countries and are shipping products back to the U.S. Trade is, and has long been, primarily about the profits of corporations and there are powerful people who believe that exploiting the rivers to an even higher degree is key to increasing the efficiency of our trading capability.
In order to offer a proper explanation and context of the TPP we need to go back in history to before the U.S. was even a country.
Not All Parties Are Fun
Corporations have been roaming and plundering the Earth for centuries. Our nation’s history with corporations begins with companies that built settlements in the original colonies. The East India Company (established by Queen Elizabeth I on New Year’s Eve 1600) exploited the British colonies of North America and the resources of the “New World”. The British Parliament passed the Tea Act of 1773 to help the East India Company dump tax free tea on the colonies causing fear of putting colonial merchants out of business. The Act triggered the Boston Tea Party, which caused Parliament to enact even more stringent controls in the colonies. The American Revolution followed.
Strong tension over the role and power of corporations in the U.S threads throughout our history dating back from the establishment of our Constitution through the late 1800’s, with many Americans strongly opposed to granting corporations any powers or rights. [tipso tip=”“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.””]Thomas Jefferson[/tipso] and James Madison were among the Founding Fathers who believed that corporations (especially monopolies) and concentrated wealth were a danger to democracy.
The Corporate-less U.S. Constitution
The U.S. Constitution makes no mention of corporations. To prevent the possibility of an American East India Company, the states were the primary moderator for corporations and allowed them charters with many restrictions. Few, if any, of today’s corporations would exist as they are under these restrictions. States could revoke a charter if the corporation did not fulfill or went beyond its charter or if it misbehaved. Corporations could not make political or charitable contributions; they were not allowed to own stock in other companies; and their charters were typically limited in time. All corporate records were required to be open and available to the state government where they were chartered. None of the Bill of Rights granted to people were awarded to corporations, because, up until the later 1800’s, corporations were considered artificial entities subservient to real humans.
U.S. Corporations are “Humanized” and “Super-Sized”
For decades, states regulated corporations and retained the rights to ensure corporations served the public good. Through the Civil War, popular opposition successfully repelled efforts to weaken government control of corporations. Then the tide turned. Much as Jefferson and Madison predicted, wealthy people pressured government to reduce the state control of corporations. Unable to win popular support, the most successful method was the loading of courts with pro-business justices. Before the war, Abraham Lincoln worked for railroads claiming they were “persons” in an 1850 Illinois lawsuit. During the war President Lincoln signed laws that granted corporations near monopolistic power and land grants that lead to a massive geographic expansion of railroads and their political power. By late 1864 Lincoln apparently regretted what he had been essentially forced to do to win the war and offered the following thoughts in a letter to a friend:
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety than ever before, even in the midst of the war. God grant that my suspicions may prove groundless.”
Corporations then filed numerous lawsuits pursing what has become known as “corporate personhood”, the formal and legal establishment of corporations being equal in the law to humans. In 1886, a case called ‘Santa Clara County versus Southern Pacific Railroad Company’ allegedly settled the debate through a court recorder header note declaring that Chief Justice Waite had declared during the case that corporations are persons in accordance with the intent of the Fourteenth Amendment to the U.S. Constitution approved by the states in 1868. The amendment was actually intended to protect freed African-America slaves and grant them constitutional rights.
Ironically, corporations used the Fourteenth Amendment to pursue their personhood agenda; of the 307 Fourteenth Amendment suits filed between 1886 and 1910, corporations brought 288 of them. Since 1920 numerous other suits have been used to gain First, Fourth, and Fifth Amendment rights rendering corporations in some people’s opinion, “super humans” because they can live indefinitely, can merge or split, cannot be jailed, and have immense financial power. The effort continues to the present day. The 2010 Supreme Court ruling Citizens United v. Federal Election Commission significantly affected election campaign financing. In another suit, corporations are now even asserting rights of religious freedom.
Avoiding War through Global Fast Food Franchises
After World War II governments across the globe wanted to reduce the likelihood of the destruction and death the world had experienced. Forty-four nations represented at a July 1944 meeting in Bretton Woods, New Hampshire met to create institutions that they believed would solve the problem by improving global economic prosperity and connections. They established the World Bank, International Monetary Fund, and, somewhat later, the General Agreement on Tariffs and Trade (GATT). GATT, which would become the World Trade Organization (WTO) in 1995, is the foundation and precursor for TPP. The WTO has 159 member nations and is all about trade. In part, it’s Mission Statement states:
“The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. The WTO also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application.”
A year before WTO was established the North America Free Trade Agreement (NAFTA) was created. This pact between the U.S., Canada, and Mexico has had conflicting impacts upon each country. Indicators suggest that the U.S. lost potentially a million well-paying jobs while the trade deficits between both Canada and Mexico increased. Despite the promises of jobs, NAFTA, however, only contributed to a trend of job exportation and increased trade deficits ignited by recessions and the globalization of our economy.
By 1999 the world had 60,000 parent transnational corporations with 500,000 foreign affiliates; by 2009 there were 80,000 parent transnational corporations. The main function of these corporations is trade, both with other corporations and with their own affiliates. Also by 1999 a growing movement opposing the WTO and globalization had developed world-wide spawning protests at many of the WTO and trade-related meetings. Protests in Seattle during a November WTO Ministerial Meeting in 1999 caused the meeting held there to collapse.
The world changed in many ways during the next decade with a disturbing period of recession, terrorism, two wars, the Wall Street bail-out and a corporate pushback that touted the inevitability of globalization. These activities and events shifted the focus and priorities away from corporate accountability to one of requiring a “shared sacrifice”, extensive anti-environmental government actions, and experiences of outright attacks on first amendment rights and a citizens’ ability to protest. It ended with another recession at a level not seen since 1929 that lead to massive job losses, millions of home foreclosures, possibly the greatest wealth disparity in modern times – but no bail-out for “Main Street”.
On the ten year anniversary of the Seattle protests the Guardian newspaper wrote an article appropriately titled Protesters in Seattle warned us what was coming, but we didn’t listen, which reminded us what the protests had been about:
- “a highly volatile financial system built on unsustainable levels of debt,”
- globalization, which “benefited only a small proportion of the global population,”
- corporate power that was “corrupting political systems that were unable to fight back or were co-opted by corporations,”
- the “economic system of global capitalism, which was destructive of the environment (while) burning through finite resources at ever faster speed”
All of these warnings can be tied back to a key provision of the 2000-page document creating the WTO in 1995 which states:
“Each member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.”
The “annexed “Agreements” include trade agreements and allow a WTO member to challenge any law of another country that is believed to deprive the country (or corporation) of expected benefits from trade. It directly attacks sovereignty regarding labor, financial, environmental, health and safety standards that exceed the WTO accepted standards.
Through 2011 major transnational corporations had filed 450 investor-state cases in 89 countries (including the U.S.) challenging environmental regulations that have included toxic chemicals, hydraulic fracturing, timber, mining, and green jobs. They have challenged the Clean Air Act, the Endangered Species Act, and renewable energy programs.
The Trans Pacific Partnership – “NAFTA on Steroids”
Since 2006, Pacific-Rim country representatives have been meeting secretly, typically in secluded places with high security, drafting what appears to be the most comprehensive and restrictive trade agreement in history. The U.S. joined the process in 2008 and currently twelve countries are in the pact and they are looking for more partners. The Trans Pacific Partnership (TPP) is apparently open to any country eliminating the need for other trade agreements – a feature known as a “docking agreement.” Future Congressional and public scrutiny are also eliminated with this “docking” feature. Rumors circulate that the TPP contains 29 chapters, of which only five cover trade. Because primarily only corporate advisers are allowed to participate, all that the public knows of this agreement has come largely from two recently leaked chapters cover investing and intellectual property rights. At least eighteen meetings have been held thus far with a goal of finalizing the process by the end of 2013, which they will not meet. The U.S. goals on the negotiations, as has been the case it seems for all past agreements, are:
“Through the TPP, the United States is seeking to advance a 21st-century trade and investment framework that will boost competitiveness, expand trade and investment with the robust economies of the Asia Pacific, and support the creation and retention of U.S. jobs, while promoting core U.S. principles on labor rights, environmental protection, and transparency.”
Because of the secrecy it is difficult to communicate details. However, the mere fact that our government has chosen to keep the public and even Members of Congress in the dark for several years screams for the need for strong opposition to this agreement. While we have many more questions than we have answers the President is seeking “fast-track” approval that would limit Congress’s ability to debate the TPP. Some Members of Congress are pushing back, largely the result of growing public opposition. Congress and the public should be up in arms over this secretive process because the TPP is nothing short of a major constitutional amendment that completely bypasses the democratic process.
There is an irony in all of this. The proponents have always touted these agreements as free trade – the elimination of trade barriers – which will improve the lives of millions. We have seen the results of decades of similar agreements, which fall far short of their author’s claims. What has become more apparent is that free trade is really code for monopolistic protectionism that enriches corporations, undermines sovereign laws, and shifts jobs to lower wage countries.
One might wonder if global trade agreements are worth the time and money invested. Increasingly there is a strange but profitable phenomenon called redundant trade occurring when the same products are simultaneously being exported and imported. Although from a rational point of public view this makes no sense however, to someone bleeding lots of money from this system in a globalized market that has for decades artificially flourished through cheap energy, it makes perfect sense.
Trade agreements between countries are supposed to be about improving the public benefit, not the wealth of corporations or a small group of already very wealthy people. Because our trade agreements for the last 20 years have not benefited the American public, maybe the entire idea of trade and trade protections needs to be revisited, hopefully by people other than those who are negotiating TPP and their corporate advisors.
If you have not already done so, you might want to call your Congressional Representative and Senators asking them to oppose TPP.
Note: This article used information from books written by Thom Hartmann, David C. Korten and Ted Nance on corporation