Obama’s Covert Trade Deal
Has the Obama Administration’s Pacific trade negotiations violated the President’s pledge to open government?
- The Obama administration has often stated its commitment to open government. So why is it keeping such a tight wraps on the Trans-Pacific Partnership?
- A group of some 600 trade "advisers," dominated by representatives of big businesses, who enjoy access to draft texts and negotiators.
- This is more than a trade deal. Only 5 of its 29 chapters cover trade matters like tariffs or quotas.
- The agreement would be a boon for Wall Street and its campaign to water down regulations put in place after the 2008 financial crisis.
- The agreement would practically forbid bans on risky financial products, including the toxic derivatives that helped cause the crisis in the first place.
The Obama administration has often stated its commitment to open government. So why is it keeping such tight wraps on the contents of the Trans-Pacific Partnership, the most significant international commercial agreement since the creation of the World Trade Organization in 1995?
The agreement, under negotiation since 2008, would set new rules for everything from food safety and financial markets to medicine prices and Internet freedom. It would include at least 12 of the countries bordering the Pacific and be open for more to join. President Obama has said he wants to sign it by October.
Although Congress has exclusive constitutional authority to set the terms of trade, so far the executive branch has managed to resist repeated requests by members of Congress to see the text of the draft agreement and has denied requests from members to attend negotiations as observers — reversing past practice.
While the agreement could rewrite broad sections of nontrade policies affecting Americans’ daily lives, the administration also has rejected demands by outside groups that the nearly complete text be publicly released. Even the George W. Bush administration, hardly a paragon of transparency, published online the draft text of the last similarly sweeping agreement, called the Free Trade Area of the Americas, in 2001.
There is one exception to this wall of secrecy: a group of some 600 trade “advisers,” dominated by representatives of big businesses, who enjoy privileged access to draft texts and negotiators.
This covert approach is a major problem because the agreement is more than just a trade deal. Only 5 of its 29 chapters cover traditional trade matters, like tariffs or quotas. The others impose parameters on nontrade policies. Existing and future American laws must be altered to conform with these terms, or trade sanctions can be imposed against American exports.
Remember the debate in January 2012 over the Stop Online Piracy Act, which would have imposed harsh penalties for even the most minor and inadvertent infraction of a company’s copyright? The ensuing uproar derailed the proposal. But now, the very corporations behind SOPA are at it again, hoping to reincarnate its terms within the Trans-Pacific Partnership’s sweeping proposed copyright provisions.
From another leak, we know the pact would also take aim at policies to control the cost of medicine. Pharmaceutical companies, which are among those enjoying access to negotiators as “advisers,” have long lobbied against government efforts to keep the cost of medicines down. Under the agreement, these companies could challenge such measures by claiming that they undermined their new rights granted by the deal.
And yet another leak revealed that the deal would include even more expansive incentives to relocate domestic manufacturing offshore than were included in Nafta — a deal that drained millions of manufacturing jobs from the American economy.
The agreement would also be a boon for Wall Street and its campaign to water down regulations put in place after the 2008 financial crisis. Among other things, it would practically forbid bans on risky financial products, including the toxic derivatives that helped cause the crisis in the first place.
Of course, the agreement must eventually face a Congressional vote, which means that one day it will become public.
So why keep it a secret? Because Mr. Obama wants the agreement to be given fast-track treatment on Capitol Hill. Under this extraordinary and rarely used procedure, he could sign the agreement before Congress voted on it. And Congress’s post-facto vote would be under rules limiting debate, banning all amendments and forcing a quick vote.
Ron Kirk, until recently Mr. Obama’s top trade official, was remarkably candid about why he opposed making the text public: doing so, he suggested to Reuters, would raise such opposition that it could make the deal impossible to sign.
Michael Froman, nominated to be Mr. Kirk’s replacement, will most likely become the public face of the administration’s very private negotiations and the apparent calculation that underlies them. As someone whose professional experience has been during the Internet era, he must know that such extreme secrecy is bound to backfire.
Whatever one thinks about “free trade,” the secrecy of the Trans-Pacific Partnership process represents a huge assault on the principles and practice of democratic governance. That is untenable in the age of transparency, especially coming from an administration that is otherwise so quick to trumpet its commitment to open government.
This op-ed originally appeared in the June 3 edition of the New York Times.