Chicago Wages Could Suffer
In his latest State of the Union Address, President Barack Obama made clear his determination to combat wage inequality while simultaneously pushing a new free trade agreement, the Trans-Pacific Partnership (TPP), through Congress without amendment or filibuster.
According to Michael Froman, the current United States Trade Representative, “The TPP is the most significant trade negotiation in a generation, and promises significant economic benefits for American business, workers, farmers, ranchers, and service providers.” However, the TPP has come under bi-partisan attack in Congress and many workers, farmers, activists and others. They are all too familiar with the North American Free Trade Agreement (NAFTA), the previous major international free trade agreement, and believe the president’s goals to fight income inequality and fast track the TPP make a conflict of interest. These critics point to NAFTA’s legacy in which income inequality was only exacerbated.
The TPP currently includes 12 countries in the Asia-Pacific region, including the United States, Canada, Australia, Chile and Japan, but it has the potential to include more countries in the region. The agreement will economically bind participating countries and provide them with the power to regulate a wide variety of matters beyond international trade, such as Internet freedom, food safety, healthcare costs, workers’ rights and environmental standards. If successful, the TPP will impact the economic future of the United States and much of the world.
Only when members of Congress in both parties objected to the lack of transparency surrounding the new agreement did the TPP gain notoriety. According to Oregon Democratic Senator Ron Wyden in a statement to President Obama, “The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations — like Halliburton, Chevron, PhRMA, Comcast and the Motion Picture Association of America — are being consulted and made privy to the details of the agreement.” Likewise, 22 House Republicans signed a letter to President Obama that objected to the executive branch circumventing Congress, stating that “Fast Track allows the president to send these executive branch-authored bills directly to the floor for a vote under rules forbidding all floor amendments and limiting debate …It takes the floor schedule out of the hands of the House majority and gives it to the President.”
The TPP bears many similarities to NAFTA and is known amongst its opponents as “NAFTA on steroids.” According to Carson Starkey of the Illinois Fair Trade Coalition, the fundamental difference between the TPP and NAFTA is “the fact that [the TPP] is so much larger. It encompasses a larger portion of the world’s economy.” Starkey argues that, like NAFTA, the TPP will generate an even wider income gap. “The TPP forces workers to compete globally for low wages. Factory workers in Chicago will be competing with low-paid factory workers in Vietnam.”
“We may not hear the ‘giant sucking sound’ this time around,” he continues, referencing 1992 presidential candidate Ross Perot’s well-known criticism of NAFTA, “but we will hear a dripping sound as wages continue to fall and environmental standards go unenforced. The TPP allows corporations to override labor, environmental and food standards.”
The TPP will result in the outsourcing of even more jobs to developing countries where labor is cheaper. The jobs that are being outsourced are moving up the wage ladder. Even jobs that were once thought unable to be outsourced, like those in insurance and accounting, are now sent overseas to be done by workers with lower wages. This ensures that even a four-year college degree will not guarantee Americans a place in the workforce. “Free trade has benefitted companies, not workers,” says Starkey. “Minimum wage has fallen in the United States over the last 30 years. In the 1970s, you’d be making more at minimum wage than you are now in 2014. The only people who have benefitted are overwhelmingly the top 1%.”
Indeed, according to Lori Wallach of the watchdog group Public Citizen in an article for the Huffington Post, since NAFTA was implemented, the income of the wealthiest 10 percent has increased by 24 percent, while the income of the top 1 percent increased by 58 percent. The TPP, as an expanded version of NAFTA, is likely to provide the nation’s wealthiest with another generous income hike at the expense of the rest of the populace.
Another major concern for members of Congress and activists alike is the role the Trans-Pacific Partnership will play in the future of the Internet. Earlier this year, the Supreme Court struck down net neutrality, allowing corporations to control and limit the websites Internet users can access. According to the Electronic Frontier Foundation (EFF), an organization focused on promoting open access to the Internet and protecting the first Amendment rights of Internet users, the TPP “puts at risk some of the most fundamental rights that enable access to knowledge for the world’s citizens.” The TPP also proposes even tighter copyright laws and more strict regulations on the distribution of intellectual property. The EFF states, “The US Trade Rep is pursuing a TPP agreement that will require signatory countries to adopt heightened copyright protection that advances the agenda of the U.S. entertainment and pharmaceutical industries, but omits the flexibilities and exceptions that protect Internet users and technology innovators.”
However, the heightened copyright protection will have repercussions beyond Internet freedom. Intellectual property, like U.S. jobs, will be outsourced to the countries participating in the partnership. Corporations like Monsanto or big pharmaceutical companies will have even tighter control over the distribution of their intellectual property, namely seeds and medicine, which are used by people worldwide. “The TPP will further limit the ability of farmers in developing countries to keep their seeds,” says Carson Starkey. “Countries around the world will have less access to generic drugs. The TPP will limit the ability of average people to have access to drugs, seeds, and food. The average person will have to pay three times more for the things they need to live.”
Obama traveled to Mexico on February 19 to meet Mexican President Enrique Peña Nieto and Canadian Prime Minister Stephen Harper to discuss the partnership. His trade representative Michael B. Froman described the TPP the previous day as simply “upgrading our trading relationships not only with Mexico and Canada but with nine other countries as well.” The Trans-Pacific Partnership is gaining even more momentum, and he response both within and outside of Congress remains to be seen.