TPP would damage Maine small businesses and communities

TPP would damage Maine small businesses and communities

The Trans-Pacific Partnership is an enormous and expansive trade deal, arguably the largest in United States history, and it deserves a full hearing to examine its likely impacts, globally, nationally, and in regard to Maine. We all have the right and the responsibility to ensure that it is well understood by all those who will be impacted by its implementation.

The TPP, while being argued at the highest levels of government as an engine to further develop the strength of the American economy by easing trade barriers and encouraging U.S. exports, actually poses substantial threats to American jobs and wages. It also threatens national, state, and local economic and regulatory sovereignty over the environment, food safety, and public health. More than just a give-away of national, and regional sovereignty rights, modern proposed trade deals like the Trans-Pacific Partnership represent significant take-overs and appropriations of economic decision-making, formerly the domain of national, state, and local governments. In essence, it transfers power to unaccountable, extra-governmental, corporate entities.

The TPP is designed to deliberately remove many layers of democracy, public input and scrutiny in decision-making. This is a net loss for democracy at every level. The TPP replaces democracy with private, corporate power over many economic decisions with, as David Korten put it, “significant implications for nearly every aspect of American life—including intellectual property rights, labor and environmental protections, consumer safety and product labeling, government procurement, and national resource management.”

This binding pact, which encompasses as much as 40% of the world’s economic activity, falls far short of establishing the high standards that the United States should require of a modern trade deal. Rather than having closed-door discussions, that narrowly focus on which industries may receive small advantages and disadvantages, policymakers should be asking deeper questions about whether the rules of the TPP as a whole will create American jobs, enhance environmental sustainability, improve public health, raise worker’s wages, and advance human rights and democracy.

After carefully considering all the terms outlined in the TPP, the members of the Maine Small Business Coalition, along with the Maine Fair Trade Campaign and thousands of other business and worker’s groups across the country, believe that the answer to every one of those deeper questions is no.

Our opposition to the TPP is broad and varied, but here is a short summary of the issues that we find most disturbing:

First, let’s put things into context. As a result of globalization, there has been a consolidation of industries that has created great disruption of regional and local economies. Regional and local leaders used to provide localized economic development plans that met the needs of the local communities. Now, the needs of the local communities are overlooked in favor of large-scale corporate benefit. This leaves those in small American communities to pay the price at the local level. Jobs are outsourced, and manufacturing of goods purchased locally has been moved. In addition, locally made goods and services can’t compete with the prices of goods where production is subsidized and where economies ‘of scale’ are making huge amounts of cheaply produced products for export. Economic globalization and free trade has had dire impacts on workers and local communities. In addition to literally re-locating jobs to locations where profit comes at the expense of worker wages, human rights, and the environment, free trade agreements in the industrialized nations have strengthened the ability of employers to accept lower wages and benefits. To quote a recent Citizen’s Trade Campaign letter:

The TPP is the latest opportunity to “offshore more good-paying American jobs, lower [the] wages in the jobs that are left and increase income inequality by forcing U.S. employers into closer competition with companies exploiting labor in countries like Vietnam, with workers legally paid less than 65 cents an hour, and Malaysia, where an estimated one third of workers in the country’s export-oriented electronics industry are the victims of human trafficking.”

“And the TPP’s labor standards are grossly inadequate to the task of protecting human rights abroad and jobs here at home. The countries involved in the TPP have labor and human rights records so egregious that the “May 10th” model — which was never sufficient to tackle the systemic labor abuses in Colombia — is simply incapable of ensuring that workers in Mexico, Vietnam, Malaysia and all TPP countries will be able to exercise the rights they are promised on paper. Even if the labor standards were much stronger, the TPP is also so poorly negotiated that it allows products assembled, mainly from parts manufactured in “third party” countries, with no TPP obligations whatsoever to enter the United States duty free.”

One of the more disturbing TPP requirements affecting small, local businesses includes procurement waivers that eliminate “Buy American” and “Buy Local” preferences that are currently found in many types of government purchasing contracts. Buy American policies require most federal government purchases of goods to go to American firms, which allows tax dollars to be recycled back into our economy. Under TPP requirements, Buy American would be effectively gutted, as TPP rules require that foreign corporations receive “national treatment” in government procurement bids. This will allow foreign corporations to take over the local procurement markets and effectively export American jobs directly tied to federal procurement laws, by ‘off-shoring’ our tax dollars.

While previous trade agreements were aimed to open up new markets, a primary intention of the TPP is to reduce or eliminate state and federal regulations that are viewed as “trade irritants,” which is likely to eliminate many small markets nationally and globally. To deal with “barriers to trade,” an expansive body of investor rights takes up most of the text of the TPP. The TPP sets up a system of independent, extra-governmental, secret tribunals, known as an Investor-State Dispute Settlement (ISDS) system. This system allows corporations the right to sue for losses from ‘expected future profits,’ such as when business profits could be hurt by environmental or regulatory standards that rise above an accepted standard for all signatory nations–except as they pertain to ‘investor rights’. These private three-person corporate tribunals will be given greater rights and more power to arbitrate disagreements than even the Supreme Court of the United States!

What this means for states like Maine and Vermont is that state labeling laws (including GMO-labeling, and identifying products as being produced locally) may be vulnerable to litigation, and thus struck down. Numerous health warnings and nutrition information labels are at risk of being viewed as “barriers to trade” and eliminated. There is also a threat of litigation for evolving environmental, health and safety standards that meet the needs of local people, or from local procurement laws (after a three year window eclipses) if they are viewed as impeding corporate profitability. This will have a definite chilling effect on regulatory standards, while also diminishing the regulatory sovereignty of local, state and national governments, since foreign corporations can sue nations, states, and municipalities for any losses to ‘expected future profits’ that may result from any such regulation. This takes away our control at the local level to determine the quality of life that we wish to promote in our communities and on behalf of our citizens.

The aims of the TPP are contrary to the interests of small, local businesses in Maine. The TPP will not strengthen our local economies. It will not result in workers seeing higher wages, or allow environmental and safety standards to be strengthened. It will not allow greater access to locally produced goods and services. In fact, the opposite is true.

We can and should collectively look at the big picture and realize that in adopting the provisions of the TPP, we are forcing our Maine businesses to compete with thousands of foreign corporations that do not have our labor laws, health and safety regulations, or environmental standards. We will be facing a ‘race to the bottom’ to compete with those countries that maintain archaic standards that violate the rights of the people and the environment on nearly every level. This isn’t good for our communities, or our state or national governments. And, it certainly isn’t good for our livelihoods.

The TPP favors a handful of large multi-national corporate entities, and it destroys the checks and balances that allow smaller businesses to succeed. In order to protect American sovereignty, the integrity of the American workforce, and ensure an equitable opportunity for all businesses to succeed, we need to strongly reject the Trans-Pacific Partnership.

Adapted from testimony to the Maine Citizens’ Trade Policy Commission.

About author

Alex Jackimovicz
Alex Jackimovicz 1 posts

Alex is an electrical contractor and business owner from Boothbay and serves on the steering committee of the Maine Small Business Coalition.

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