10-13-16 CICA Op-Ed: The Trans-Pacific Partnership, another bad free trade agreement…PART 2

CICGA-CO Independent Cattle Growers Association logoCICA OP-ED:
The Trans-Pacific Partnership, another bad free trade agreement. 
Why free trade isn’t always fair for America….Part 2

The Trans-Pacific Partnership (TPP) is advocated by supporters and the Obama administration, as a “free trade” agreement between the United States and eleven Pacific Rim countries that will boost our economy and increase exports. However, the TPP lacks necessary safeguards for American sovereignty, workers, producers and consumers. Instead, the agreement provides no protection against currency manipulation and overwhelmingly expands power to foreign nations and multinational corporations under tribunal courts.

Contrary to claims that the TPP will improve the economy, a study released by The Global and Environmental Institute at Tufts University finds “that the benefits to economic growth are even smaller than those projected with full – employment models, and are negative for Japan and the United States . . . We find negative effects on growth in the United States and in Japan.” The future of American ranchers and USA-raised beef would be drastically impacted if the TPP passes.

Gerald Schreiber, R-Calf USA, aptly observes that “With each trade agreement the U.S. signs, we have subjugated our sovereignty to the World Trade Organization” (WTO). Case in point, the WTO actions in 2015 concerning the U.S.’ Country of Origin Labeling (COOL) for beef and pork. For the first time ever, COOL would have allowed American consumers to know where their pork and beef comes from. (Americans know where their produce, clothing and goods come from and CICA believes Americans should have the right to know the same for meat.) Under the North America Free Trade Agreement (NAFTA), Canada and Mexico complained of potential adverse impacts to their profits if Americans had the choice between buying USA-raised or imported meat. Shortly following the passage of COOL, Congress repealed it amidst WTO threats of $1 billion in retaliatory import tariffs against the U.S.. Multinational corporations already import tariff-free, lesser quality, less regulated beef and sell it to American consumers without any realized competition from American beef, stifling American ranchers’ profits and potentially endangering the health of consumers.

Perilously, the TPP determines the country of origin for beef to be wherever the animal is slaughtered, regardless of where it is raised. It’s plausible that multinational packers could meet the U.S. demand for beef with cheaper imported beef, destroying the domestic market by driving demand and prices down even further. Quality U.S. beef is indeed more expensive than beef from countries that have Foot and Mouth Disease (FMD) and Mad Cow Disease outbreaks, manipulated currencies and weaker or non-existent environmental or labor regulations.

Three of the twelve nations in TPP have had confirmed cases of FMD, a highly contagious disease that was eradicated from the U.S. in 1929. The transmission of FMD to cattle, pork, goats, deer, buffalo, and other cloven hooved animals, can rapidly spread through various methods including aerosol and human clothing. Epidemics can costs billions to control. Although not a health threat to humans, FMD is considered a very real bioterrorism threat which is now actively monitored by the U.S. Government. An outbreak of FMD would have catastrophic consequences to domestic agriculture. Why should the U.S. agree to the TPP when it requires the U.S. to allow imports from foreign countries if their safety standards are deemed “equivalent” to U.S. standards?

In a series of briefs published on the Roosevelt Institute’s website, former senior vice president and chief economist of the World Bank, Joseph E. Stiglitz, points out that “the most economically significant provisions are not cuts to trade barriers. Instead, the key element is TPP’s investment chapter, which gives foreign investors the right to sue governments in private international arbitration when they feel their newly created property rights are violated (a process known as investor–state dispute settlement, or ISDS). Two arbitrators can, in effect, undermine decisions of Congress and the president, ordering billions of dollars in payments for their lost investment value and guesstimated lost profits.” The New York Times reported similar concerns, that “Companies and investors would be empowered to challenge regulations, rules, government actions and court rulings — federal, state or local — before tribunals organized under the World Bank or the United Nations.” Member nations would be forbidden from favoring “goods produced in its territory”. State promoting programs like the Colorado Proud with the slogan, “Better for you. Better for Colorado.”, could be considered a threat to other national or multinational corporations’ profits.

Conventional economic theory in unbalanced trade markets has never worked and the cattle industry will be the next victim if the TPP is passed. Why champion the TPP for the purpose of lowering tariffs into Japan’s market to increase our exports, while turning a blind eye to the dangers to American cattle producers? Increased competition from from less regulated imports will put smaller beef producers in the U.S. out of business and American consumers at risk. Trade agreements aren’t necessarily bad, but in the words of Stiglizt, “who benefits from such efforts depends entirely upon the specific rules included in the agreements.” The CICA advocates for American ranchers and agrees with Stiglitz that President Obama “should be fighting for a trade agreement that creates jobs and growth—a quite different agreement from the TPP, which will most likely create more economic pain and hardship for America’s working families and small businesses.”

The Colorado Independent CattleGrowers Association’s mission is to actively promote policy that will beneficially affect the live cattle industry at the local, state and national level, securing and preserving a viable livelihood for present and future generations. The Association shall serve to support the financial, environmental, cultural and historical interests of independent cattle producers throughout Colorado and across America. Learn more online at www.coloica.com or find us on Facebook.
Capaldo, Jeronim, et al.  “Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement.”  Global Development and Environment Institute Working Paper NO. 16 – 01, January 2016, http://www.ase.tufts.edu/gdae/Pubs/wp/16-01Capaldo-IzurietaTPP.pdf.
Stiglitz, Joseph E. “Tricks of the Trade Deal: Six Big Problems with the Trans-Pacific Partnership.”  The Roosevelt Institute, 28 Mar. 2016,  http://rooseveltinstitute.org/tricks-trade-deal-six-big-problems-trans-pacific-partnership/.
Weisman, Jonathan, “Trans-Pacific Partnership Seen as Door for Foreign Suits Against U.S.”  25 Mar. 2015, http://www.nytimes.com/2015/03/26/business/trans-pacific-partnership-seen-as-door-for-foreign-suits-against-us.html.