Another Race to the Bottom, Instead of to the Top

One of my mantras, as anyone who's read even one of my posts probably knows, is Transparency. Or, in the words of the eminent jurist Louis Brandeis, "Sunlight is said to be the best disinfectant."

Which is why I find secret negotiations so disquieting. I recognize that some negotiating must be done away from prying eyes, but when everything is done in the dark? Well, that raises my suspicions.

Which is why I've been increasingly concerned about the Trans-Pacific Partnership (TPP), which is supposed to create the largest free trade area in the world.

If you are one of the key delegates from Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, or Vietnam, you no doubt believe that TPP "is critical for creating jobs and promoting growth, providing opportunity for our citizens and contributing to regional integration and the strengthening of the multilateral trading system." Sounds good, right? (The quote is from the website of the Office of the US Trade Representative, found here)

On the other hand, if you're from the Electronic Frontier Foundation, you think that TPP is "is a secretive, multi-national trade agreement that threatens to extend restrictive intellectual property (IP) laws across the globe and rewrite international rules on its enforcement." (From the EFF website, found here) Similar complaints have been voiced by other stakeholders who have felt locked out of the discussions.

The only details that have been made available to those of us who aren't delegates have been leaked documents, most recently in December of last year (Wikileaks link, here).

As Nobel laureate economist Joseph E. Stiglitz wrote in yesterday's New York Times, "Based on the leaks -- and the history of arrangements in past trade pacts -- it is easy to infer the shape of the whole TPP, and it doesn't look good." (Full essay, here)

More correctly, it may look good to the wealthiest 1%, but to the rest of us, not so much.

Stiglitz points out that trade deals originally (post-World War II) "focused on lowering tariffs." The idea was that lower tariffs would increase trade, and "each country could develop the sectors in which it had strengths and as a result, standards of living would rise. Some jobs would be lost, but new jobs would be created."

And by and large, that idea worked. So what's different now? A new emphasis:

The focus has shifted to "nontariff barriers," and the most important of these -- for the corporate interests pushing agreements -- are regulations. Huge multinational corporations complain that inconsistent regulations make business costly.

That makes sense: if all the rules were the same, think how much easier it would be for any company to open an office, a store, a factory in a new country. This would certainly be good for corporate profits. But would it be good for the rest of us?

Stiglitz reminds us that "most of the regulations, even if they are imperfect, are there for a reason: to protect workers, consumers, the economy and the environment."

The professor can imagine a positive to this drive for "regulatory harmonization":

One could, of course, get regulatory harmonization by strengthening regulations to the highest standards everywhere.

But he thinks that's unlikely. And the secretiveness with which the negotiations have taken place make it more likely that the depressing second sentence of Stiglitz's paragraph is correct:

But when corporations call for harmonization, what they really mean is a race to the bottom.

I hope that Professor Stiglitz is wrong. There's one way for the US trade representative and others to show that: Open up the proceedings so that everyone who will be affected by this new pact -- that would be all of us -- can take part.