By William C. Shelton

(The opinions and views expressed in the commentaries of The Somerville Times belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville Times, its staff or publishers)

The Trans-Pacific Partnership (TPP) is a trade and investment agreement being negotiated among the U.S. and eleven other Pacific Rim countries. It would be the largest trade deal in history, affecting 40% of the world economy.

National news outlets are covering it with the illusory objectivity that characterizes corporate media. The illusion is that objectivity is simply a matter of reciting claims made by conflicting parties in a “balanced” way.

Genuine objectivity would involve rigorously examining verifiable evidence of similar trade policies’ historical outcomes and cautiously projecting TPP’s likely outcomes. Of course the latter is somewhat challenging, since the public and press are not allowed to see the text of the agreement.

TPP claims

Those who advocate for TPP are making the same claims that they made when they advocated for the North American Free Trade Agreement (NAFTA), the Korean free trade agreement (KORUS), and Chinese trade concessions. They claim that TPP will create more and better jobs in the U.S., increase American exports, and narrow our yawning trade deficit.

The President wants fast-track authority. That would allow him to submit the negotiated agreement to Congress without allowing Congress to amend it. Since provisions in the TPP “outline” that the public is allowed to see are similar to those in the aforementioned agreements, it’s worth examining how those agreements lived up to the claims made for them.

Trade and inequality

Following World War II, gains in worker productivity were shared equally between people who made their money from money and those who made their money from work—that is, between profits and wages. But somewhere in the early 1970s, median wages flattened, while productivity steadily increased.

That trend continues to today. Between 1996 and 2015, U.S. gross domestic product doubled while median household income declined. “Free trade” agreements were one of the mechanisms by which the wealthiest Americans appropriated the productivity gains created by all Americans.

When he pushed NAFTA through Congress, Bill Clinton claimed that it would create 200,000 jobs in its first two years and a million in five years. Instead, imports swamped exports. Between 1993 and 2013, the U.S. trade deficit with Mexico and Canada increased from $17.0 billion to $177.2 billion, displacing 850,000 jobs. Still, NAFTA became the template for a dozen other trade agreements.

President Obama claimed that KORUS would “support 70,000 American jobs” because it would “increase exports of American goods from $10 billion to $11 billion.” Instead the trade balance with Korea worsened by $12 billion, eliminating 75,000 U.S. jobs between 2011 and 2014.

Bill Clinton claimed that admitting China to the World Trade Organization would create “a win-win result for both countries,” promising that American jobs “can grow substantially with the new access to the Chinese market the WTO agreement creates.” Between then and 2013 our trade deficit with China increased by $240 billion, eliminating 3.2 million U.S. jobs.

These agreements also allowed American corporations to locate production elsewhere and sell back to the U.S. Since 2001, 60,000 U.S. factories have closed. And since 1997, we lost more than 5 million manufacturing jobs.

As well-paying jobs with benefits disappeared, workers took whatever jobs they could find, at whatever wages. Managers often told workers that if they wouldn’t accept lower compensation, operations would move to Mexico. They used the same tactics to intimidate union organizing efforts.

In Mexico, NAFTA’s effects wiped out gainful employment for millions of farmers and small businesses, producing a surge of illegal immigration. Yet those who forcefully advocate “free trade” extensively overlap with those who get hysterical about illegal immigrants.

Stealth and secrecy

President Obama insists that this agreement will be different, but his negotiators are working in secret, and he refuses to release its text. It has been made available to members of Congress—within a secure room in which they are not allowed to take notes or bring staff. And there are conflicting reports on how much is actually available to them.

Loss of sovereignty

Genuine conservatives should be alarmed by the limitations that TPP would impose on U.S. sovereignty. NAFTA introduced “Investor State Dispute Settlement” (ISDS) requirements for treaty partners, and ISDS has been incorporated into subsequent trade agreements, including those among other nations. TPP would greatly expand ISDS’s domain.

ISDS authorizes private corporations to sue sovereign governments, win monetary judgments, and block law enforcement if the plaintiff companies successfully argue that those laws are “tantamount to expropriation.” They argue this to tribunals of private-sector attorneys, not public bodies.

ISDS cases have imposed heavy fines on Germany for its environmental regulation, on Egypt for enforcing minimum-wage laws, and on Australia and Uruguay for their anti-smoking statutes. TPP would allow both foreign corporations and American corporations who set up foreign subsidiaries to sue the U.S.

Rationale and reality

For the most part, advocates on both sides agree that TPP implementation would increase U.S. exports of capital and intellectual property while further reducing exports of labor-intensive products. TPP’s advocates say that globalization makes this inevitable, and if we are going to succeed, we must increase our workers’ skills and education while concentrating on knowledge-based industries.

But workers without college degrees still constitute 70% of the U.S. workforce, and those who say that workers must adjust are unwilling to invest in their retraining.

With a top marginal income tax rate of 90%, in the 1950s and 60s America invested in the infrastructure, education, and research necessary to drive a thriving economy. Today investors are taxed at half the rate of workers, and our infrastructure is crumbling, research investments declining, and higher education costs, increasingly out of reach.

Fair trade vs. free trade

The U.S. is still the largest market in the world. The economies of all potential TPP signatories would suffer if they could not sell to us. This would give our trade negotiators substantial leverage if they served the 99% rather than the 1%.

They could begin by requiring an end to the currency manipulation that a number of TPP countries use to artificially lower their products’ costs while increasing ours. The Economic Policy Institute estimates that this alone could produce between 2.3 and 5.8 million new U.S. jobs.

They could refuse to weaken our labor, consumer and environmental protections to facilitate the sale of goods by companies that abuse their workers and environment. They could bar the import of goods that are products of such abuse.

And they could conduct negotiations in public, for all the world to see.