Four more years of Trump?

Improbable as it may seem, President Trump could be re-elected in 2020.

Photo by Anthony Behar

He’s been vilified by many, including those who know him personally such as former FBI director James Comey.

“He has a craving for affirmation that I’ve never seen in an adult before,” Comey told a conference in Ottawa. “It’s all, ‘What will fill this hole inside me?’ (Globe and Mail, June 5, 2018)”

Author Thomas Frank’s assessment is less psychological:

“He is deeply unpopular, the biggest buffoon any of us has ever seen in the White House. He manages to disgrace the office nearly every single day. He insults our intelligence with his blustering rhetoric. He endorses racial stereotypes and makes common cause with bigots. He has succeeded in offending countless foreign governments [!]. He has no idea what a president is supposed to be or do and (perhaps luckily) he has no clue how to govern (Harper’s magazine, April, 2018).”

However, Trump seems to vaguely understand the connection between trade deals and wage stagnation.

Trump withdrew from one such deal, the Trans-Pacific Partnership, which would have strengthened U.S. corporate power at the expense of Canada.

If he pulls out of NAFTA, it will hurt all three countries in the short term. But trade will not stop. We will continue to trade with the U.S. under rules of the World Trade Organization. Tariffs under the WTO would add only 1.5 per cent to Canadian exports.

Trade deals have been a bad deal for many U.S. workers. Jobs have been sent elsewhere. Wages have been stagnant. The threat of moving jobs offshore looms over those workers who complain.

Candidate Trump characteristically expressed his disdain for NAFTA on a visit to Flint, Michigan, where hundreds of thousands had been poisoned by lead in the water. In a caustic manner, he said “It used to be that cars were made in Flint and you couldn’t drink the water in Mexico. And now the cars are made in Mexico and you can’t drink the water in Flint.” Funny, and a telling display of Trump’s lack of sympathy.

The American economy is on a roll and that could put Trump back in office for another four years. The U.S. unemployment rate was 3.9 per cent in April, 2018, a seventeen-year low. Under trade deals, corporate America is currently sending some of those jobs offshore. If trade deals are cancelled that will create a worker shortage that will drive wages up.

Of course, cancelling trade deals will also drive up the cost of goods for Americans but voters may not care, or will be unable to make the connection. The pain of unintended consequences has never been a problem for Trump says Thomas Frank:

“The president, always a fan of burning down the village in order to save it, is currently threatening to scuttle the whole agreement: ‘A lot of people don’t realize how good it would be to terminate NAFTA, because the way you’re going to make the best deal is to terminate NAFTA.’”

What matters for American workers is that they are back at work. No matter that the sparks for the economic recovery were ignited by former President Obama and chair of the Federal Reserve Janet Yellen.

In the 2020 campaign, the slogan could be “it’s the jobs, stupid.” And Trump could win.

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TPP rises from the ashes

Rumours of the death of the TPP are greatly exaggerated. After President Trump announced U.S. withdrawal from the Trans-Pacific Partnership, I congratulated him: “Thank you, Mr. Trump, for killing the TPP.”

 image: WMAL radio

I now realize that Trump’s withdrawal from the TPP was not an indicator of leadership, but a sign of retreat from the international community. It’s just another indication of the degree of U.S. marginalization. Trump’s withdrawal from the Paris Agreement is yet another indicator that we must carry on without him.

Where the original TPP had a number of flaws, the new TPP can be negotiated to Canada’s advantage. Canada was disadvantaged in the first round because we were latecomers: we had to accept what had already been negotiated.

Canada is a trading nation and as such, we depend on fair trade agreements. As politicians like to do, I’ll list my five conditions for acceptance of the new TPP -dubbed TPP11 after the number of countries left to pick up the pieces.

Investor-state dispute settlement provisions (ISDS) should not be part of TPP11. This allows companies to seek damages from governments when local regulations interfere with profit-making.

When disputes arise, as they are bound to do, they should be settled in a transparent manner by judges, similar to the International Court, not in private between arbitrators as is now done with NAFTA.

Environmental standards should not be part of TPP11. Environmental damage is seen by industry as a cost of doing business -a price which indigenous peoples and future generations will pay. Environmental standards need to be negotiated by separate accords like the Paris Agreement.

Intellectual property and should be excluded as well. Artists and small software companies need protection, but too often concern for intellectual property masks large corporate interests such as Disney.

Exclude health regulations as well. They are an excuse for Big Pharma to extend the patent life of drugs that could be made cheaper with generics.

TPP11 will be a meeting of middle powers now that the U.S. is out, and China and Europe were never in. Canada can then negotiate from a position of strength when it comes to superpowers. Trump favours individual bilateral deals because he imagines an advantage over smaller countries. But if those smaller countries can form a block where there is an alternative to the bully-tactics of Trump.

The TTP11 would give Canada access to markets not previously available, says Hugh Stephens of the Canadian Global Affairs Institute. It will jump-start bilateral talks that were going nowhere, like those between Japan and Canada. With Japan in the TTP11, negotiations can proceed. And trade agreements under the umbrella of TPP11 can take place with other countries where Canada has no bilateral agreements such as Australia, New Zealand, Malaysia and Vietnam and Malaysia.

And in countries where Canada does have bilateral agreements, such as Mexico, Chile and Peru, the TTP11 can tie up loose ends.

Whereas Canada was a follower in the original TTP, we can be a leader in fair trade under TTP11. With the U.S. retreating into a fog of befuddlement, Canada needs to step up on the world stage.

 

 

Thank you, Mr. Trump, for killing the TPP

It’s a rare thing when the views of president-elect Trump and Canadian activists align as in their opposition to the Trans-Pacific Partnership. Trump has vowed to kill the deal the day he is sworn in.

From http://stopbadtradedeals.org/

However, the source of loathing couldn’t be more different. Canada is a trading nation and we depend on the flow of goods for jobs. Trump wants to set up barriers to trade and regards such deals as “job-killing.”

Unlike the deal between Canada and Europe, the Comprehensive Economic and Trade Agreement (CETA), we were on the sidelines when the TPP was negotiated. The TPP had little to do with reducing trade barriers. Law professor Michael Geist of the University of Ottawa outlines the other provisions:

“Much of the TPP focused on economic regulation, such as intellectual property enforcement, health regulation and environmental standards. Trade agreements are a poor place to negotiate these issues, which have traditionally fallen within the purview of international organizations that develop consensus-based treaties with broad stakeholder participation (Globe and Mail, November 16, 2019).”

Trump has NAFTA within his sights, too. With the North American Free Trade Agreement threatened by the belligerent president-elect, it’s vital that Canada look elsewhere. Canada already reached a deal with South Korea in 2014 and has engaged in talks with Japan, India and China regarding similar agreements.

Ongoing irritants plague all of these trade deals because corporations insist on corrupting them with their own interests under the label of “free trade.” One of those irritants is the investor-state dispute settlement provisions (ISDS) which allow companies to seek damages from governments when local regulations interfere with profit making.

Canada was stung by an ISDS under NAFTA in which a Delaware-based company proposed expansion of a quarry in the Bay of Fundy. Nova Scotia rejected it on environmental grounds. The federal government rejected it. Then a secret NAFTA tribunal approved it and we are stuck with a bill of hundreds of millions in compensation.

Tribunals aren’t a necessary part of trade agreements when you consider we have a court system. It’s not like we’re dealing with developing countries whose court systems are unknown or viewed as dodgy. CETA is a slight improvement over NAFTA. Members of the tribunal will be appointed by countries instead of corporations giving it the aspect of an international court.

One way to bypass trade deals is for unions to negotiate international agreements that are not susceptible to tribunals. Canadian auto unions have recently bargained deals with the big 3 auto manufacturers worth $1.6 billion. Jim Stanford, former economist for the Canadian Auto Workers and Unifor, and now professor McMaster University is thrilled with the deal which acknowledges superior productivity in Canada:

“Most Canadian auto plants operate at or near full capacity. Combined with advanced technology and work organization, that gives the Canadian industry an important productivity advantage. Output per worker is 10 per cent to 15 per cent higher than it is in the United States (November 21, 2016).”

Trade deals have been muddied by the addition of non-trade provisions, although I doubt that’s what motivates Trump.

Don’t call the TPP a free trade agreement

Canada is a trading nation. Trade agreements are good for Canada. The Trans-Pacific Partnership is not one of those.

With a few exceptions, Canada’s trade barriers are already low and the TPP will have little effect on trade. Professor Blayne Haggart from Brock University in St. Catharines, Ontario, says it’s all about increasing corporate power. Sections that are supposed to be incidental riders are the real essence:

“Instead, agreements such as the TPP are about implementing policies that have nothing to do with comparative advantage, policies that are often designed to lead to higher consumer costs and concentrated corporate power. Treated as marginal issues, these policies are ‘free-trade free-riders,’ coasting along on an unearned legitimacy.”

By “comparative advantage” he means trade between partners that benefits both. “Costs are lowered, production is maximized and people can buy imports at prices lower than would have prevailed had they produced everything themselves,” explains Haggart in the Globe and Mail.

The TPP is not a free trade agreement; it’s a consolidation of U.S. interests globally. The details have to be carefully dissected but here are a few things that we know.

One of the “free-trade free-riders” is intellectual property. The U.S. wants to extend the patent protection for drugs to prevent generic manufacturers from providing cheaper medicines. Groups such as Doctors Without Borders warn that greater drug-patent protection would “limit competition from generic drug manufacturers that reduce drug prices and improve access to treatment, and would accelerate already soaring medicine and vaccine prices.”

Another is extended copyright length. The TPP would extend the life of copyrights from 50 years to 70 years beyond the life of the author. This would benefit U.S. media companies and provide little benefit for artists or the public. Copyright holders are often corporate media giants like Disney.

If the negotiators of the TPP were honest, they would admit that this is not a “partnership,” it’s an imposition of U.S. interests on trading partners. One of the biggest U.S. exports is American culture, what they like to call the entertainment industry. Another is health care. These are the money-makers that the U.S. wants to protect.

One more free-trade free-rider is the infamous “investor-state dispute settlement.” It places corporations on the same level of states, allowing foreign firms to sue countries, not only for breach of contract but for public policies such as environmental protection and access to drinking water.

As I explained in my column of October 15, Canada is already on the receiving end of the most dispute claims under NAFTA. We can expect more under the TPP as corporations try to bring our public policies in line with their private interests.

Yet another provision would allow car manufacturers to hide operating codes that allow them to cheat on emission regulations the way Volkswagen did under the guise of intellectual property. These codes should be examined by regulators the way that slot machines are.

Just how bad the TPP is for Canada has yet to be determined. The 6,000 pages of the secretly negotiated agreement have only been recently released. One thing that should make us suspicious is when supporters call it a free trade agreement.

Even without the details, one thing about the TPP remains constant

We don’t know much about the Trans-Pacific Partnership that the Conservatives recently signed except that it will replace North American Free Trade Agreement.

As a trading nation, Canadians generally favour trade agreements. Last year, an Angus Reid poll showed 68 per cent in favour of a trade deal with Europe.

We favour of trade deals while being woefully ignorant of the details; sometimes in the dark about their very existence. In the case of the TPP, Environics showed that 75 per cent didn’t even know what the TPP was; let alone that the Conservatives were negotiating it on our behalf.

This blind faith in the concept of trade agreements often leads us into a blissful unawareness. One principle about the TPP will likely remain constant: private tribunals will replace our courts when it comes to disagreements.

That’s what the Investor–State Dispute Settlement provision does under NAFTA. I would hazard a guess that few Canadians are even aware of the ISDS provision under Chapter 11.

ISDS allows foreign investors to settle disputes with governments through binding private arbitration instead of Canadian courts. Yes, governments can be dictated to by arbitrators. Why would governments give up such a mandate of their power? The Monitor magazine explains:

“The dubious rationale for granting this extraordinarily sweeping right to foreign investors was that the Mexican courts of the day were prone to corruption and political interference.”

If that were a valid justification, Mexico should be on the receiving end of corporate claims. In fact, Mexico has only had a few while Canada has had the most.

“Canada has faced 36 ISDS claims, more than any other developed country in the world, and since 2005 we’ve been hit by 70% of all NAFTA investor lawsuits.”

One of those claims against Canada came in March this year after ExxonMobil’s Canadian subsidiary won $17.3 million in damages after challenging requirements that they dedicate a tiny percentage (0.33%) of their revenues to research and development, education and training in Newfoundland and Labrador.

“But what is especially galling about this case is that Exxon, along with every other company active in the offshore oil sector, had explicitly agreed to abide by provincial R&D commitments.”

In 2010, the federal government had to pay AbitibiBowater $130-million to settle an ISDS complaint after former premier Danny Williams’ expropriation of the company’s mill. Williams said that the owners had broken the lease agreement by walking away from mill, leaving 800 unemployed.

The Harper government tried to weasel out of paying the settlement claiming that the province had caused the problem. More likely, it was an attempt to punish William’s for his lack of Tory support. The last time I looked, Newfoundland is still part of Canada and since NAFTA applies to Canada, it applies to Newfoundland. If the offending province were Alberta, Harper probably would not have complained.

Most of the talk around the TPP has been whether car parts will hurt and beef parts will prosper. Don’t hold your breath waiting to hear how Canada will be dictated to by corporations through private tribunals held in secret.