The United States and 11 other Pacific Rim countries — including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam — are currently negotiating a significant trade deal called the Trans-Pacific Partnership (TPP). The reach of this trade pact will likely extend beyond the 12 countries, as negotiators intend to be able to add countries to the agreement down the road.
Seattle City Councilmembers do not get to vote on United States trade policy. But the City of Seattle and the State of Washington are two of the most economically trade-dependent cities and states, respectively, in the country. Seattle in particular is home to numerous internationally recognized companies, which heightens our interest as a City Council in this new trade deal.
Proponents of the TPP say the deal is needed to expand opportunities for American workers and businesses by lowering barriers to getting our products to Asian markets. And yet, Seattle is currently prospering quite well under the current trade policies in place; we’ve got some of the lowest unemployment rates in the country and have some of the most successful companies in the world headquartered in our region. So we must be certain that any changes to the way things are done now will actually result in the outcomes we want—improving conditions for our workers and protecting our natural environment.
While proponents also claim the TPP will be the most progressive trade deal in U.S. history, the deal has been negotiated completely behind closed doors, with only members of Congress able to receive briefings on its contents. Further, the White House is asking Congress for Trade Promotion Authority, commonly known as “Fast Track” authority, which would allow the TPP to be negotiated and finalized with no opportunity for Congress to amend it and strictly limiting the time and procedures under which it would be debated. It would restrict Congress to a simple yes or no vote on the deal with no opportunity to make amendments.
The only drafts available to the public are via WikiLeaks, and what we see in these leaked drafts of the TPP raise serious concerns about the ability of local governments like the City of Seattle to enact local labor and environmental standards in line with our own policies and standards. United States Senator Elizabeth Warren’s recent op-ed in the Washington Post highlights grave concerns over the “Investor-State Dispute Settlement” provisions included in the draft TPP.
The name may sound mild, but don’t be fooled. Agreeing to ISDS in this enormous new treaty would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty.
ISDS would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages.
Given Seattle’s role in advancing some of the highest labor and environmental standards of any city in the country, such as new minimum wage law, we could be a prime target for these ISDS suits. These ISDS provisions were included in prior trade deals such as NAFTA, and to date multinational corporations have launched over 550 challenges against 98 different countries, according to the United Nations Conference on Trade and Development 2014 report on ISDS.
If you don’t buy Senator Warren’s take, even libertarians at the Cato Institute are concerned about ISDS:
ISDS grants foreign investors the right to sue host governments in third-party arbitration tribunals for treatment that allegedly fails to meet certain standards, such as new laws, regulations, or policies that might have a discriminatory effect on foreign investors that reduces the value of their assets. Certainly, investors – and in this context we’re talking mostly about multinational corporations (MNCs) – should have recourse to justice when these situations arise. But under ISDS, U.S. investors abroad and foreign investors in the United States can collect damages from the treasuries of their host governments by virtue of the judgments of arbitration panels that are entirely outside of the legal structure of the respective countries. This all raises serious questions about democratic accountability, sovereignty, checks and balances, and the separation of power.
I do not think we can risk granting fast track authority to the President given what little we know about the TPP, especially since what little we know (e.g., ISDS) causes such concern. So tomorrow in the Planning, Land Use and Sustainability Committee, I am proposing a resolution co-sponsored by Councilmember Sawant that opposes fast track and raises serious concerns about the TPP as we understand it today. With all due respect to the White House, proclaiming something is progressive does not make it so. Transparency and democracy are key value for progressive politics, and should be for our progressive policies as well. Fast track goes against those principles.
The resolution we are proposing does three things:
- It says the Seattle City Council opposes “Fast Track” authority for the TPP and instead requests that the President and Congress carry out a fully transparent and inclusive legislative process for consideration of the TPP.
- It urges President Obama and U.S. Trade Representative Michael Froman to negotiate the Trans-Pacific Partnership to advance the interests of workers, to maintain the sovereignty of local governments, to safeguard our environment, to improve the quality of life in all countries that are signatory to the agreement, and to ensure the absolute sovereignty of U. S. courts and not agree to arbitration outside of the normal judicial process.
- It says that if these principles are not adequately addressed in the final Trans-Pacific Partnership Agreement, the Seattle City Council will urge our Congressional delegation to vote to reject this trade agreement.
I am pro-trade. And I believe the U.S. can negotiate truly progressive trade deals. But for that to be the case, it must be done transparently, and it must always strive to lift standards for workers and the environment here in the Pacific Northwest and across the globe, not subjugate those standards to the profits of multinational corporations.