If you thought President Obama’s expressions of sympathy for the Occupy Wall Street movement meant he was suddenly going to stand up for “the 99 percent” and their planet, think again. Obama has just submitted to Congress the Chamber of Commerce-backed Colombia, Panama, and Korea Free Trade Agreements, which are opposed by pretty much every constituency involved in the OWS movement, from environmentalists to labor unions and human rights activits. It’s a rare trifecta of hippie punching. And now, thanks to maneuvering by Obama and his business-friendly Chief of Staff William Daley and U.S. Trade Representative Ron Kirk, they’re on an accelerated schedule in Congress, and will be voted on Wednesday, according to a report in The Hill.
So what’s in these trade agreements that so arouses the ire of progressives?
First, more bailouts! If you like corporate bailouts, you’ll love Obama’s FTA’s. They represent the globalization of disaster capitalism. Now, instead of just being on the hook to guarantee Wall Street firms if they make bad investments, the U.S. government will be responsible for bailing out foreign companies too if we decide to improve environmental or labor protections in ways that cost them money.
Here’s how: “Investor protection provisions” in the agreements actually give foreign companies the right to challenge U.S. environmental and labor laws if they deem them to be somehow costing them money. The United States then has the delightful option of changing its law or paying millions or billions in compensation to foreign companies … just for obeying our laws like American companies do.
Previous free trade agreements have included similar provisions, and governments have already shelled out $350 million, with billions more pending in cases affecting the United States. Critics, such as Public Citizen’s Todd Tucker, believe that the investor provisions in these free trade deals are even worse, and the bailouts for foreign companies could reach the billions. In addition to the monetary cost, these provisions have a chilling effect on legislation: before changing our laws, we’ll now not only have to assess the effect not only on our own economy and environment, but also the cost to overseas operations of foreign companies as well.
We’ve had experience with this type of provision in previous trade deals, and it’s not pretty: just this past month, the World Trade Organization issued a ruling that says notorious Mexican fishing operations must be given “dolphin-safe” labels on their tuna fish — even though these operations routinely kill dolphins (Mexico’s fleet actually seeks out dolphins to cast their nets knowing that they frequently swim near tuna). Just so it’s clear, the United States isn’t banning import of dolphin-dangerous tuna — we just insist that tuna fish labeled “dolphin-safe” doesn’t actually involve killing dolphins.
Of cours, adorable marine mammals won’t be the only victims. Job-hungry Americans will bear the brunt of these deals as well. The Korea FTA alone will add a net $13.9 billion to our annual trade deficit with South Korea and cost 159,000 jobs, according to a study by the Economic Policy Institute. That’s a giant anvil of unemployment around the neck of the economy: when we do start to dig out of the recession, it will take that much more growth just to get back to where we are today.
The Panama deal rounds out the greed train with its own investor provisions. The country is one of the most notorious offshore tax havens. Under the agreement, investors will be able to challenge U.S. efforts to crack down on this type of shenanigans — a huge sop to the very Wall Street financial institutions that are the direct target of the Occupy movement.
As bad as the trade deals are, they could have at least represented a strategic opportunity to pass the President’s jobs bill, which is supported by many of the same groups that bitterly oppose the free trade agreements. Obama could cut a deal with Republicans: he only submits the trade agreements on condition that Republicans pass the jobs package, thus compensating for at least some of the employment losses expected to occur under the trade deals.
Of course, that’s not going to happen. Obama’s not exactly the guy you want walking into a car dealership with you. As I wrote in a tragic-accurate 2007 article about his failure to bargain as a senator on the Peru trade agreement that forecast his inability to haggle his way out of a paper bag of debt ceiling, Obama is “the world’s worst negotiator.”
Obama also seems to have a highly evolved capacity to divide his own party in two: while a majority are expected to oppose the deals, the pro-trade New Democrat caucus is expected to back it, giving Republicans and the White House the votes they need to force the agreements through.
Let’s be clear what this is: President Obama’s substantive response to the Occupy Wall Street protests is to push Wall Street’s free trade agreements. Of course, he’s adopted anti-greed rhetoric (or at least anti-ATM fee rhetoric), but when it comes to what his administration pushes in the corridors of power, it’s the same old Wall Street agenda. Indeed, he may be trying to jam the trade agreements through Congress before the Occupy Wall Street movement grows to a size at which politicians get chary of defying their calls for economic and environmental justice.
This is a real test for Occupy Wall Street, the first direct challenge from the White House to a broad swathe of their constituencies. Whether or not they meet the challenge will send a signal whether these protests are really just a giant, exciting outlet for pent up rage, or a movement that understands power and can transform our country.
