WASHINGTON — Even the venue was a poke in the eye.
U.S. President Barack Obama could have chosen any of hundreds of corporate offices as the backdrop for his highest-profile speech on the Trans-Pacific Partnership, the massive 12-country trade deal opposed by his usual progressive allies.
He chose Nike’s.
In a Friday appearance at the Oregon headquarters of the shoe and apparel company long a target of trade critics, Obama made a detailed and occasionally disdainful case for his claim that some of his “dearest friends” are “just wrong” on trade—and that the TPP would be far better for workers than previous deals like the North American Free Trade Agreement.
“Past trade agreements, it’s true, didn’t always reflect our values or didn’t always do enough to protect American workers. But that’s why we’re designing a different kind of trade deal,” Obama said.
Obama alternately disparaged progressives and attempted to sway them. Addressing the complaints of Nike opponents who have complained for years about its reliance on poorly paid workers in Asia, he said the TPP would force countries like Vietnam to raise wages and labour standards.
But he brushed off concerns about outsourcing, saying companies solely interested in wages have already sent their jobs overseas. The TPP, he said, would “open the doors to the higher-skill, higher-wage jobs of the future.”
Nike strengthened his argument with a gift of a pre-speech announcement. The company said it would create as many as 10,000 new U.S. jobs in manufacturing and engineering if the TPP were approved.
“Before NAFTA, major U.S. firms also promised to create jobs,” the American Federation of Labor and Congress of Industrial Organizations, a leading TPP opponent, responded on Twitter. “Instead they sent thousands offshore.”
The massive 12-country deal will likely include Canada. It has received far less attention north of the border than it has south, partly because of an escalating war of words between Obama and a liberal Democrat with a national following, Massachusetts Senator Elizabeth Warren.
Warren believes the TPP would benefit multinational companies over average Americans and undermine U.S. rules on labour and the environment. And she has derided the secrecy surrounding the deal, which will not be revealed to the public until it is signed.
Obama didn’t name Warren on Friday. But he unmistakably accused her of dishonesty.
“Critics warn that parts of this deal would undermine American regulation – food safety, worker safety, even financial regulations. They’re making this stuff up. This is just not true,” he said.
Questions and answers on the TPP
What is it?
The Trans-Pacific Partnership is a proposed free trade agreement between 12 countries on the Pacific Ocean: Canada, the U.S., Australia, Japan, Malaysia, Mexico, Vietnam, Singapore, Peru, New Zealand, Chile and Brunei.
What makes it such a big deal?
The countries involved in the TPP make up 40 per cent of the world’s economic production. The agreement would affect dozens of industries and dozens of everyday products and services, from clothing to medicine to food to cars to books to the Internet to banking.
Why else is it important?
The purpose of traditional trade agreements was to eliminate tariffs — taxes slapped on imported products. While that is a primary goal here, the TPP covers a wide range of non-tariff concerns, including intellectual property, food safety, and labour standards. There are also important consequences for world politics. The TPP is part of an American e to counter the growing influence of China.
What don’t we know?
Though other free trade agreements give us an idea, it’s impossible to know exactly what’s in the TPP. The negotiations have been conducted in secret.
Drafts have been leaked of TPP sections on three significant topics: intellectual property, the environment, and “investor-state dispute settlement” — common but controversial rules that give companies the right to go to arbitration panels, outside the regular courts, to challenge laws they believe violate their rights under the deal.
How big would the economic impact be?
The most widely cited TPP study, by economists at the Peterson Institute for International Economics, predicts a 0.4 per cent increase in U.S. economic output and 0.5 per cent increase in Canadian economic output, by 2025, if TPP is approved. That’s a $10 billion improvement in Canada — far from nothing, but not immediately country-changing.
Where do things stand?
The countries involved are hinting that they are close to a deal, but we don’t know exactly how close. (The top U.S. trade official has been saying since 2013 that the talks had reached the “end game.”) The parties are scheduled to talk in Guam for two weeks beginning on Thursday, then for three days in the Philippines.
What are the sticking points?
The U.S. Congress hasn’t yet given Obama “fast-track” authority — the power to negotiate a deal without having Congress change it. Other countries, including Canada, say they can’t agree to concessions if they know Congress could fiddle.
The U.S. and Japan, the two largest economies involved, haven’t resolved their clash over two delicate policies: U.S. tariffs on auto parts and Japan’s heavy fortifications around its cherished rice market. And the U.S. also has an unresolved beef with Canada over the “supply management” system that protects dairy and poultry farmers.
The Canada Problem
“All eyes right now are on Canada,” chief U.S. agricultural negotiator Darci Vetter said in January.
The Obama administration has suggested repeatedly that Canada could be kicked out of the Trans-Pacific Partnership if it refuses to abandon the “supply management” system that protects dairy and poultry farmers from competition. And last year, 140 members urged Obama to “pursue the TPP negotiations without any country, including Japan, Canada or others, that proves unwilling to open its market.”
Prime Minister Stephen Harper has shown no sign of budging.
Supply management shields farmers through a web of production quotas, hefty import tariffs and prices set by industry boards rather than the free market. The system benefits only about 15,000 farmers, and costs consumers millions in higher prices, but the issue is widely viewed as politically delicate.
“We will continue to promote Canadian trade interests across all sectors of our economy, including those subject to supply management,” Max Moncaster, spokesman for International Trade Minister Ed Fast, said in an email.
Trade expert Laura Dawson said she doesn’t take the U.S. eviction threats seriously. Other countries in the TPP, she said, will be allowed to keep protections on their own sensitive agricultural products.
“From a trade perspective, it’s not a good idea; from an economic efficiency perspective, Canada should be giving up supply management. But I don’t think, and I could be proved wrong, that TPP is going to force Canada to give up supply management,” said Dawson, president of the firm Dawson Strategic and incoming director of the Canada Institute at the Woodrow Wilson Center.
The arguments on TPP
John Manley, president and CEO of the Canadian Council of Chief Executives, and leaders of other business groups: “The Trans-Pacific Partnership negotiations represent an historic opportunity to provide Canadian entrepreneurs and exporters of goods and services with access to almost 800 million new customers.”
Thomas Donohue, president and CEO of the U.S. Chamber of Commerce: “TPP gives the United States a strong hand in writing the rules for trade for this important region — it makes us an active player, not a bystander stuck on the outside looking in. TPP would affirm and deepen America’s ties to Asia at a time when there is a perception that we are pulling back.”
Alan Greenspan, former chairman of the Federal Reserve, and other prominent economists: “Expanded trade through these agreements will contribute to higher incomes and stronger productivity growth over time in both the United States and other countries. U.S. businesses will enjoy improved access to overseas markets, while the greater variety of choices and lower prices trade brings will allow household budgets to go further to the benefit of American families.”
Republican Rep. Paul Ryan: “China is negotiating trade deals all over the world, and they’re trying to rig the rules in their favour. So it all comes down to this question: is China going to write the rules of the global economy, or are we?”
Maude Barlow, chairperson of the Council of Canadians: “Once again the Harper government is forcing Canada into a major trade negotiation that will only benefit the 1 per cent. Like the Canada-EU deal, the Trans-Pacific Partnership could force Canada to change its drug policies, its copyright policies, its environmental and public health rules — all without going through the normal parliamentary process. “
Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers: “We’ve seen it over and over, first with NAFTA, then with the Korea-U.S. Free Trade Agreement (FTA), then the Colombia FTA and now with the TPP. These agreements have been a death sentence for hundreds of thousands of American workers in industries that range from autos to agriculture. We simply cannot afford to keep repeating the mistakes of the past.”
Richard Trumka, president of the American Federation of Labor and Congress of Industrial Organizations, to Vox: “Currency manipulation . . . has or will cost us between 2.3 million and 5.8 million jobs. . . . And yet there’s nothing in the agreement to stop it. So all of the benefits they claim we could get from TPP, even if you assume every one of the benefits is right, could be wiped out the next day by a country manipulating its currency, to negate all this.”
Judit Rius Sanjuan, manager of the Doctors Without Borders U.S. Access Campaign: “If passed in its current form, you can say goodbye to patent terms that expire at 20 years, and hello to even longer monopolies and sky-high drug prices. Governments of every TPP country: if you ever try to challenge a patent or control drug prices, get ready to be sued for hundreds of millions by pharmaceutical companies.”