Pacific Rim Trade Agreement
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July 3, 2012 1:04 p.m.
Guests: Carol Guthrie, Asst. U.S. Trade Representative
Celeste Drake, Trade & Globalization Policy expert, AFL-CIO
Related Story: Free Trade Negotiations Sneak Up On San Diego
FUDGE: You're listening to Midday Edition. I'm Tom Fudge filling in for Maureen Cavanaugh. Free-trade agreements can be very controversial, but you probably don't want know the talks about a major trade agreement between the U.S. and the Pacific rim are going on right now in San Diego. The ten days of talks at the Bayfront Hilton, make up the 13th in a series of meetings about the transpacific partnership free-trade agreement. Signees include the U.S., New Zealand, Australia, to name a few. Businesses say free trade provides new markets and helps out our economy. Labor groups say they help to shift jobs oversees and dilute environmental protections. Two guests see the trade pac in different ways. Joining me is Carol Guthrie, U.S. trade representative for media and communications. Thank you very much.
GUTHRIE: Glade to be here.
FUDGE: Also joining me is Celeste Drake, trade and globalization policy expert for the AFL-CIO.
DRAKE: Thanks. Glad to be here.
FUDGE: Carol, it's almost safe to say nobody in San Diego ever heard of the transpacific trade agreement until this week. So what are the goals of this agreement?
GUTHRIE: Well, the Obama administration has as an overriding goal to put Americans back to work. We know there are a lot of folks in this country who need jobs, and we believe that trade done right is responsibly is a way that we can support more jobs in the United States. And so our goal is to gain more access, and new access, to the really dynamic markets of the Asian Pacific for U.S. exporters. And the ways we want to do that are through not only lowering tariff, but by breaking down some of the behind the border barrier, things that are bound in regulation and other methods that countries may use to keep U.S. exports from coming in. So we're working with our trading partners to make exports from the United States easier to get into these other countries, because if we make it here and sell it there, more people get to work in the United States.
FUDGE: Where did the impetus for this partnership come from? U.S. government? Corporations? Foreign nations? Who started the ball rolling?
GUTHRIE: Well, to go back into the history a little bit, there was a small group of Asian Pacific nations who had started working on a trade agreement known as the Pacific 4 or the P-4, and the United States and looking at the best opportunities to expand trade in a way that would help us to support jobs at home saw the potential for working more closely with our trading partners in the Asian Pacific to open those markets and get some of that access. Together, the Asian Pacific nations represent about 40% of global trade, it's one of the most growing dynamic markets with a growing number of consumers who are ready to buy American goods and services. So this is an opportunity that the Obama administration felt that we should move forward with, but in a new way, where we talked to stakeholders and create something groundbreaking that does trade in a new way.
FUDGE: And we're talking about $40 billion in trade every year?
GUTHRIE: Much, much much more than that.
FUDGE: Much more than that. Well, this is a diverse group of nations. The United States involved in talks, Vietnam involved. There are some nations that are conspicuous by their absence, China, Japan, Korea. Why are they absent?
GUTHRIE: Well, there are a number of reasons with regard to each of the countries that you mentioned. All of the Asian Pacific nations are welcome to express their interest and seek to join the transpacific partnership. We've said it's not something you're invited to. It's something you aspire to. Japan has expressed its interest. And we're currently in consultations with Japan to see whether the United States believes Japan is ready to meet the high standards this we've all agreed to have in the TPP, and also whether they're ready to address some bilateral issues of concern. We have concern about ways in which Japan's market blocks or hippeders U.S. exports to Japan. And we want to make sure they are ready to come to the table and fix those issues for American exporters and workers.
FUDGE: Celeste drake, let's talk about what are some of your issues of concern. Has the AFL CIO been involved in these negotiations in any way?
DRAKE: We've been involved to the extent possible. The actual negotiating sessions are closed to all but the official negotiators from each country. But stake holders can come and participate on the side. So for instance, there's been a stake holder tabling session that's happened at the Dallas round, which was the most recent round in May. And in this round. And there's a briefing where the chief negotiators come and answer questions which are posed by the stakeholders, business groups, labor group, environmental groups, and so forth. But the most important work is meeting individually with those negotiators and having an opportunity to make your case about why a particular provision has or has not worked out particularly well.
FUDGE: Well, what are your big concerns?
DRAKE: Our concerns are many. I would share the opening statement that Carol gave in terms of trade done right can be good for the economy. It's been our experience that past U.S. trades have not been trade done right. America has lost 700,000 jobs due to NAFTA, and lost 2.8 million jobs due to trade with China. So we think it involves careful consideration of looking at the rules to create jobs here. The rules of origin, how much of a product has to be made within the trade agreement. Countries, it has to do with how subsidies are treated so they don't outcompete and take jobs from the U.S. but it also has to do with consumer protections, environmental protections, labor protections that we care about just as much in the U.S. as we do in our trading partners because it's really a global movement.
FUDGE: One of your concerns is that this could allow national corporations to challenge U.S. laws.
DRAKE: Absolutely. It's something called investor state dispute settlement, and in each of our trade agreements since NAFTA, there's a provision -- one of the things these agreements do is they don't just lower tariffs. They create rules about regulation, services, and they provide information so the company can invest in the soil. And if the foreign investor feels its rights have been violated in some way, it can not bring a case through the domestic courts. It can skip and go to an international arbitration panel to say we didn't receive the profit we expected. This law say problem. And it's happened already in California. If anyone remembers we used to have a gasoline additive. It was very viscus, leaked out of storage tanks, it was toxic. California banned it. The Canadian company that made it sued the U.S. under NAFTA to say we've lost our profits because this toxin was banned.
FUDGE: Okay. And you mentioned NAFTA. Do you see this as another NAFTA?
DRAKE: Well, we're hoping that it becomes a good, progressive, job-creating positive agreement. What we don't want to see is sort of NAFTA 2, the revenge.
FUDGE: Well, let me get a comment from Carol, assistant U.S. trade representative. Celeste drake is a trade and globalization policy expert for AFL CIO. And Carol, how would you like to respond to some of the concerns that Celeste mentions?
GUTHRIE: It may take me a few minutes. Celeste covered a lot of ground. But I'm very pleased to say that one of the Obama administration's objectives for this trade agreement, and one that we've stated from the very beginning is that we want this to be a high-standard, 21st century trade agreement that tackles new problems not tackled in previous trade agreement and that tackles old problems in new ways. We understand that no need a trade agreement for the next hundred years or the next 20 years not a trade agreement of the past. With regard to the investor state provisions, we have looked with great care at the issue of whether the TPP investment texts could in any way impair our ability to regulate on the environment, on public safety laws, as well as in our financial services. And we are convinced that nothing in the proposal could impair the government's ability to pursue legitimate public interest regulation. And we include numerous safeguards in our TPP investment text to make sure that all legitimate government regulation is protected.
FUDGE: So you feel that our trading partners would not be able to circumvent U.S. law?
GUTHRIE: Trading partners rarely bring cases in the United States. And when they do, the United States wins. We have never lost a case. We've never paid a penny on an investor state case. However, the reverse is that when U.S. investors, who employ 22 million Americans in the United States, when you ask investors abroad in counter discriminator or inefficient or overall onerous practices in countries where they invest, they very frequently are able to win redress that makes it easier for them to do business in those places and keep employing Americans at home. This is really a process that we have looked at. We have heard folks' concerns. That's why we're glad to have the input of people like Celeste on the advisory committee and the president's trade advisory committee so we can talk about these concerns and be sure to look at them carefully and make sure we're forming the right policy.
FUDGE: Do free-trade agreements cause the United States to lose jobs by shipping them overseas?
DRAKE: They can. And several of them have. Again, I was talking about NAFTA where we've lost 700,000 jobs. China, with whom we do not have a free-trade agreement, is a member of the WTO. The job loss has been incredible. 1.9 million of those jobs we've lost are in manufacturing. And it doesn't have to be that way. We can compare ourselves to Germany, which has nearly double the union density rate as the United States , which has four higher wages than the manufacturing sector, which rode out the crisis that began in 2008 better than the U.S., and they have an export surplus with China. And it seems that our trade agreements and our domestic manufacturing policy are designed to sort of compete with China on their own ground which is low wage, low rights. And we don't have to do that.
FUDGE: Quickly, this is the 13th meeting happening in San Diego. When is this trade agreement going to be presented to Congress?
GUTHRIE: Well, last year in Honolulu, the leaders initiated negotiators to reach an agreement as soon as possible. And we're working toward that. Having said that, it'll be done when we get it right. We want to make super we deliver the kind of 21st century agreement we've promised.