Trans Pacific Partnership: A Deal Made in Secret by the Devil?

by the Curmudgeon with Victor Sperandeo



The Trans-Pacific Partnership (TPP) is a proposed regional regulatory and investment treaty which is being negotiated among the U.S. and 11 Pacific Rim countries1 which encompass 40% of the global economy.   While work began nine years ago (2005), contentious issues such as agriculture, intellectual property, and services and investments have caused negotiations to continue to the present day. 

Note 1.  11 Pacific Rim countries are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The NY Times says TPP is a major component of President Obama’s Pivot to Asia.  It's viewed as a way to bind Pacific trading partners closer to the United States while raising a challenge to Asia’s rising power, China, which has pointedly been excluded from the deal.  TPP will address a number of festering issues that have become stumbling blocks as global trade has soared, including e-commerce, financial services and cross-border Internet communications.   There are also traditional trade issues involved. The United States is eager to establish formal trade agreements with five of the nations involved — Japan, Malaysia, Brunei, New Zealand and Vietnam — and strengthen NAFTA, its current trade agreement with Canada and Mexico.

The issues TPP addresses include:

·       Tariffs and Quotas

·       Environmental, Labor and Intellectual Property Standards

·       Data Flows

·       Services

·       State-Owned Businesses

Currently, TPP faces a contentious battle for approval by Congress and would likely fail unless Congress first decides to give President Barack Obama fast-track authority that would ease passage of the deal.  Yet there's tremendous opposition in giving Obama fast track authority in Congress, trade unions, environmentalists and Latino organizations which argue that past trade pacts failed to deliver on their promise and that the latest effort would harm American workers.

The A.F.L.-C.I.O. and virtually every major union, convinced that trade promotion authority will ease passage of trade deals that will cost jobs and depress already stagnant wages, have vowed a fierce fight. The A.F.L.-C.I.O. announced a “massive” six-figure advertising campaign to pressure 16 selected senators and 36 House members to oppose fast-track authority.

“We can’t afford to pass fast track, which would lead to more lost jobs and lower wages,” said Richard Trumka, president of the A.F.L.-C.I.O. “We want Congress to keep its leverage over trade negotiations ― not rubber-stamp a deal that delivers profits for global corporations, but not good jobs for working people.”

Secret Trade Deal Read by Only a Few:

TPP has been called a "secretive" trade deal because the specific text and terms of the pact have not been released to the public, and are being negotiated in secret.  Members of Congress can see the text, but only in a secure, soundproof room.  Before entering that room, lawmakers must surrender their cellphones and other mobile devices. Any notes taken inside the room must be left in the room. They also cannot tell the public what they've seen.

"I bet that none of my colleagues have read the entire document. I would bet that most of them haven't even spent a couple hours looking at it," said Democratic Senator Sherrod Brown of Ohio, who has acknowledged he has yet to read every single page of the trade agreement.

"There is more access in most cases to CIA and Defense Department and Iran sanctions documents, better access to congressional staff and others than for this trade agreement,"  Brown told NPR. 

The White House is making it considerably harder for lawmakers to discuss or analyze a trade agreement that is key to how they will vote on the fast-track bill.  "That's why people are so troubled about this agreement. It really begs the question ― the secrecy begs the question ― what's in this agreement that we don't really understand or know about?" Brown said.

The White House points out the final TPP language will be made public 60 days before the president signs the agreement. But by then, negotiations will be over and changes to the language can't be made. And the Senate is set to vote very soon on a bill that forces lawmakers to give up their rights to amend the agreement.

“TPP negotiations are still ongoing and there is no final agreement," said a U.S. government spokesman in a statement. "However, months before an agreement is even signed by the President, and many months before it is ever voted on, the entire agreement -- including this chapter -- will be public.”

The NY Times notes that previous trade agreements were shared more openly.  Despite the secrecy efforts, portions of the document have been leaking out, through WikiLeaks and other organizations.

Public Citizen Opinion on TPP:

The Public Citizen  advocates for a healthier and more equitable world by making government work for the people and by defending democracy from corporate greed. Here's what they say about the TPP:

The TPP would expand the North American Free Trade Agreement (NAFTA) "trade" pact model that has spurred massive U.S. trade deficits and job loss, downward pressure on wages, unprecedented levels of inequality and new floods of agricultural imports. The TPP not only replicates, but expands NAFTA's special protections for firms that offshore U.S. jobs. And U.S. TPP negotiators literally used the 2011 Korea FTA – under which exports have fallen and trade deficits have surged – as the template for the TPP.

This secretive deal could: offshore American jobs and increase income inequality, jack up the cost of medicines, sneak in SOPA-like threats to Internet freedom, and empower corporations to attack our environmental and health safeguards, expose the U.S. to unsafe food and products, roll back Wall Street reforms, and ban "Buy American" policies needed to create green jobs.

Although it is called a "free trade" agreement (?), the TPP is not mainly about trade. Of TPP's 29 draft chapters, only five deal with traditional trade issues. One chapter would provide incentives to offshore jobs to low-wage countries. Many would impose limits on government policies that we rely on in our daily lives for safe food, a clean environment, and more. Our domestic federal, state and local policies would be required to comply with TPP rules.

Victor's Cogent Comments on the TPP:

The TPP "Treaty" begs the question of why anyone calls it a "Partnership?" The TPP is of far greater importance to the economy and the markets in the intermediate and long term than is commonly understood. It is also a huge threat to civil liberties and defies the U.S. Constitution.                                                                                                                                     

The U.S. Constitution Article II Section 2 Clause 2 (AKA the "treaty clause") empowers the President to "propose treaties," but it's only with "advice and consent" [2] of the Senate by a super majority or at least 2/3 (67 of 100 members of the Senate) that has to approve and pass the TPP or any other “treaty.”

Note 2:  Under the Constitution, presidential nominations for executive and judicial posts take effect only when confirmed by the Senate, and international treaties become effective only when the Senate approves them by a two-thirds vote.

The current trade deal has been completely reversed from what the Constitution dictates. President Obama has so far been able to outfox the power of Congress by making this a "Fast Track" authority which he promulgates without "advice and consent.”  If Congress permits it. That would be changing the Constitution by the dictate of our President!

TPP “fast track” would give the President the right to propose initiatives with the Senate to vote it's disapproval by a 2/3's vote, or it’s approved. There is no "advice" sought.... So instead of 2/3's vote to vote FOR the treaty to pass, “Fast Track” would require a 2/3's “vote it down” or it passes. To make it clear if 50 vote yes and 50 vote no- it PASSES!  Do you not find that incredible?  I do!

Rick Manning, President of Americans for Limited Government, states in a May 7th editorial: How Trans-Pacific Partnership Fundamentally Transforms US:

In essence, TPP would give this and future presidents unprecedented authority to add countries to it and change the terms Congress ratified, after the fact, effectively ending Congress’ role in the treaty-making process forever.  Should TPP be ratified, no nation would choose to subject itself to the congressional ratification process through a bilateral deal when they could garner the economic benefits of a trade deal with the stroke of a president’s pen.”

As the Curmudgeon notes above, the TPP treaty was and is being negotiated IN SECRET with only major multi-national corporations at the table. This is the new method of making laws today... completely un-constitutional.  Whatever happened to transparency and full disclosure?

Members of Congress will get an 800-1000 page treaty, and have to read it, then vote it in or out without any amendments?  The proposed law is known to a select few people.  The public and the press have little knowledge of what's in it and no say whatsoever about what is good for the people.

What is known is that TPP is highly partial and favorable to international corporations and has almost nothing to do with "free trade." Instead, TPP is all about building a world that looks like the European Union - or a "New World Order."  In my humble opinion, that also includes climate change, Internet controls (e.g. FCC regulation of Internet as a Title 2 public utility), and super liberal immigration laws, copyright laws that benefit large corporations and far more "statist" policies and controls.

TPP approval would be a signing away of rights that encompass virtually all of an individual's freedoms, subject to the power elites dictates. For example, here is an important blurb of the "free trade" proposed laws and its consequences by Grant Gross IDG News Service: 

"Lawmakers should be wary of awakening the fury of the many Internet users opposed to TPP, said Evan Greer, campaign manager for digital rights group Fight for the Future. Lawmakers could face a backlash similar to the Internet activism opposed to the Stop Online Piracy Act (SOPA) in 2011 and 2012, he said via email.

Copyright industries are using fast-track trade legislation and the TPP to “quietly push for extreme policies that the public would never accept if they were proposed openly,” Greer said. “The future of the Internet is too important to be decided in secret or through backroom deals and Senate horse-trading.”

Tens of thousands of Internet users, using tools from Fight for the Future and other groups, have contacted their lawmakers in opposition to the fast-track legislation and TPP, he said. “This should be clear: Any member of Congress who votes for fast track/trade promotion authority is voting against the basic rights of every Internet user in the world,” he added.”They should take a look at recent history from SOPA to net neutrality: Hell hath no fury like the Internet scorned.”

The above article excerpt is a sample of the TPP "Free Trade" fiasco.  It's an incredible sham put forth by many in both parties.  Why?  Because of promised huge contributions of multi-national corporations, which is no different than the 77,000 pages of tax code which I submit is legal bribery from corporations to lawmakers for special favors in exchange for campaign contributions.

Of course, you will never read this in the main stream media (print or on-line), which are not legitimate news organizations, but pure propaganda machines.  They are propaganda brain washers, because the main owners of the five corporations who control 90% of the TV broadcasting make their money from marketing ads. They must demand Keynesian answers and initiatives so as to not allow recessions which would sharply decrease ad revenue and crater their stocks. They are liberals because it pays, not because liberalism might help poor or middle class people.  It's all about the money in their pockets.

To reiterate, TPP is NOT about jobs and lower prices due to more production of goods and services (which Adam Smith and David Ricardo observed and wrote about in 1776 and 1821, respectively).  It’s about what Mussolini called "Corporatism” which in reality is Fascism. 

 I challenge anyone to provide solid  evidence, over the last 25 years, that ANY trade deal has lowered the" trade deficit" or increased middle class jobs and pay. Contact me via email to the Curmudgeon if you accept this challenge.

This is why the unions and Senator Elizabeth Warren hate TPP.  As Ms. Warren put it:  "We can't keep pushing through trade deals that benefit multi-international companies at the expense of workers." 

From "Trade Wars in Congress, by THE EDITORIAL BOARD of the NY Times on May 12th (with my parenthetical comments):

"Done right, the Pacific trade deal, which is nearing completion, could help reduce environmental destruction,(i.e. higher taxes), and improve the lives of workers in countries like Brunei, Peru, Chile and Vietnam, which are part of the negotiations.  (Why no mention of USA workers?)  That agreement would also strengthen American alliances in Asia, because it includes Malaysia and Singapore. Administration officials say other countries like South Korea and Thailand might want to join the pact in the future."  (Uniquely this is a living treaty where countries can come in later).

“Some provisions that are expected to be part of the deal could raise problems. For example, some public interest groups fear that the deal could force developing countries to adopt strict patent regulations that could make many medicines unaffordable to poor people.  Other critics like Senator Elizabeth Warren, Democrat of Massachusetts, are worried that provisions in the trade agreement that prohibit governments from discriminating against foreign companies might be used by international banks to challenge American financial regulations.”

Another History Lesson (and conjecture):

On March 23, 1775 Patrick Henry made a speech in which he said: “Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!”                                                                                                                     

The TPP trade deal, in Patrick Henry's mind, would be treason by Congress and the President.  Mr. Henry would have raised the militia (according to the Constitution) to attack Washington DC, in order to imprison and/or kill the “representatives of the people” who voted for such a deal. 

More apropos were his words which are directly related to this SECRET DEAL:                                        

The liberties of a people never were, nor ever will be, secure when the transactions of their rulers may be concealed from them.  The most iniquitous plots may be carried on against their liberty and happiness. 

Patrick Henry, please call your militia now!

Good luck and till next time....

The Curmudgeon


Follow the Curmudgeon on Twitter @ajwdct247

Curmudgeon is a retired investment professional.  He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996.  He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies and government policies.  Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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