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The TPP: A huge boulder welded to the US elections.

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The TPP: A huge boulder welded to the US elections.

Author: Alejandro Villamar, 18-3-16

Translated by Anoosha Boralessa (March 2016); not reviewed by or any other organization or person.

The US presidential electoral campaign is the most important political process of the year. It takes place amid a crisis which is clearly economic in nature but which has also been transformed into a crisis that is all too clearly about the traditional political party system.

Both Donald Trump, an ultra-conservative, and Bernie Sanders, a democratic socialist, are candidates that, with their rare character and non-conventional speech, together with successful campaigns displacing the other candidates, highlight the crisis of the classic, false, imaginary US voter, of bi- partisanship and a deeply dissatisfied majority.

Is it possible that the TPP escapes this political priority? Or rather, is the TPP, like many other draft FTAs or global rules, subordinated to economic reality, perception and the dynamism of the campaign and strategy of the political, electoral system and its contenders?

Till now, not one of the candidates considers coming out in favour of the TPP a good strategy to win approval and much less to gather future votes.

From June 2015 when the famous fast track was approved by a margin of only 10 votes and earlier surveys indicated a clear opposition of 68% of the general public to giving the green light to the TPP, we perceived that the TPP was a controversial issue for the electoral strategies of both parties.

After returning from the summer recess, legislators and the administration itself face a hurricane of converging political pressures from representatives of powerful manufacturing sectors, trade unions and civil organizations. The draft is not good enough.

Traditional neoliberals and promoters of the FTAs were forced to tone down their campaign and their requests to revise those issues they consider unsatisfactory; for example, extending the time limit for monopolies on patents on drugs, greater control of the internet and limiting digital rights. But they have not stopped applying pressure on or lobbying legislators, governments and mass media.

Mid-Autumn 2015 yields two wins. On 5 October, the Obama administration, after numerous failed attempts, concludes the TPP negotiations in Atlanta. This is accompanied by a very optimistic media campaign. But at the same time, commenced the harvest of having negotiated in secret and at the side-lines of all event without corporations. Presidential candidates begin to make declarations fiercely opposed [to the TPP].

On 5 October, Senator Bernie Sanders rejects the Treaty and also declares that the TPP can be derailed. Two days later, on 7 October, Hillary Clinton, the favourite candidate of elites within the Democrats and the financial elite, declares that the final draft of the TPP is not the gold standard; therefore she would not support it. Political wit flies…

In the camp of the ultraconservative candidates of the Tea Party, pragmatic electoral positions are adopted. Donald Trump goes on the offensive by declaring that “Obama’s TTP is insane” . Before the Iowa caucus, a key state at this stage of the primaries, Ted Cruz adds that “I voted against fast track and I will vote against the TPP”; while Senator Marco Rubio retracts his prior support for the TPP, and rules out that the TPP is going to be a pillar of his presidency.

The campaigns and results of the primary elections have revealed surprising voting behaviour among different groups of voters. This is how an Australian observer summed it up:

“The primary elections have brought to the surface profound currents of dissatisfaction among vast sectors of the American society, in ordinary voters’ long-term perspective”.

Meanwhile a traditional, mainstream newspaper, The Wall Street Journal, pointed out:
“It has shone the spotlight on an emerging reality at the heart of the 2016 campaign: … Many voters in the presidential primaries feel that free trade has alienated jobs and perspectives… This is the year of the frustrated white man. Both Donald Trump and Bernie Sanders, have profited from this.”

I have here some hard background data on this reality that influences electoral conduct.

The Pew Centre’s national survey (November 2015) shows that across the entire political spectrum, there is a loss of confidence: today only 36% of Republicans have confidence; earlier in 2007, it was 61%; among the Democrats, before it was 57%, now 37%. As for the Gallup survey (January 2016), it recorded that 76% of Americans were dissatisfied with the current situation.,

In contrast to the ultraconservative stereotype that the majorities, notably the Republicans, reject interventionism, the survey registered that a slight majority of Republicans (57%), and 80% or more of Democrats think the State must intervene in the economy.

So it is not surprising that even the conventional survey-takers select the three main concerns of the US electorate as being: the government, the economy and unemployment. In February 2016, the survey recorded that 71% of the sample displayed dissatisfaction with the economy; in contrast, 23% expressed satisfaction. The biggest problem identified was the economy (17%), the government (16%) and unemployment (11%).

This expectation or non-conformity according to the party preference shows that only 24% of Democrats expect that the economy will improve in a year; in other words, 44% less than in January. As for Republicans, only 16% anticipate that the economic conditions will improve within a year, almost the same, as the expectation in January (19%).

The citizens’ concern about unemployment. The numbers on the quantity of unemployed in the US has been the site for battle and propaganda. This is not only because the quantity is linked to creating real jobs but also due to the quality and above all quantity of jobs lost in recent years. In February 2016, the Official Rate of Unemployment (calculated by the Department of Work) is 5.2% ( ). However, recognized experts in the academic world such as John Williams, consider that the rate of unemployment is almost four times higher.

On the other hand, detailed analysis by independent experts on the dynamics of salaries shows that “from 1979, the vast majority of US workers have witnessed their hourly salaries being frozen or reduced. This is despite a 149% growth in real GDP and a 64% net growth in productivity during this period (1979-2014)”. The exception that confirms the rule is the salary of the highest stratum (decile). In the period 2007 – 2014, the vast majority of wages decreased between 6.3% and 2.1%, according to the stratum (or decile), or else have been frozen.

A “detail” contrary to the myth of the happy US world: around 74 million workers (53.1% of people with a job, have low wages ($12.16/hr or less). Of these, 41.2 million (29.3%) receive support from government support to make ends meet, even though 19 million of these workers have a full-time job. .
The TPP boulder is present in all states. The media battle in favour of Free Trade continues, but a clear majority of Americans consider that free trade treaties have not benefitted them. Indeed, the negotiating history of the TPP hardly convinces them that it will bring advantages in terms of more work, higher wages and more sovereignty. Neither do the blinkered econometric studies of institutions with high neoliberal fundamentalist mandate that supports the TPP convince either the ordinary citizen, or independent academics and still less insiders have seen the meaning and interest of those that design this type of mega-treaty. Such is the case of the analyses of the Peterson Institute.

For example, last year the former Labour Secretaries during the administration of J. Carter and B. Clinton - F. Ray Marshall and Robert Reich, respectively - asked the representatives and senators not to approve either the fast track or the TPP, since this type of agreement is going to be harmful to US workers. Experts on the issue declared in a Joint Letter:

“As a result (of FTAs), millions of well-remunerated jobs in the manufacturing industry have disappeared. The trade agreements are much less about trade and much more about protecting investment and intellectual property abroad. Increasingly, national health, security, labour laws and the environment have been considered as "non-tariff barriers " to trade and profits.”

Today Robert Reich declares: free trade today enriches only “one percent”.

Amid full battle for the vote of Detroit, the heart of the automobile industry, Hillary Clinton, declared:
Where trade agreements are concerned, my position is this: I am not going to support any agreement unless it helps create good jobs and higher wages for US workers and protects our national security ... This is why I voted against the last big multi-national trade agreement, known as CAFTA. This is why I do not support the trade agreement, The Transpacific Partnership… But, later on, "Even if the United States never signed another trade agreement, globalization is not going to disappear." 03/03/2016.

For his part, Jared Bernstein, the former economic adviser to Vice President Joseph R. Biden Jr., declared to the New York Times newspaper:
"Economic populism in the presidential campaign has forced us to recognize that the expansion of trade is a double-edged sword".
This same J. Bernstein also wrote:
“Trade should not be confused with treaties … basic theory of trade connects prices to salaries and in the United States, globalization –-mediated by treaties – is fully accepted as contributing to both freezing salaries and increasing inequality…Thus the Era of Free Trade could be over. This is good.”.

The orthodox neoliberal tide begins to react. With declarations and such clear results in the primaries, by the second week of March, the media, alarmed, began to activate their defence of Free Trade. Two outstanding conservative journalists highlight in the Wall Street Journal that Reagan’s motto “Protectionism is Destruction” was a genuine message and could be torn up in the 2016 electoral race, An influential conservative columnist in the New York Times discredits Trump and all those opposed to the TPP. Business leaders complain in the Washington Post
“Promoters of trade feel rather powerless…, when the regular messengers are members of a political class that has fallen into disgrace among a large number of voters.”
Headlines of victimization appear: The TPP is the victim of electoral protectionism. By taking protectionist positions in the campaign, both parties are also constructing walls against Canada.

The political and economic elites of the countries negotiating the TPP are shaken, concerned by the inroad of “economic nationalism” in the US presidential battle.

Thus, Breitbart, the influential centre-ground conservative, together with other political strategists, warns of the danger of the triumph of economic nationalism for the US; it is encapsulated in the increasingly critical positions to free trade at both ends of the political spectrum (Trump and Sanders) in the presidential primaries. And of the growing concern of the economic elites in other countries about this situation.

Tremors in Tokyo. The growing threat that the TPP will fail in the US casts a shadow on the whole debate and on Japan’s ratification that is scheduled to begin after the budget is passed this March. "Thus in Japan there is opposition to the TPP," said a professor at Showa University, Tokyo. "If Japan approves it and it is not passed in the US, it would be an enormous blow for the Abe Administration”

In Mexico, the party was called off. Attentive to the US political situation, at the end of January the government decided to defer debate and ratification to November, thereby addressing and avoiding the risk that “the North American electoral process could leave Mexico ‘standing in the lurch’”.

And with “alpha” nerves, Guajardo, the Mexican “negotiator” confessed in a meeting with officials of the governing party that “it has failed to pass on to the entire population the benefits brought about by North American trade integration and has warned about the possibility of a candidate like Trump, who is against more trade integration and the TPP, coming to power. "It would be highly naïve to think that this current political (situation) is “business as usual” [something usual, N. del T.] At the end of the day, we have neglected our capacity to guarantee for the people of North America fundamentally the profits that trade integration has brought". .

According to a journalist for the Financial Times, the (Mexican) government plans to re-educate the leaders of the presidential campaign and the media to “counteract misinformation” on Mexico in the US. So states Francisco Guzmán, the chief-of-staff of the cabinet of the President Enrique Peña Nieto. (Sic!) 07/03/2016

As for Canada, it is taking its time to ratify the TPP. According to Kirsten Hillman, the Head TPP negotiator for Canada, "all countries around the table will be looking to see what happens in the US. Thus for them, this election is a priority." And a source close to the government indicated that "Canada has signed the treaty in its current form but will not proceed to ratify it until the situation becomes clearer in the Congress " 16-12-2015

In Chile things are not so sweet: the government, an enthusiastic promoter of the TPP, has been lobbied throughout the negotiations by legislators and social organizations. Legislators have conditioned their approval. In these circumstances, it has delayed the ratification of the Transpacific Agreement.

In Peru, there is urgency but no legislators: due to the known aim of the TPP negotiators and its legislative clientele to seek ratification, originally before the next presidential elections on 10 April, the situation has become complicated. The political weakness of the outgoing administration, and the public opposition to the TPP appear inhibiting factors. There do not appear to be the conditions for its discussion and eventual ratification in the electoral context, to the point that on 15 March 2016, the president of the Congress asked law-makers to be present, then he held sessions without a quorum. He declared that "…after the elections, Congress will discuss and will vote on whether to approve the treaty". Meanwhile, in a pithy tweet, the chief of the ministerial cabinet said that a parliamentary debate on the TPP is necessary.

In light of the clear opposition of candidates to the TPP, V. Guido, a US journalist, accurately declared: “The future of the TPP is as clear as mud”. And furthermore, it appears that in the House the first steps have been taken to affirm Senator Bernie Sanders: We can derail the TPP!

Thus the question is: are the elections a boulder welded to the neck of the TPP, or is the TPP a massive boulder that hangs from the neck of candidates and voters?

Mexico City 16/03/2016

Alejandro Villamar /RMALC
My thanks to Alberto Arroyo for his observations.

 source: ALAI