Friday, January 16, 2015

NAFTA, TPP, and Clinton Global Initiative's "Free Trade" Activism


by Gaius Publius

I want to tie three small pieces into one package. The first piece, Bill Clinton and NAFTA. The second piece, Barack Obama and TPP. The third piece, Hillary Clinton, the Clinton Global Initiative and its neoliberal "free trade" activism.

Despite "Predictions" NAFTA Exported Millions of American Jobs

Let's start with NAFTA, which everyone now knows was a jobs and trade-deficit disaster, and a billionaire pot of gold. It's likely though that you may not know the details, including the details of how it was sold. So a quick look back.

This is from a recent Huffington Post piece by Michele Swenson. She opens by looking at the 1990s and tying together President Bill Clinton, NAFTA-loving billionaire Pete Peterson (the one who hates Social Security), and the "prediction" — before it was passed — that NAFTA would create a million American jobs.

Pay attention also to the predicted shrinking trade deficit. That piece — the trade-deficit piece — is often lost. From the article (my emphasis throughout):
NAFTA promoters in the '90s promised increased U.S. exports and jobs, with shrinking trade deficits. Senior Fellows of the Peterson Institute for International Economics (PIIE), projected a NAFTA-induced trade surplus with Mexico, in turn, creating 170,000 new U.S. jobs by 1995. Within two years of NAFTA's passage, PIIE prognosticators readjusted their projection of new NAFTA-created jobs downward to "zero." The same group, created by billionaire corporate cheerleader Pete Peterson, is again forecasting increased exports and jobs if the Trans-Pacific Partnership (TPP) is passed.

Referencing 19 serious pre-NAFTA economic studies projecting zero net job loss if NAFTA were to pass, President Bill Clinton estimated the creation of 200,000 U.S. jobs within two years, and 1 million within five years, based on a projected export boom to Mexico. Twenty years after Clinton signed NAFTA into law, Global Trade Watch reports a 450 percent increase in the U.S. trade deficit, resulting in the export of almost one million jobs, and downward pressure on wages.

In fact, the average annual U.S. agricultural trade deficit with Mexico and Canada ballooned to almost three times the pre-NAFTA level, to $975 million within two decades of NAFTA's passage, eliminating an estimated one million net U.S. jobs by 2004, reports the Economic Policy Institute. As U.S. food processors moved to Mexico to take advantage of low wages, U.S. food imports soared. Public Citizen has tallied in a comprehensive report the promises by U.S. corporations to create specific numbers of jobs if NAFTA passed, and the consequent record of many of the same firms who relocated jobs to Mexico and Canada.
So let's fix three pieces in our brains:

▪ Before NAFTA passed, Bill Clinton, Pete Peterson and a raft of "pre-NAFTA economic studies" predicted one million new jobs, increased exports, and a lower trade deficit.

▪ After NAFTA passed, we lost one million jobs, increased imports, and increased the trade deficit by a factor of almost 5.

▪ Pro-NAFTA companies, who promised to create new jobs here, moved existing jobs abroad almost as soon as it was signed.

The third piece counts. Clinton claims to have been mistaken on free-trade policy (as opposed to being knowingly complicit with the damage). But I can't imagine either Peterson or any American CEO didn't have the obvious stapled in front of them — that when it's cheaper to export jobs, you export jobs and pocket the cash. That NAFTA was going to be a gift of cash from the day it was conceived.

In other words, NAFTA was designed by its creators to export jobs, and "predictions" to the contrary were just propaganda. CEO substitution rule: When they mention "more jobs," they mean "more profit."

Obama Wants to Give Us (and His Friends) the Next NAFTA

The next NAFTA is called "TPP" (the Trans-Pacific Partnership), there's a trans-Atlantic version in the wings (called, TPIP), and Barack Obama is playing the Clinton game with both. He and his corporate-controlled friends are pushing for them, starting with TPP, hoping that a Republican Congress can give him what a Democratic Congress could not.

Of course they're promising "more jobs" again, but the deal itself and the negotiations are in secret, and they'll only allow a vote under "Fast Track" rules — no amendments, just an up-or-down vote. All of this to promote deceptively named "free trade," meaning freedom for the global holders of wealth to do whatever they want with it anywhere in the world.

Here's Alan Grayson on what "free trade" has done to America (my paragraphing):
Trade is a simple concept. You sell me yours, and I’ll sell you mine. That’s not what’s happening. What’s happening is that day after day, month after month, and year after year, Americans are buying goods and services manufactured by foreigners, and those foreigners are not buying goods and services manufactured by Americans.

We are creating millions — no — tens of millions of jobs in other countries with our purchasing power, and we are losing tens of millions of jobs in our country, because foreigners are not buying our goods and services.

What are they doing? They’re buying our assets. So we lose twice. We lose the jobs, and we are driven deeper and deeper into national debt – and, ultimately, national bankruptcy. That is the end game.

This is not free trade; it’s fake trade. We have fake trade. That’s why before NAFTA was enacted and went into effect, this country never had a trade deficit as much as $140 billion a year, while every single year since then — for 20 years now — we have had a trade deficit of over $140 billion a year. We have had a[n average annual] trade deficit of half a trillion dollars now, for the past 14 years.
Notice the focus on the trade deficit. A trade deficit is national wealth exported. The picture at the top shows the history of our trade deficit. The small red dip in the middle is the Reagan–Bush I era, when we started exporting high-tech manufacturing to Japan, the beginning of the end of manufacturing in the U.S. The second, large red dip is ... Bill Clinton and NAFTA.

Again, a large trade deficit is the export of national wealth.

Grayson is exercised about this issue because TPP is coming back in the next Congress — Obama, Boehner, McConnell and all of their corporate and CEO-class friends want it badly. Why? We can certainly speculate. People like Boehner and McConnell want to pay off their prepurchased campaign "obligations." In addition, Obama likely wants his legacy library (scroll down) and a Bill Clinton future.

But notice Grayson's additional comment. Foreign recipients of all this cash are buying our assets with it:
Listen, we are in a deep, deep hole, thanks to fake trade. Thanks to fake trade, right now, 1/7th of all the assets in this country — every business, every plot of land, every car – 1/7th of all the assets in the country are now owned by foreigners. And ultimately, if we keep going the way we’re going, they all will be.

That’s why we have the most unequal distribution of income [among all industrial nations] in our country, [and] the most unequal distribution of wealth in our history. We’re in a deep, deep hole. And there’s a simple rule about holes: When you’re in a hole, stop digging. Stop digging!
For a family or a nation, putting your assets for sale is the opposite of earning money. It's literally the road to financial ruin.

The way to stop digging this hole is to stop TPP and Fast Track, the enabling bill that will make "trade" deals move through Congress like water down your throat — no amendments, limited debate, vote and be done. I've written about TPP (for a primer, start here, or click any of the links in Swenson's HuffPost piece), and will again. For now though, just remember — NAFTA killed American jobs and transferred our wealth abroad. TPP will do the same.

Hillary Clinton Is a TPP Candidate

Keep all this in mind when the phrase "lesser evil" turns up again in 2016. Just as Hillary Clinton is a carbon candidate (click to see why), she's a "free trade" TPP candidate as well. Yes, she once said ... sorta, under pressure of a political campaign ... that NAFTA could have been better ("has not lived up to its promises"). But buried near the end of Michele Swenson's June 2014 article is this:
"Free Trade" Advocates Convene at Clinton Global Initiative
The reference is to the main 2014 CGI conference. For starters, this information is a lot more current than a 2008 campaign-driven regret. For another, it shows the way the Clinton Foundation's CGI is used as an agent of neoliberal policies. Swenson's whole section on this is worth reading, but here are some of the better bits (some paragraphing mine):
Echoing promises of lowered trade barriers, improved labor conditions and environmental protections made by NAFTA advocates two decades earlier, Secretary of State Hillary Clinton in Hanoi, Viet Nam in 2012 promoted the Trans-Pacific Partnership, the most far-reaching trade agreement ever, encompassing 12 Pacific Rim countries. Secretary Clinton stated support for free expression online, and pronounced, "Democracy and prosperity go hand-in-hand," even as the backroom dealings of hundreds of corporate lobbyists have engaged in writing the TPP to challenge everything from Net Neutrality to democratic process and state sovereignty.

An amplification of NAFTA provisions, leaked segments of the secretive treaty reveal that wholesale powers granted by the TPP to corporations would permit them to sue governments for alleged lost profits in special international tribunals that bypass the U.S. court system, and to advocate overturn of regulatory laws intended to protect people and the environment.

As the Clinton Global Initiative convenes in Denver June 23-25 [2014], it brings together some of the same financial hard-hitters who cheerleaded NAFTA into being, and seek to do the same for the TPP. Among them, Robert Rubin, chief economic advisor to the Clinton White House, is listed as a participant in a panel discussion "Exploring what it will take for the U.S. to retain a position of global economic leadership in an increasingly complex world."
Note the last paragraph, and especially final sentence. Here's its original form, with the name of the panel discussion: 
Among them, Robert Rubin, chief economic advisor to the Clinton White House, is listed as a participant in a panel discussion "Exploring what it will take for the U.S. to retain a position of global economic leadership in an increasingly complex world."
Just as "more jobs" always means "more profit" for people like Rubin, a comment about "U.S." global "leadership" is really just about them and their ruling position in the world. Here's the translation:
Among them, Robert Rubin, chief economic advisor to the Clinton White House, is listed as a participant in a panel discussion "Exploring what it will take for people like me to retain a position of global wealth and power in an increasingly complex world."
Just make the substitution and the sentence is perfectly true.

The Clinton Global Initiative Is a Neoliberal Activist Organization

The do-gooder aspect of the Clinton family's CGI — yes, family; the official name of the umbrella organization is "Bill, Hillary and Chelsea Clinton Foundation" — obscures its definition of "good." The organization promotes these "good" things — more carbon emissions in the form of fracked methane ("America's natural gas"), privately-owned schools, privately-owned public infrastructure like bridges and roads — and it does so by hosting forums presented people like Robert Rubin, fracked methane CEOs, and other billionaire beneficiaries of these policies.

From the same Huff Post article:
Noble Energy, engaged in worldwide oil and gas exploration and production, is co-funder with Anadarko Petroleum of whitewashed pro-fracking ads under the acronym "CRED" (Coloradans for Responsible Energy Development). At the CGI event, Noble's CEO is scheduled to host a discussion of "the ways in which the North American energy revolution is altering the geopolitical, economic, and energy policy landscapes," seeking reexamination of "the traditional social and regulatory frameworks in which energy is produced, consumed and exported," while touting the "low-carbon profile" of natural gas (no doubt minus consideration of externalities of hydrofracking -- the overall costs to taxpayers and the environment).
CGI sells "energy independence" — meaning continuing profits for "U.S." oil and gas companies:
Another [CGI] forum examines the United States' "changing relationship to its natural resources - "chiefly... vast oil and gas deposits that will enable the U.S. to be near energy independence within the next two decades." 
CGI sells privatized education, and road and bridge repair financed with "public-private partnerships":
Still another [CGI forum] -- the use of "public-private partnerships to improve education, modernize infrastructure, and advance environmentally-conscious energy production."
"Public-private partnership" means using corporate money to finance public needs, then giving the bulk of the benefit back to the corporation in the form of profit (most of which lines CEO-class pockets). Think parking meters in Chicago.

CGI also promotes studies in "behavioral psychology" to find better ways to influence ("nudge" ... "gently urge") changes in public behavior that benefit the billionaires (my paragraphing below):
A CGI Breakout Session has a panel of CEOs considering "Behavioral Economics," how to use "behavioral modifications [to] yield significant impact" -- "ways that the public and private sectors can utilize behavioral psychology to create a healthier, greener, and more financially-secure America..."

Highlighted are "successful nudge strategies that can be applied widely throughout the United States" that gently urge people toward a desired behavior. Promoting healthier foods (which can also be subjectively defined) is one thing. Extending this technique to the backroom dealings around a trade deal like the TPP, it is more ominous to regard corporate manipulation with the intent of overriding laws and regulations passed to protect people and the environment, in service of the corporate bottom line.
The U.S. television viewer is already heavily "influenced" (nudged; propagandized) by what she watches. There's a science to it, and CGI wants to help billionaires harness that science to their benefit. 

"A Meeting of One-Percenters"

All in all, the bottom line is clear. The piece closes by noting the obvious contradiction — how can a "meeting of one-percenters" address problems their own policies, eagerly pursued, are causing?
The Denver forum of the Clinton Global Initiative seems nothing if not a meeting of one-percenters. Participating corporate media (Bloomberg TV, MSNBC, NBC's David Gregory) tend to act as megaphones for the powerful, covering the news from the perspective of Wall St., not Main St., while glossing over the disastrous effects of NAFTA, and the even greater corporate power grab of the Trans-Pacific Partnership. The Corporate-Washington moneymill spits out evermore millionaires who are disconnected from the vast majority of people. Even Chelsea Clinton is a reported multimillionaire.

Regarding economic inequity, gauged by one in three Americans living at or close to the poverty line, CGI calls for consideration of strategies for a "just, sustainable, and prosperous future." Participants might consider that since the implementation of NAFTA, economic inequality has exploded. Reports Public Citizen's Global Trade Watch, "Since NAFTA's implementation, the share of national income collected by the richest 10 percent has risen by 24 percent, while the top 1 percent's share has shot up by 58 percent."
What's the goal of CGI? The answer has to be — to prop up the One Percent (actually the 0.001%, the 1% of the 1%) while appearing to do good, or by doing enough good to appear to be all-good.

As to CGI's managers, from the Clintons on down, are they failing to solve global economic problems out of ignorance of the obvious — that their proposed "solutions" are in fact the cause? Or are they failing for some other reason? If trade deals, to pick just one issue, are so bad for the average worker, are they too ... what, dumb? ... to see that, or too venal to cop to it?

And what about the Clintons themselves? What causes this family to collect millions for a foundation loved by "do-gooder" billionaires — and likely funded by them — a foundation that promotes policies that keep these people rich and the rest of us poor, despite its stated objectives?

There are several ways to answer these questions, some social, some intellectual, some financial. None is flattering.

NAFTA, TPP and Hillary Clinton's CGI

Back to where we started, I want to tie up this bundle. This is in part about TPP, but it's also about Hillary Clinton and what CGI says about how she would act if elected. I want to ask three questions:

▪ Is there any question that NAFTA and TPP are good only for billionaires?

▪ Is there any question that the Clinton Global Initiative promotes billionaire policies, including but not limited to job-killing "free trade" deals?

▪ Is there any question that CGI's activism represents policy directions that all of the Clintons approve?

And a fourth question:

▪ If the answers above are No, No, and No, how is Hillary Clinton the "lesser evil" on America's most important domestic issue, extreme and worsening economic inequality? 

I'm not sure I can answer that in a way that comforts left-leaning 2016 voters.


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At 1:21 PM, Anonymous Anonymous said...

Thank you for reviewing this. I remember the day after Ross Perot-Al Gore debate over NAFTA the Washington Post and all of the other neo-liberal papers proclaimed that Al Gore had won the debate. Well, given that much of the debate consisted of predictions about how NAFTA would turn out for the US it was difficult then for me to see how a winner could be proclaimed so quickly. But of course the answer is obvious as you presented it here: the neo-liberal predictions weren't predictions at all, just propaganda. Yours is one of the very few reviews of NAFTA and all of the other FTA's have actually accomplished and for whom that I have seen. A society which never reviews its predictions to see where, how and why they err, but simply moves on to the next set of similar phony predictions digs itself a deep hole. We have been digging this hole for decades now and it's getting very dark down here.

At 6:32 PM, Blogger ifthethunderdontgetya™³²®© said...

These deals are not "trade" deals in the sense of tariffs.

As Dean Baker has pointed out, the trade barriers between the countries that would be party to the deals are already extremely low.

They are about corporate government. Some little country wants to protect its citizens from being raped by Citibank and fiends?

Too bad, your politicians signed a deal with the devil, now you're stuck.


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