The 10 biggest lies you’ve been told about the Trans-Pacific Partnership
You can call it "misleading" or "offering half-truths," but when push comes to a shove, these are lies
Skip to CommentsTopics: Barack Obama, Elizabeth Warren, international trade, TPP, Trade Deals, Trans-Pacific Partnership, News, Politics News
President Barack Obama gestures as he speaks at Lehman College in the Bronx borough of New York, Monday, May 4, 2015. Obama announced the creation of an independent nonprofit organization that is a spin off his "My Brother's Keeper" program, which works to give young men of color more opportunities through mentoring and business partnerships. (AP Photo/Pablo Martinez Monsivais)(Credit: AP)Today, the Senate makes a critical test vote on the Obama Administration’s trade agenda, kicking off a process that the White House hopes to end with the signing of an agreement between 12 nations called the Trans-Pacific Partnership. In preparation for this vote, President Obama has been deliberately antagonizing his critics, mostly liberal Democrats. Senator Elizabeth Warren is “a politician, like everybody else,” Obama said Friday to Yahoo News, who has “got a voice that she wants to get out there,” framing her concerns as insincere self-aggrandizement. Those concerns, Obama added, are “absolutely wrong.”
This is not the first time that Obama and his aides have depicted opposition on trade as deliberate misinformation designed to stir up a left-leaning political base, or generate campaign contributions; my favorite is the claim that Warren is merely trying to energize a non-existent Presidential campaign.
It’s beneath the dignity of the Presidency to so aggressively paint opponents as not just wrong on the facts, but hiding the truth on purpose. Warren has responded without using the same indecorous tactics. Unfortunately, I don’t have the same self-control. So by way of response, here are ten moments where the President or his subordinates have lied – call it “misled” or “offered half-truths” or whatever; but I’m in an ornery mood so let’s just say lied – about his trade agenda:
1. 40 PERCENT: The President and his team have repeatedly described TPP as a deal involving nearly 40 percent of global GDP. This tells only part of the story. First of all, the U.S. by itself represents 22 percent of global GDP; a bill naming a post office would involve that much. Second, we already have free trade agreements with six TPP partners – Canada, Mexico, Australia, Singapore, Chile and Peru – and between them and us, that’s 80 percent of the total GDP in this deal. The vast majority of the rest is represented by Japan, where the average applied tariff is a skinny 1.2 percent, per the World Bank.
You can see this paragraph in graphic form here. The point is that saying TPP is about “40 percent of GDP” intimates that it would massively change the ability to export without tariffs. In reality it would have virtually no significance in opening new markets. To the extent that there’s a barrier in global trade today, it comes from currency manipulation by countries wanting to keep their exports cheap. The TPP has no currency provisions.
2. JOB CREATION: Saying, as the White House has, that the deal would support “an additional 650,000 jobs” is not true. This figure came from a hypothetical calculation of a report by the Peterson Institute for International Economics, which the Institute itself said was an incorrect way to use their data. “We don’t believe that trade agreements change the labor force in the long run,” said Peter Petri, author of the report, in a fact check of the claim.
The deal is actually more about building up barriers than taking them down. Much of TPP is devoted to increasing copyright and patent protections for prescription drugs and Hollywood media content. As economist Dean Baker notes, this is protectionist, and will raise prices for drugs, movies and music here and abroad.
3. EXPORTS ONLY: The Administration constantly discusses trade as solely a question of U.S. exports. A recent Council of Economic Advisors report touts: Exporters pay higher wages, and export industry growth translates into higher average earnings. But the Economic Policy Institute points out that this ignores imports, and therefore the ballooning trade deficit, which weighs down economic growth and wages. Talking about trade without discussing both imports and exports is like relaying the score of a ballgame by saying “Dodgers 4.” It is literally a half-truth. Recent trade deals have in fact increased the trade deficit, such as the agreement with South Korea. Senator Sherrod Brown notes that the deal has only increased exports by $1 billion since 2011, while increasing imports by $12 billion, costing America 75,000 jobs.
4. MOST PROGRESSIVE: Obama has called TPP “the most progressive trade deal in history.” First of all, so did Bill Clinton and Al Gore, when talking about NAFTA in 1993. Second, there’s reason to believe TPP doesn’t even clear a low bar for progressive trade deals. The Sierra Club, based on a leaked TPP environmental chapter, said that the deal is weaker than the landmark “May 10 agreement” for deals with Peru, Panama and Colombia, struck in 2007. Key Democrats who devised labor and environmental standards for those agreements, like Rep. Sander Levin, believe that TPP falls short. Even if the chapters were up to par, consistent lack of enforcement of the rules makes them ineffective. The U.S. Trade Representative has actually claimed the Colombia free trade agreement is positive because only one trade unionist in the country is being murdered every other week. Labor groups can only ask the White House to enforce labor rights violations, and for the past several years, the Administration simply hasn’t. So when Obama says violators of TPP will face “meaningful consequences,” based on the Administration’s prior enforcement, he’s lying.
5. CHANGING LAWS: On the controversial topic of Investor-State Dispute Settlement (ISDS), where corporations can sue sovereign governments for monetary damages for violating trade agreements that hurt the company’s “expected future profits,” the White House has engaged in a shell game. They say, “No trade agreement is going to force us to change our laws.” But the point of a corporation suing the United States or any trade partner is to put enough financial pressure on a government to force them to alter the law themselves. So ISDS doesn’t “cause” a change in law only in the narrowest sense. Even third-party countries have curtailed regulations in reaction to ISDS rulings, as New Zealand did with their cigarette packaging law, awaiting the outcome of a dispute between the tobacco industry and Australia (a suit that continues despite an initial victory for Australia).