Treasury Secretary Jack Lew on Tuesday gave insight into how the administration intends to sell its trade agenda to the left, two days before other cabinet-level officials will hold closed-door meetings with Congressional Democrats on the Trans Pacific Partnership (TPP).
Lew’s remarks show how the White House is laboring to make the passage of “fast-track” legislation–a prerequisite to TPP advancement–more palatable to Democrats by paying lip service to trade-related anxieties, on one hand, while failing to be completely forthright about the multilateral deals it seeks.
At a House Financial Services Committee hearing, Lew argued that the administration sees trade talks as an inappropriate vehicle for conversations on regulation—a concern raised by many progressive lawmakers–while downplaying the impact that the trade reform it wants could have on commercial oversight.
“We do not believe that prudential standards should be subjected to trade negotiating processes or trade remedies,” Lew claimed, in response to a question asked by Rep. Bill Huizenga (R-Mich.).
The Treasury Secretary had been pressed by the chair of the monetary policy and trade subcommittee to say if American negotiators are refusing “to engage on the regulatory side” with European equivalents discussing the Transatlantic Trade and Investment Partnership (TTIP).
“We’ve been very clear with our European counterparts, that we think market access is an appropriate issue to be negotiated in trade negotiations,” Lew said.
He also claimed that, through international fora such as the G-20 and the Organization for Economic Cooperation and Development, US trade negotiators have media to discuss “high standards that are as harmonized as possible, under a system of national responsibility.”
It is difficult, however, at some level, to know where “market access” starts and “prudential standards” end, but the Obama administration is intent on pushing the former, even if it is, almost certainly, at the expense of the latter.
In late January, for example, US Trade Representative Michael Froman told Senate Finance Committee chair Orrin Hatch (R-Utah) that the Obama administration is angling to have “protection against data localization requirements” in the TPP. While Froman talked about the rules as if they constitute “nontariff barriers” (a favorite term of US trade negotiators) that mandate “the construction of redundant infrastructure,” public interest advocates have pointed out that they enable regulators to do their jobs. University of Auckland law professor Jane Kelsey and Public Citizen digital rights advocate Burcu Kilic have said localization requirements make it easier to enforce consumer, labor and environmental protections.
“Governments can and do seek to make regulation more effective when there is a local presence,” Kelsey and Kilic noted, saying it’s difficult enough to enforce rules in countries “where foreign firms can minimize their local legal presence and capital backing.”
And while it did not come up in the hearing on Tuesday, another controversial aspect of trade agreements designed to uphold “market access” is also often used as a means of advancing a deregulation.
In the news lately after coming under fire from Sen. Elizabeth Warren (D-Mass.), investor-state dispute resolution tribunals are decried as a means for wealthy interests to advance their agendas. As the name suggests, only investors can bring cases to the bodies. Governments can’t access them to win monetary damages, and the mediation organ cannot be petitioned by labor unions, environmentalists or other public interest organizations.
Proponents of the institution have said that investor-state resolution tribunals are key to enforcing “non-discrimination” provisions in trade deals—stipulations requiring governments to treat domestic companies and foreign firms the same. But they are often imbued with corporate values and used to enforce a “minimum standard of treatment” for investors–ones that often have nothing to do with trade. They are councils that, in theory, uphold market access, but, in practice, more often than not, opaquely enforce neoliberal rules and laws.
Not unlike how Lew claimed on Tuesday that market access and regulation are separate matters, USTR Froman a few months ago sought to assuage Democrats’ fears about TPP by focusing on investment state tribunals. As The Sentinel reported in January, he told Sen. Tammy Baldwin (D-Wisc.)–after she, Warren, and Sen. Ed Markey (D-Mass.) reached out with an inquiry–that investor guarantees in the working TPP agreement “are designed to prevent the kind of abuses of the investor-State [sic] dispute settlement that have happened under agreements negotiated by other countries.” Froman characterized those misguided deals as “more expansive” with “few (or none) of the extensive safeguards being proposed in TPP.”
But, as with every aspect of the working TPP, lawmakers have been unable to verify Froman’s claims. The draft agreement—the so-called “bracketed text”–has not been made available by the Obama administration to lawmakers asking to see it.
Even as a key vote on fast track trade promotion authority looks set for next month, the administration has continued to peddle its trade agenda behind a wall of secrecy. As The Hill reported Monday, Froman and Labor Secretary Thomas Perez are convening with House Democrats on Wednesday in a “classified briefing” to talk about the TPP. Members are only allowed to bring a single staffer with an “active Secret-level or high clearance.”
It isn’t even entirely clear what kind of access to the draft TPP Perez, Lew and Commerce Secretary Penny Pritzker have (Pritzker is also this week lobbying Congressional Democrats to get on board with the trade agenda). Requests for information about access sent by The Sentinel to the USTR, The Labor Department and the Commerce Department went unanswered by the time of publication.
What is known is that the administration appears to be trying to convince Congressional Democrats of the merits of the Obama trade agenda by recognizing their fears—even if they aren’t fully respecting them, by discussing the issue in an aboveboard fashion.
And the White House might very well have its work set out for it, rhetorical tricks aside. As The Sentinel noted on March 5, progressives in Congress, and progressive public interest groups are rallying their networks of supporters to stop fast-track, buoyed by their February Net Neutrality victory.
