This article by the Huffington Post appeared to be relevant to our recent class discussions on trade. It also appeared to be useful because it broadened my knowledge of the controversial Trans-Pacific Partnership (TPP.) There are many parts to the TPP, but one of the main parts that many critics want excluded from the trade deal, is what they are calling “the secret court system” known as the investor-state dispute settlement (ISDS.) The issues within this type of court system is that if a government of a foreign country implements regulations that violates the trade agreement or discriminates the company, the company then can go through this system and appeal to an arbitrary panel, which is made up of three corporate lawyers, and be essentially reimbursed for future company profits. The problem with this type of system, is that it could tie up the hands of foreign governments when they are trying to put in safety or environmental regulations because these companies could claim them to be violations or discrimination resulting in possible huge economic losses for the country and its people and a huge profit for top investors.
This article seemed to tie into our class discussions first because it had to do with trade, but mostly because it outlined one of the reasons trade and trade agreements makes people nervous. From this article, it appears a lot of people might be in favor of the TPP, but when there are certain provisions, such as this one with the ISDS, it makes the deal seem a little political and corporate favored. This opens up the door for corporations to monopolize power and hurt the economy and middle class/lower class citizens within the foreign nation. It also could monopolize power within the stronger nations and their investors and hurt the less powerful nations and their investors too.
Hi Marissa!
ReplyDeleteThought the article you posted was interesting. I am always a little hesitant to trust Buzzfeed or Huffington Post as I find them best suited to entertain rather than inform. However, it is difficult to find a news source today which does not lean to the right or left!
I liked that the article incorporated a short clip of Obama. His comment about the TPP being passed because it is "The right thing to do" was somewhat comical. Economically people do things because it benefits them, although immorality is not encouraged it is allowed. This has fueled distrust within the US; the American public perceives politicians in a negative light.
I am not sure why Obama is supporting the TPP as many Democrats are not in favor of ISDS. There must be a reason why Obama sees his pivot-to-Asia foreign policy as crucial to his legacy. Why do you think he came out in favor of TPP?
Overall great post!
-Hattie
Hey Hattie!
DeleteThank you for your comment. I get nervous about using articles such as this too because they tend to be one-sided, but it helped me understand the flip-side of why so many people are hesitant about the TPP.
To answer your question, I believe Obama is doing this because it is a big part of his legacy and he has only a few more months left in office, so he wants to push for this before he leaves. I also believe it's because he believes it will benefit our country as a whole. I think we touched on this a bit in class or maybe I read it somewhere, but I believe the legislature is nervous because they are looking at their specific areas that they represent and see that it has potential to hurt those middle class workers. I could be wrong in this statement, but I believe they are looking at the smaller pictures within the bigger one because that is what their job entails. Obama is the head of everything, so he is looking at the big picture and I believe he sees this as benefiting the country as a whole. Maybe he also is pushing for this because he wants more economic ties within that area as security and influence due to some of our historical enemies in that area, Russia and N. Korea. That's another possible side of it that just came to mind.
I think the TPP could be a good thing for the most part, but the specifics of the ISDS is one provision that I can understand as a downside. Unfortunately, that is a factor with negotiations is that we aren't always going to win it all and we may have to give up some. The question would be is whether this provision that we conceded to will make the TPP result in more bad than good for America? Some of Congress seems to believe so and Obama doesn't. I don't know who is right on this point though, unfortunately. I'm hoping to learn more about the subject as we continue on through this class. Thank you!
Hey Marissa,
ReplyDeleteI thought that this was an interesting article as well! Thinking back to class, Rodrik argues that countries with more open trade have an increased scope of government (and increased spending on the welfare system) to help mitigate the risk that comes with open trade. But in the case of the ISDS courts we see the government trying to protect large corporations or investors by compensating them for future losses that might be brought onto them because of the TPP. But it doesn’t seem right that these wealthy investors would benefit by being awarded billions of dollars, coming from taxpayer’s to compensate for the loss of future profits of these companies.
In regard to the video in the beginning of the article, I thought it was comical that President Obama was talking about how, “nothing is easy in the United States Congress right now.” Nothing is mentioned in the video about the actual TPP policies that are at hand and what he is trying to get passed (something that is all too common in politics). The way our government and political parties are set up it may be frustrating that it takes a long time to come to different decisions; but sometimes it is important that it isn’t extremely easy to pass certain laws or agreements that may go against what the majority of the American people want.
-Julia
Hi Marissa!
ReplyDeletethought the article you posted was very interesting! It provided a mostly democratic perspective however. I think that the article points out and interesting paradigm within the democrtic party. President Obama is in favor of the TPP yet so many people within the party are not.
Also, the point about tying the hands of foreign governments is crucial. If we are truly free trade, then we don't want the hands of other governments tied but standards we approve of.
Well done!
Ben