By using the power of the public purse, we can encourage federal contractors to be upstanding corporate citizens.
As President Obama scrambles to salvage his trade agenda this week, his top emissary to Japan is appealing to Democrats by lifting up one of the party’s most beloved icons — her father.
In “My Dad, JFK, Was for Free Trade,” Ambassador Caroline Kennedy wrote “For my father, President John F. Kennedy, expanding trade was integral to America’s prosperity and security.”
There’s no doubt trade was high on Kennedy’s agenda. He championed the Trade Expansion Act of 1962, which established the Office of the U.S. Trade Representative and led to a successful “Kennedy Round” of multilateral trade talks.
The thing is, though, JFK would have a hard time recognizing today’s trade agreements.
Back in his era, the main goal was tariff reduction, plain and simple. Six European governments had just formed the Common Market, the Brits were talking about joining, and Kennedy feared a Fortress Europe that locked out American products.
There are some 1960s-style tariff schedules in the Trans-Pacific Partnership (TPP), the 12-country pact the Obama administration hopes to finalize—if they can get Congress to approve “fast track” trade promotion authority.
But that’s not why a diverse coalition of labor, environmental, faith, immigrant, food safety, civil rights, and consumer groups came together to block Obama’s trade package last Friday.
What’s strengthened the opposition are the pact’s 24 chapters that have nothing to do with old-fashioned trade in goods but instead impose rules on financial services, sanitary standards, government procurement, and other domestic policies. Such international rules simply didn’t exist in JFK’s day.
The president who created the Peace Corps might have also been surprised to learn that global health groups have been fighting TPP provisions on patent rights for pharmaceutical companies. Based on leaked drafts of the intellectual property rights chapter, Doctors Without Borders has called the TPP “the most damaging trade agreement we have ever seen in terms of access to medicines for poor people.”
Another major difference in today’s trade deals are the rights granted to foreign investors. Back in Kennedy’s day, foreign corporations couldn’t sue the U.S. government to demand compensation over actions—including public interest regulations —that reduce the value of their investment. That’s come about through the “investor-state” dispute settlement procedures in the 1994 North American Free Trade Agreement (NAFTA) and other more recent trade and investment treaties.
The leaked draft of the TPP investment chapterincludes these investor powers, a revelation that has united strange political bedfellows. In a piece applauding Democrat Sen. Elizabeth Warren for speaking out on the issue, Daniel Ikenson of the libertarian Cato Institute wrote that these investor rights raise “serious questions about democratic accountability, sovereignty, checks and balances, and the separation of power.”
At a meeting I attended in the 1990s, a U.S. Trade Representative (USTR) negotiator responded to concerns about environmental and social impacts of trade agreements by saying these issues were secondary to his primary job of advancing the interests of U.S. corporations. Afterwards, I contacted one of my organization’s former board members, William Matson Roth, who’d served as the second U.S. Trade Representative, after Kennedy had established the position in 1962.
“Was this his understanding at the time of USTR’s mission?” I asked. “Absolutely not,” he said. The official aim of the 1962 Act that created the agency was “to promote the general welfare, foreign policy, and security of the United States.” Because of this broad mandate, there had been a big debate over where to situate USTR, he explained. Should it be in the State Department? No — that would make it too politicized. Should it be in the Commerce Department? No — it should not just represent narrow commercial interests.
USTR was given an independent perch within the government, but that doesn’t mean our current negotiators have risen above narrow interests.
Would JFK have been for or against the Trans-Pacific Partnership? I don’t feel the need to speculate. What we do need is a debate based on the actual content of our modern-day “trade” policies.
This piece originally appeared in Fortune.
Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies.