Trade
Frequently Asked Questions on Trade
Is it true “fast track” is undemocratic and prevents Congress from amending a final trade agreement? If this is the case, why is fast track necessary?
Trade Promotion Authority (TPA), sometimes called “fast track,” is legislation that directs the administration to achieve Congressionally-directed objectives in trade agreements. In exchange, and if Congress agrees the administration met those objectives, Congress agrees to vote on trade deals in a timely manner.
In the House of Representatives, unlike the Senate, you don’t need TPA to “fast track” legislation. That’s because in the House, the majority party can move any bill through the committee of jurisdiction and to the floor for a vote without a single opportunity for amendment and as little as 40 minutes of debate. Under that scenario, any member has little to no chance of impacting legislation.
While Congress doesn’t need TPA to consider trade legislation, without TPA in the House, Democrats yield all decision-making to Speaker Boehner. With TPA, however, progressive and environmentally-conscious Democrats like Congressman Blumenauer can influence trade agreements by providing strong negotiating objectives that the administration must follow, or securing process changes such as increased transparency.
These trade deals are secret; no one knows what’s in them, not even Congress. Really?
While the language that makes up a trade agreement is classified while under negotiation, it is by no means kept a secret from everyone.
A broad spectrum of stakeholders, including all members of Congress, congressional staff with clearance, labor unions, environmental groups, consumer groups, health groups, industry representatives, state and local governments, academia, and many others all have access to these agreements.
In poker, or when buying a used car, you don’t want to show your opponent your hand or reveal to the salesman how much you’re willing to pay. There is a similar need for some level of confidentiality in trade negotiations so the United States doesn’t weaken its bargaining power. That said, Congressman Blumenauer has long questioned why, if somebody believes in trade done right and wants more of it, they would insist on keeping agreements secret at all times. That is why he’s pushed for TPA to require information about U.S. positions on future treaties to be publicized as they are made.
For the Trans-Pacific Partnership (TPP), as well as all future agreements, TPA will require that the entire text be public for 60 days before the President signs it. Following the President’s signature and once implementing legislation has been introduced in the House and Senate, Congress has up to 90 days to consider it.
In Congress, any member can do exactly what Mr. Blumenauer has done on numerous occasions – they can sit down at a time of their choosing and review the documents for as long as they’d like. They can do this on their own, with the U. S. Trade Representative, or with personal counsel. Any Member of Congress who says they don’t know what’s in the agreement has not made the effort to find out.
Also, under an earlier TPA, Congress created a three-tiered advisory committee system where over 500 sets of stakeholders have access to text and are consulted on trade negotiations. The highest-level of cleared advisors are members of the President’s Advisory Committee on Trade Policy Negotiations. Four of our largest labor unions – the International Brotherhood of Teamsters, United Auto Workers, United Food and Commercial Workers, and United Steel Workers – are members. Other advisory committees members are as diverse as the International Association of Skateboarding Companies, the World Wildlife Fund, and Stoneyfield Farms.
Do trade agreements make it easier to ship Oregon’s middle-class jobs overseas?
International trade is a key source of jobs for Oregon. 490,000 Oregon jobs are tied to, or supported by, international trade. In the midst of the economic recession, Oregon’s trade-related employment grew 7.5 times faster than overall employment levels. These jobs benefit rural and urban Oregon alike, from high-tech companies to producers of the highly sought-after Oregon agricultural products, and more than 90 percent of Oregon’s nearly 6,000 exporters are small- and medium-sized businesses.
Oregon is a trade powerhouse.
In 2014, we exported over $20 billion in goods. Portland ranks 4th among the largest metro areas in terms of export value, and Oregon ranked 7th in the nation when measuring the total value of products sent abroad. Unlike the country as a whole, Oregon has a trade surplus in both goods and services. We even have a trade surplus with China.
Oregon is also a manufacturing powerhouse. Manufacturing accounts for nearly 40 percent of Oregon’s GDP, the second highest in the country and is a sector that continues to grow. In 2013, Oregon was the third fastest-growing state economy in the United States, and two-thirds of that growth came from durable goods manufacturing. Over the past decade, Oregon’s manufacturing exports have grown strongly.
Countries across the globe have nearly unfettered access to U.S. markets, including Oregon’s. The reverse, however, is not true. Since the vast majority of our exports are already destined for Pacific Region countries, Oregonians stand to gain when those countries agree to lower barriers to trade and to reduce unfair practices.
Is the Trans-Pacific Partnership “NAFTA on Steroids”?
NAFTA was a terrible trade agreement.
It was based on a shortsighted, race-to-the-bottom approach that continues to negatively impact the region today. Over time, however, advocates in Congress and across the country have pushed for, and secured, significant reforms in how the United States crafts trade agreements. The Trans-Pacific Partnership is poised to build on these improvements.
Recognizing the importance of trade for Oregon’s economy, Congressman Blumenauer worked in Congress to constructively engage on trade policy in an effort to ensure that the “good” gets better, the “bad” happens less often, and the “ugly” is prevented. Oregonians deserve honest trade that helps U.S. businesses to grow and develop products here, adding value and innovation, and then exporting products and services, whether by land, sea, air, or the Internet, to consumers abroad. In pursuing this, there’s a balance we can strike that both helps our economy, but also protects critical areas like the environment and increases labor standards and human rights protections abroad.
An honest trade debate acknowledges that not all of our previous free trade agreements (FTAs) achieved this. NAFTA – which was voted on before Blumenauer came to Congress – is one such example. The Central America Free Trade Agreement (CAFTA) – which he voted against – is another.
An honest conversation about trade must also acknowledge the fact that, over time, we’ve been able to make progress by requiring our trading partners to improve their track record on workers’ rights, consumer protections, and environmental standards as a condition for receiving preferential access to U.S. markets.
In what has become known as the “May 10th Agreement,” a deal reached between a Democratic Congress and the Bush Administration, we were able to secure the first ever fully enforceable labor and environmental protections in a trade agreement. That means if a country fails to adhere to certain labor and environmental standards, the United States could impose trade sanctions on them until they changed course. It also ensured critical pharmaceuticals would remain affordable for developing and emerging markets.
The Trans-Pacific Partnership represents a unique opportunity to build on this agreement by securing enforceable labor, environmental, and consumer protections across 40 percent of the global economy. Since both Canada and Mexico are TPP member countries, these negotiations also present a meaningful opportunity to reform NAFTA by linking its market access provisions with enforceable worker rights and conservation protections. TPP done right provides NAFTA critics, like Representative Blumenauer, a chance to correct this egregious trade failure.
If trade expands, won’t this devastate our environment?
No. In fact, any trade agreement supported by Congressman Blumenauer will include provisions he’s championed for decades that are likely to strengthen environmental protections to a degree that no amount of foreign aid could ever bring about.
Since 2007, agreements negotiated by Democrats ensured that binding, enforceable environmental protections would be part of all U.S. trade agreements going forward. The U.S.-Peru Free Trade Agreement, for instance, required Peru, a country that’s 60 percent Amazon rainforest, to establish a Ministry of the Environment, enact new laws and regulations to protect and sustainably manage the Amazon, and fund the enforcement of these environmental laws.
The Congressman has fought for these provisions not only because it was the right thing to do, but also because we have so much to gain. Illegal logging alone costs the U.S. timber industry $1 billion every year. Wildlife trafficking has grown into the fourth-largest branch of illegal trade in the last five years, with a net worth of $19 billion annually. With strong environmental provisions, TPP, for example, can help close the spigot for these black markets that too often funds criminal and terrorist networks.
There is no question that if these agreements were enforced, the environment would be in better shape.
According to leaked text, the Trans-Pacific Partnership will have strong, enforceable rules on fishing subsidies and fishing management practices that will strengthen protections for Pacific fish stocks. A major agreement under negotiation will reduce tariffs and other barriers on environmental goods, making renewable energy products more affordable for consumers, and businesses in the renewables sector more competitive with traditional sources of carbon-intensive energy.
What is Congressman Blumenauer doing to try and make TPA better?
The TPA bill currently under consideration by Congress will deliver unprecedented transparency in trade negotiations, ensure future trade deals break new ground to promote human rights, workers’ rights and subject 40 percent of the global economy to stronger and fully enforceable environmental protections. But during each step of the legislative process, Congressman Blumenauer is fighting to improve this bill even further to reflect Oregon values – focusing his efforts on improving environmental provisions and increasing enforcement of current and future agreements.
Blumenauer recently introduced two pieces of legislation – the Green 301 Act and the STRONGER Act. The Green 301 Act will expand Section 301 of the Trade Act of 1974 to address the unfair enforcement of environmental laws by U.S. trading partners, making sure all bad actors are held accountable, that overall levels of compliance are raised, and that good actors are not penalized for following the rules.
The STRONGER Act would create an enforcement trust fund, paid for by foreign exporting cheaters, to allow the United States to better enforce and implement our trade agreements, with a focus on environmental and labor commitments.
Finally, Congressman Blumenauer is also working on legislation that would further reduce trade barriers for Oregon’s unique outdoor recreation companies.
TPA has not been passed into law, and until it is, he will do everything in his power to improve it to ensure higher standards and stronger enforcement of our agreements.
How will American workers be able to compete with countries like Vietnam who have such low labor standards?
Vietnam is developing dramatically and, in a remarkable transformation, has become a key U.S. ally in the region. With or without TPP, trade between the United States and Vietnam is already significant and will continue to grow. Since the mid-2000s, the United States has been Vietnam’s largest single-country export market, and in 2013, exports to the United States represented about 18 percent of Vietnam’s total exports.
For Congressman Blumenauer, the question is not whether the United States should or should not trade with Vietnam, because that’s already happening at an ever-increasing rate. Instead, he is asking how can we improve existing trade practices and shape future ones. Vietnam’s participation in the negotiations could accelerate economic reforms in the country according to 21st century standards.
As part of any agreement, Vietnam will be required to update its labor laws to ensure they conform to the International Labour Organization core standards, strengthen its environmental rules, and open many closed sectors of its economy to competition. These are changes that would not happen anytime soon without the leverage and incentive provided by TPP. Instead of maintaining the status quo, Congressman Blumenauer is seeking to improve it.
I’ve heard Investor State Dispute Settlement (ISDS) gives foreign corporations the ability to bypass U.S. courts and sue the government in undemocratic, unaccountable international tribunals if they feel their profits are threatened. Can this be true?
Under ISDS, a foreign investor can sue the state, if the state has violated substantive obligations intended to protect foreign investors and investments from discriminatory, unfair, or arbitrary treatment by the host government. The investor’s claim is heard by a panel of three distinguished trade lawyers and scholars chosen by the state and by the investor. If a tribunal finds that the host government has treated the investor in an arbitrary, discriminatory, or unfair manner, based on customary international law or the provisions of the trade agreement, then the tribunal can award money damages to the investor. If the tribunal judges find that the claim is frivolous, they can award costs and attorneys’ fees to the government.
Only money damages are available – the tribunal has no power to order the government to change any law or regulations. The tribunal also has no power to award punitive damages for egregious conduct.
Provisions like these have been part of international law for many years and were created to avoid direct state-to-state conflict over commercial matters. There are now 2,400 bilateral investment treaties that contain investor-state provisions, as does nearly every trade agreement. These claims typically occur in industries with high degrees of state involvement, and unsurprisingly, the most frequent defendants are Argentina and Venezuela.
With ISDS, will foreign corporations have greater rights than U.S. companies? Doesn’t this threaten our environmental and public health regulations?
Foreign investors in the United States have no greater rights than those that are available to U.S. investors under existing U.S. legal principles and practices. An investor can only bring a claim for violations of key international law norms. For instance, claims can arise when investors are discriminated against compared to a country’s own investors, when investors fail to receive minimal levels of treatment in accordance with customary international law, and when a country nationalizes or expropriates an investor’s property. Even though damages are available, these claims are very expensive to bring, and as a result, most investors in the United States who seek damages against the U.S. government just file in federal court. International arbitrations are expensive and, according to claims data, unlikely to succeed – 67 percent of the time the state wins the case.