Nationalism, internationalism and the TPP

The Trans-Pacific Partnership (TPP) is part of a drive by the US to consolidate a bloc of countries around the Pacific Ocean to challenge China economically, politically and militarily. It is part of Obama’s “pivot to Asia”.

US capitalism is the dominant force among the nations encompassed by the TPP. The US delegation involved in the secret negotiations that resulted in the TPP, in addition to government officials, had a high proportion of lawyers for big corporations. They made sure that US capitalists’ interests were well protected.

Yet the key argument in the US against the TPP is reactionary: that US workers should oppose it because it supposedly gives advantages to capitalists in other countries as against US capitalists, and thus is harmful to US jobs.

The thrust of this xenophobic argument takes the focus off the real reason for the dire economic situation the US working class faces – the workings of the capitalist system itself, including the Great Recession and its aftermath.

The mystery behind this massive loss of jobs lies in both the destruction of capital and its increased application in the last 30 years.

It cuts across international working class solidarity, pitting US workers against “foreign” workers, who are allegedly taking jobs from “us”. This thinking has its domestic counterpart in the argument that foreigners, immigrants, Blacks and so forth are taking jobs from white workers, which is Republican presidential candidate Donald Trump’s main talking point.

However, there are many very good reasons why US workers and all the workers encompassed by the TPP should oppose it. Fundamentally, it would strengthen the hand of capital against workers’ interests in all signatory countries. That’s why it was negotiated in secret, without public input.

It really shouldn’t be called a “trade” agreement. In the past, there was a debate about free trade vs. protectionism. But tariffs are generally lower than in the past, so this isn’t the real issue. The TPP is mostly about a host of issues including intellectual property rights, financial regulations, labour laws and rules for health, safety and the environment.

From what has been leaked about it, US big business has obtained concessions that secure and extend its patents, trademarks and copyrights abroad, and protections of its global franchise agreements, securities and loans. New rules make it easier for corporations in the richer countries to outsource parts of production to lower wage countries.

At the same time, the TPP rules mean less protection for consumers, workers and the environment. These rules would allow big business to override such protections, including in labour laws.

For example, Big Pharma gets extensions of its patents under the TPP, delaying the availability of cheaper generic medicines. In the US, this will drive up medical costs even more. Workers and peasants in poorer countries will be denied affordable drugs, including many life-saving ones.

Corporations also get an international tribunal composed of private attorneys, outside any nation’s legal system, which can order compensation for any lost profits resulting from a country’s regulations.

A similar system exists in an agreement between Switzerland and Uruguay. The tobacco giant Phillip Morris is suing Uruguay under this agreement, claiming that Uruguay’s anti-smoking regulations unfairly diminish the company’s profits.

The North American Free Trade Agreement (NAFTA) has a similar provision. Because the Obama administration, under great public pressure, ruled against the XL pipeline that would have transported Canadian tar sands oil to refineries on the Gulf of Mexico, the company has tried to sue the US for $15 billion in lost future profits. Given the dominant role of the US in NAFTA, this suit may not get far.

The environmental organisation 350.org notes: “The TPP would give foreign fossil fuel corporations the right to sue city, state and national governments if climate action hurt their profits. It would also eliminate environmental reviews of fracked gas export facilities that would make Big Oil billions of dollars”.

These examples just scratch the surface of the myriad of pro-capitalist and anti-worker regulations in the TPP. It should be opposed on these grounds.

Bernie Sanders, who is still challenging Hillary Clinton for the Democratic presidential nomination, refers to all this. But he too, like the other candidates, makes chauvinist appeals to US workers. What is needed is international working class solidarity, not division along national lines.

We should also take a closer look at whether the increasingly precarious situation facing US workers is primarily due to imports and outsourcing of production by US corporations to lower wage countries. Kim Moody, a founder of Labor Notes, whose magazine and conferences seek to bring together class struggle union militants, takes up one aspect – the decline of manufacturing jobs in the US:

“Probably the most commented on … is the decline of manufacturing employment from 27 percent of private employees in 1980 to 11 percent in 2010 … While manufacturing has been declining for some time, the dramatic loss of nearly five million manufacturing, production and nonsupervisory jobs calls for an explanation.

“Many, particularly in the labour movement, argue that the culprit was trade. Clearly some industries like basic steel, textiles, garments, etc. saw big losses to imports. But these losses account for only about 20 percent of the five million. Nor does ‘offshoring’, which grew over much of this period but recently slowed down, account for massive losses as domestic content in US manufacturing still averages about 85-90 percent, well above the global average of 72 percent. As the United Nations observed, ‘Large economies, such as the United States or Japan, tend to have significant internal value chains and rely less on foreign imports’.

“The problem with trade-based explanations is that manufacturing output hasn’t shown a decline, but had grown in real terms by 131 percent from 1982 to 2007, just before the Great Recession reduced output. At an annual average of 5 percent this is only slightly less than the 6 percent annual growth of the [boom years] of the 1960s.

“The mystery behind this massive loss of jobs lies in both the destruction of capital, on the one hand, and its increased application in the last 30 years, on the other. The disappearance of manufacturing jobs hasn’t followed the more or less steady upward trajectory of imports since the mid-1980s. Rather, massive job destruction has occurred during the four major recessions of this period as capital itself has been destroyed: in 1980-82, 2.5 million manufacturing production jobs lost; 1990-92, 725,000; 2000-03, about 678,000; and during the Great Recession another two million jobs gone.”

Moody points to two factors in the periods of “recovery” after these recessions, which kept employment flat. One was the “increased application of capital” in new technology that displaced workers; the other was greatly increased intensification of labour under the rubric of “lean” and “just in time” production. Both have increased productivity but not working class living standards.

In other words, the recessions of the business cycle, with a long term tendency toward stagnation, capital investment in labour saving technologies and neoliberal assaults on workers have resulted in the intensification of the labour process and job shedding.

These are the reasons why the US working class is in such a dire situation. NAFTA and TPP are piling on top of this.