Free Trade as Enabler of Inequality
So what exactly is so great about free trade. What great advantage have we got out of it. George HW Bush started NAFTA, free trade between Canada and Mexico. Under David Ricardo's trade theory, free trade is not a zero sum game, but a win-win situation. NAFTA was the minor impact. The bigger impact was the WTO. That was estabilished under Clinton during the Uruguay round of trade talks in 1994. That lead to huge protest in 1999 WTO conference in Seattle. WTO establish free trade between US, Europe and Asia. China entered free trade in 2001. That was the big elephant in the room with their unlimited almost free labor market. In 2000 as one of the last great act for Bill Clinton, he signed the CFMA act deregulated the derivatives market, and eventually led to 2008 financial meltdown.
1999 was booming times for the stock market. Dot Coms were in full swing. Everyone was getting rich. Nobody talked about WTO. Crash came in 2000, and recession came on 9/11/2001. Everyone expected the recession to be over soon. 2001 was when China joined free trade. Jobs everywhere were sent oversea. Incredibly cheap stuffs were starting to be imported. When the recession ended in 2002, everyone was amazed that it was a "jobless" recover. It was the first time that has happened. People wondered why jobless rate did not improve. 2003 was invasion of Iraq. It was notable that while soldiers were sent oversea to fight, we were recovering from recession, and nobody was asked to sacrafice for the war. No war bonds or war tax. The jobless recover lasted from 2002 all the way to 2008. People were not getting jobs, but they were using their home as ATM machines. Interest rates were kept low, and credit was easy to come by. Because of the CFMA act of 2000, as long as you can sign on the dotted line, you were given credit no question asked. Nobody ever asked where the money was coming from either. General public did not know about the derivatives time bomb. Government spending continued to increase even during boom times.
By 2008, people were broke. Their credit was maxed out. With the crash, many lost their homes. Bankrupcy law was changed summer of 2008 just before the crash to make it harder to walk away from debt. Very timely. 2008 all the way to 2014, people are still jobless. Median houshold income dropped every year from 2000 to 2014. By Christmas of 2014, 60% of shopper were not willing to buy expensive gifts because jobs they have do not pay like they do before. All the while there is unemployment in US, China is growing more advance. They have new fighters, new missles. We are supporting the rise of China. The 40 years the US fougth communism, now we are support China, which is just the same totalitarian government.
What are we getting out of free trade. Products are less expensive, but we have high unemployment. The governement is in big debt trying to prop up the economy.
Interstingly, while Obama and Republicans were like yin and yang, and fought over every single item, Korea free trade passed quietly on 2011. 83-15 Senate and 278-151 in House. Knowing that South Korea instead of US would benefit from free trade. There was not talk on the radio about the pros and cons of the bill. Only a quick sentence saying they are passing the bill to both countries advantage. Only after it was passed in the following weeks were there talk about US being shafted, but only quiet talks.
Hilary in Seoul South Korea said the Korea trade deal is a top priority to her and the Obama administration.
So why free trade? Who is benefiting. Why pass trade bill so quietly?
Trans Pacific Pact - US trade deal with 11 Pacific Rim nations. It specifically excludes China.
Trans Pacific Partnership
Sep 2008, 2 months before election of Obama, US announced it would join the P4 trade agreement that would eventually become the TPP. This signals that both political parties in the US are in support of trade deals. George Bush was afraid of China's influence over the South Pacific area. Danger was acute because the Doha negotiations at the WTO collapsed during the summer of 08. APEC alone would not be sufficient to maintain US influence in the region.
March 15 2010- Round 1 of Trans Pacific Partnership in Melbourne Australia.
November 5th, 2012, speaking in Australia -
"This TPP sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field. And when negotiated, this agreement will cover 40 percent of the world's total trade and build in strong protections for workers and the environment." - Hillary Clinton - http://m.state.gov/md200565.htm
Note that this was at a time when TPP was as well know as CFMA act of 2000 back in 2000 before it let to economic meltdown of 2008. Hilary was part of the creator of the TPP at this time.
Note that in 2012, no Americans have heard about TPP. It was rarely mentioned in the news. Even NPR only mentioned it lightly.
July 2014 in her memoir Hard Choices, Hilary said TPP won't be perfect, and no trade deal will be, but should benefit workers. At this point, these are more noise about this thing called the TPP in the media.
May 22 2015 at press conference in New Hamshire, she had some concerns about the TPP, and will reserve judgement. Note that by now, the TPP is starting to get on front page of news. People are quite concened about another trade deal to plunge US into recession as recovery was slowly taking place, and the wealth gap is ever expanding.
June 2015 congress passed the Trade Preference Extension Act of 2015. Allow
President to execute trade deals witn only a up or down vote simple majority
vote from congress with no ammendment. TPP negotiation was done in secret, and
congress would not be allowed to see what is in the negotiation until near the
vote. When voting comes, there is a timetable of 90 days total. 30 days for
congress to privately see the TPP. After that is 60 days window for the public
to see and comment. Up to 105 days for US International Trade Comission to conduct
a eonomic review. After that, House and Senate has 90 days to vote.
Given how easy the South Korea trade deal quietly passed both house even during height of infighting between the parties, the expectation is the TPP is set for success.
July 2015, Hilary's poll number saw a distinct down turn while Bernie's poll
had a definite steady upswing since May. (It was in the 5% range in Jan 2015)
Political has obtained a draft copy of the intellectual property section of the TPP. It was heavily in favor of Big Pharma drug manufacturers.
July 2015, Hilary vehemently denies involvement in the TPP. However, Wikileak
disclosed numerous documents that showed top aides in her State Department were
heavily involved in the TPP trade deal. Documents obtained were dated 2009-2010.
Obama senior administration also told CBS News that Hilary was one of the biggest
backer of TPP.
-This does make you wonder why Hilary choose to use her personal email server for all her correspondance.
Aug 2015, Bernie was still 20 points behind Hilary, but was higher than Obama was when Obama ran against Hilary. Bernie was strictly against freetrade, and that position resonated with the public. By now, people in general realize how much freetrade devestated the general population, and the way it has been implemented led to increased wealth gap.
Oct 5 2015 TPP finalized. Signing ceremony on Feb 4 2015. (Still need to be ratified by all countries)
On Oct 8 2015, Hilary changed her position on the TPP, announced it on PBS Newshour. She now oppose it.
Oct 9 2015, WikiLeaks announced it has obtained the final intellectual property rights chapter of the TPP. The release of it caused a lot of stir and public outrage in the media.
Nov 16 2015, WikiLeaks released the full final text of the TPP. The document is still officially secret, and congress and the publice should not be able to see it. This makes for an interesting situation. For one thing, that blows away the 90 day window that congress and eventually the pubic can see it when it is finally revealed. Now everyone already know what is in it.
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