Bill Black: The Lie That “China Wins” if the TPP Kangaroo Tribunals are Stopped

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By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly published with New Economic Perspectives

Proponents of the Trans-Pacific Partnership (TPP) know that they have a major problem. Bernie Sanders, Hillary Clinton, and Donald Trump each oppose the deal. CEOs, however, have not given up on their dream of being able to rig the international system through the creation of kangaroo tribunals that can, effectively, destroy effective regulation and the enforcement of rules to protect the public. As I explained in my most recent column on this subject, “trade” is simply the pretext for this assault on the rule of law and national sovereignty. President Obama plans to try to get the TPP approved by the lame duck Senate after the November elections. Outgoing officials no longer must fear (or respect the will of) the voters and they are eager to cash in on the corporate largess that will reward politicians that vote for the international CEO impunity deals.

The “serious people” of the lame stream media are encouraging the lame ducks to vote for the CEOs’ dream deal. One of their principal claims is “If T.P.P. falls apart, China wins. It’s as simple as that.” TPP is deliberately opaque, complex, and crafted in secrecy by the CEOs’ lobbyists to be the opposite of “simple.” It has nothing to do with China winning or losing. TPP is all about Article 9 of the TPP, which allows CEOs to rig the system so that the CEOs win and the people and nations lose. If the TPP becomes law Chinese CEOs win because the kangaroo tribunals of Article 9 will intensify the global “race to the bottom” that is eviscerating what remains of the rule of law even in nations that are not parties to the TPP.

The ‘serious person’s” article never mentions Article 9, but it does include this carefully crafted attempt to mislead his readers: “[TPP] binds Vietnam to countries where the rule of law is arbiter rather than authoritarian diktat.” As Americans are now all too aware, the American “rule of law” is a threadbare pretense when it comes to powerful financial CEOs. Article 9 is the “rule of law” only in the sense that it specifies that the “rule of law” does not apply to the kangaroo tribunals that can impose billions of dollars in penalties on a nation for the high crime of trying to discourage smoking. Article 9 is designed to bypass one of the most important requisites of national sovereignty – a nation’s laws and judicial system.

Article 9 is authoritarian diktat – by the CEOs of multinational corporations. CEOs share a community of interest to block effective regulation and enforcement against corporate crimes and abuses. CEOs and their lobbyists were given unique access to craft the draft deal while the public was excluded. Everything we know from human history tells us that they would use that power and secret access to rig the system to benefit their interests and ensure that they could use Article 9 to impair the ability of nations to use the “rule of law” to prevent corporate abuses and crimes.

The same newspaper article claims that Vietnam is required by the TPP to take a series of actions such as ending child labor, establishing a minimum wage, and allowing unions. Those TPP provisions are unenforceable and no one believes that Vietnam will comply. TPP was crafted in secret by the CEOs’ lobbyists – while the public was deliberately excluded – to ensure that the workers’ “rights” were unenforceable. Workers have no ability under the TPP to sue Vietnam to enforce those provisions.

Article 9, by contrast, was drafted by the CEOs’ lobbyists to be enforceable. It allows CEOs to sue before kangaroo tribunals to issue massive (enforceable) financial penalties against any signatory nation that adopts rules to protect its people from even life-threatening criminal acts by corporate officials as long as the kangaroo tribunal decides the rules are “arbitrary.” The kangaroo tribunal decisions and penalties are subject to no meaningful right of appeal, so any supposed “legal standard” is simply Potemkin propaganda.

Hillary Clinton supporters should consider the same “serious person’s” comments on her position on the TPP. (Note: I am an economic adviser to Bernie Sanders.)

As for Clinton, she believed in 2012 that the T.P.P. “sets the gold standard in trade agreements,” before deciding last October that “I am not in favor of what I have learned about it.” The best that can be said about this is that it was probably a tactical cave-in she would reverse if she wins.

Sadly, there is a precedent for this fear. As a candidate, Senator Obama opposed the deal. As President he has become its cheerleader.

The “serious person” ends his article with this sentence expressing his contempt for the American people’s increasing opposition to these CEO impunity deals.

Congress should resist populist ranting and ratify [the TPP].

We can stop the TPP. People are increasingly coming to understand that it has nothing to do with “free trade” and everything to do with CEOs’ dream of rigging the system so that they can get even wealthier through the “sure thing” of fraud and abuse with impunity from the laws. Conservatives are enraged when they discover that it represents a wholesale assault on American sovereignty in favor of kangaroo tribunals dominated by CEOs. The CEOs used their government cronies to hide the TPP deal from the public for so many years because they knew it could not withstand scrutiny once the public became aware of its true nature.

Article 9 creates a new profit center for the CEOs of multinational corporations – suing the nations that sign the TPP and similar deals. That puts the Treasury and the general public at risk, but it will maximize the CEOs’ bonuses at our expense.

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  1. Synoia

    Aka: Suing for fun and profit. Probably more lucrative than taking a risk by making and selling products and services.

      1. RBHoughton

        And do not neglect to raise a glass to the humanitarian and socially-responsible spirit that caused the whistleblower to leak.

  2. Kim Kaufman

    I remember when I used to make fun of people ranting about “one world government” and the Tri-Lateral Commission, etc. The TPP, and assorted agreements connected with it, is the carrying out of the long dreamed of one world government: it creates one corporate government governed by a few corporate lawyers entirely for the benefit of the corporations.

  3. Alex morfesis

    Rather confused why the pearl clutchers of the christies/$othebeez unesco krewe are not screaming “patrimony patrimony”…they must realize every dirtbag treasure hunting operation will use this to rip apart the business model of preventing new discoveries from making it into the private market….
    Destroying the business model of keeping new finds in the hands of “approved and responsible” travel promotion organizations commonly known as big city museums…to insure the looting by previous generations holds its value…

  4. Chauncey Gardiner

    This spin that “China wins if TPP tribunals are stopped” would be humorous if this wasn’t such a serious matter. What is this, a Marseilles Three-Card Monte con?!… The China Bilateral Investment Treaty (BIT) has been very quietly and surreptitiously negotiated by this administration and their coterie of corporate and Wall Street lobbyists over the past three years.

    According to its title, this bilateral agreement with China is evidently a treaty, which would be legally binding. We the People have a legal right to know the specific terms and provisions that it contains BEFORE it is voted on by Congress.

    There has been no disclosure of the specific terms and provisions of this treaty in U.S. mainstream corporate media or elsewhere. When will the proposed terms of the China Bilateral Investment Treaty (BIT) be made public?… When Pigs Fly? … And who controls the World Bank?

    All this is entirely consistent with past patterns of obfuscation and behavior by this administration despite all their wonderful speeches about transparency.

  5. bornagaindem

    I am pretty sick of the constant use of the phrase the gold standard by Hillary Clinton and the implication that she flip flopped or is only saying she doesn’t support TPP cynically. This is the entire gold standard quote:

    So it’s fair to say that our economies are entwined, and we need to keep upping our game both bilaterally and with partners across the region through agreements like the Trans-Pacific Partnership or TPP. Australia is a critical partner. 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.

    That’s key, because we know from experience, and of course research proves it, that respecting workers’ rights leads to positive long-term economic outcomes, better jobs with higher wages and safer working conditions. And including everybody in that, those who have been previously left out of the formal economy will help build a strong middle class, not only here in Australia or in our country, but across Asia. And that will be good for us.

    If we do this right, and that’s what we’re trying to do, then globalization, which is inevitable, can become a race to the top with rising standards of living and more broadly shared prosperity. Now, this is what I call jobs diplomacy, and that’s what I’ve been focused on in part as Secretary of State. And that’s one of the reasons that I wanted to come here to Adelaide and come to this impressive facility

    This was speech given at Techport a facility in Australia on a visit as Secretary of State for her BOSS Obama who clearly supports the TPP. No one never gives you the whole context because it would undermine the sound bite that they are trying to make you believe. Frankly if I read this I would not be unhappy with a TPP that actually did this. It is perfectly understandable that when you start a negotiation you can be for it in principle but against it when the actual facts come out which Clinton has says she is. Since when does the secretary of state openly oppose her boss – the president? And why would she; 4 years before negotiations were completed?

    More importantly as Senator she voted against CAFTA ” because it did not have enough labor or environmental protections”. She did vote for other smaller agreements which means she tries to think carefully about what the consequences are.

    The TPP is a bad deal a) because it is not really about trade and b) the idea that a tribunal instead of our courts should have a say in whether a community has a right to ban something is not what Americans want or our constitution enshrines.

    But there is no evidence that Hillary doesn’t share those same concerns. As a wife I know I can differ drastically from what my husband thinks and Hillary is not Bill Clinton. Tarring her with his mistakes is nonsense. More importantly was anyone concerned whether Laura Bush agreed with George Bush on the issues? Does anyone care if Michelle Obama disagrees with Barack? You wouldn’t even pose the question.

    1. Yves Smith Post author

      You must assume that NC readers are naifs. We’ve been writing about the TPP for years.

      Clinton is being utterly dishonest in saying that the TPP is about trade and that there were any concerns about workers. US trade is substantially liberalized and the economists who pencil out the gains, using models that historically overstated the results, have all conceded that they are microscopic.

      The TPP and the TTIP, from their very outset, strengthened and extended the national-sovereignty reducing investor-state dispute settlement panels that were part of CAFTA. These are intended to strengthen the rights of multinational corporations at the expense of worker rights and consumer and environmental protections. And those are features the US pushed hard for that out counterparts have resisted to a significant degree.

      Moreover, the TPP has been depicted as a core part of the “pivot to Asia” strategy, and Clinton was the architect of that. She’s not just a good team member, she’s was a central player on this one.

    2. knowbuddhau

      Oh my, thanks for the early morning laughs. I almost thought this was satirical. Are you being paid by Corrupt, excuse me, Correct the Record?

      Has Laura Bush or Michelle Obama ever held elected office? Either one ever been SecState or Senator? Run for POTUS? Attempted to craft a behemoth of a national health care plan? Most of all, has either ever said their unelected husband would be “in charge” of the economy, despite being the one campaigning to be elected to do just that?

      “No evidence that Hillary doesn’t share those concerns,” you say? As Yves says, she was the architect of the “pivot to Asia.” She had plenty of opportunity to show us if she did share them. Where’s the evidence she does?

      And if I were you, I’d avoid that “e” word altogether. Where’s the evidence she made any attempt to get authorization for her FOIA-defying email server? Oh that’s right, according to DoS itself, she didn’t, and wouldn’t have gotten it if she tried. Where’s the evidence she didn’t sell a public office for private gain? Among those 30,000 emails she tried so hard to hide?

      “Evidence.” Hooboy, what a hoot. Thanks again.

    3. tegnost

      “If we do this right, and that’s what we’re trying to do, then globalization, which is inevitable, can become a race to the top with rising standards of living and more broadly shared prosperity.”
      Leaving aside the comedy that is “race to the top” (how’s that plan working in the usa? o that’s right, in 2000 there were 49 billionaires, in 2012 there were 425, a shocking decline from the high of 469 in 2007! That’s some shared sacrifice for you…), globalization is a goal, not inevitable. Many have tried to rule the world (ok maybe not that many, but some) and to my knowledge none have succeeded. The globalization that is supposedly inevitable, however, ruins the lives of 90% of the people, and you’d have to be riding a magic sparkle pony to believe they’re going to go along with it. Look at greece for the best example of what happens when a country gives away it’s sovereignty for “the good of the whole” which is of course what globalists expect everyone to go along with. Look at the EZ, then extrapolate it globally, and that’s what your globalized world looks like, No thanks. We currently have a globally interconnected world and mostly free trade right now and the TPP and other trade deals are more protectionist than anything else, proving that our betters are actually afraid of competition. See hillerites demanding bernie drop out now because competition could hurt the hillz, what if she has to make some populist claim that she doesn’t believe? She’s only a liar if we make her a liar by forcing her to say something she doesn’t believe in order to win the competition with bernie, right? Most importantly, though, as all hillary apologists do,you claim
      “But there is no evidence that Hillary doesn’t share those same concerns.”
      There is also no evidence that she does share those concerns. If you’re correct then obama should release her emails on TPP. to prove you right. Lastly, do you favor obamas policies? If you do then by extension you support hillary supporting him, so postulations that “maybe” she doesn’t agree with him can only be countered with “maybe” robotic pigs can fly.. Since you support the TPP as she claims it is, then by all means vote for hillary, but don’t be so shocked when the plurality says “no thanks” like I do, the well being of k street is not as important to me as my own.

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