Report Impacts of the Trans-Pacific Partnership the Labor Advisory
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Report on the Impacts of the Trans-Pacific Partnership By The Labor Advisory Committee on Trade Negotiations and Trade Policy December 2, 2015 Table of Contents Table of Acronyms ................................................................................................................................................................... iv I. Executive Summary ........................................................................................................................................................ 6 II. A Note on the LAC Process .................................................................................................................................... 8 III. Statutorily Required Analysis .............................................................................................................................. 10 IV. Were the Trade Negotiating Objectives Set Forth in Fast Track 2015 Achieved and in the Best Interests of America’s Working Families? ....................................................................................................... 11 V. Were the Labor Advisory Committee’s Objectives Met? ........................................................................... 14 Currency: Objective not met. .............................................................................................................................. 14 Rules of Origin: Objectives not met. ................................................................................................................... 14 Market Access Assurances: Objective not met. ................................................................................................. 15 State-Owned Enterprises: While an SOE Chapter is included in the TPP, the LAC’s objectives were not met. .. 15 Labor: Objectives not met. .................................................................................................................................. 15 Investment: While the Investment Chapter has some very minor differences from the version in the Peru FTA, the LAC’s objectives were not met. ..................................................................................................................... 17 Enhanced Screening Mechanism for Inward Bound FDI: Objective not met. ..................................................... 18 Procurement: Objectives not met. ...................................................................................................................... 19 Dock-on: Objectives not met. .............................................................................................................................. 19 Elimination of Technology Transfer Mandates and Production Offsets in Return for Market Access: Objective not met. ............................................................................................................................................................... 20 Intellectual Property & Drug Pricing Transparency: Objectives partially met. ................................................... 21 Public Services: Objective not met. ..................................................................................................................... 21 Financial Services: Objective not met. ................................................................................................................ 22 Climate Change: Objective not met. ................................................................................................................... 22 VI. Analysis of the TPP’s Likely Effects on Critical Industries & Sectors ........................................... 23 Manufacturing—General..................................................................................................................................... 23 Aerospace Manufacturing ................................................................................................................................... 25 Air Transport Services .......................................................................................................................................... 26 Apparel and Textile .............................................................................................................................................. 26 Auto & Auto Parts Industry ................................................................................................................................. 27 Call Centers .......................................................................................................................................................... 29 Dairy .................................................................................................................................................................... 32 Meat/Proteins ..................................................................................................................................................... 33 i Public Sector ........................................................................................................................................................ 34 Steel ..................................................................................................................................................................... 35 VII. Analysis of Critical Issues in the TPP .................................................................................................................. 38 The LAC Expects the TPP to Drive Down Wages, Cost Jobs, and Have a Negative Impact on the U.S. Economy as a Whole................................................................................................................................................................ 38 Chart 1: Job Displacement Due to Existing Bad Trade Policies ....................................................................... 39 Chart 2: Workers’ Share of National Income is Shrinking (U.S.) (Credit: St. Louis Federal Reserve) .............. 40 Chart 3: Workers’ Share of National Income is Shrinking (Comparative) (Credit: The Economist) ................ 41 Currency Manipulation Is Addressed Only in a Completely Unenforceable Side Agreement, Wholly Outside the Legal Structure of the TPP ................................................................................................................................... 43 The TPP’s Provisions Relating to Medicines Jeopardize Access, Fail to Protect Public Health, and Undermine Sustainable Development ................................................................................................................................... 45 Intellectual Property ........................................................................................................................................ 46 Investment Chapter ......................................................................................................................................... 47 Transparency Annex ........................................................................................................................................ 47 The TPP’s Docking Provisions Don’t Ensure Appropriate Trading Partners or Guarantee Adequate Congressional Oversight and a Vote on New Members ...................................................................................... 48 The TPP Does Not Ensure Its Rules Will Be Adequately Resourced or Timely Enforced ..................................... 49 The TPP Fails to Live Up to “May 10” Standards ................................................................................................. 50 The TPP Will Not Help the U.S. Compete Against China ..................................................................................... 53 VIII. Analysis of the Impacts of Critical TPP Chapters ............................................................................... 55 Rules of Origin ..................................................................................................................................................... 55 State-Owned Enterprises..................................................................................................................................... 56 Government Procurement .................................................................................................................................. 58 Investment ........................................................................................................................................................... 58 Environment ........................................................................................................................................................ 60 Chart 4: Most Carbon Intensive Industries ...................................................................................................... 63 Chart 5: Carbon Intensive Industries by Trade Exposure (2009 figures) ......................................................... 63 Labor .................................................................................................................................................................... 64 IX. Analysis of Labor Conditions in TPP Partner Countries ............................................................................ 69 Australia ............................................................................................................................................................... 69 Brunei .................................................................................................................................................................