Thursday, May 14, 2015

Fast Tracking an International EPA - Howard Richman, Raymond Richman, and Jesse Richman

by Howard Richman, Raymond Richman, and Jesse Richman

Instead of creating a new tangle of international environmental regulations, there is a simple and principled way for the United States to structure its trade policy, one that is founded on the principle of reciprocity. If we require balanced trade in our trade agreements, we don’t have to regulate the practices of our trading partners.

American businesses are subject to many levels of regulation. But federal, state, and local levels of environmental regulation are not enough for President Obama. He is currently negotiating the Trans Pacific Partnership (TPP) which will add the equivalent of an international Environmental Protection Agency (EPA).

Obama’s enthusiasm for international regulation is no surprise. More surprising is that Senator Majority Leader Mitch McConnell is helping Obama. Political analyst Dick Morris is aghast. The title of his commentary about climate change and TPP is entitled:  “GOP: Lost Its Soul or Just Its Mind?

Ironically, this is the same McConnell who is fighting the federal EPA’s climate change regulations that are closing America’s coal-fired power plants and threatening the jobs of Kentucky miners.

Perhaps McConnell is simply unaware of TPP implications. TPP is secret from the American people and only two senators say that they have read it, neither of whom is named McConnell. 

McConnell reports that working so closely with Obama on Fast-Track has been “an almost out-of-body experience” for him. The simplest explanation is that McConnell has received a transplant of Nancy Pelosi’s brain!

Pelosi once famously said of ObamaCare: “You have to pass the bill so that you can find out what is in it.” Now, in effect, McConnell is telling his fellow senators: “We have to give up our right to amend Obama’s trade treaties so that we can find out what is in them!”

The International EPA

President Obama has not been secret about his goal to create an international EPA. In January 2014, his trade representative, who is negotiating the Trans Pacific Partnership (TPP) treaty, laid out environmental protection as Obama’s bottom line in the trade negotiations:
The United States’ position on the environment in the Trans-Pacific Partnership negotiations is this: environmental stewardship is a core American value, and we will insist on a robust, fully enforceable environment chapter in the TPP or we will not come to agreement.
Even though the current draft of TPP is secret, we do know Obama’s goals for this EPA. His trade representative continued:
Our proposals in the TPP are centered around the enforcement of environmental laws, including those implementing multilateral environmental agreements (MEAs) in TPP partner countries, and also around trailblazing, first-ever conservation proposals that will raise standards across the region. Furthermore, our proposals would enhance international cooperation and create new opportunities for public participation in environmental governance and enforcement.
So Obama’s main goal is to “implement multilateral environmental agreements.” What does this mean? The Brookings Institution’s Joshua Meltzer explains:
As a twenty-first-century trade agreement, the Trans-Pacific Partnership Agreement (TPP) presents an important opportunity to address a range of environmental issues, from illegal logging to climate change and to craft rules that strike an appropriate balance between supporting open trade and ensuring governments can respond to pressing environmental issues.
Would the climate change regulations be balanced? More likely they would be completely unfair, like the climate change agreement that Obama negotiated with China which commits the United States to a huge reduction in carbon emissions of 26% -28% from 2005 levels, but lets China, already a much larger carbon emitter, continue to expand its carbon emissions until 2030.

Now, climate change regulations aren’t yet in the treaty, and they won’t be added before the Republican Senate and the Republican House vote to give up their ability to amend the treaty. But it is obvious that they are coming. Dick Morris points out:
[E]nvironmental protections embodied in the agreement could be interpreted to require climate change regulation even in the absence of congressional authorization.
The administration is anxious to assure Congress that it has no such intentions, but we know that this president cannot be trusted to exercise restraint in using any power he has been granted.
And, once provisions for immigration and climate change are included in the treaty, they cannot be superseded or even modified by an act of Congress. The treaty provisions would have the force of the “law of the land” under our Constitution.
The climate change regulations might not even yet be in TPP when the House and Senate vote next year on whether or not to approve the final treaty in an up-or-down vote, but that doesn’t mean that they won’t be added before Obama leaves office. These treaties are “living agreements,” meaning that they can be changed without any input from Congress whatsoever. Senator Sessions explains:
A USTR outline of the Trans-Pacific Partnership (which TPA [Fast-Track] would expedite) notes in the “Key Features” summary that the TPP is a “living agreement.” This means the President could update the agreement “as appropriate to address trade issues that emerge in the future as well as new issues that arise with the expansion of the agreement to include new countries.” The “living agreement” provision means that participating nations could both add countries to the TPP without Congress’ approval (like China), and could also change any of the terms of the agreement, including in controversial areas such as the entry of foreign workers and foreign employees. Again: these changes would not be subject to congressional approval.
These regulations would be enforced by the private court system set up by TPP. The Washington Post comments:
[T]he Investor-State Dispute Settlement provisions [in TPP] establish a private corporate court system for foreign investors, giving them the right to sue the United States if any U.S. or state regulation… somehow infringes on future expected profits. There is no appeal. And damages -- imposed on taxpayers -- can reach billions of dollars.
This private court system is truly the most dangerous aspect of the TPP treaty. It lets injured businesses sue the U.S. Government for damages. It is much more dangerous than the toothless World Trade Organization, which relies upon member state tariff retaliation, not billion dollar fines, to enforce its decisions.

Balanced Trade -- The Alternative that Works

Instead of creating a new tangle of international environmental regulations, there is a simple and principled way for the United States to structure its trade policy, one that is founded on the principle of reciprocity. If we require balanced trade in our trade agreements, we don’t have to regulate the practices of our trading partners.

Congress could easily balance trade without any trade agreements whatsoever, simply by enacting the Scaled Tariff, a single country variable tariff which is applied to each trade-surplus trading partner proportionately to the trade surplus it runs with the United States.  As we show in our 2014 book Balanced Trade this approach complies with current international trade law.

With balanced trade, environmental regulations can be kept local. When a trading partner permits massive pollution in order to subsidize exports, the trade balancing tariff will prevent them from undermining U.S. production -- they have to import more from us if they want to export more to us.

A Pro-America Policy

Senator Sessions urges his colleagues to consider the novel idea of adopting a pro-America trade policy:
Our job is to raise our own standard of living here in America, not to lower our standard of living to achieve greater parity with the rest of the world. If we want an international trade deal that advances the interests of our own people, then perhaps we don’t need a “fast-track” but a regular track: where the President sends us any proposal he deems worthy and we review it on its own merits.
According to a 2014 poll, the vast majority of Republicans voters are with Sessions on this issue  Recently, Republican pollster Frank Luntz found that 70 percent of the American people believe that the trade agreements signed over the last two decades have benefitted other countries rather than the United States.  And, so far, five of the potential Republican candidates for president have expressed their opposition to Fast Track (Huckabee, Trump, Graham, Fiorini and Jindal). 

A Republican candidate who stands up for America could recreate the Reagan coalition and win a sweeping Republican victory in 2016. But instead, Senator McConnell is determined to help Obama pursue his anti-growth agenda. He has scheduled the first vote on Fast Track for Tuesday (May 12).

If Fast Track passes, Obama will be empowered to negotiate pretend “free trade” agreements that create the equivalent of an international EPA, enable currency manipulation, and slow U.S. economic growth far into the distant future. That would be Obama’s parting present to America -- gift wrapped by a Republican Congress.

The Richmans co-authored the 2014 book Balanced Trade: Ending the Unbearable Costs of America’s Trade Deficits, published by Lexington Books and the 2008 book Trading Away Our Future, published by Ideal Taxes Association.


Copyright - Original materials copyright (c) by the authors.

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