A little well-founded paranoia about a loss of U.S. sovereignty

By Rob Schofield - N.C. Policy Watch

There are a lot of good reasons to be skeptical about the claims of those who issue regular rants about “world government” and supposedly diabolical plots to subvert U.S. sovereignty. If you ever venture out into the political blogosphere or the world of social media (or just check your “junk mail” file), you know how these claims tend to go.

Usually, the allegation is that liberal elites led by our power mad, socialist President are on the verge of ceding all powers of the United States government to the United Nations. Sometimes the reference is to something called “Agenda 21.” At others, the claim is that a move is afoot to merge all of North America into one large new country that will be flooded with dark-skinned immigrants bent on overrunning Anglo Saxon culture.

The rants are, in a word, mad and deserving of all the derision that sane people can pour on them.

The world’s largest economy and most powerful country has nothing to fear from a paper tiger like the United Nations (or the people of Canada or Mexico for that matter) and the notion that any American president would voluntarily “surrender” to any or all of them is just plain silly.

None of this is to say, however, that negative consequences don’t frequently flow from international agreements. As states like North Carolina know only too well (see for instance the sometimes devastating legacies of “NAFTA” and “CAFTA”), the power of “free trade” agreements to cause harm to U.S. citizens while benefiting foreign and multi-national corporations is well-established. As analysts at the Economic Policy Institute detailed back in 2013, NAFTA cost hundreds of thousands of American jobs in its first two decades of operation.

And while such agreements are, of course, not always a one-way street — there are important national interests that can be served via an expansion of free trade, even sometimes at the expense of American jobs – it’s worth noting that average Americans have been much more likely to lose out to giant corporate interests than they have been to foreign governments or the bodies like the U.N. when it comes to the pursuit of international agreements in recent years.

This brings us to a topic much in the news in recent weeks: the so-called Trans Pacific Partnership or “TPP.” As reported in this space two years ago, the United States has been engaged for quite some time in secret negotiations to craft a giant new trade agreement that has the potential to have enormous and lasting impacts on the global economy.

The NAFTA-like threats to U.S. workers posed by TPP have received a great deal of attention in recent weeks. Indeed, even Presidential frontrunner Hillary Clinton has gone so far as to speak out against the proposal being negotiated by her former boss.

Senator Elizabeth Warren has also weighed in in opposition.

One area, however, that has received much less attention is the danger that TPP appears likely to pose to average consumers as they interact with corporations.

What this means, as a practical matter, is that U.S. consumer protection laws surrounding things like financial services (e.g. banking, insurance, asset management, pension funds, securities) and even pharmaceuticals, health care and environmental protection could be subjected to a “race to the bottom” competition in which countries seek to outdo each other in making their laws more favorable to business and then export them to fellow TPP states. For a relatively tame, real world example, think of the way U.S. credit card companies moved to Delaware and South Dakota to evade interest rate caps and then import higher rates back into other states.

If such a regime were in place on an international level (and a related agreement under negotiation — the “Trade in Services Agreement” (TISA) — could make matters even worse) it’s not hard to conceive of even more frightening examples that could ensue.

Predatory payday lending, for instance, is fully legal in the TPP signatory states Australia and New Zealand. From what we know so far about TPP, it seems quite possible that such businesses in those countries could bring actions to have U.S. laws (like North Carolina’s outright ban on payday loans) invalidated as unduly burdensome. What’s next – “lawful” home improvement scams based in Singapore? Vietnam-based credit insurance rip-offs?

None of this means, of course, that there’s some nefarious conspiracy afoot to deprive Americans of fundamental freedoms or to impose some massive and sudden overhaul of the republic. Most of the authors and supporters of TPP have no doubt convinced themselves that the overall impact of the deal will be positive for Americans.

That said, there is good reason to be extremely worried that the TPP represents an enormously troublesome transfer of law and rulemaking authority from democratic institutions to an undemocratic regime driven by profit and greed. As such, it represents but the latest in a long series of such events in which unaccountable multinational corporations are seizing greater and greater control of our lives.

Let’s hope members of Congress in both parties evince a significant measure of paranoia over such a possibility.

Rob Schofield is the Director of Research and Policy Development at N.C. Policy Watch


By Rob Schofield

N.C. Policy Watch

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