The Trans-Pacific Partnership: A Threat To America’s Retirees

IntroductionWe believe that highlighting the threat the TPP poses to retirees and Medicare is the right strategy to slow down and eventually

defeat the TPP.

With the knowledge of the strength of our message and our collective voices, we have created this presentation to assist you

in our ongoing fight against the TPP.

It includes everything you will need to better understand the TPP and ensure that you can work towards stopping its passage.

With details on the TPP itself, information on how prior “free” trade deals hurt working families and what next steps we need to take, the information here will help you to stop the TPP dead in

its tracks!

How “Free” Trade Deals Hurt Working Families and Retirees

• “Free” Trade cost American families jobs: Korea FTA= 75,000; NAFTA= 700,000; WTO= Millions

• It has made it easier to offshore jobs

• It has empowered global firms with special legal rights, but no obligations

• It has driven a race to the bottom in wages, environmental protections, and consumer standards

• Since China joined the WTO, the U.S. has lost more than 60,000 factories and more than 5 million manufacturing jobs

• Employers use the threat of offshoring to secure pay & benefit givebacks from U.S. unions and employees, including cuts to pensions and retirement savings, hurting current and future retirees.

KORUS: Korea-US Free Trade AgreementJobs Promised, Not Delivered

• The 2010 Korea-US Free Trade Agreement (KORUS) was supposed to add over 70,000 jobs. Instead it destroyed 40,000.

• KORUS was supposed to lower the U.S. trade deficit with Korea. In its first year, the deficit worsened by $5.8 billion - a whopping 39.8% increase in ONE year!

NAFTA• NAFTA (North American Free Trade Agreement), is the U.S.’s

largest regional FTA to date. In its 20 year history, it has:

• Cost the U.S. 700,000 jobs

• Undermined labor and environmental protections in the U.S., Canada, and Mexico

• Contributed to increasing inequality and stagnant wages in all 3 countries

• Increased corporate influence in all 3 countries, particularly through “ISDS,” private “corporate courts” used to hold democratically-enacted policies for ransom

• Undermined job creation policies including “Buy American”

NAFTA: Destroyed Jobs and Exploded the Trade Deficit

• NAFTA eliminated over 700,000 jobs from the U.S.

• U.S. had $1.6 billion trade surplus with Mexico before NAFTA; Today, we have a $97.2 billion trade deficit.

1993 (Before NAFTA)$1.3 Billion Trade SURPLUS

Supported 29,400 jobs

2010 $97.2 Billion Trade Deficit

Destroyed Over 700,000 jobs

Corporate Friendly “Free” Trade Deals Contribute To More Money For Profits, Less To Working Families And Retirees

Workers’ Share of National Income is Shrinking Leading To A Less Secure Retirement For Current And Future Retirees

“Free” Trade Deals Have Helped Detach Worker Productivity From Worker Wage Increases

Workers’ Share of National Income is Shrinking Leading To A Less Secure Retirement For Current And Future Retirees

Another result: Increasing Inequality!

Credit: EPI analysis of U.S. Census Bureau data.

1973-2009

1947-1973

Real family income growth

Off the charts!

Poorest 20%

Second20%

Middle 20%

Fourth 20%

Richest 20%

Top 0.1%

Top 0.01%

*1973-2008

645% rise in

income*

$27 million average income

454% rise in

income*

$3 million average income

117%

98%104% 105%

89%

-6%6%

16%

29%

57%

*Average income includes realized capital gains.

The Trans-Pacific Partnership = NAFTA on Steroids

• The Trans-Pacific Partnership covers 12 countries

• USA, Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Brunei, Malaysia, Singapore, and Vietnam

• These countries represent 40% of the global economy.

The TPP Isn’t Just About “Free” Trade It Affects Us Here At Home

• For example, the TPP covers:

• Labor laws

• Anti-Trust laws

• Patent & copyright laws

• Environmental protections

• Wall Street/banking regulations

• Food, cosmetic, and medical device safety

• Government purchasing (e.g., Buy American)

• Drug pricing in public healthcare programs such as Medicare

• A private justice system (“corporate courts”) for foreign investors

• Public services, such as transportation, healthcare, and education

TPP Threat: ISDS -- A Threat to Jobs & Democracy

The Investor-State Dispute Settlement (ISDS) provisions of the TPP would empower foreign corporations to:

• Bypass national courts

• Allow foreign investors to use private “corporate courts” to seek taxpayer compensation for local, state, or federal laws & regulations that threaten their “expected future profits”

• Has been used to attack decisions on toxic chemicals, local building permits, & even minimum wages

Here are some ways the TPP could affect your local government:

• Foreign firms could challenge “Big Box” laws designed to keep abusive employers out & preserve local retailers

• A foreign investor could challenge a decision to deny a permit to a dangerous/toxic facility

• A foreign investor could challenge a local minimum wage increase

• A foreign country could challenge state rules on the practice of medicine or insurance

• Your county government might not be able to prefer products from your state when purchasing

TPP Threat: Bye, Bye Buy American Policies

• The TPP will limit the ability of the federal government (and possibly state governments) to stimulate the economy by ensuring taxpayer monies can be used to buy U.S.-made goods and services.

• Companies could not be barred because of their human rights and labor rights records.

• It will constrain how national and state governments may use public funds in construction projects, purchases of goods and services, etc.

TPP Threat:Americans Competing With Third-World Wages• Suppression of the right to form independent

unions.

• Restrictions on Strikes. Vietnam’s Labor Code allows party-controlled unions to strike but imposes strict and cumbersome conditions that must first be met, which effectively nullify this right.

• Vietnam is guilty of using child labor and forced labor in its garment sector.

• There is a U.S. arms embargo against Vietnam because of its human rights violations and imprisonment of political dissidents

TPP Threat:Criminally Low Wages

$58.00

$8.70

$4.59$2.23

United States Malaysia China Vietnam

Daily Minimum Wages(January 2013 in Dollars)

Other TPP Threats:• Deregulation of banks, food safety & product

safety rules

• Foreign subsidized companies (SOEs) that behave in a predatory manner & undercut U.S. private sector firms lead to lost U.S. jobs

• Weak rules of origin that allow China and other countries to benefit without even agreeing to the rules lead to more outsourcing and lost U.S. jobs

• Continued weak & ineffective efforts to protect labor rights and ensure environmental compliance

• Less local control, more corporate control

The TPP Threat To Retirees:Higher Drug Prices For All Americans

• New monopoly rights for drug companies, making it harder to access generic medicines

• Biologics, other drugs remain expensive because no generic options

• U.S. patent rules already keep drug prices high and the TPP will make some patent rules worse

• Drug companies are using TPP to prevent Congress from ever reforming U.S. patent laws.

The TPP Threat To Retirees:Threatens Medicare

• Could undermine cost saving measures in Medicare.

• ISDS could be used to block Medicare policies that make drugs more affordable for taxpayers & beneficiaries.

• Block Congress from enacting price negotiations in Medicare or requiring discounts on drugs purchased.

TPP TIMELINE• When Congress passed Trade Promotion Authority, also known as Fast

Track, earlier this year it forced the approval of the TPP to follow a specific timeline:

• Once the White House gives notice of intent to sign the TPP a 90-day countdown until when Congress can vote on the deal begins.

• Members of Congress and staff with security clearances will have access to the deal during the first 30 days of the countdown, but not the public.

• After this 30-day period the text of the TPP will be released to the public, but then it must be voted on within 60 days.

• With only 2 months for the public to review before Congress must vote - time is of the essence.

What Do We Do Now?• It’s not too late to act!

• Text “TPP” to 235246

• Contact your state Alliance for Retired Americans at xxx-xxx-xxxx or xxxxx@xxxx.com

• Work on a campaign to pass a state or local resolution against a bad TPP

• Commit to telling at least one friend or family member about the dangers of TPP

• Share this PowerPoint and Alliance information on the TPP with friends or family

• Call your Member of Congress at 1-855-712-8441 to say “No TPP that doesn’t work for retirees!”

• Visit aflcio.org/trade and aflcio.org/blog to learn more