Category: International Commerce

How Lovely!

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As Secretary of State, Hillary Clinton had her State Department aggressively push fracking across the world:

One icy morning in February 2012, Hillary Clinton’s plane touched down in the Bulgarian capital, Sofia, which was just digging out from a fierce blizzard. Wrapped in a thick coat, the secretary of state descended the stairs to the snow-covered tarmac, where she and her aides piled into a motorcade bound for the presidential palace. That afternoon, they huddled with Bulgarian leaders, including Prime Minister Boyko Borissov, discussing everything from Syria’s bloody civil war to their joint search for loose nukes. But the focus of the talks was fracking. The previous year, Bulgaria had signed a five-year, $68 million deal, granting US oil giant Chevron millions of acres in shale gas concessions. Bulgarians were outraged. Shortly before Clinton arrived, tens of thousands of protesters poured into the streets carrying placards that read “Stop fracking with our water” and “Chevron go home.” Bulgaria’s parliament responded by voting overwhelmingly for a fracking moratorium.

Clinton urged Bulgarian officials to give fracking another chance. According to Borissov, she agreed to help fly in the “best specialists on these new technologies to present the benefits to the Bulgarian people.” But resistance only grew. The following month in neighboring Romania, thousands of people gathered to protest another Chevron fracking project, and Romania’s parliament began weighing its own shale gas moratorium. Again Clinton intervened, dispatching her special envoy for energy in Eurasia, Richard Morningstar, to push back against the fracking bans. The State Depart­ment’s lobbying effort culminated in late May 2012, when Morningstar held a series of meetings on fracking with top Bulgarian and Romanian officials. He also touted the technology in an interview on Bulgarian national radio, saying it could lead to a fivefold drop in the price of natural gas. A few weeks later, Romania’s parliament voted down its proposed fracking ban and Bulgaria’s eased its moratorium.

The episode sheds light on a crucial but little-known dimension of Clinton’s diplomatic legacy. Under her leadership, the State Department worked closely with energy companies to spread fracking around the globe—part of a broader push to fight climate change, boost global energy supply, and undercut the power of adversaries such as Russia that use their energy resources as a cudgel. But environmental groups fear that exporting fracking, which has been linked to drinking-water contamination and earthquakes at home, could wreak havoc in countries with scant environmental regulation. And according to interviews, diplomatic cables, and other documents obtained by Mother Jones, American officials—some with deep ties to industry—also helped US firms clinch potentially lucrative shale concessions overseas, raising troubling questions about whose interests the program actually serves.

………

Clinton, who was sworn in as secretary of state in early 2009, believed that shale gas could help rewrite global energy politics. “This is a moment of profound change,” she later told a crowd at Georgetown University. “Countries that used to depend on others for their energy are now producers. How will this shape world events? Who will benefit, and who will not?…The answers to these questions are being written right now, and we intend to play a major role.” Clinton tapped a lawyer named David Goldwyn as her special envoy for international energy affairs; his charge was “to elevate energy diplomacy as a key function of US foreign policy.”

………

Goldwyn had a long history of promoting drilling overseas—both as a Department of Energy official under Bill Clinton and as a representative of the oil industry. From 2005 to 2009 he directed the US-Libya Business Association, an organization funded primarily by US oil companies—including Chevron, Exxon Mobil, and Marathon—clamoring to tap Libya’s abundant supply. Goldwyn lobbied Congress for pro-Libyan policies and even battled legislation that would have allowed families of the Lockerbie bombing victims to sue the Libyan government for its alleged role in the attack.

………

But environmental groups were barely consulted, while industry played a crucial role. When Goldwyn unveiled the initiative in April 2010, it was at a meeting of the United States Energy Association, a trade organization representing Chevron, Exxon Mobil, and ConocoPhillips, all of which were pursuing fracking overseas. Among their top targets was Poland, which preliminary studies suggested had abundant shale gas. The day after Goldwyn’s announcement, the US Embassy in Warsaw helped organize a shale gas conference, underwritten by these same companies (plus the oil field services company Halliburton) and attended by officials from the departments of State and Energy.

………

Around the time of his departure, WikiLeaks released a slew of diplomatic cables, including one describing a 2009 meeting during which Goldwyn and Canadian officials discussed development of the Alberta oil sands—a project benefiting some of the same firms behind the US-Libya Business Association. The cable said that Goldwyn had coached his Canadian counterparts on improving “oil sands messaging” and helped alleviate their concerns about getting oil sands crude to US markets. This embarrassed the State Department, which is reviewing the controversial Keystone XL pipeline proposal to transport crude oil from Canada and is under fire from environmentalists.

After leaving State, Goldwyn took a job with Sutherland, a law and lobbying firm that touts his “deep understanding” of pipeline issues, and launched his own company, Goldwyn Global Strategies.

In late 2011, Clinton finally unveiled the new Bureau of Energy Resources, with 63 employees and a multimillion-dollar budget. She also promised to instruct US embassies around the globe to step up their work on energy issues and “pursue more outreach to private-sector energy” firms, some of which had generously supported both her and President Barack Obama’s political campaigns. (One Chevron executive bundled large sums for Clinton’s 2008 presidential bid, for example.)

So Clinton, who at the Flint debates was using double-talk about common sense regulations, employed a energy industry lobbyist to run her policy of aggressively pushing fracking to the world.

Later in the article, they talk about how her pet lobbyist lobbied aggressively for Canadian tar sands at State.

Yes, she sure sounds like someone who is serious about the dangers of fracking and Canadian bitumen, and the associated problems with global warming, doesn’t she?

Why Trump Might Become President

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For all of his bombast, Thomas Franks notes that Donald Trump has a serious and real position on trade that is unique amongst his Republican compatriots, specifically he is the only one who talks against the current regime of free trade fetishism that is the Washington Consensus.

Over the past 50 years, there has been a trajectory towards greater trade liberalization, along with a massive expansion in property rights and rents.

Ordinary Americans note that this has made their lives, and the lives of their children, measurably worse.

The Very Serious People (VSPs) among our elites argue that in the long run we will benefit, but it’s been over 2 generations with poor results, and as John Maynard Keynes said, “In the long run, we are all dead.”

The VSPs maintain that it is all racism.  It’s something more significant than that:

………

Or so we’re told. Last week, I decided to watch several hours of Trump speeches for myself. I saw the man ramble and boast and threaten and even seem to gloat when protesters were ejected from the arenas in which he spoke. I was disgusted by these things, as I have been disgusted by Trump for 20 years. But I also noticed something surprising. In each of the speeches I watched, Trump spent a good part of his time talking about an entirely legitimate issue, one that could even be called leftwing.

Yes, Donald Trump talked about trade. In fact, to judge by how much time he spent talking about it, trade may be his single biggest concern – not white supremacy. Not even his plan to build a wall along the Mexican border, the issue that first won him political fame. He did it again during the debate on 3 March: asked about his political excommunication by Mitt Romney, he chose to pivot and talk about … trade.

It seems to obsess him: the destructive free-trade deals our leaders have made, the many companies that have moved their production facilities to other lands, the phone calls he will make to those companies’ CEOs in order to threaten them with steep tariffs unless they move back to the US.

Trump embellished this vision with another favorite leftwing idea: under his leadership, the government would “start competitive bidding in the drug industry”. (“We don’t competitively bid!” he marveled – another true fact, a legendary boondoggle brought to you by the George W Bush administration.) Trump extended the critique to the military-industrial complex, describing how the government is forced to buy lousy but expensive airplanes thanks to the power of industry lobbyists.

Or so we’re told. Last week, I decided to watch several hours of Trump speeches for myself. I saw the man ramble and boast and threaten and even seem to gloat when protesters were ejected from the arenas in which he spoke. I was disgusted by these things, as I have been disgusted by Trump for 20 years. But I also noticed something surprising. In each of the speeches I watched, Trump spent a good part of his time talking about an entirely legitimate issue, one that could even be called leftwing.

Yes, Donald Trump talked about trade. In fact, to judge by how much time he spent talking about it, trade may be his single biggest concern – not white supremacy. Not even his plan to build a wall along the Mexican border, the issue that first won him political fame. He did it again during the debate on 3 March: asked about his political excommunication by Mitt Romney, he chose to pivot and talk about … trade.

It seems to obsess him: the destructive free-trade deals our leaders have made, the many companies that have moved their production facilities to other lands, the phone calls he will make to those companies’ CEOs in order to threaten them with steep tariffs unless they move back to the US.

Trump embellished this vision with another favorite leftwing idea: under his leadership, the government would “start competitive bidding in the drug industry”. (“We don’t competitively bid!” he marveled – another true fact, a legendary boondoggle brought to you by the George W Bush administration.) Trump extended the critique to the military-industrial complex, describing how the government is forced to buy lousy but expensive airplanes thanks to the power of industry lobbyists.

The most frightening thing about Donald Trump is that he is the best Republican on the issues, not his demagoguery.

Headline of the Day

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Clowns Kicked out of Trans Pacific Partnership Roadshow.

It’s a real headline, and it does not refer to the people trying to sell that piece of unmitigated crap, it refers to actual clowns:

Four people dressed as clowns have been kicked out of the first stop of the Government’s Trans-Pacific Partnership information roadshow in Auckland.

The quartet were honking horns, blowing balloons and laughing, Newstalk ZB reported.

Master of Ceremonies Sean Plunket asked those also present at the roadshow to vote on whether they should be allowed to stay, before they were escorted out by police.

The 12-country agreement is designed to free up trade and investment between the countries, but has been a beacon for controversy for several years, mainly due to the secrecy of the deal, lack of public consultation and fears New Zealand’s sovereignty could be diminished. Widespread protests occurred when it was signed in Auckland a month ago, and traffic in the city was brought to a halt by protesters who blocked roads and motorway on and off-ramps.

I do understand why they were thrown out.

The real clowns are the people in suits trying to sell the deal.

Another TTP/TTIP Talking Point Shown to be a Lie

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One of the claims made by the supporters of current and pending trade deals is that the US has never been sued through the Investor-State Dispute Settlement (ISDS) process, with the implication that such a suit will simply never happen.

Not so much:

A $15 billion lawsuit by the company behind the Keystone XL pipeline against the US government shows the serious threat to democracy posed by special privileges for investors, a new report has said. TransCanada is suing under investor-state dispute settlement (ISDS) clauses of the North American Free Trade Agreement (NAFTA) to demand damages following rejection of the controversial pipeline due to its climate impact.

Keystone illustrates how the increasingly common ISDS clauses, that are contained in the draft EU-Canada trade agreement (CETA) and the proposed EU-US deal (TTIP), can be used to undermine climate action, the report by T&E, Friends of the Earth Europe and Sierra Club stated.

Last year US president Barack Obama denied permission to build the US-stage of the Keystone XL pipeline, which would have transported crude oil from Canada’s tar sands to American refineries, as it was not in the interest of national security and would have undercut America’s climate leadership. TransCanada’s lawsuit is under chapter 11 of NAFTA, which allows multinational corporations to sue governments if they feel they have not been treated as a domestic company would have been.

TransCanada has reportedly invested $3.1 billion in the project but is seeking five times this amount in damages. It will be able to launch its case as early as May 2016. A three-judge tribunal will issue a ruling, which cannot be appealed to any national court. It can award damages but not force the US to grant permission for Keystone to be built.

The ISDS process as currently practiced is a morass of corruption and opacity.

It’s underlying philosophy is that government has no rights to protect the common good, and that any lost profits as a result is a taking.

It is a perverted and evil thing.

F%$# the Mouse

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You know, now that Mickey has stopped palling around with Michael Eisner, Disney has really gone to the dark side:

The Walt Disney Company has a reputation for lobbying hard on copyright issues. The 1998 copyright extension has even been dubbed the “Mickey Mouse Protection Act” by activists like Lawrence Lessig that have worked to reform copyright laws.

This year, the company is turning to its employees to fund some of that battle. Disney CEO Bob Iger has sent a letter to the company’s employees, asking for them to open their hearts—and their wallets—to the company’s political action committee, DisneyPAC.

In the letter, which was provided to Ars by a Disney employee, Iger tells workers about his company’s recent intellectual property victories, including stronger IP protections in the Trans-Pacific Partnership, a Supreme Court victory that destroyed Aereo, and continued vigilance about the “state of copyright law in the digital environment.” It also mentions that Disney is seeking an opening to lower the corporate tax rate.

“With the support of the US Government we achieved a win in the Supreme Court against Aereo—an Internet service claiming the right to retransmit our broadcast signals without paying copyright or retransmission consent fees,” writes Iger. “In the coming year, we expect Congress and the Administration to be active on copyright regime issues, efforts to enact legislation to approve and implement the Trans-Pacific Partnership trade agreement, tax reform, and more proposals to weaken retransmission consent, to name a few.”

The source who provided the letter to Ars asked to remain anonymous, and they were bothered by the assumption that anyone who worked for Disney would agree with the company’s political positions on tax, trade, intellectual property, and other matters.

“It just seems insensitive to folks that support the company but don’t necessarily support all of its priorities,” the source said. “Especially for something like TPP, which I view as particularly controversial. We do have a company position, but there’s going to be a wide variety of opinion [within the company].”

………
The Disney letter has language explicitly reassuring employees that their jobs won’t be affected by their decision whether or not to give to DisneyPAC.

“Your contribution is important to all of us, but I want to emphasize that all contributions are voluntary and have no impact on your job status, performance review, compensation, or employment,” writes Iger. “Any amount given or the decision not to give will not advantage or disadvantage you.”

If you believe that Disney won’t be making a list and checking it twice, you still believe in Santa Claus.

This isn’t a United Way drive, this is a demand to employees that they give to an organization promulgating Disney’s interest.

As I said at the start, f%$# the mouse.

And this is Mild Compared to the Trans-Pacific Partnership

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The WTO has just ruled that requiring the labeling of dolphin safe tuna is an unacceptable restraint of trade:

International trade deals like the Trans-Pacific Partnership (TPP) need to be carefully examined piece by piece because they can take precedence over a country’s own laws.

Case in point: the World Trade Organization (WTO) on Friday ruled that dolphin-safe tuna labeling rules — required by U.S. law, in an effort to protect intelligent mammals from slaughter — violate the rights of Mexican fishers.

As a result, the U.S. will have to either alter the law or face sanctions from Mexico.

I wrote a few weeks ago about how the “investor-state dispute settlement system” baked into trade agreements can force countries to compensate corporations when regulations cut into their profits.

The long-running quarrel over tuna reveals another way that domestic laws can be overturned by trade agreements: when countries can file trade challenges on behalf of domestic industries.

“This should serve as a warning against expansive trade deals like the Trans-Pacific Partnership that would replicate rules that undermine safeguards for wildlife, clean air, and clean water,” said the Sierra Club’s Ilana Solomon in a statement.

This short of crap is a feature of trade deals, not a bug.

It’s Good Policy. It’s Good Politics, and So the Tories and the Lib-Dems Will Not Support It

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But all the leaders of the other major parties are demanding that the National Heal Service be protected against predatory investors:

Leaders of almost every major political party in the United Kingdom have signed an appeal not to allow a transatlantic trade deal known as TTIP become the Trojan horse that allows American business interests to take over the NHS.

The appeal, organised by the trade union Unite, has achieved the rare feat of bringing together all of Northern Ireland’s main political parties. TTIP, or the Transatlantic Trade and Investment Partnership, would free up trade between the US and the EU, by allowing companies from either side of the Atlantic to operate under the same rules.

One of its most controversial elements would be the creation of a new supranational court, the Investor State Dispute Settlement (ISDS) through which foreign investors could sue governments, or the EU, over any action or legislation that hurt their businesses. It is feared that an American private healthcare firm which was prevented from buying up part of the NHS would be able to go to the ISDS and claim millions of pounds in compensation from the British government for lost business.

………

The appeal has also been signed by the Labour leader, Jeremy Corbyn, Scotland’s First Minister, Nicola Sturgeon, the Ukip leader Nigel Farage, the Green Party leader Natalie Bennett, and Plaid Cymru leader Leanne Wood, and by Peter Robinson of the Democratic Unionist Party, and Sinn Fein’s Martin McGuinness.


The organisers, from Unite, say that they approached the Conservatives asking for support but were refused, and are awaiting a reply from the Liberal Democrats.

The Tories have been wanting to privatize the NHS since it began operations in 1948, and the Liberal Democrats have specialized in being completely useless and ineffectual since before Lloyd George died, so their actions are not surprising.

Unfortunately, in the mad rush for a bad deal, it is very likely that privatized healthcare, with its associated excessive spending and poor health outcomes, will be in the UK’s future.

This is not a Surprise

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As far as trade agreements are concerned, the recent focus here on Techdirt and elsewhere has been on TPP as it finally achieved some kind of agreement — what kind, we still don’t know, despite promises that the text would be released as soon as it was finished. But during this time, TPP’s sibling, TAFTA/TTIP, has been grinding away slowly in the background. It’s already well behind schedule — there were rather ridiculous initial plans to get it finished by the end of last year — and there’s now evidence of growing panic among the negotiators that they won’t even get it finished by the end of President Obama’s second term, which would pose huge problems in terms of ratification.

One sign of that panic is that the original ambitions to include just about everything are being jettisoned, as it becomes clear that in some sectors — cosmetics, for example — the US and EU regulatory approaches are just too different to reconcile. Another indicator is an important leaked document obtained by the Guardian last week. It’s the latest (29 September) draft proposal for the chapter on sustainable development. What emerges from every page of the document, embedded below, is that the European Commission is now so desperate for a deal — any deal — that it has gone back on just about every promise it made (pdf) to protect the environment and ensure that TTIP promoted sustainable development. Three environmental groups — the Sierra Club, Friends of the Earth Europe and PowerShift — have taken advantage of this leak to offer an analysis of the European Commission’s real intent in the environmental field. They see four key problems:

The leaked text fails to provide any adequate defense for environment-related policies likely to be undermined by TTIP. For example, nothing in the text would prevent foreign corporations from launching challenges against climate or other environmental policies adopted on either side of the Atlantic in unaccountable trade tribunals.

The environmental provisions are vaguely worded, creating loopholes that would allow governments to continue environmentally harmful practices. The chapter lacks any obligation to ratify multilateral agreements that would bolster environmental protection and includes a set of vague goals with respect to biological diversity, illegal wildlife trade, and chemicals.

The leaked text includes several provisions that the European Commission may claim as “safeguards,” such as a recognition of the “right of each Party determine its sustainable development policies and priorities” but none would effectively shield environmental policies from being challenged by rules in TTIP.

There is no enforcement mechanism for any of the provisions mentioned in the text. Even if one were included, it would still be weaker than the enforcement mechanism provided for foreign investors either through the investor-state dispute settlement mechanism or the renamed investment court system.

This is how this is really supposed to work.

You make promises to protect the people, and then declare that an agreement is essential, so you cannot keep those promises.

The goals of these deals are, and have been for as long as I remember, has been to screw the ordinary citizen at the for the benefit of the already obscenely rich.

This Is a Feature, Not a Bug

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According to recently leaked documents, it appears that the TTIP will not contain meaningful environmental standards:

The EU appears to have broken a promise to reinforce environmental protections in a leaked draft negotiating text submitted in the latest round of TTIP talks in Miami.

In January, the bloc promised to safeguard green laws, defend international standards and protect the EU’s right to set high levels of environmental protection, in a haggle with the US over terms for a free trade deal.

But a confidential text seen by the Guardian and filed in the sustainable development chapter of negotiations earlier this week contains only vaguely phrased and non-binding commitments to environmental safeguards.

No obligations to ratify international environmental conventions are proposed, and ways of enforcing goals on biodiversity, chemicals and the illegal wildlife trade are similarly absent.

The document does recognise a “right of each party to determine its sustainable development policies and priorities”. But lawyers say this will have far weaker standing than provisions allowing investors to sue states that pass laws breaching legitimate expectations of profit.

“The safeguards provided to sustainable development are virtually non-existent compared to those provided to investors and the difference is rather stark,” said Tim Grabiel, a Paris-based environmental attorney. “The sustainable development chapter comprises a series of aspirational statements and loosely worded commitments with an unclear dispute settlement mechanism. It has little if any legal force.”

………

US officials maintain that few such cases are ever likely to be brought under the TTIP, which could wipe away tariffs in the world’s largest ever free trade deal.

However, environmental cases accounted for 60% of the 127 ISDS cases already brought against EU countries under bilateral trade agreements in the last two decades, according to Friends of the Earth Europe. Europe’s taxpayers paid out at least $3.5bn to private investors as a result.

Natacha Cingotti, a trade campaigner for the group, said that only a carve-out of environmental protections from the tribunal process could prevent such cases mushrooming after a TTIP deal.

“This new leak illustrates that the European commission is not serious about protecting essential safeguards for citizens and the environment in the context of the TTIP talks,” she told the Guardian. “Powerful corporate polluters are likely to get VIP treatment under it, while the only chapter that could bring strong language to protect essential regulations to build a sustainable future is weak and unenforceable.”

This is what always happens, because the goal of all of these deals has been to encourage a race to the bottom in terms of labor and environmental standards while making sure that the interests of parasitic financial interests are protected at all costs.

This has always been what drives these deals.

Good News

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Of course, if Europeans on the the TTIP trade deal, then the privacy ruling of the European High Court would go away:

Europe’s top court, the Court of Justice of the European Union (CJEU), has struck down the 15-year-old Safe Harbour agreement that allowed the free flow of information between the US and EU. The most significant repercussion of this ruling is that American companies, such as Facebook, Google, and Twitter, may not be allowed to send user data from Europe back to the US.

It’s important to note that the CJEU’s ruling (PDF) will not immediately prevent US companies from sending data back to the motherland. Rather, the courts in each EU member state can now rule that the Safe Harbour agreement is illegal in their country. It is is very unlikely, however, that a national court would countermand the CJEU’s ruling in this case.

The case was originally sent to the CJEU by the High Court of Ireland, after the Irish data protection authority rejected a complaint from Maximillian Schrems, an Austrian citizen. He had argued that in light of Snowden’s revelations about the NSA, the data he provided to Facebook that was transferred from the company’s Irish subsidiary to the US under the Safe Harbour scheme was not, in fact, safely harboured. Advocate General Yves Bot of the CJEU agreed with Schrems that the EU-US Safe Harbour system did not meet the requirements of the Data Protection Directive, because of NSA access to EU personal data.

According to an earlier CJEU statement (PDF), “the access enjoyed by the United States intelligence services to the transferred data constitutes an interference with the right to respect for private life and the right to protection of personal data, which are guaranteed by the [Charter of Fundamental Rights of the EU].” Another issue, according to the Advocate General, was “the inability of citizens of the EU to be heard on the question of the surveillance and interception of their data in the United States,” which therefore amounts to “an interference with the right of EU citizens to an effective remedy, protected by the Charter.”

Because the CJEU was ruling on an issue in Ireland, the Irish court is expected to make its own judgement shortly. It is likely that the Irish court will side with the CJEU. When that happens, one of two things will need to happen: Facebook, and many other US companies with Irish subsidiaries, will need to keep European data within the EU; or the US will need to provide real privacy protection for EU data when it flows back to the US. As the latter is unlikely due to pressure from the NSA and other intelligence agencies, we suspect most US companies will opt for the former.

If the TTIP, the trans-Atlantic version of the TPP, is adopted, all of these protections go away, because profits trump people under these deals.

You Arrogant Ass! You Killed Us!

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Somehow or other, they got an agreement on the Trans Pacific Partnership (TPP), so they win, and the rest of us lose:

The United States and 11 other Pacific Rim countries have agreed to wide-ranging trade pact that would eliminate duties on countless goods and establish uniform rules on intellectual property, labor rights and the environment.

The seven-year effort by the U.S., concluded Monday, was aimed at embedding an American-led vision of an economic and political order in Asia. If approved by Congress, the accord would be the biggest regional trade pact ever reached and one that the U.S. hopes will be a model for future agreements.

The Trans-Pacific Partnership, or TPP, trade deal is expected to help a few U.S. industries while hurting a handful of others. In general, the deal will benefit larger companies in several industries such as pharmaceuticals, entertainment and other services where the U.S. is a global leader. Businesses such as mom-and-pop car-part dealers and apparel makers will probably face more competition from foreign-made goods.

Basically, small businesses get the shaft, as do workers, union rights, environmental and safety protections.

This is a bad deal, and a bankrupt philosophy, and Obama pushed it because he wanted to check another box on his legacy ticket.

I will be calling my Representative and my Senators, and telling him that if they vote for the TPP, I will vote against them in the primary, and in the general.

I’m not just talking about a symbolic vote. I’ll vote for whoever is most likely to defeat them, even if this is a Republican.*

My Hope is that there are enough Republicans who will let their hysterical hatred of Obama to vote this down, even though their corporate masters want this.

*I just threw up in my mouth.

Good Idea

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The Deputy Governor of the People’s Bank of China, their central bank, is calling for the the imposition of a financial transactions tax:

China should take measures, such as the so-called Tobin tax, to deter currency speculators, according to central bank Deputy Governor Yi Gang.

The steps could include a punitive levy on foreign-exchange trades and the imposition of “handling” fees to counter short-term capital flows aiming for arbitrage, Yi wrote in an article in China Finance magazine, a People’s Bank of China publication. He is revisiting the Tobin tax idea after mentioning it more than a year ago.

His comments suggest the PBOC take greater control of the currency at a time when China is looking to satisfy the International Monetary Fund’s condition that the yuan be more freely usable before it can be admitted into the agency’s Special Drawing Rights basket. While the nation is opening up the interbank bond and currency markets to foreign central banks, it has introduced measures against bets on yuan declines after a surprise devaluation in August triggered the biggest monthly slide since 1994.

Nobel Laureate economist James Tobin first proposed the levy in 1972 after U.S. President Richard Nixon’s decision to abandon the dollar’s peg with gold pushed up global volatility. The tax has in the past been rejected by economies from Europe to South Korea because of the risk investors will simply take their business elsewhere.

That last bit is false, of course.

The British financial center, the City of London, has been a major financial center even though it has a ½% transaction tax.

This suggestion is largely a statement of self interest:  China is experiencing, or will soon experience, a downturn, and when that happens they would be whipsawed by destructive capital flows.

Setting this up before a panic would be beneficial.

Setting this up now and forever, on all financial transactions to discourage unproductive speculation would be a very good thing.

Uruguay is Now My Favorite Latin American Nation

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Last year, they legalized Marijuana, and now they have regected the Trade in Services Agreement (TISA) international trade deal:

Often referred to as the Switzerland of South America, Uruguay is long accustomed to doing things its own way. It was the first nation in Latin America to establish a welfare state. It also has an unusually large middle class for the region and unlike its giant neighbors to the north and west, Brazil and Argentina, is largely free of serious income inequality.

Two years ago, during José Mujica’s presidency, Uruguay became the first nation to legalize marijuana in Latin America, a continent that is being ripped apart by drug trafficking and its associated violence and corruption of state institutions.

Now Uruguay has done something that no other semi-aligned nation on this planet has dared to do: it has rejected the advances of the global corporatocracy.

………

Earlier this month Uruguay’s government decided to end its participation in the secret negotiations of the Trade in Services Agreement (TISA). After months of intense pressure led by unions and other grassroots movements that culminated in a national general strike on the issue – the first of its kind around the globe – the Uruguayan President Tabare Vazquez bowed to public opinion and left the US-led trade agreement.

………

TiSA involves more countries than TTIP and TPP combined: The United States and all 28 members of the European Union, Australia, Canada, Chile, Colombia, Costa Rica, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Taiwan and Turkey.

Together, these 52 nations form the charmingly named “Really Good Friends of Services” group, which represents almost 70% of all trade in services worldwide. Until its government’s recent u-turn Uruguay was supposed to be the 53rd Good Friend of Services.

………
TiSA has spent the last two years taking shape behind the hermetically sealed doors of highly secure locations around the world. According to the agreement’s provisional text, the document is supposed to remain confidential and concealed from public view for at least five years after being signed. Even the World Trade Organization has been sidelined from negotiations.
But thanks to whistle blowing sites like WikiLeaks, the Associated Whistleblowing Press and Filtrala, crucial details have seeped to the surface. Here’s a brief outline of what is known to date (for more specifics click here, here and here):
1.TiSA would “lock in” the privatization of services – even in cases where private service delivery has failed – meaning governments can never return water, energy, health, education or other services to public hands.
2.TiSA would restrict signatory governments’ right to regulate stronger standards in the public’s interest. For example, it will affect environmental regulations, licensing of health facilities and laboratories, waste disposal centres, power plants, school and university accreditation and broadcast licenses.
3.TiSA would limit the ability of governments to regulate the financial services industry, at a time when the global economy is still struggling to recover from a crisis caused primarily by financial deregulation. More specifically, if signed the trade agreement would:

  • Restrict the ability of governments to place limits on the trading of derivative contracts — the largely unregulated weapons of mass financial destruction that helped trigger the 2007-08 Global Financial Crisis.
  • Bar new financial regulations that do not conform to deregulatory rules. Signatory governments will essentially agree not to apply new financial policy measures which in any way contradict the agreement’s emphasis on deregulatory measures.
  • Prohibit national governments from using capital controls to prevent or mitigate financial crises. The leaked texts prohibit restrictions on financial inflows – used to prevent rapid currency appreciation, asset bubbles and other macroeconomic problems – and financial outflows, used to prevent sudden capital flight in times of crisis.
  • Require acceptance of financial products not yet invented. Despite the pivotal role that new, complex financial products played in the Financial Crisis, TISA would require governments to allow all new financial products and services, including ones not yet invented, to be sold within their territories.

4. TiSA would ban any restrictions on cross-border information flows and localization requirements for ICT service providers. A provision proposed by US negotiators would rule out any conditions for the transfer of personal data to third countries that are currently in place in EU data protection law. In other words, multinational corporations will have carte blanche to pry into just about every facet of the working and personal lives of the inhabitants of roughly a quarter of the world’s 200-or-so nations.

As I wrote in LEAKED: Secret Negotiations to Let Big Brother Go Global, if TiSA is signed in its current form – and we will not know exactly what that form is until at least five years down the line – our personal data will be freely bought and sold on the open market place without our knowledge; companies and governments will be able to store it for as long as they desire and use it for just about any purpose.

Obviously, in the grand scheme of things, Uruguay doesn’t count for a whole lot, the whole country has a population is less than that of Los Angeles, but it is the first time that any country involved in the negotiations has pulled out, and should make it easier for another nation to take this step, which means that that standing up to the interests of the US, which are primarily to support data brokers, pharma, IP restrictions, and the banksters.

This is a good thing for the people of Uruguay, and if it leads to more countries pulling out of this agreement, it will be a good thing for the world.

TPP: the Fat Lady Ain’t Singing, but She Is Warming Up

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At the end of last month, the negotiations that were supposed to put the Trans Pacific Partnership (TPP) ended without an agreement.

What’s more, there wasn’t even a date set for a followup summit:

Trade negotiators from the United States and 11 other Pacific nations failed to reach final agreement on Friday, with difficult talks on the largest regional trade agreement ever deadlocking over protections for drug companies and access to agriculture markets on both sides of the Pacific.

Trade ministers, in a joint statement, said late Friday they had made “significant progress” and will return to their home countries to obtain high-level signoffs for a small number of final sticking points on the agreement, the Trans-Pacific Partnership, with bilateral talks reconvening soon.

“There are an enormous number of issues that one works through at these talks, narrowing differences, finding landing zones,” said Michael B. Froman, the United States trade representative. “I am very impressed with the work that has been done. I am gratified by the progress that has been made.”

Still, the breakdown is a setback for the Obama administration, which had promoted the talks here as the final round ahead of an accord that would bind 40 percent of the world’s economy under a new set of rules for commerce.

This is a failure, and a big one.

In a normally unproductive summit, the Japanese would oblique.

When a Japanese diplomat says, “It would be difficult,” it should be read “No!” with the explanation point, and when a Japanese diplomat says that, “It would be very difficult, it’s the equivalent of “F%$# You White Man.”

This time, the Japanese Economy Minister, who is their lead on this deal, just explicitly stated that the US were too wimpy:

Japan has expressed concern about a loss of momentum in talks on a pan-Pacific trade pact after participants failed to agree to meet again this month to try to clinch a deal that would cover 40 percent of the global economy.

Ministers from the 12 nations negotiating the Trans-Pacific Partnership (TPP), which would stretch from Japan to Chile, fell short of a deal at talks last month on the Hawaiian island of Maui, despite early optimism.

Japanese Economy Minister Akira Amari, in a blog circulated on Tuesday, also questioned why the United States appeared to have lacked its usual “stubborn persistence” at those talks, despite a willingness of some countries to stay to try to reach an agreement.

If this were translated into standard American discourse, it would use language that would make George Carlin uncomfortable.

And from Australia, a country whose foreign policy is defined by a desperate need to be “In the Club”, the Trade Minister is saying that a deal is unlikely:

Australia’s trade minister, Andrew Robb, has appeared at the National Press Club in Canberra today, where he admitted that concluding the Trans-Pacific Partnership (TPP) trade deal is looking increasingly unlikely.

According to AAP, Rob said that sugar and dairy access remained key sticking points, along with motor vehicle assess between Mexico, the US, Canada and Japan. He also noted that “the closer we get to a US presidential election, the more prospect (there is) of it falling over”.

There is also the upcoming Canadian elections later this year.

Seeing as how this deal sucks, it’s a good thing that it appears to be comatose.

An Outbreak of Sanity. Now Get the Drivers Some Anti-Psychotic Drugs………

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Boston has dropped their Olympic bid:

Deep skepticism here about whether taxpayers would be stuck footing the bill for the Olympics has doomed Boston’s bid to host the 2024 Summer Games and raised questions about whether any other major American city might be willing to take on the risk.

The United States Olympic Committee said Monday that it was withdrawing Boston as its proposed bid city because resistance among residents was too great to overcome in the short time that remained before the committee had to formally propose a bid city by Sept. 15.

“We have not been able to get a majority of the citizens of Boston to support hosting the 2024 Olympic and Paralympic Games,” Scott Blackmun, the chief executive of the U.S.O.C., said in a statement as he raised the white flag. “Therefore, the U.S.O.C. does not think that the level of support enjoyed by Boston’s bid would allow it to prevail over great bids from Paris, Rome, Hamburg, Budapest or Toronto.”

Here is the sticking point:

Voters told pollsters that they were most concerned about having to pay for cost overruns. But they were also dismayed by what they considered as Boston 2024’s lack of transparency and the sense that a small cabal of business leaders who stood to profit seemed to be running the show in secrecy. And they questioned whether much-need improvements in transportation, housing and education would get done if the city were so focused on the Olympics.

Mr. Wallechinsky, the historian, said that the U.S.O.C. should “take a good hard look at themselves” and conduct an investigation into “how they could have picked Boston in the first place.” He said one of the worst moments came when the U.S.O.C. watched as Boston 2024 said that its bid, which was not initially disclosed to the public, called for no public financing; the U.S.O.C. knew that was not true, he said, as the public found out later after news outlets obtained the bid.

So, they lied to the people of Boston, and the USOC wanted Boston to guarantee to cover the costs of any f%$#-ups that the looters, “Small cabal of business leaders who stood to profit,” managed to extract from the process.

They are now looking at LA, but the last time that LA hosted, they ignored the bling, and reused existing facilities, and that eliminates the possibilities for graft that drive the International Olympic Committee since Juan Antonio Samaranch (An actual card-carrying fascist, he served in the Franco regime in Spain) took over the presidency of the organization in 1980.

The 2024 Olympics will not be in the US.  Most likely, it will be in a totalitarian state, since the financially ruinous exercises in narcissistic self-aggrandizement seems to built into the DNA of that form of government.

My guess is that the 2024 Olympics will be held in Pyongyang. (Just kidding, but my last joke in this vein was Arisia)

Nice That This Has Made The Times

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It appears that the mainstream media is finally noticing that a big problem in US healthcare is prices, and not people taking their children to the doctor for a case of the sniffles:

As complaints grow about exorbitant drug prices, pharmaceutical companies are coming under pressure to disclose the development costs and profits of those medicines and the rationale for charging what they do.

So-called pharmaceutical cost transparency bills have been introduced in at least six state legislatures in the last year, aiming to make drug companies justify their prices, which are often attributed to high research and development costs.

“If a prescription drug demands an outrageous price tag, the public, insurers and federal, state and local governments should have access to the information that supposedly justifies the cost,” says the preamble of a bill introduced in the New York State Senate in May.

In an article being published Thursday, more than 100 prominent oncologists called for support of a grass-roots movement to stem the rapid increases of prices of cancer drugs, including by letting Medicare negotiate prices with pharmaceutical companies and letting patients import less expensive medicines from Canada.

“There is no relief in sight because drug companies keep challenging the market with even higher prices,” the doctors wrote in the journal Mayo Clinic Proceedings. “This raises the question of whether current pricing of cancer drugs is based on reasonable expectation of return on investment or whether it is based on what prices the market can bear.”

………

“The industry has used R&D costs for the justification, but anyone who is reasonably sophisticated understands those are sunk costs and have little to do with pricing,” Mr. Rother said. “The more important information is any calculation of value. If the drug actually cures people, then what costs in health care are you saving?”

Dr. Jerry Avorn, a professor at Harvard Medical School and critic of some drug company practices, said the industry “has brought this on itself by charging prices that are so astonishing, it makes citizens wonder, ‘Where did this figure come from?’ ”

Yes, it does make citizens wonder.

What could help is ending evergreening, where a company uses a compliant FDA and US Patent Office to extend their legal monopolies, or the insane way in which the orphan drug act is used to grant legal monopolies on drugs that are literally thousands of years old.  (For example Colchicine has been in use for at least 3500 years, and when the company got exclusivity, it raised the price by a factor of 50)

The problem with drug prices, as well other medical prices, is that we have structures in place that allow corporations, which are by their very nature designed to function as sociopaths to extort excessive rents.

And we are exporting this model to the rest of the world through out trade deals like the TPP and TTIP, which will put the health of citizens in the signatory nations at the same sort of risk that exists here.

Obama Just Whitewashed Malaysian Slave Trafficking

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The Obama administration has just upgraded Maylaysia’s human trafficking tier, despite the absence of any evidence of improvement:

The United States is upgrading Malaysia from the lowest tier on its list of worst human trafficking centres, US sources said on Wednesday, a move that could smooth the way for an ambitious US-led free-trade deal with the south-east Asian nation and 11 other countries.

The upgrade to so-called “tier two watch list” status removes a potential barrier to President Barack Obama’s signature global trade deal.

A provision in a related trade bill passed by Congress last month barred from fast-tracked trade deals Malaysia and other countries that earn the worst US human trafficking ranking in the eyes of the US State Department.

The upgrade follows international scrutiny and outcry over Malaysian efforts to combat human trafficking after the discovery this year of scores of graves in people-smuggling camps near its northern border with Thailand.

The State Department last year downgraded Malaysia in its annual “Trafficking in Persons” report to tier three, alongside North Korea, Syria and Zimbabwe, citing “limited efforts to improve its flawed victim protection regime” and other problems.

But a congressional source with knowledge of the decision told Reuters the administration had approved the upgraded status. A second source familiar with the matter confirmed the decision.

Some US lawmakers and human-rights advocates had expected Malaysia to remain on tier three this year given its slow pace of convictions in human-trafficking cases and pervasive trafficking in industries such as electronics and palm oil.

………

In its report last year, the State Department said Malaysia had reported 89 human-trafficking investigations in the 12 months to March 2014, down from 190 the previous year, and nine convictions compared to 21 the previous year.

In the latest year to March, Malaysia’s conviction rate is believed to have fallen further, according to human-rights advocates, despite a rise in the number of investigations. That reinforced speculation Malaysia would remain on tier three.

“I would be stunned if they are upgraded. They have done very little to improve the protection from abuse that migrant workers face,” said Phil Robertson, deputy director of Human Rights Watch’s Asia division.

This decision has the effect of condoning slavery in Malaysia, and throughout the world.

Of course, this does not matter to Barack Obama, because is looking at the TPP in the Pacific, the TTIP with Europe, and TiSA* world wide.

*The TiSA is arguably far worse than the other two deals, and has as one of its goals to make financial, insurance, and investment regulation next to impossible.

Óχι* Euro?

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So Greece has now officially defaulted on its IMF loan:

Greece has officially missed its payment to the IMF.

Though this is not technically considered a “default” — the IMF now considers Greece “in arrears” — Greece has now officially not paid the 1.6 billion euros (or about $1.8 billion) it owed the IMF by Tuesday.

IMF managing director Christine Lagarde, however, said in June that she would consider Greece in default if it did not pay.

 This is the largest missed payment ever owed to the IMF.

Greece is now no longer in a bailout program for the first time since 2010.

 In a statement, the IMF confirmed that Greece missed the payment due on Tuesday and added that Greece requested an extension of its repayment, which the IMF’s executive board will consider “in due course.”

 Greek banks and the Athens stock exchange remain closed through this week ahead of a July 5 referendum to vote on the latest bailout proposal from Greece’s creditors.

This is a big deal, but I do not think that the Greek government was left with a choice.

It has become increasingly clear that the goal of the Troika has been regime change ever since Syriza won the last election, primarily because they are a bunch of moralistic† idiots, who do not realize that the alternative to Syriza is not a return to the center-left and center-right parties, but rather the rise of the fascist Golden Dawn party”.

This is why Greek PM Alexis Tsipras felt compelled to call a referendum.

The demands of the Troika have always been about a number of things, none of which have anything to do with the well being of the Greek people:

  • Protecting their own domestic banks from thrie exposureto Greek Debt.
  • Reinforcing German hegemony of the Euro Zone. (Berlin only on this one)
  • Making a public example of Greece as a warning to others.
  • Preventing other “leftist” (social democrat by the standards of the 1960s) parties, particularly Die Linke (The Left) in Germany, from coming to power.
  • Discrediting the modern social safety net.

It should be noted that I do not see any way to a happy ending here:

………

But a former deputy governor of Cyprus’s central bank, Spyros Stavrinakis, has warned that reopening the banks will be hard.

Stavrinakis lived through the 2013 Cyprus crisis, in which capital controls were imposed for almost two years.

He says:

Once you impose capital controls, you immediately send a message that there is something wrong with the banking sector.

It is very difficult to phase down and unwind capital controls, once they are imposed, Stavrinakis adds.

………

Most things in the European Union are designed to actively obfuscate reality. These are called deposit insurance schemes but that is a legal lie. In the United States the FDIC is Federal (its right in the name). The EU imposes a requirement that each country “insure” their deposits but it provides no financing for this. The last data I saw (which I can only verify from 3 years ago) is that the Greek deposit insurance fund has a paltry 3 billion dollars in it. In short there is no current backstop for Greek depositors. This is why they are talking about implementing a European wide deposit insurance union but that isn’t supposed to come until next year at the earliest and who knows if that will really happen and to what extent it will be universal among current Eurozone members. relevant links below.

………

Three-and-a-half billion euros. That is roughly how much cash Greece’s banks need to get through the week if each adult takes out the €60 ($67) they are allowed each day. It isn’t much for Greeks to live on, but it may be more than the banks have.

Also, in the realm of the absurd, there is a  crowdfunding project for the Greek Bailout Fund on  Indiegogo, with about €¾ million raised, out of the €1.6 billion needed raised so far.

The German insistence on Versailles Treaty economics, when juxtaposed with the Greek tradition financial profligacy and corruption, has produced a truly toxic mix, which will probably break up the Euro Zone, if not the whole European Union.

*Greek for no.
†The word for “debt” in German is “Schuld”. This is also the word for “guilt” or “blame”, which explains why the Germans are so fond of Sado-Monitarism. The Germans see this as a morality play, and the last time that Germans tried to enforce a morality on the rest of Europe, it was pretty unfortunate.

F%$# Me, I Agree with that Bigot Jeff Sessions*

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Yesterday, the Senate voted for cloture on Fast Track authority (TPA), and today, they voted to pass the measure, which will require the House and Senate to vote on any trade agreements within 60 days, and prohibit any amendments or meaningful discussion, which would include including the noxious Trans Pacific Partnership (TPP):

Barack Obama was given the authority he has long sought to expedite negotiations for a massive trade deal with countries on the Pacific rim, propelling the US toward a landmark agreement that, both proponents and critics agree, will reshape the global economy.

The Republican-controlled Senate finally passed legislation on Wednesday that gives the president the power to “fast-track” negotiations with the 11 other countries party to the Trans-Pacific Partnership.

The vote, which passed 60-38, was a significant victory for multinational corporations which have been lobbying hard for a trade agreement expected to lower tariffs and create new regulations for sectors as diverse as agriculture, banking and the pharmaceutical industry.

Let’s note that the tariffs among the largest economies in the deal are already around 1%.

What this is really about is aiding rent seeking industries, primarily pharma and finance, by creating new “rights” and forestalling meaningful regulation, because 7 figure lobbying salaries following retirement from politics don’t grow on trees.

It is the very apotheosis of rent seeking, and I oppose this bill.

BTW, here is a list of Vichy Democrats who voted for cloture, They should not be supported in ay primary, nor should they be supported in a general election.

In the long run, and in the medium run as well, this would be a good thing, one need only remember how the 1994 electoral debacle, which was driven by NAFTA.

  1. Bennet (D-CO)
  2. Cantwell (D-WA)
  3. Carper (D-DE)
  4. Coons (D-DE)
  5. Feinstein (D-CA)
  6. Heitkamp (D-ND)
  7. Kaine (D-VA)
  8. McCaskill (D-MO)
  9. Murray (D-WA)
  10. Nelson (D-FL)
  11. Shaheen (D-NH)
  12. Warner (D-VA)
  13. Wyden (D-OR)

I would also note that those Democrats who voted for cloture who are up for reelection in 2016, Patty Murray, Michael Bennet, and Ron Wyden are dead men walking anyway, because they have given their opponents such a heavy club..

My Senator, Ben Cardin, would probably have voted for cloture if they needed another vote, but I’ll leave him for a later discussion.

As to my agreeing with Jeff Sessions on this (God Help Me), when he says, “President Obama, and allies in Congress, have won this fast-track vote. But, in exchange, they may find that they are losing something far greater: the trust of the American people, I have to honestly agree. (His full statement after break)

This is a bad deal, and a bad thing, and much like in 1994, the Republicans are going to spot weld this on the Democratic Party, which will probably lead to their keeping the Senate.

*Before his Senate career, he was a US attorney, and then he was nominated by Reagan to the Federal Judgeship, but he was rejected by the Senate because of credible allegations of bigotry.

Sessions Comments On Senate Vote To Advance Fast-Track Authority For Executive – News Releases


Senator Jeff Sessions

“President Obama, and allies in Congress, have won this fast-track vote. But, in exchange, they may find that they are losing something far greater: the trust of the American people.”  


WASHINGTON—U.S. Sen. Jeff Sessions (R-AL) issued the following statement today after the Senate voted to advance six-year fast-track executive authority:

“Americans increasingly believe that their country isn’t serving its own citizens. They need look no further than a bipartisan vote of Congress that will transfer congressional power to the Executive Branch and, in turn, to a transnational Pacific Union and the global interests who will help write its rules.

The same routine plays out over and again. We are told a massive bill must be passed, all the business lobbyists and leaders tell us how grand it will be, but that it must be rushed through before the voters spoil the plan. As with Obamacare and the Gang of Eight, the politicians meet with the consultants to craft the talking points—not based on what the bill actually does, but what they hope people will believe it does. And when ordinary Americans who never asked for the plan, who don’t want the plan, who want no part of the plan, resist, they are scorned, mocked, and heaped with condescension.

Washington broke arms and heads to get that 60th vote—not one to spare—to impose on the American people a plan which imperils their jobs, wages, and control over their own affairs. It is remarkable that so much energy has been expended on advancing the things Americans oppose, and preventing the things Americans want.

For instance: thousands of loyal Americans have been laid off and forced to train the foreign workers brought in to fill their jobs—at Disney, at Southern California Edison, across the country. Does Washington rush to their defense? No, the politicians and the lobbyists rush to move legislation that would double or triple the very program responsible for replacing them.

This ‘econometarian’ ideology holds that if a company can increase its bottom line—whether by insourcing foreign workers or outsourcing production—then it’s always a win, never a downside.

President Obama, and allies in Congress, have won this fast-track vote. But, in exchange, they may find that they are losing something far greater: the trust of the American people. Americans have a fundamental, decent, and just demand: that the people they elect defend their interests. And every issue to come before us in the coming months will have to pass this test: does it strengthen, or weaken, the position of the everyday, loyal American citizen?”