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The Latest Hurdle for a Rotten Trade Deal: Malaysia, the TPP and the Slavery Provision

Tuesday, June 02, 2015 By Yves Smith, Naked Capitalism | Op-Ed
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Huffington Post has reconfirmed its reporting, namely, that the Administration has a hairball to untangle to get Malaysia to sign the TransPacific Partnership. Basically, Malaysia needs to have an anti-slavery provision that was inserted in the bill in committee watered down. And the reason that that has to happen, as our reader Antifa pointed out in comments, is that Malaysia controls the Straits of Malacca, a critical shipping choke point. One of the major objectives of the pact is to strengthen America’s position in the region relative to China. Thus Malaysia’s location makes it a critically important signatory to the pact.

From the Huffington Post account (emphasis ours):

On Friday night, in an impressive display of dysfunction, the U.S. Senate approved a controversial trade bill with a provision that the White House, Senate leadership and the author of the language himself wanted taken out.

The provision, which bars countries that engage in slavery from being part of major trade deals with the U.S., was written by Sen. Bob Menendez (D-N.J.). At the insistence of the White House, Menendez agreed to modify his language to say that as long as a country is taking “concrete” steps toward reducing human trafficking and forced labor, it can be part of a trade deal. Under the original language, the country that would be excluded from the pending Trans-Pacific Partnership pact is Malaysia.

But because the Senate is the Senate, it was unable to swap out the original language for the modification. (The chamber needed unanimous consent to make the legislative move, and an unknown senator or senators objected.) So the trade promotion authority bill that passed Friday includes the strong anti-slavery language, which the House will now work to take out to ensure that Malaysia (and, potentially, other countries in the future) can be part of the deal.

Observers are left with a deeper question: Why, in the year 2015, is the White House teaming up with Republican leaders essentially to defend the practice of slavery?

Cue Antifa:

Malaysia’s membership in the circle of TPP nations is not vital because Malaysia — it’s vital because of the Malacca Straits, through which virtually all the shipping in that part of the world passes. It’s a bottleneck, a chokepoint, and if Malaysia is “driven into the arms of China” then China can close those Straits to shipping how, when, and as they please.

Which would neuter the US Navy in that part of the world, reducing them to observer status. When people at the Pentagon talk about America’s role as the world’s policeman, they are talking about the Navy’s ability to project overwhelming force wherever and whenever needed. The three little chokepoints world trade and shipping depend on are the Strait of Hormuz, the Straits of Malacca, and the Panama Canal. Taking one of those and giving control of it to China and Friends — or to anyone but the US Navy — puts the world’s policeman in a clown suit.

And Andrew Watts added:

In terms of geopolitics, a pseudo-science imo, there isn’t a more strategic chokepoint in the world. A quarter of the world’s shipping goes through the Straits of Malacca. Look at a list of member states of TPP and tell me this isn’t an anti-Chinese military alliance or there are alternative shipping lanes. The transportation routes via the Eurasian Silk Road is one way to circumvent this potential naval blockade but shipping via the sea has always been cheaper than shipping by land.

The only reason why business and intellectual property rights is apart of the deal is because Obama needs to bribe as many domestic power centers as possible to pass it. This is straight outta his Obamacare playbook. The reason for the secrecy is probably due to the military nature of the pact. in any case nobody wants the perception that this is preparation for some future Sino-American war.

But if I were a Chinese political leader in Beijing I would not trust any assurances to the contrary that come from Washington.

Strait of Malacca control was also one of the domino theory issues that contributed to the Vietnam War.

Correct. Which proves that the US military has always had it in it’s sights AND they’re willing to go to war for control over it.

Of course, one might ask why we are now working so hard against China after having made the US dependent on her by allowing, even encouraging, US multinationals to outsource and offshore manufacturing in China.

A Malaysian government official effectively confirmed that the government expects Fast Track authority to include the watering-down language in the amendment that the Senate failed to pass:

Minister Datuk Seri Mustapa Mohamed today minimised concerns that Malaysia could be excluded from the Trans-Pacific Partnership Agreement (TPPA) over its dismal people-trafficking record..

“TPP is still being discussed and nothing has been finalised yet,” Mustapa told Malay Mail Online.

“In the event discussions are concluded, the outcome of these discussions will go to Cabinet and Parliament for approval. Regarding our Tier 3 position on human trafficking, this could be resolved if a Tier 3 country is seen to be taking concrete steps to implement recommendations in the Trafficking in Persons report,” he added.

Mustapa was referring to the US State Department’s annual Trafficking in Persons report that downgraded Malaysia last year to Tier 3, its worst ranking on human trafficking abuses globally.

Notice that same “taking concrete steps” phrase? That’s straight from that failed amendment.

As the Huffington Post’s Ryan Grim said in his initial report:

The slavery provision’s survival means that the House will either need to amend the bill and send it back to the Senate, which would cause a delay and complicate the House debate, or pass a bill and go to conference with the Senate, also causing a delay. It also potentially could be fixed in separate legislation otherwise moving through Congress. But time is not on the side of advocates of the trade agenda, as summer recess is approaching, followed by a heated presidential campaign season. “It leaves a substantial problem that no one’s sure how will be addressed,” said one senator.

Since Obama has had the embarrassing spectacle of having set a ministerial meeting for the TPP this week at which the other intended signatories were to give their final offers, based on the assumption that Obama would have Fast Track authority in hand. The negotiators increasingly doubt that Obama can get the bill passed this year, and the general assumption is that Congresscritters won’t touch this issue in 2016, an election year.

I strongly urge you to keep calling your Senators and Representatives. Concentrate on the slavery issue, since there is opposition on the right and left, and the folks on the Hill are likely not well prepared for voter pressure on this aspect of the sausage-making, since the MSM has pointedly ignored it. I’d also call Hillary Clinton’s office, and tell her staffers how deeply disappointed you are that she clearly supports the TPP (see this Gaius Publius post for details), even though she has tried to keep that under wraps. Tell her that anything less than vocal opposition is a dealbreaker for you as far as her presidential candidacy is concerned. Thanks for keeping the pressure up!

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Yves Smith

Yves Smith has been in and around finance for more than 30 years as an investment banker, management consultant to financial institutions across a large range of wholesale banking and trading markets businesses, and a corporate finance adviser. She has also written for The New York Times, Al Jazeera, the New Republic, Salon, the Conference Board Review, the Australian Financial Review and other financial publications. Her TV appearances include NBC News, CNBC, Fox Business, PBS, Bill Moyers, The Real News Network, Democracy Now!, Russia TV, ABC (Australia), Al Jazeera and BNN (Canada). Follow her on Twitter: @yvessmith.

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The Latest Hurdle for a Rotten Trade Deal: Malaysia, the TPP and the Slavery Provision

Tuesday, June 02, 2015 By Yves Smith, Naked Capitalism | Op-Ed
  • font size decrease font size decrease font size increase font size increase font size
  • Print

Huffington Post has reconfirmed its reporting, namely, that the Administration has a hairball to untangle to get Malaysia to sign the TransPacific Partnership. Basically, Malaysia needs to have an anti-slavery provision that was inserted in the bill in committee watered down. And the reason that that has to happen, as our reader Antifa pointed out in comments, is that Malaysia controls the Straits of Malacca, a critical shipping choke point. One of the major objectives of the pact is to strengthen America’s position in the region relative to China. Thus Malaysia’s location makes it a critically important signatory to the pact.

From the Huffington Post account (emphasis ours):

On Friday night, in an impressive display of dysfunction, the U.S. Senate approved a controversial trade bill with a provision that the White House, Senate leadership and the author of the language himself wanted taken out.

The provision, which bars countries that engage in slavery from being part of major trade deals with the U.S., was written by Sen. Bob Menendez (D-N.J.). At the insistence of the White House, Menendez agreed to modify his language to say that as long as a country is taking “concrete” steps toward reducing human trafficking and forced labor, it can be part of a trade deal. Under the original language, the country that would be excluded from the pending Trans-Pacific Partnership pact is Malaysia.

But because the Senate is the Senate, it was unable to swap out the original language for the modification. (The chamber needed unanimous consent to make the legislative move, and an unknown senator or senators objected.) So the trade promotion authority bill that passed Friday includes the strong anti-slavery language, which the House will now work to take out to ensure that Malaysia (and, potentially, other countries in the future) can be part of the deal.

Observers are left with a deeper question: Why, in the year 2015, is the White House teaming up with Republican leaders essentially to defend the practice of slavery?

Cue Antifa:

Malaysia’s membership in the circle of TPP nations is not vital because Malaysia — it’s vital because of the Malacca Straits, through which virtually all the shipping in that part of the world passes. It’s a bottleneck, a chokepoint, and if Malaysia is “driven into the arms of China” then China can close those Straits to shipping how, when, and as they please.

Which would neuter the US Navy in that part of the world, reducing them to observer status. When people at the Pentagon talk about America’s role as the world’s policeman, they are talking about the Navy’s ability to project overwhelming force wherever and whenever needed. The three little chokepoints world trade and shipping depend on are the Strait of Hormuz, the Straits of Malacca, and the Panama Canal. Taking one of those and giving control of it to China and Friends — or to anyone but the US Navy — puts the world’s policeman in a clown suit.

And Andrew Watts added:

In terms of geopolitics, a pseudo-science imo, there isn’t a more strategic chokepoint in the world. A quarter of the world’s shipping goes through the Straits of Malacca. Look at a list of member states of TPP and tell me this isn’t an anti-Chinese military alliance or there are alternative shipping lanes. The transportation routes via the Eurasian Silk Road is one way to circumvent this potential naval blockade but shipping via the sea has always been cheaper than shipping by land.

The only reason why business and intellectual property rights is apart of the deal is because Obama needs to bribe as many domestic power centers as possible to pass it. This is straight outta his Obamacare playbook. The reason for the secrecy is probably due to the military nature of the pact. in any case nobody wants the perception that this is preparation for some future Sino-American war.

But if I were a Chinese political leader in Beijing I would not trust any assurances to the contrary that come from Washington.

Strait of Malacca control was also one of the domino theory issues that contributed to the Vietnam War.

Correct. Which proves that the US military has always had it in it’s sights AND they’re willing to go to war for control over it.

Of course, one might ask why we are now working so hard against China after having made the US dependent on her by allowing, even encouraging, US multinationals to outsource and offshore manufacturing in China.

A Malaysian government official effectively confirmed that the government expects Fast Track authority to include the watering-down language in the amendment that the Senate failed to pass:

Minister Datuk Seri Mustapa Mohamed today minimised concerns that Malaysia could be excluded from the Trans-Pacific Partnership Agreement (TPPA) over its dismal people-trafficking record..

“TPP is still being discussed and nothing has been finalised yet,” Mustapa told Malay Mail Online.

“In the event discussions are concluded, the outcome of these discussions will go to Cabinet and Parliament for approval. Regarding our Tier 3 position on human trafficking, this could be resolved if a Tier 3 country is seen to be taking concrete steps to implement recommendations in the Trafficking in Persons report,” he added.

Mustapa was referring to the US State Department’s annual Trafficking in Persons report that downgraded Malaysia last year to Tier 3, its worst ranking on human trafficking abuses globally.

Notice that same “taking concrete steps” phrase? That’s straight from that failed amendment.

As the Huffington Post’s Ryan Grim said in his initial report:

The slavery provision’s survival means that the House will either need to amend the bill and send it back to the Senate, which would cause a delay and complicate the House debate, or pass a bill and go to conference with the Senate, also causing a delay. It also potentially could be fixed in separate legislation otherwise moving through Congress. But time is not on the side of advocates of the trade agenda, as summer recess is approaching, followed by a heated presidential campaign season. “It leaves a substantial problem that no one’s sure how will be addressed,” said one senator.

Since Obama has had the embarrassing spectacle of having set a ministerial meeting for the TPP this week at which the other intended signatories were to give their final offers, based on the assumption that Obama would have Fast Track authority in hand. The negotiators increasingly doubt that Obama can get the bill passed this year, and the general assumption is that Congresscritters won’t touch this issue in 2016, an election year.

I strongly urge you to keep calling your Senators and Representatives. Concentrate on the slavery issue, since there is opposition on the right and left, and the folks on the Hill are likely not well prepared for voter pressure on this aspect of the sausage-making, since the MSM has pointedly ignored it. I’d also call Hillary Clinton’s office, and tell her staffers how deeply disappointed you are that she clearly supports the TPP (see this Gaius Publius post for details), even though she has tried to keep that under wraps. Tell her that anything less than vocal opposition is a dealbreaker for you as far as her presidential candidacy is concerned. Thanks for keeping the pressure up!

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Yves Smith

Yves Smith has been in and around finance for more than 30 years as an investment banker, management consultant to financial institutions across a large range of wholesale banking and trading markets businesses, and a corporate finance adviser. She has also written for The New York Times, Al Jazeera, the New Republic, Salon, the Conference Board Review, the Australian Financial Review and other financial publications. Her TV appearances include NBC News, CNBC, Fox Business, PBS, Bill Moyers, The Real News Network, Democracy Now!, Russia TV, ABC (Australia), Al Jazeera and BNN (Canada). Follow her on Twitter: @yvessmith.