Tide Begins to Turn against FIFA in Rio de Janeiro
By Brian Mier | CEPR Americas Blog | August 15, 2013
After two months of protests that started over price gouging in public transportation and spread to a variety of issues spanning the political spectrum, positive results are beginning to be seen in Rio de Janeiro, where governor Sérgio Cabral, once touted in the New York Times as a possible 2014 presidential candidate is now so unpopular that socialist former mayoral candidate Marcelo Freixo said that he doesn’t think he could even get elected as a condominium residents association secretary.
During the last week a series of measures was announced that seem to show a turning of the tide against the hegemony wielded by the Fédération Internationale de Football Association (FIFA) and the Rio de Janeiro state and municipal governments over local residents.
First, after spending over $500 million rehabbing the structurally sound Maracana stadium – its third multi-million rehab in a dozen years – the plan to privatize and sell it off to a group of cronies for a fraction of that value has been stalled. The landmark status for the neighboring high school and Indigenous museum buildings has been upheld by the court system, so they can no longer be destroyed to create a parking garage. Furthermore, the federal government has blocked destruction of the public swimming pool and athletic track that made up part of the stadium compound. According to the privatization agreement, these are deal killers. The original plan was to surround the stadium with parking garages and luxury shops for the white, middle-class patrons who would now be the only ones able to easily afford ticket prices. The consortium that was poised to take over management of the stadium announced that it was going to back out, then changed its mind but still hasn’t closed a deal. It appears that the new, expensive ticket prices are keeping fans away and this might prove to be a deciding factor in blocking privatization.
Meanwhile, last Friday, the mayor’s office announced that after years of protests and construction of an alternative participatory development plan by local residents together with social movements and the Universidade Federal de Rio de Janeiro planning department, it will no longer raze the neighborhood of Vila Autódromo, which was originally marked for destruction in order to “beautify” the neighborhood for the upcoming “mega-events.” Since 2008, the mayor’s office has evicted tens of thousands of people, but it is hoped that this too will mark a turning point against a government that, until its popularity plummeted last month, felt like it could do whatever it wanted.
The much hailed program for setting up police stations in favelas that were previously controlled by drug trafficking organizations and paramilitary militias, called UPP, is also coming under fire. Drug trafficking gangs continue to operate within the pacified favelas, albeit without carrying machine guns around on the street, and a recent study shows that disappearances of residents has increased by over 50 percent in favelas after the UPP Units have been put in place. The disappearance of a construction worker and father of four, last seen being forced into a UPP Police car in front of his house in Rocinha, has turned into a national issue, as people are holding up signs all over the country during protests asking, “Where is Amarildo?”
Across the nation, people are rising up against the planned “state of exception” that FIFA demands take place for two months before and after the World Cup in 2014, coded into Brazilian law as part of the “General Law of the World Cup” of June 5, 2012. This “state of exception” will enable the government to bypass public bidding laws, provide tax abatement on all official FIFA-sponsored products and hire private foreign security forces to replace the local police protecting players and FIFA officials. In accordance with the Brazilian constitution of 1989, a “state of exception” can only be called in cases of war or natural disasters, making the FIFA law technically illegal. But popular and legal challenges to the Brazilian general “Law of the Cup” are mounting. During the World Cup in South Africa FIFA was able to leave the country with $2.4 billion in profits, while South Africans were left footing the maintenance bill for “white elephant” stadiums in towns with no major sports teams. It will be interesting to see how much FIFA is able to get away with this time around, especially since 2014 is an election year in Brazil.
Brian Mier is a geographer and freelance journalist who lives in Brazil and works as a policy analyst at the Centro de Direitos Econômicos e Sociais. He has a podcast, focused on news reported in the Brazilian alternative media, at http://progressivebrazil.tumblr.com/
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Honduran Union Leader Faces Death Threats
By Eric Gottwald | Labor is Not a Commodity | August 15, 2013
Long-time Honduran union leader José María Martínez of FESTAGRO is facing serious and repeated death threats for speaking out for banana workers’ rights.
For the past 20 years, Martínez has hosted a daily radio show called “Trade Unionist on Air” where he shares labor rights, human rights, and citizenship information with Honduras’ agricultural workers and answers questions for callers concerned about rights violations. Since September of 2012, Martínez has been working closely with workers at the Tres Hermanas banana plantations, suppliers for Chiquita Bananas, who have been struggling to win a collective bargaining agreement in the face of harsh employer repression. Since May, the struggle of the Tres Hermanas workers has been a frequent topic on Martínez’s radio program.
On June 25, 2013, unidentified callers used an untraceable number to call Martínez, demanding he “stop talking sh*t on the radio or [they] will shut his mouth for him,” and to “prepare your burial clothes because we are going to kill you.” They repeated those threats the following day. The perpetrators also made repeated calls to his wife reiterating the death threats and citing the specific clothing Martinez wore each day as proof they were following him.
On July 5th, those threats escalated as an unmarked vehicle staked out Radio Progreso, home to “Trade Unionist on Air.” The vehicle circled Martínez’s place of work four times at the hour Martínez was getting off air. Martínez was forced to escape through a back exit, escorted by Father Ismael Moreno, the Catholic priest who serves as the director for Radio Progreso.
The local police force has warned Martínez to not leave his home without first notifying them for his own protection. Since the 2009 coup, 31 trade unionists, 52 rural workers, and 28 journalists have been murdered in Honduras.
FESTAGRO has asked for supporters to write to the US and Honduran governments to demand protection for José María Martínez and an investigation into these threats:
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Honduras Attorney General’s Office: denuncias@mp.hn
- US Department of State, Ben Gedan, Honduras Desk: gedanbn@state.gov
You can also write to Chiquita Bananas (who buys from Tres Hermanas) and Jose Lorenzo Obregon, owner of the Tres Hermanas Plantation, to ask that they speak out against these threats and use their influence to end Tres Hermanas’ ongoing refusal to bargain with SITRAINBA, workers’ legally recognized bargaining representative.
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Jose Lorenzo Obregon, Owner of the Tres Hermanas Plantation: jolobregon@gmail.com
- Chiquita Banana, Manuel Rodriguez, Vice President for Labor Relations: mrodriguez@Chiquita.com
Eric Gottwald is Senior Policy Analyst at the International Labor Rights Forum.
Related articles
- Guatemala urged to investigate trade unionist murders (theguardian.com)
- TUC protests to Colombia over threats (morningstaronline.co.uk)
- What it means to be a union member in Colombia and Chicago (alethonews.wordpress.com)
- Speak without fear in Honduras (unesco.org)
Brazil: Senate Approves Law to Fund Public Services with Oil Revenue
By Kahina Boudarène | The Argentina Independent | August 15, 2013
The law to fund public services with oil revenue, headed by Brazil president Dilma Rousseff, was ratified yesterday by the Senate, two weeks after its approval by the lower house.
“We listened to the streets voices,” declared Renan Calheiros, leader of the Senate, referring to the massive social movements that started several weeks ago all around the country.
The senate has approved the move to use 75% of crude oil revenue to finance education and the other 25% to bankroll the health sector.
The law affects all oil contracts that fall within the “declaration of commerciality”, which was signed on 3rd December 2012.
At first, Rousseff wanted to direct 100% of the revenue to education. The measure was part of a pact announced last June to establish “ways to fight effectively against corruption”.
The pact contains four key points: a national mobility plan privileging public transports; 100% of the oil revenue to education sector; bringing thousands of foreign doctors to the country; and meeting with leaders from peaceful demonstrations, youth organisations, trade unions, workers movements and popular organisations.
Fallouts of Iran Sanctions
By Ali Fathollah-Nejad | World Policy Blog | July 31, 2013
Iran’s President-elect Hassan Rohani has promised to ease the tensions surrounding the international relations of his country. In line with the will of the majority of Iranians, the issue of economic sanctions – weighing heavily on the latter’s day-to-day life – will be a key to that end.
In general, the purpose of sanctions is to force a political opponent to do what she would not do otherwise. In the case of the sanctions imposed on Iran – during the course of what is commonly but simplistically referred to as the “nuclear crisis” – the stated goal has been to force a reversal of Tehran’s nuclear calculus toward slowing down or even halting its nuclear program. This goal has clearly not been met. Instead this period has witnessed ever more crippling sanctions – a form of “structural violence” exerted upon an entire country and its people.
Economic sanctions are one of the most preferred instruments of Western foreign policy. The immediate Western reaction to the Syrian crisis is the most recent evidence of this. In the Iranian case, sanctions have been an integral part of the transatlantic strategy pursued against Tehran, code-named “coercive diplomacy” in Diplomatic Studies. There, sanctions are usually presented as a quasi-peaceful means and as such inherently part of a purely diplomatic approach geared towards avoiding a military confrontation. However, as the Iraqi case demonstrates, sanctions are the last step before military action. In other words, “smart sanctions” are likely to be succeeded by “smart bombs.”
Apart from this worst-case scenario, sanctions have not proven to facilitate the resolution of conflicts; on the contrary, they rather tend to harden the opposing fronts. Frequently, opposing sides view sanctions through fundamentally different prisms. In this case, while the West conceives of sanctions in a cost–benefit framework – the heavier the costs imposed on the targeted country by way of sanctions, the more willing the sanctioned state will be to offer concessions. Iran on its part sees them as a means of illegitimate pressure against which she ought to resist. This explains why in the last couple of years the escalation of sanctions was accompanied by that of the nuclear program. For example, in 2006 – before the Iran sanctions were elevated to an undoubtedly crippling dimension by the United States and the European Union – Iran had a thousand centrifuges; the number today is much more than tenfold. This reality of the nuclear dynamics in the wake of sanctions remains largely ignored in Western capitals.
Moreover, it should be stressed that policymakers in the West have so far devoted much more time and energy to identifying which new set of sanctions to impose rather than to committedly and creatively finding a diplomatic solution of the decade-old stalemate.
The popular rhetoric of sanctions incorrectly characterizes the nature of the socio-economic effects imposed on the target country. Contrary to what is commonly claimed, sanctions actually weaken the lower and middle classes, particularly affecting the most vulnerable in society – workers, women and the youth. As a result, the power gap between the state and society widens. All this, as a matter of fact, actually dampens the prospect of popular uprising. A person struggling for economic survival barely has the luxury of engaging as a citoyen in the struggle for democracy. This explains the firm renunciation of sanctions by Iran’s civil society – voices that the West has largely chosen to ignore.
In political-economic terms, sanctions have largely paralyzed Iran’s civilian economy while state and semi-state economic entities – especially those associated with the Revolutionary Guards – have been able to benefit inter alia by monopolizing imports of various goods via “black channels.” State resources have buoyed those companies that have access to them, leaving others to drown in the tide of rising costs. Sanctions have also prompted enormous growth in the volume of bilateral trade between Iran and China (still about $ 40 billion according to the Iran–China Chamber of Commerce and Industries which is closely related to the regime) – to the detriment of producers and jobs in Iran. The reality of sanctions is that they have cemented the politico-economic power configuration in Iran.
Sanctions produce far-reaching effects at the geopolitical and geo-economic levels. Corresponding with the implicit geopolitical rationale for sanctions – that if you cannot control or influence a country, you will resort to weakening it – these restrictions have indeed stunted Iran’s development trajectory. This inflicted damage has not, however, produced the ultimate goal of reversing Iran’s nuclear and regional policies and has in fact damaged Western interests by boosting the clout of countries like China, Russia, and other regional states.
In the wake of the U.S.-pressured withdrawal of the Europeans from the Iranian market, Iran was virtually handed over to China on a silver plate – something Beijing is indeed quite appreciative of. China’s economic presence in Iran can be witnessed all across the board: from the construction of the Tehran Metro to the exploration of Persian Gulf oil and gas fields.
Iran’s technocrats – a prime victim of the sanctions – observe this development with great concern. Among other things, they have seen that a healthy competition between different foreign competitors is sorely missing, and that the lack of high-tech (formerly delivered by the West) has reduced the quality of domestic production. All of this has a negative impact (mid- and long-term) on Iran’s economic and technological development. If the situation remains unchanged, such damage can hardly be compensated. As another case in point, the sale of Iranian oil to large customers such as China or India has turned into barter – a de facto “junk for oil” program has emerged. In addition, during the past couple of years China has been given preferential rates by Iran for its oil imports.
Finally, some of Iran’s neighboring countries also benefit from the sanctions. Most significantly, due to the energy sanctions against Iran, Russia can safeguard its quasi-monopoly on Europe’s energy supply – a strategic interest held by Moscow which is unlikely to be reversed easily. To a much lesser degree but still noteworthy, Turkey – which has turned into the sole land trade corridor reaching Iran from the West – has seen its profits in its dealings with Iran risen sharply. Not surprisingly, its business press has been cheering the Iran sanctions as providing Ankara with a competitive trade advantage. Also off the radar, Qatar which in the Persian Gulf is sharing the world’s largest gas field with Iran, has been able to exploit South Pars much more rapidly than Iran given the latter’s lack of access to advanced technologies. This has resulted in a tremendous gap of revenues between the two countries of many several billion dollars.
Ultimately, the policy of sanctions is counter-productive on multiple levels, most sensitively on diplomatic and socio-economic grounds. The sanctions – whether called “crippling” or “targeted” – disproportionately affect the civilian population. “Smart sanctions” are very much an oxymoron as “smart bombs” which allegedly function in surgical precision. And like their military counterparts, “targeted sanctions” inflict extensive “collateral damage.”
Despite the political need to seriously reconsider sanctions as a tool for a judicious and solution-oriented foreign policy, there are many political and institutional barriers to overcome before the extremely dense web of Iran sanctions can be dissolved – which remains not only a huge political challenge but also a moral one. The first step in this direction will be the sober realization among policymakers that while sanctions do have effects, these are not the ones officially proclaimed or desired – neither in socio-economic terms nor in the sphere of Realpolitik when it comes to altering Tehran’s nuclear calculation. Leaving the sanctions against Iran in place advances the specter of an Iraqization of Iran – with all its adverse effects internally (destruction of society) as well as externally (war and destabilization of an already too fragile regional balance).
To pave the way for a new chapter in Iran’s relations with the West, Rohani has already proved his wisdom by his choice of foreign minister. Mohammad-Javad Zarif, Iran’s former ambassador to the UN, has already been labeled as “Tehran’s leading connoisseur of the U.S. political elite”. All this undoubtedly presents the most suited prerequisite towards the aim of alleviating the multi-level liability that sanctions constitute. But at the end, it is the responsibility of those who have imposed the sanctions to initiate the process of their removal. The ball is now in the West’s court. It would truly be the “height of irresponsibility” if one missed this opportunity offered by the Iranian people who have already paid dearly for an utterly miscalculated transatlantic “coercive diplomacy.”
*****
Ali Fathollah-Nejad is an Iranian-German political scientist educated at universities in France, Germany, the Netherlands, and the UK. His website is at fathollah-nejad.com.
Brazil says may go to UN over NSA espionage
Press TV – August 15, 2013
Brazil says it may go to the UN over a controversial US spying program on Brazilian citizens, rejecting Washington’s claims that the operation was purely aimed at fighting terrorism.
Addressing a congressional panel on Wednesday, Brazilian Communications Minister Paulo Bernardo said Brasilia was not satisfied with the explanations presented by US Secretary of State John Kerry during his Tuesday visit.
“Consequently, we will bring the case to international organizations, probably the United Nations,” he added.
Kerry’s visit was aimed at easing diplomatic tensions with the Latin American country.
Washington has defended the espionage program as a lawful measure aimed at countering terrorist attacks across the world.
However, Bernardo stressed that the operation also “involved industrial, trade and diplomatic espionage.”
Based on documents leaked by former US intelligence contractor Edward Snowden, Washington has tapped Brazilians’ telephone conversations and emails.
They also indicate that Washington maintains an intelligence base in Brasilia, part of a network of 16 such stations operated by the US National Security Agency (NSA) around the world to intercept foreign satellite transmissions.
Brazil may reject US fighter jet deal over NSA spying scandal
RT | August 13, 2013
Brazilian officials have expressed reluctance to purchasing dozens of military planes from the US after it was revealed that the NSA not only closely monitored Brazilian energy and military affairs, but also mined for commercial secrets.
The US had planned to sell Brazil – a country in the process of revitalizing its Air Force – 36 fighter jets in a deal worth more than US$4 billion. But when US Secretary of State John Kerry meets with Brazilian President Dilma Rousseff on Tuesday, the leaders will not discuss the deal, a source near to the situation told Reuters.
Kerry traveled to Colombia before making his way to Brazil in an attempt to repair relations with Latin American nations after NSA leaker Edward Snowden disclosed documents showing that the US spied on communications related to the military, political and terror issues, and energy policies.
“We cannot talk about the fighters now…You cannot give such a contract to a country that you do not trust,” the source said.
Chicago-based Boeing Co. is competing for the $4 billion contract against France’s Rafale and Sweden’s Gripen, although the longer Brazil goes without choosing, the more likely it is that other competitors will enter the fray.
Rousseff delayed a decision on the fighter jets because of budget woes and widespread demonstrations protesting austerity and government corruption.
“I don’t expect the president to decide on the fighter contract this year, and next year is an election year so it might have to wait until 2015,” a Brazilian government source said.
Brazil’s Foreign Minister, Antonio Patriota, informed United Nations Secretary General Ban Ki-Moon of the nation’s situation as recently as last week.
Tuesday’s visit will be Kerry’s first trip to Brazil as Secretary of State.
But it’s not just Brazil that was reportedly upset over the NSA revelations. Even Colombia – one of Washington’s closest allies in the region – was unhappy about the information revealed. In Bogota, Kerry aimed to play down the rift during a press conference.
“Frankly, we work on a huge number of issues and this was in fact a very small part of the overall conversation and one in which I’m confident I was able to explain precisely that this has received the support of all three branches of our government,” Kerry told reporters. “It has been completely conducted under our Constitution and the law…The president has taken great steps in the last few days…to reassure people of the US intentions here.”
US Vice President Joe Biden has visited Brazil and Colombia, and President Barack Obama recently made a three-day trip to Mexico and Puerto Rico. Both trips have been portrayed as evidence of US politicking below the equator.
During his visit to Brazil, Biden said that stronger trade ties should usher in a new era of relations between Washington and Brasília.
How long that goodwill will last remains to be seen, according Carl Meacham, former Latin America adviser on the Senate Foreign Relations Committee and director of the Americas Program at the Center for Strategic and International Studies.
“I think the tone of the visit will be a bit tense because of these issues raised by the surveillance [program] and I think Secretary Kerry will have to speak to that,” he told AP.
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Greenwald Testifies to Brazilian Senate about NSA Espionage Targeting Brazil and Latin America
By Mabel Duran-Sanchez | CEPR Americas Blog | August 10, 2013
This past Tuesday, investigative journalist Glenn Greenwald testified before the Brazilian Senate’s Committee on Foreign Relations and National Defense (CRE) at a public hearing on the clandestine surveillance activities of the U.S. National Security Agency (NSA) in Brazil.
Greenwald, who has published many top-secret NSA documents leaked to him by whistleblower Edward Snowden, explained how the agency’s surveillance programs go far beyond gathering intelligence related to terrorism and other national security threats, as the U.S. government has suggested. According to Greenwald, NSA spying has focused on foreign business interests as a means for the U.S. government to gain a competitive advantage in negotiations. Greenwald mentioned that he has information regarding instances of NSA surveillance of the Organization of American States (OAS) and secret intelligence documents on economic agreements with Latin American nations. He explained that this type of surveillance has helped the U.S. to make the agreements appear more appealing to Latin American countries. Brazil’s concern about this economic espionage is particularly understandable given that it is the U.S.’s largest trading partner in South America.
During the hearing, Greenwald made reference to a 2009 letter wherein Thomas Shannon, the former Assistant Secretary of State for Western Hemisphere Affairs (from November 2005 – November 2009) and current U.S. Ambassador to Brazil, celebrated the NSA’s surveillance program in Latin America and how it has helped advance U.S. foreign policy goals in the region. Greenwald wrote a detailed account of his findings in an article entitled “Did Obama know what they were thinking?” in the Brazilian print magazine, Época. In this piece, Greenwald explains that Shannon’s letter, addressed to NSA Director Keith Alexander, discusses how the spy agency obtained hundreds of documents belonging to Latin American delegations detailing their “plans and intentions” during the summit. Shannon asserted that these documents were instrumental in helping the Obama administration engage with the delegations and deal with “controversial subjects like Cuba” and “difficult counterparts” like former President of Venezuela, Hugo Chávez, and Bolivian President, Evo Morales. In the same letter Shannon encouraged Alexander to continue providing similar intelligence as “the information from the NSA will continue to give us the advantage that our diplomacy needs,” especially ahead of an upcoming OAS General Assembly meeting in which he knew discussions on Cuba’s suspension from the OAS would ensue.
Greenwald went on to explain the functioning of the NSA’s XKeyscore program to the Brazilian senators, which he referred to as the most frightening of all the programs revealed thus far. He also discussed the first U.S. secret surveillance program revealed to the world, PRISM. In the next 10 days, Greenwald said, he will have further reports on U.S. surveillance and “[t]here will certainly be many more revelations on spying by the U.S. government and how they are invading the communications of Bra[z]il and Latin America.”
When asked by the current CRE President, Senator Ricardo Ferraço, what the international community should do if the U.S. continues its mass surveillance programs, Greenwald said that although many governments around the world have expressed indignation, it has been a “superficial indignation.” He called on foreign governments to put pressure on the U.S. by granting Snowden asylum, which would be most effective if many countries were to do so.
According to Reuters, Greenwald also told reporters that “[t]he Brazilian government is showing much more anger in public than it is showing in private discussions with the U.S. government,” but that “[a]ll governments are doing this, even in Europe.” Although some Brazilian senators have questioned President Rousseff’s upcoming trip to Washington, yesterday, Foreign Minister Antonio Patriota told reporters that “the trip is still on.” Nevertheless, Patriota added that the NSA revelations are “an issue that cannot be left out of the bilateral US-Brazil agenda,” and that he would raise the issue when John Kerry travels to Brasilia early next week.
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Banks Threaten to Punish Cities that Use Eminent Domain to Help Underwater Homeowners
By Ken Broder | AllGov | August 4, 2013
Roughly half the homeowners in the Bay Area city of Richmond are underwater on their mortgages, but city officials have come up with a plan to float them to safety, much to the consternation of banks and other moneyed interests.
The city is strongly considering using the power of eminent domain to seize the homes, which are worth less than the amount owed on the mortgage, and sell them back to the owners at fair market prices. Richmond, a poor city by most measurements, has not benefited much by the recent surge in housing prices and many of the homeowners owe three or four times as much as the home is worth, according to The New York Times.
It would be the first city in the nation to use eminent domain in this fashion. But they certainly aren’t the only city that would benefit immensely from the strategy. A lot of cities with low-income minority populations were sold a ton of predatory loans that shouldn’t have been offered, and the Times says at least two dozen are actively considering the move.
Banks—which make money by selling the homes to lenders in the secondary market, who then make money by foreclosing on the homes and reselling them—have promised to block the city with lawsuits. They promise an end to lending in the city if it persists in its plan.
On July 29, the city, according to Carolyn Said of the San Francisco Chronicle, “sent letters to 32 banks and other mortgage holders offering to buy 624 underwater mortgages at discounts to the homes’ current value. If the offers are spurned, the letter said Richmond may use the power of eminent domain to condemn the mortgages and seize them, paying court-determined fair market value.”
The current market value of the 624 homes is about $177 million, but the face value of their mortgages is $242 million. Richmond has given the loan holders until August 14 to sell the homes.
As explained by Shaila Dewan of The New York Times:
“In a hypothetical example, a home mortgaged for $400,000 is now worth $200,000. The city plans to buy the loan for $160,000, or about 80 percent of the value of the home, a discount that factors in the risk of default. Then, the city would write down the debt to $190,000 and allow the homeowner to refinance at the new amount, probably through a government program.”
The city and investors would take $30,000 and use it for expenses and a small profit, while the homeowner ends up with $10,000 in equity.
The banks and secondary lenders would lose a cash cow that relies on the suffering of homeowners. At stake are more than just the primary mortgages. There are $450 billion in second liens and equity loans on bank books that could be affected. The lenders have called the eminent domain tactic illegal and unconstitutional, and an array of heavy hitters, including the Securities Industry and Financial Markets Association, the American Bankers Association and the National Association of Realtors, have lined up in opposition.
Besides threatening court action, they are seeking legislation at the state and federal level to snuff out the nascent movement, and revving up advertising campaigns to argue their case.
However, as David Brodwin of U.S. News and World Report put it, “it’s hard to see why bailing out homeowners with a program of this sort is any less an affront to the principles of capitalism than bailing out banks that made bad investments in mortgage backed derivatives.”
To Learn More:
Richmond’s Pioneering Eminent-Domain Threat (by Carolyn Said, San Francisco Chronicle)
A City Invokes Seizure Laws to Save Homes (by Shaila Dewan, New York Times)
California City Seizes Homes to Save Them (by Ilyce Glink, CBS Money Watch)
One City’s Bold Plan to Prevent Foreclosures (by David Brodwin, U.S. News and World Report)
Will Medical Trade Be Included in the EU Trade Deal and the TPP? If Not, Why Not?
CEPR | August 4, 2013
The NYT has an article today on the enormous savings available to people who had major surgeries performed in Europe rather than the United States. The piece reports that the cost of hip replacement or knee replacement surgery in the United States are more than five times higher than they are in comparable quality facilities in Europe. (The gap would be even larger with facilities in Thailand and India.)
This shows the enormous potential gains from increased medical trade. In effect, our hospitals, doctors, and medical equipment makers benefit from tariffs on the order of 500 percent or more. If the Obama administration really is interesting in promoting growth through trade it would be difficult to imagine a sector with larger potential gains than trade in medical care. The agreements would focus on setting clear liability rules, accreditation systems, and removing obstacles for insurers and government programs that prevent them taking advantage of lower cost medical services in other countries.
If the trade deals do not include major openings on medical trade then it would be a clear example of why these deals are in fact about selective protectionism rather than free trade. Past trade deals have been quite explicitly focused on putting U.S. manufacturing workers in direct competition with the low paid manufacturing workers in developing countries.
Anyone who believes in free trade would want U.S. doctors and other professionals subjected to the same sort of competition. Otherwise, they really only want to use trade to lower the wages of less educated workers to benefit the the wealthy. (Low wages means cheap help.) It is dishonest to call that policy “free trade.”

