WASHINGTON (Sputnik) — The claim that the US Export-Import Bank and Trans Pacific Partnership (TPP) agreement promote free trade is a myth because they selectively liberalize or manage markets based on what best suits US interests, former delegate to the UN Convention on International Trade Law (UNCITRAL) Professor Raj Bhala told Sputnik.
“It’s a myth that either the Trans-Pacific Partnership or the Export-Import Bank are engaged in free trade,” Bhala stated on Monday.
The Export-Import Bank allows the United States to grant loan guarantees and credit to foreign companies seeking to purchase American goods.
On June 30, 2015, the US Congress let the Bank’s charter expire after a pitched fight among Republicans in the House of Representatives.
Free trade should not even be employed as a concept to assess the Export-Import Bank, he added.
“If you measured it [Export-Import Bank] by the yardstick of free trade, it would fail,” Bhala said.
Bhala, however, warned that accusing all Export-Import Bank programs of illegally subsidizing exports would be premature because, although they engage in activities that work like subsidies in practice, whether they violate international trade laws is not apparent without further investigation.
Some Republican opponents of the Export-Import Bank have argued it provides an unfair, taxpayer-funded subsidy to a small number of companies.
The US House of Representatives will vote on the reauthorization of the Export-Import Bank this week if it passes the Senate on Monday. The Export-Import Bank reauthorization was included in a must-pass highway transportation funding bill.
The TPP is a trade pact currently being negotiated in unusual secrecy between the United States and 12 Asian and Pacific Rim nations.