I’m strongly against the proposed Trans Pacific Partnership agreement and the fast track proposal for approving it, based on what I know of both.
I write this even though I admit I don’t know what will be in the TPP when it is finally submitted to Congress. I could be wrong in everything I say. I don’t think I will be, in fact I’m pretty sure I won’t be, but in this post, I link to arguments in favor as well as those opposed so you can judge both sides of the question.
I link. You decide.
Most economists favor the TPP. Most of them think the issue is free trade while I think the issue is national sovereignty. The nations in the TPP have few if any tariffs or import quotes among each other. The goal of the TPP is the harmonize national laws so that trade can proceed unimpeded. The problem with that, as I see it, is that that important laws on such subjects as intellectual property will be enacted without much debate and without much opportunity to change them in the future.
The geopolitical importance of the Trans Pacific Partnership by Mireya Solis of the Brookings Institution.
Why Obama’s key trade deal with Asia would actually be good for American workers by David Autor, David Dorn and George H. Hanson for the Washington Post.
A trade deal must work for America’s middle class by Lawrence Summers for Financial Times.
A Trade Deal Liberals Can Live With by Noah Smith for Bloomberg View.
No Big Deal by Paul Krugman for the New York Times.
TPP at the National Association of Business Economists by Paul Krugman for the New York Times.
Why Paul Krugman is wrong to oppose the Trans Pacific Partnership by Tyler Cowen for Marginal Revolution.
The Debate Over the Trans Pacific Partnership by Brad DeLong for the Washington Center for Equitable Growth.
Fun With Brad DeLong on TPP by Dean Baker for Beat the Press.
Beware economists bearing foreign policy arguments by Matt Yglesias for Vox.com.
Special courts for foreign investors by Simon Lester of the Cato Institute and Ben Beachy of Public Citizen.
Free Trade Is Elites Betraying Their Own Populations by Ian Welsh.
The classic Economics 101 argument in favor of free trade is based on a hypothetical example of trade between two countries, such as England and Portugal, showing that it is to the interests of capitalists in each country to invest in whatever their country enjoys the greatest comparative advantage, and to import all the rest.
The problem with this argument is that it doesn’t take into account the possibility, which didn’t exist in the time of Adam Smith and David Ricardo, that capitalists in one country could invest all their capital in another country. It also doesn’t take into account trading among many countries and the possibility one or more countries might be frozen out.
Winners and Losers
The lineup of supporters and opponents of the TPP and fast track give a good indication of who the winners and losers are likely to be. The winners will be Wall Street, Hollywood and Silicon Valley. The losers will be rust belt industries, labor unions and environmentalists.
Of course this could turn out to be wrong. If there is an enforceable minimum wage component in the TPP, I will be pleasantly surprised and might change my mind. But based on leaked drafts of the TPP, the only enforceable rights will be the right of corporations to not lose profits because of unfair and unexpected changes in laws and regulations.
Trans Pacific Partnership (TPP) by the Office of the United States Trade Representative.
Trade Promotion Authority: An Important Tool for U.S. Economic Growth and Jobs by Trade Benefits America.
What Is the Trans Pacific Partnership (TPP) by the U.S. Business Coalition for TPP..
Civil Society, Environmentalists Firmly Opposed to Trans Pacific Partnership by Global Research.
Trans Pacific Partnership Free Trade Agreement by the AFL-CIO.
What Is the Trans Pacific Partnership Agreement (TPP)? by the Electronic Frontier Foundation.
The Pivot to Asia
The final argument to the Trans Pacific Partnership is that is part of a struggle by the United States against China. The argument is that it is in the national interest of the United States to create an agreement in which Americans write the rules rather than one in which Chinese write the rules.
The problem I have with this argument is that there is a big difference between a trade agreement in which representatives of the American public write the rules and one in which representatives of U.S.-based corporations write the rules.
American CEOs as a group do not particularly identify with the interests of the American people. I frequently read about bankers or Silicon Valley enterpreneurs thinking out loud about how nice it would be to have their own island or their own sovereign country in which they would not be subject to any nation’s law.
I don’t think CEOs in all countries necessarily think this way. I think wealthy business executives in China and Japan think of their nation as the unit of competition, rather than their individual business.
Here’s What You Need to Know About the Trade Deal Dividing the Left by Garbrielle Canon for Mother Jones.
Trans Pacific Partnership Is the Foundation of All Future Trade Deals by Danny Vinik for The New Republic.
The reason I’m sure the TPP will be as bad as it is cracked up to be is the extreme secrecy that surrounds the negotiation and the text, and the eagerness of the Obama administration to push it through without adequate discussion. If they had nothing to hide, they wouldn’t be hiding it.
Two other trade deals, the Transatlantic Trade and Investment Partnership (TTIP or TAFTA) and the Trade In Services Agreement (TISA), are in earlier stages of negotiation. All the arguments for and against the TPP apply to them.
I think that other trade agreements, such as NAFTA, also need to be revised to give greater protection to workers, consumers, public health and the environment.
I would be in favor of a free trade agreement that contained uniform rules preventing companies and nations from gaining an unfair advantage in international trade by violating labor rights, endangering public health, polluting the environment, and increasing greenhouse gas emissions, with an impartial tribunal to enforce penalties for violating these tights.
I don’t think such an agreement is likely anytime soon. In the meantime I am opposed to an agreement in which the only entities with enforceable rights are foreign investors.