Saturday, April 25, 2015

The TPP has nothing to do with free trade - it's all about protecting monopolies

Anyone who has not been living under a rock knows or has heard something about the Trans Pacific Partnership, aka, the TPP. I have been doing quite a bit of reading on the subject and one common theme emerges, trade barriers are already very low. Conservatives and liberals agree on this point.

So without even having a chance to read the agreement, and believe me, very few people outside of negotiations have any access to it, we know that the vast majority of the agreement is not about free trade. There is very little that can be done to free up trade anymore. TechDirt covers the history of trade agreements in more detail to show, rather conclusively, that this deal is not about free trade.

Economist Dean Baker also confirms that trade deals are already low. In fact, he goes farther by noting that the main purpose of the deal is to impose a more business friendly legal atmosphere so that businesses can be less accountable to the customers they serve and the countries the serve in.

Baker also notes that the trade deal will make rent seekers very, very happy. If you make pharmaceuticals, this is a great deal for you. If you make movies, music or other works protected by copyright, it's cool. If you have ridiculous software patents, this deal is a bonus. Even the Cato Institute, a conservative organization if I ever saw one, agrees that there nothing not to love in the TPP if you're a rent seeker.

I note also that Trade Promotion Authority, aka, "Fast Track Authority" has managed to eke it's way out of committee. TPA allows the Senate to approve the treaty, but only without any chance to amend it and only with an up or down vote. Once ratified by the Senate, the president can sign it. Congress has been wresting with TPA for the TPP for more than a year, and the latest hurdle had something to do with human trafficking, particularly with Malaysia, as the Washington Post reports:
The amendment, offered by Sen. Bob Menendez (D-N.J.), would prevent Congress from "fast tracking" any treaties with countries considered by the State Department to be far out of compliance with international standards on human trafficking. Currently, that list includes Malaysia, which is also a party to the Trans-Pacific Partnership, a massive trade deal with Pacific Rim countries that is in the final stages of negotiation.
I find a certain sense of irony that the issue of human trafficking could potentially throw the entire treaty off the tracks, for awhile anyway. The Post notes that a human trafficking amendment passed the committee 16-10. A bill similar to the amendment to the TPA amendment passed the Senate 99-0, so we know there is bipartisan support for measures to stop human trafficking. In case you're wondering, human trafficking is one of the clearest indications that slavery is still alive and well. Its an industry almost exclusively run by men, but dominated by women and girls. Here it is abundantly clear that rent seeking is not only diverse, it is also quite perverse.

Trade barriers and tariffs are already very low. The only remaining reason for the TPP is to seek competitive advantage over other people. From employees to consumers, the TPP has exploitation built in. The odd thing is, as Dean Baker noted in his article (and many others like it), hardly anyone is talking about using monetary policy to improve trade the right way, by balancing it.
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