American resistance to TTP trade pact grows
Macrobusiness Australia | March 18, 2014
American resistance to TTP trade pact grows
By Leith van Onselen
The prospects of concluding the Trans-Pacific Partnership (TPP) – the proposed regional trade deal between 12 Pacific Rim countries, including Australia – look to have taken another hit, with opposition towards the deal in the US continuing to grow.
Late last year, Nobel Prize winning economist, Joseph Stiglitz, posted an open letter questioning negotiators’ secrecy and warning about “grave risks on all sorts of topics” posed by the TPP, as well as claiming that it contains “many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible”.
In February, Congress refused to grant President Obama “Trade Promotion Authority” (TPA), which would have allowed the President to negotiate the TPP and then bring it back to Congress for an up or down vote, with no amendments allowed, effectively stymieing negotiations, at least until after the mid-term Congressional elections in November. Congress’ decision not to grant TPA was reportedly heavily influenced by protectionist interests within the US – in particular the textile, apparel, dairy and sugar industries – which are bitterly opposed to the TPP.
And later in February, Nobel Prize winning economist, Obama-backer, and international trade expert, Paul Krugman, questioned the merits of the TPP in an Op-Ed piece in the New York Times, arguing that there isn’t a compelling case for the deal either for the US or world as a whole.
What the T.P.P. would do, however, is increase the ability of certain corporations to assert control over intellectual property. Again, think drug patents and movie rights.Is this a good thing from a global point of view? Doubtful. The kind of property rights we’re talking about here can alternatively be described as legal monopolies. True, temporary monopolies are, in fact, how we reward new ideas; but arguing that we need even more monopolization is very dubious — and has nothing at all to do with classical arguments for free trade.
Yesterday, Nobel Prize winning economist, Joseph Stiglitz, returned to once again slam the TPP, arguing that it would enrich global elites at the expense of the poor and middle class. From the New York Times:
Right now, there are trade proposals in the works that threaten to put most Americans on the wrong side of globalization…Most immediately at issue is the Trans-Pacific Partnership, or TPP… [where]… negotiations have been taking place in secret, forcing us to rely on leaked drafts to guess at the proposed provisions…
Based on the leaks — and the history of arrangements in past trade pacts — it is easy to infer the shape of the whole TPP, and it doesn’t look good. There is a real risk that it will benefit the wealthiest sliver of the American and global elite at the expense of everyone else. The fact that such a plan is under consideration at all is testament to how deeply inequality reverberates through our economic policies.
…when corporations call for harmonization, what they really mean is a race to the bottom…
What we know of its particulars only makes it more unpalatable. One of the worst is that it allows corporations to seek restitution in an international tribunal, not only for unjust expropriation, but also for alleged diminution of their potential profits as a result of regulation…
There are other noxious provisions. America has been fighting to lower the cost of health care. But the TPP would make the introduction of generic drugs more difficult, and thus raise the price of medicines…
Trickle-down economics is a myth. Enriching corporations — as the TPP would — will not necessarily help those in the middle, let alone those at the bottom.
All this is good news for Australia, in light of the risks posed to Australia’s sovereignty and consumer welfare arising from the TPP. As long as opposition to the TPP within America continues, deadlines will continue to get pushed into the future, and enthusiasm for the TPP amongst the 12 Pacific Rim countries will likely wane, lessening the chance that a deal will eventually be struck.
unconventionaleconomist@hotmail.com
