Drudge Retort: The Other Side of the News
Monday, November 28, 2016

In spite of the hopes of many elite types for a last-minute resurrection, it appears that the Trans-Pacific Partnership (TPP) is finally dead. This is good news, but it took a long time to kill the deal.

The basic point that everyone should know by now is that the TPP had little to do with trade. The United States already had trade deals with six of the 11 other countries in the pact. The trade barriers with the other five countries were already very low in most cases, so there was little room left for further trade liberalization in the TPP.

Instead, the main purpose of the TPP was to lock in place a business friendly structure of regulation. The deal was negotiated by a series of working groups that were dominated by representatives of major corporations. The regulatory structure was to be enforced by investor-state dispute settlement tribunals. This is an extra-judicial system that would be able to override U.S. laws

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with secret rulings that were not bound by precedent or subject to appeal.

In addition, the TPP would strengthen and lengthen patent and copyrights and related protections. This is protectionism: It is 180 degrees at odds with free trade. These protections can raise the price of protected items, like prescription drugs, by a factor of ten or even a hundred. This is equivalent to tariffs of several thousand percent, with the same waste and incentives for corruption. Free traders oppose such protections, if they are honest.

The dishonesty used to push the TPP continued with the post-mortems. Both the "New York Times and Washington Post" gave us stern warnings about how China is likely to capitalize by pushing ahead with its own trade deal for East Asia and the Pacific. This appeal to anti-China sentiments is striking since it completely contradicts everything that the "free traders" ordinarily say about trade.

First, we ordinarily believe that more prosperous trading partners are good for the United States. If China and other countries in the region reduce their trade barriers, it should lead to faster growth, making them better customers for U.S. exports and better suppliers of high quality imports. This is the reason that the United States generally supported the growth of the European Common Market and later the European Union.

There is an argument that we may not want to see China, a country without a democratic government or respect for basic human rights, get even stronger. But it is not clear what the alternative proposal is.

Furthermore, almost without exception, the current group of China fearers was 100 percent supportive of admitting China into the WTO without imposing conditions like respecting the rights of workers to organize. In other words, no one should take these people's concerns on China very seriously

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"The decision by proponents of the TPP to push ahead with their deal almost certainly cost Hillary Clinton the election. Trade was a big issue in swing states like Michigan and Pennsylvania and the people who cared about trade overwhelmingly voted for Trump. So the TPP might be dead, but we will have to deal with its legacy in the form of President Trump - thanks guys."

#1 | Posted by PunchyPossum at 2016-11-28 11:20 PM | Reply

Okay.

#2 | Posted by BruceBanner at 2016-11-28 11:32 PM | Reply

Okay.

#2 | Posted by BruceBanner at 2016-11-

The smartest thing you ever said on a thread about free trade.

#3 | Posted by PunchyPossum at 2016-11-29 12:55 AM | Reply | Newsworthy 1

Come on now Mr Possum. You know I'm more pro worker than almost anyone on here. I've worked those jobs. Still believe/participate in maintaining strong worker's rights.

#4 | Posted by BruceBanner at 2016-11-29 11:32 AM | Reply

"Furthermore, almost without exception, the current group of China fearers was 100 percent supportive of admitting China into the WTO without imposing conditions like respecting the rights of workers to organize. In other words, no one should take these people's concerns on China very seriously"

As someone who was instrumental in documenting this since 2000 during grad school, I couldn't disagree more. TPP is a mia culpa, not a doubling down. I'm not a fan of the extrajudicial tribunals or the internet policies, but TPP is written for one purpose: to take back the concessions made to China during that time when the ascended to the WTO.

I never thought this would become a top foreign policy issue again after nearly two-decades of terrorism, but it's true. The "Silk Road" among other trade deals have the potential to force it's own trade agreements to be more lax, like with China. Or the opposite is we limit foreign trade and face the GDP consequences.

TPP has geopolitical advantages, and I fear they have been largely ignored because it's easy to make a case against it from a worker's perspective. It's a tradeoff between a few more industrial jobs for being the global leader in international trade. One feels better but one is a lot better for the future of the country.

But, it's your call America.

#5 | Posted by bocaink at 2016-11-29 02:18 PM | Reply

#5 --------.

How can you say "It's a tradeoff between a few more industrial jobs for being the global leader in international trade" if all the trade is imports? Our trade deficit is high enough. The last thing we need is more free trade with slave nations like Bangladesh and Vietnam, etc...

#6 | Posted by HeliumRat at 2016-11-29 05:29 PM | Reply

Great Article. The author had some really good points. What we usually receive as fodder against free trade is centrally planned economic policy intended to preserve obsolete jobs in an effort to protect obsolete labor. That wasn't the case here. Instead of using a stick (like, for beating) as economic incentive, using a carrot. And this is a method that has been very productive in the past. BetaMax never got far beyond the beta stage because Sony opted to remain proprietary. JVC ended up dominating the market with their VHS foprmat. Apple languished for a decade while keeping a close hold on their operating systems, only recovering when they were able to create a highly valuable brand image...something that would be almost impossible for competitors in markets where dominant products were treated like commodities.

The author also brings up healthcare professionals. This country is in desperate need of more doctors...and there is no easier way to get them than allowing them to come and work over here.

But that doesn't change the fact that even after all these changes, low value workers in the US would still be low value workers. Maybe their cost of living would go down, but barring some sort of cataclysm that wipes out huge numbers of humans, a low value worker's value is not going to increase. Outside of the use of brute force.

#7 | Posted by madbomber at 2016-11-29 07:15 PM | Reply

As for the TPP itself, virtually all analysis suggests net increases in productivity for all parties involved. There were few dissenters, and those who did were met with criticism on their research methods. Many of those who did were also the usual talking heads who routinely advocate on behalf of obsolete labor.

#8 | Posted by madbomber at 2016-11-29 07:22 PM | Reply

#7 - we could have more doctors if the AMA allowed more to be trained. it is a false scarcity to keep profits up. Much like Free Trade and Automation.

Its a scam for increased profits.

They are putting capital before labor.

#9 | Posted by Prolix247 at 2016-11-29 09:05 PM | Reply

#9 agreed..... And an excellent point.

#10 | Posted by AndreaMackris at 2016-11-29 09:20 PM | Reply

That's true, but my understanding is that current quotas are not even being met. I agree that there should be no quota, but eliminating that limitation isn't going to get you anything if you can't find the bodies willing to invest the time and energy in attending med school.

#11 | Posted by madbomber at 2016-11-30 06:36 AM | Reply

You are parroting the new H1B version of quotas. Under the new regime you need underpaid doctors to maintain the wealth of the establishment doctors. You will only find that with foreign doctors who will work cheaply. Americans will want market value.

So what do you do?

State there are not enough willing Americans who want to become doctors.

Think about that statement for a second.

#12 | Posted by Prolix247 at 2016-11-30 09:11 PM | Reply

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