TO BE, OR NOT TO BE, THE TPP

In mid November, the text of the Trans Pacific Partnership (TPP) was released.  Those members of the Congress who said they read the whole thing are probably fibbing.

There are three ways a befuddled citizen can figure out what to think about a complex deal like the TPP.

The first is tribal:  Listen for signals from the politicians you support and assume they’ve made the right decisions.  But that’s not so easy when it comes to the TPP because the agreement divides both parties.

It’s no surprise that President Obama is strongly in favor of a deal he and his sides just finished negotiating.  “It’s an agreement that puts American workers first and will help middle-class families get ahead,” he said.  “It includes the strongest commitments on labor and the environment of any trade agreement in history.”  The Democratic presidential candidates don’t agree.  Bernie Sanders says the TPP is “even worse” than he expected.  Hillary Rodham Clinton opposes it too, and hopes you’ll forget that she once called it “the gold standard” of trade deals.

Among Republicans, “establishment” candidates Jeb Bush and John Kasich support the agreement, as do Ben Carson and Marco Rubio.  But Donald Trump and Ted Cruz have said they are opposed.

A second approach is to listen to what interested parties say and choose sides based on where your sympathies lie.

Manufacturing workers and their unions think another free-trade deal will inevitably hurt them.  The last half-century of globalization has coincided with a massive loss of blue-color jobs; not all of the erosion was due to trade, but to labor, the TPP looks like more of the same.  “A bad deal for American workers,” AFL-CIO President Richard Trumka said.

Environmentalists are condemning the deal too, mostly because it doesn’t crack down on climate change.  But this is, after all, a trade deal; talks on global warming are already underway.

Big business is mostly in favor of the deal, although not universally so.  Tobacco companies are unhappy that it deprives them of the right to sue countries that restrict trade by limiting cigarette sales.  Pharmaceutical companies complain that they aren’t getting enough protection for their patients.  (Doctors Without Borders thinks they are getting too much.)

Hollywood, Silicon Valley and agribusiness mostly like the deal, which protects entertainment copyrights, eases the flow of data across borders and opens doors for U.S. experts of meat and rice to Asia.  California would reap benefits that the Rust Belt won’t see.

Now for the final, labor-intensive approach:  Listen to smart people who don’t have a vested interest but are trying to analyze the deal in a comprehensive way.

Joseph A. Massey, a former U.S. trade negotiator with China and Japan who has served as an advisor to Republicans and Democrats made some important points about the agreement.

First, he said, the TPP’s impact has probably been oversold.  “It has benefits for U.S. export industries, but I think they’re modest,” he said.  “It’s clearly good for the entertainment and tech sectors.  But it’s not revolutionary.”

Second, he said, the biggest threat to jobs in the United States isn’t free-trade agreements; it’s domestic policy.  “We’ve neglected our own manufacturing sector,” he said.  “Germany is a party to trade agreements too, but they’ve done a much better job at maintaining a skilled blue-color workforce.  We need more incentives for companies to invest here, employ American workers and invest in their training.”

Third, he noted, the TPP isn’t only about trade.  It’s also about economic reform, higher labor standards and environmental protection in developing countries such as Vietnam and Malaysia.  And it’s a way to knit countries on the Pacific Rim into a trading system that the United States helped design instead of one run by Asia’s growing power, China.

So are we better off with or without the TPP?  If Congress ratifies it, that won’t turbocharge the U.S. economy.  If Congress blocks the deal, that won’t stop globalization.  And like any trade agreement, it creates winners and losers.

One political lesson is clear:  The bipartisan consensus that enabled Bill Clinton and George W. Bush to pass trade agreements has broken down, mostly because, to many Americans, their costs have been clearer than their benefits.

To win Congress’ approval of the deal—an important part of Obama’s second-term agenda and his legacy—the president still has a lot of persuading to do.

The unions have always been opposed to trade deals, but by and large they have worked.  They have raised the economies of other countries and they have increased our exports and jobs.  We should support TPP wholeheartedly.

ArtSchwartzSig

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2 Comments

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2 responses to “TO BE, OR NOT TO BE, THE TPP

  1. Gary W.

    I’m for free trade. The freer the better. But, unfortunately, I don’t trust President Obama.

    You know, “If you like your doctor, you can keep your doctor.” and “If you like your insurance you can keep your insurance.” and it was a video that instigated the attack in Benghazi. Add to that, “the police behaved stupidly” and “If I had a son he’d look like Treyvon” and I become even more distrusting. Oh yeah, and don’t let me forget the promise that under Obamacare the average American family will save $2,500 per year in premiums.

    So yes, I lean toward free trade and TPP, but I’ll be searching for the gotcha somewhere within. Sorry, but I can’t help but learn from experience.

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