[CTC] Baker: Pro-TPP arguments show desperation

[Deborah James]

http://america.aljazeera.com/opinions/2015/5/pro-tpp-arguments-show-desperat
ion.html


Pro-TPP arguments show desperation


If trade agreement supporters are going with their best sell, there's
clearly little to be said in its favor 


May 27, 2015 2:00AM ET 

by Dean Baker <http://america.aljazeera.com/profiles/b/dean-baker.html>
@DeanBaker13 <http://www.twitter.com/DeanBaker13>  

The push for the Trans-Pacific Partnership (TPP) is reaching its final
stages, with the House of Representatives soon voting on granting the
president fast-track trade authority, which will almost certainly determine
the pact's outcome. The proponents of the TPP are clearly feeling the
pressure as they make every conceivable argument for the deal, no matter how
specious.

In the last few weeks, TPP advocates have repeatedly tripped up, getting
their facts wrong and their logic twisted. This hit parade of failed
arguments should be sufficient to convince any fence sitters that this deal
is not worth doing. After all, if you have a good product, you don't have to
make up nonsense to sell it.

Leading the list of failed arguments was a condescending editorial
<http://www.usatoday.com/story/opinion/2015/05/03/trans-pacific-partnership-
tpp-trade-deal-congress-editorials-debates/26843027/>  from USA Today
directed at unions that oppose the TPP because they worry it would cost
manufacturing jobs. The editorial summarily dismissed this idea. It cited
Commerce Department data showing that manufacturing output has nearly
doubled since 1997 and argued that the job loss was due to productivity
growth, not imports.

It turned out that the table used in the editorial did not actually measure
manufacturing output. The correct table showed a gain of only 40 percent
over 17 years
<http://www.cepr.net/blogs/beat-the-press/usa-today-gets-numbers-seriously-w
rong-in-pushing-trans-pacific-partnership-and-trashing-unions> . By
comparison, in the prior 10 years, when our trade deficit was not expanding,
manufacturing output increased by roughly 50 percent
<http://research.stlouisfed.org/fred2/series/OUTMS> .

USA Today eventually acknowledged the error but left the text and the
criticisms in the editorial unchanged. Remarkably, the headline of the
editorial referred to the opposition to the TPP as a "fact-free uproar."

Another big swing and miss came from Bill Daley, a former commerce secretary
under President Bill Clinton and a former executive at JPMorgan Chase who
briefly served as chief of staff in Barack Obama's administration. Daley
published a New York Times column
<http://www.nytimes.com/2015/05/19/opinion/free-trade-is-not-the-enemy.html?
ref=international>  pushing the TPP by arguing for the virtues of trade. The
piece was chock-full of errors and misleading comments, with the best line
being the claim that the United States ranks near the bottom in the ratio of
exports to GDP because of the barriers put up to our exports.

As fans of trade economics everywhere know, the main reason the United
States has a low ratio of exports to GDP is that the United States is a big
country
<http://www.cepr.net/blogs/beat-the-press/lesson-for-bill-daley-tpp-promoter
-the-united-states-is-a-big-country> . This means that Illinois and Ohio
provide a large market for items produced in Indiana. On the other hand, if
the Netherlands or Luxembourg wants to have a large market for its products,
it must export. (Paul Krugman added a chart
<http://krugman.blogs.nytimes.com/2015/05/19/the-mis-selling-of-tpp/>  to
illustrate this point.)

Then there was the issue over whether the TPP is secret. Obama and other TPP
supporters ridiculed this notion, pointing out that members of Congress can
see the draft text anytime they like. But the critics' point is that it is
impossible to have a public debate on the TPP because the members are not
allowed to take staffers with them or discuss the text with others. 

The TPP has little to do with trade. It is a deal crafted by business for
business. 

As Sen. Sherrod Brown pointed out in this context, President George W. Bush
made the draft text
<http://www.ala.org/advocacy/copyright/internationalcopyright/freetradearea>
for the Free Trade Area of the Americas (FTAA) public before asking Congress
to vote for fast-track authority. Apparently Obama is not willing to have
the same degree of openness as Bush and is attacking TPP critics for
suggesting that he should.

Washington Post columnist Ruth Marcus tried to save the day for Obama by
arguing that our partners in the FTAA gave permission to make the deal
public but our TPP partners have not done so. We're really supposed to
believe that Obama could not get similar consent
<http://www.cepr.net/blogs/beat-the-press/the-tpp-and-the-incredible-hulk-th
eory-of-international-relations>  from the TPP partners if he wanted it?

Then there was the issue of whether the TPP and other trade agreements that
could be passed under fast-track authority (this power will extend well into
the term of the next president) could jeopardize the ability of the United
States to regulate the financial sector. When Sen. Elizabeth Warren raised
this issue, Obama on May 9 dismissed her views
<https://www.yahoo.com/politics/why-obama-is-happy-to-fight-elizabeth-warren
-on-118537612596.html>  as the hypothetical musings of a former law
professor.

Then on May 13, Canada's finance minister gave a speech in which he argued
<http://www.bloomberg.com/news/articles/2015-05-13/volcker-rule-violates-naf
ta-canada-wants-exemption-oliver-says>  the Volcker rule, which limits the
extent to which government-insured banks may hold risky assets, violates the
North American Free Trade Agreement (NAFTA). It turned out that the Canadian
financial industry raised these concerns with the Treasury Department as far
back as 2011. In other words, Warren's concerns were far from hypothetical;
they reflected issues that came up with prior trade deals.

With the economic arguments for the TPP falling flat, some commentators have
turned to the geopolitical argument. Fareed Zakaria went this route in a
column
<http://www.washingtonpost.com/opinions/you-cant-stop-the-trade-machine/2015
/05/14/208d74a2-fa6e-11e4-a13c-193b1241d51a_story.html>  last week. After
implying that opponents of the TPP favored a return to autarky, he argued
that we should be less concerned about what the TPP would do for the United
States and think more about what it would do for our trading partners. He
held up NAFTA and what it did for Mexico as a model.

This should leave readers more than a bit baffled. On the economic side,
Mexico has lagged badly in the years since NAFTA went into effect. According
to International Monetary Fund data
<http://www.imf.org/external/pubs/ft/weo/2015/01/weodata/weorept.aspx?pr.x=9
1&pr.y=7&sy=1993&ey=2014&scsm=1&ssd=1&sort=country&ds=.&br=1&c=273%2C111&s=P
PPPC&grp=0&a=> , the country went from having a per capita GDP that was 34.9
percent of the United States' in 1993 to 32.7 percent last year. Developing
countries are supposed to catch up to rich countries economically, not fall
further behind.

In reality, the TPP has little to do with trade. It is a deal crafted by
business for business. The goal is to put in place a business-friendly
structure of regulation in the United States and elsewhere. No amount of
lipstick is going to make this pig pretty, and the folks who keep trying are
making themselves look very foolish in the process.

Dean Baker is co-director of the Center for Economic and Policy Research and
author, most recently, of The End of Loser Liberalism: Making Markets
Progressive.

The views expressed in this article are the author's own and do not
necessarily reflect Al Jazeera America's editorial policy. 

							

 

 

Deborah James

Our World Is Not For Sale (OWINFS) network

 

Director of International Programs

Center for Economic and Policy Research

1611 Connecticut Ave NW, Suite 400, Washington DC 20009

+1.202.293.5380 x111

 <mailto:djames at cepr.net> djames at cepr.net

 <http://www.cepr.net/> www.cepr.net 

 

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