[CTC] Dean Baker LATimes OpEd: TPP and IP

[Deborah James]

http://www.latimes.com/opinion/op-ed/la-oe-0225-baker-trans-pacific-trade-20
160225-story.html
Op-Ed 
The jobs tradeoffs in the TPP trade deal
A demonstrator in a wheelchair holds a banner reading 'Drugs at a Fair
Price' during an anti-TPP rally in Lima, Peru on Feb 4.
 (Sebastian Castaneda / EPA)
Dean Baker
President Obama is trying to round up votes in Congress to ratify the
Trans-Pacific Partnership before the end of his term. The White House has
made approval of the 12-nation free-trade deal, which took seven years to
negotiate, a top priority. But many in Congress and around the country have
serious concerns about how it will affect everything from environmental
regulations and drug prices to jobs and wages.
Supporters of the trade deal were therefore pleased when a study from the
venerable Peterson Institute for International Economics
<http://piie.com/publications/wp/wp16-2.pdf>  projected that the TPP would
boost exports and economic growth. If ratified, by 2030, the U.S. economy
would be 0.5 percentage point larger with the TPP than without it, according
to the study. Annual exports would be $387 billion higher as a result of the
deal.
Unfortunately, a closer look at the study gives considerably less cause for
celebration.
The Peterson Institute didn't really investigate the central question of
concern to U.S. politicians and voters: Will the TPP incite a wave of cheap
imports that cost workers their jobs? The model of the global economy
Peterson used, the study explains, ³assumes that the TPP will affect neither
total employment nor the national savings (or equivalently trade balances)
of countries.² So on the face of it, this paper doesn't appear to have much
to say about the jobs situation.

But if we dig further into its second assumption ‹ that trade surpluses or
deficits also are unchanged ‹ something important gets revealed.
For instance, the Peterson Institute promoted its finding that annual
exports will increase by $387 billion. If the trade balance stays the same,
that means imports will increase by $387 billion too.
The money foreigners might have spent on our cars and other manufactured
goods will instead be used to pay Pfizer higher prices for its drugs.-
Consider, then, that one of the major aspects of the trade deal is stronger
and longer patent protections for pharmaceutical companies. Obama and other
politicians have touted this as a major accomplishment, saying it will
ensure that other countries pay us for the research done by our
pharmaceutical industry.
But it is important to understand who is truly getting paid in this story ‹
and who is not. Working from the assumption that the TPP doesn't change the
trade balance, if the pharmaceutical industry starts getting more money for
its drugs, then other American industries will start getting less money for
whatever they try to sell overseas.
Manufacturing is quite likely to be a big loser. In effect, the money
foreigners might have spent on our cars and other manufactured goods will
instead be used to pay Pfizer higher prices for its drugs.
The Peterson Institute's model helps to make clear this trade-off, the
discussion of which has almost been completely missing from the public
debate over the TPP.
Obama and other proponents speak of the bolstered patent and copyright rules
in the deal as though the whole country will benefit. The reality is 180
degrees in the other direction. Such provisions will benefit the executives
and shareholders of pharmaceutical companies ‹ and to some lesser extent
other intellectual-property-oriented corporations. But those same provisions
also are likely to result in fewer jobs and lower incomes in other sectors
of our national economy.
There are certainly other positive aspects to the TPP that will make it
attractive to substantial numbers of voters and members of Congress. But for
most people, the stronger rules on patents and copyrights are not good news.
Dean Baker is co-director of the Center for Economics and Policy Research.
He is coauthor of "Getting Back to Full Employment: A Better Bargain for
Working People."

‹

Deborah James
Our World Is Not For Sale (OWINFS) network
www.ourworldisnotforsale.org <http://www.ourworldisnotforsale.org/>
 
Stop the TISA! (the proposed Trade in Services Agreement)
http://www.ourworldisnotforsale.org/en/themes/3085
Remove WTO Obstacles to Food Security!
http://www.ourworldisnotforsale.org/en/themes/3084



-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20160225/ac3d7046/attachment-0001.htm>