The Real Reason Obama Wants the TPP

Ezra KleinIf the TPP gets approved, it will not really change the way that I think about the state of my country. After five decades, I have far too much data indicating that we live in a faux democracy where the rich get whatever policies they want. But it will still be a blow. And I find it curious that we are starting to get liberal-ish commentators coming to defend the trade deal. The first person I saw was Larry Summers, A Trade Deal Must Work for America’s Middle Class. Don’t let the title fool you, he argued that the TPP will work for the middle class. Dean Baker gave him too much credit, even while destroying him, Larry Summers Gets It Largely Right on Trade.

And wherever Larry Summers goes, Brad DeLong is sure to follow, The Debate Over the Trans-Pacific Partnership: Focus. It started, “It is foolish to debate whether a trade agreement that has not yet been negotiated is a good idea and should be ratified.” That’s an interesting bit of apologetics. If we are really supposed to look closely at this deal, why is it so critical that it get fast-track authority? I understand that the Congressional Republicans are crazy, but they will mostly be for this deal. I don’t think fast-track is about slipping this one past the conservatives.

Dean BakerRegardless, Dean Baker shot back at him, Fun With Brad DeLong on TPP. (Have I mentioned recently that Dean Baker Is Must Reading?) DeLong asked to see evidence from detractors that the trade deal would hurt American workers more than it would benefit them. Baker accepted the challenge and, I think, showed very clearly that it would. But notice how ridiculous DeLong’s challenge is. Why is it up to detractors to show that the deal isn’t good? Isn’t the onus on proponents to show that it is good?

Now Ezra Klein has entered the fray in his usual “just asking questions” manner, Why the Obama Administration Is Fighting for a Trade Deal Its Liberal Allies Hate. In all, he presents eight reasons that the administration wants to do this based upon talking to “officials intimately involved in crafting the deal.” And guess what? Seven of them are just nonsense. Let’s see: (1) it’s a good deal because we say so; (2) people only think its bad because we’ve been doing this in the dark; (3) it’s not a perfect deal, just better than some other possible deal; (4) this deal is better than past deals; (5) if we don’t agree to this deal we will somehow be forced into a terrible deal of China’s; (6) It’s a trade deal and a dessert topping foreign policy; (7) we have to prove that we can push around the rest of the world with this deal that is so great for America that it has to be negotiated in private and passed before it can be seriously analyzed.

Note that most of these are duplicates. Numbers one through five are pretty much the same things, even though they also contradict each other: trust us! Six and seven are the same things: America must lead! So basically, the administration is saying that it wants the TPP because it is really good and people like me just don’t realize it, and because it gives the administration more tools to manipulate other countries. What’s shocking here is that none of these reasons has anything to do with the deal itself. Nowhere does anyone say something like, “This is a good deal because it will stop China from suppressing the value of its currency and make American exports more competitive.” For anything like that, we have to turn to the eighth reason, which I believe is 90% of the reason the administration wants to do this deal.

One really important dimension of the debate around TPP is intellectual property protections. This is an area where American businesses feel hugely disadvantaged overseas, and the administration thinks it’s giving them a big win.

Dean Baker wrote about this canard over the weekend, Getting It Wrong on Trade: TPP Is Not Good for Workers. This isn’t going to improve trade. It will just allow film and pharmaceutical companies to charge more money overseas for their products. Thus, the people overseas will not have as much money to buy other things we export. In other words, this is a way to take even more money away from workers and give it to owners. I discussed this problem last week, No Trade Deals Until Our Economy Is Fixed. To me, it is simple: I don’t care how much “trade” will be increased by a deal when I know all the gains will go to the top of the income chain.

But another thing that Baker noted is that it is ridiculous to think of corporations are “American”:

US corporations like Apple, GE, and Merck have been telling us for decades in every way they can they are not in any meaningful sense “US” corporations. They are corporations. They are interested in making profits. If this means shifting jobs overseas to take advantage of low cost labor, they will do that in a second. The same applies to environmental regulations. And, when it comes to paying taxes, if they can find a legal or semi-legal way to have their profits appear in an Irish or Cayman Islands subsidiary, they will do it, end of story.

Ezra Klein claims, “I’m currently in the undecided camp — until there’s a final text I can run by experts, it’s hard to say anything definitive…” But he must know that the whole idea with this agreement is to ram it through Congress before anyone can consider it rationally. The debate really hasn’t been about the agreement itself. It has all been about fast-track authority. He’s right that at this point, we don’t know. But the burden of proof should be on those who claim it is a great deal. And proponents don’t seem keen to make that argument. It’s very much like NAFTA before it, “Trust us!” That hasn’t worked out too well.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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