Dean Baker: Paul Krugman and TPP

[ProSense]

Dean Baker: Paul Krugman and TPP

I've got to take some issue with my friend Paul Krugman over his blogpost pronouncing the Trans-Pacific Partnership (TPP) no big deal. As a trade question he is undoubtedly right. The countries in the pact are ones with whom the United States already has extensive trade ties and generally low barriers. Eliminating or reducing the remaining barriers cannot possibly have much impact on the U.S. economy.

However it is a misunderstanding to see the TPP as being about trade. This is a deal that focuses on changes in regulatory structures to lock in pro-corporate rules. Using a "trade" agreement provides a mechanism to lock in rules that it would be difficult, if not impossible, to get through the normal political process...the U.S. and European drug companies face a serious threat in the developing world. If these countries don't enforce patents in the same way as we do, then the drugs that sell for hundreds or thousands of dollars per prescription in the U.S. may sell for $5 or $10 per prescription in the developing world. With drug prices going ever higher, it will be hard to maintain this sort of segmented market. Either people in the U.S. will go to the cheap drugs or the cheap drugs will come here.

For this reason, trade deals like the TPP, in which they hope to eventually incorporate India and other major suppliers of low cost generics, can be very important. The drug companies would like to bring these producers into line and impose high prices everywhere. (Yes, we need to pay for research. And yes, there are far more efficient mechanisms for financing research than government granted patent monopolies.)

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There are many other areas where industry groups are seeking special treatment along these lines. No, I can't give a list with links because the draft text is a secret. Public Citizen's website probably is the best source available. It includes the chapter on intellectual property that was obtained through Wikileaks...Krugman is on the money in his assessment of the impact of the TPP on trade. But the point is that the TPP is not really about trade, it's about changing the regulatory process in ways that would almost certainly be opposed by the people in most of the countries included in the deal.

http://www.cepr.net/index.php/blogs/beat-the-press/paul-krugman-and-tpp

Krugman: TPP
http://www.democraticunderground.com/10024169463

TPP and IP, A Brief Note

Dean Baker takes me to task over the Trans Pacific trade deal, arguing that it’s not really about trade — that the important (and harmful) stuff involves regulation and intellectual property rights.

I’m sympathetic to this argument; this was true, for example, of DR-CAFTA, the free trade agreement with Central America, which ended up being largely about pharma patents. Is TPP equally bad? I’ll do some homework and get back to you.

http://krugman.blogs.nytimes.com/2013/12/14/tpp-and-ip-a-brief-note/

Interestingly, Obama voted against CAFTA.

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00170
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00209

[msongs]

1. everything you need to know about TPP - being negotiated in secret by your corporatist leaders nt

[jazzimov]

2. Dean Baker: "No, I can't give a list with links because the draft text is a secret.

because the draft text is a secret."

That's the bottom line. Despite all the complaining about what's in the TPP, NOBODY REALLY KNOWS "because the draft text is a secret." It's all just speculation and BS.

Further, it's still being negotiated. There actually IS no "draft text", because no one can agree on what it should be.

All of the criticism I've seen claims that this is an "end run" around Congress - but Congress has to vote to approve it. Even if it is "fast tracked". So, if there are legal requirements within the TPP, Congress must approve them.

Generally, I am against Free Trade Agreements - they're generally good for the weaker economies but bad for the Strongest economies IMHO. I know that most economists love them, and they may be better for the World in the long run, but I just don't think they're worth the pain in the meantime. But that's my opinion - I could be wrong.

But I'll wait to support or criticize the TPP when something has actually been decided. Right now, all the criticism just seems to be anti-Obama hype.

[ProSense]

3. Good comment. n/t