The TPP is likely to empower China in the long-run

[cali]

President Obama apparently recognizes that China's rapidly growing economy and military pose significant problems for the US and the rest of the world. In response, he urges swift passage of the Trans Pacific Partnership (TPP). "If we don’t write the rules, China will write the rules out in [the Trans-Pacific] region" Obama warned in a Wall Street Journal interview. That outcome would mean: “We will be shut out—American businesses and American agriculture. That will mean a loss of U.S. jobs.” The President's analysis is flawed.

China's economic rise since 2000 stems directly from a massive net influx of American capital due to its remarkably favorable trade balance. This results from several interlocking factors: (1) China's ownership of vast stores of natural resources around the world coupled with (2) its enormous and very cheap working class enable manufacturers there to produce finished products for the US market at a cost domestic producers cannot match. (3) China's undervalued renmimbi (RMB) exacerates the American cost disadvantage. The Chinese Communist Party's ongoing practice is to buy dollars with RMB thus driving the dollar up relative to the RMB.

There is nothing in the TPP that addresses any of these factors. The TPP does not confer upon developing countries like Vietnam any significant competitive advantage that they do not already possess vis-a-vis China. For example, the TPP does not significantly reduce any tariffs protecting the US manufacturing sector from predation by producers in signatory nations.

The TPP does not address currency manipulation. Of course, even if it did, that would mean little with respect to China since it is not a party to the TPP negotiations. Likewise, it appears that the TPP does not preclude its members from entering into exclusive sales agreeements with respect to natural resources with particular countries. So China's ongoing efforts to corner various natural resources will likely continue unabated.

The President claims that if we don't help write the rules governing commerce along the Pacific rim in Asia, China will. It is unclear what specific rules the President fears. Moreover, it is hard to see how any economic rules China imposes on poor Southeast Asian nations would materially benefit what may already be the world's largest economy. China's muscle comes from its three-headed hydra of cheap labor, cheap raw materials, and cheap currency coupled with nearly unfettered access to US markets. New rules governing Vietnam and Malaysia won't change this.

Good Read:

http://dagblog.com/tpp-likely-empower-china-long-run-19560

[leveymg]

1. This is close to the truth: Free Trade with China is a way to destroy the US economy

Wall Street is quite willing to sacrifice the American industrial base to maximize the use value of capital. Meanwhile, China is more than eager to help western capitalists do that. Without regulation of trade and a national industrial policy, America will destroy itself with China's help.

[cali]

2. I found the article pretty compelling

[leveymg]

4. Trade economics is dominated by true believers. It's like Christianity before Luther

A doctrine dangerously in need of a Reformation that has spun self-selecting institutions that have been captured by special interests.

[MisterP]

14. what's the religious-history source on that? I wanna know

[DCBob]

3. I think its simply a matter of tightening our relationships with other Asian nations through trade..

that will help empower those nations against China. Not that complicated.

[cali]

5. no, it's a bit more complicated than you believe.

it's simplistic to the point of absurd to think that nations in China's sphere of influence are going to be "against China". Not to mention that China already has a trade agreement with 10 nations within that sphere- including Malaysia and Vietnam and nothing in the TPP precludes them from forming other trade agreements.

[DCBob]

6. Its not complicated at all. This will simply help keep the relationships with China more fair.

[cali]

7. Declarative statements with no elaboration and no evidence are simply

a steaming pile.

lame, bob. exceedingly so..

[DCBob]

8. I think anyone who isnt profoundly biased understands those simple statements.

[cali]

9. Yes, I'm biased- so are you. duh. My bias comes from a fuck of a lot of

research and I can tap into it. You? Evidently not so much.

[DCBob]

10. I think you would be against this deal no matter what it said.

Its easy to find things in any large trade deal that some wont like. Its always going to be a balance of giving and taking.

[cali]

11. and you would be wrong, dc

Here's what I could support:

Limiting the use of the ISDS.
strict enforcement of provisions and strong disciplinary actions against offenders- both corporations and nations

One thing we do know for sure: The U.S. is responsible for some very bad crap in the leaked investment and property rights chapters. In other words, we can see what the priorities of U.S. negotiators were, so whether these chapters have been rewritten (we know some things like the "greening" of drug patents are still extant as President Obama has defended that specific provision) we know some of the things that the U.S. has been insistent about.

And right back at you, bob: I am convinced that you would support it no matter what and that you don't particularly care whether labor activists are murdered and children die from horrific environmental degradation- both of which have happened under ftas. Hey, for you and your co-supporters it's the price to pay, right bob? After all there are winners and losers in free trade agreements.

[DCBob]

12. Ridiculous stuff in your last paragraph.. not worth commenting on.

[cali]

13. not much more ridiculous than YOUR speculation

speculation of that crap kind is always lame. I was just dishing it back- with an extra helping.