Just in case you are buying the "18,000 tax cuts" argument . . .

[OrwellwasRight]

. . . here is some context from the AFL-CIO. It seems to me that information without context isn't all that useful, so it is hard for me to distinguish Michael Froman's glittering generalities on the TPP from straight up propaganda.

So Now the TPP Is Just a Massive Tax Cut? Hardly...

10/08/2015

Celeste Drake

The latest sales pitch on the recently concluded Trans-Pacific Partnership (TPP) is that it is a massive tax cut, with 18,000 tariffs (taxes on individual products from the United States to other countries) being eliminated. While 18,000 tax cuts sounds great in a vacuum, it’s not the whole story. Here are some things you should know as you evaluate this latest claim:

1. These tariff cuts can’t grow our exports all that much. Worldwide, tariffs already are extremely low because of years of tariff-reducing negotiations through the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). According to Mary Amiti and Benjamin Mandel of the Federal Reserve Bank of New York, the applied tariff rate for about 90% of U.S. exports to TPP partners is already zero. So only 10% of U.S. exports to TPP countries face any tariffs at all—and half those products face tariffs of 5% or less. This means the potential for export growth from the TPP is actually pretty small. There are far better ways to grow our economy—infrastructure investment is one example.

2. These tariff cuts may not grow our economy at all: They can be wiped out overnight by currency devaluation. The point of reducing tariffs is to bring the prices of U.S. and foreign goods into balance. But that balance can be totally undermined if, for example, Japan artificially reduces the value of the yen, which would make Japanese goods cheaper and U.S. goods more expensive. Currency devaluation acts in the same way a tariff does: as a tax on U.S. exports. Because the TPP does not contain ANY rules on currency, countries are free to devalue their currency at any time.


3. The TPP forces Americans to pay a very high price for these tariff cuts. In exchange for reducing the Japanese tariff on shoes, for example, (which are not a major U.S. export), the U.S. government has agreed to weaken our Buy American policies and provide thousands of new foreign investors with the right to sue our government, in front of panels of private lawyers, if their “expected profits” are reduced by U.S. labor, environmental and public health or safety laws. Foreign investors can even sue over local zoning and permitting decisions they don’t like! An end run around U.S. courts is far too high a price to pay for what amounts to a handful of tariff reductions.

More at link: http://www.aflcio.org/Blog/Economy/So-Now-the-TPP-Is-Just-a-Massive-Tax-Cut-Hardly

[Vincardog]

1. An end run around U.S. courts is far too high a price to pay for what amounts to a handful of

tariff reductions. Plus we have no VAT most of the other countries do.

[OrwellwasRight]

7. +1

[Fearless]

2. The problem is...

The playing field isn't level. If there was a universal equivalent minimum wage world wide there's things would work just fine. The problem is there isn't. So good jobs move to other countries where minimum wages are lower, and we don't actually profit from it because we lost good paying jobs and the influx of cheaper goods is actually still a net loss not a net gain for us.

[4dsc]

3. #3 is very dangerous for all of us

This is one example that should be repeated to everyone until this is defeated.

[OrwellwasRight]

8. Agree.

Shout it from the rooftops!

[fasttense]

4. And corporations are just so special that they get an extra-special court system

just for them to use against entire nations. Now why are we giving them such special treatment? They certainly have managed to pull out a lot of jobs from the US. The few little crappy pissy jobs they leave here in the US certainly are NOT worth any special treatment.

I say let's use VAT taxes like the Europeans use them - as tariffs. They put on and take off the VAT tax to give their home grown businesses better pricing.

[angrychair]

5. I get it

I do. Let's be honest and realistic with all this TPP fear-mongering. No one can say with any real authority what all the details are in this treaty and there actual and not percieved, short- and long-term implications are going to be for the U.S. Not yet.
I can say that it will not result in the Chinese Red Army kicking in my front door and slapping me in shakles to be a slave in a factory somewhere making socks.
At the end out the day, the objective of a trade pact is not to bankrupt or dramatically disrupt the very economy that it needs to hopefully profit from, or else what would be the point?
It makes as about much sense as China selling off all the U.S. debt they own (roughly 17%) to bankrupt and "own" our country. First and foremost, it doesn't work like that. Money systems are not that simplistic.
Nor are trading sytems.
When someone implies that TPP will crush us and destroy our freedoms and turn us into slaves, the first question you have too ask is "why? What is the end game?" Broken economies don't have money.
Plus, given the massive Asian component in this, it sometimes comes across as xenophobic.
Not saying it's all rainbows and unicorns, just wait to see how it all plays out. Nothing is set in stone.
Treaties are written on paper for a reason.

[OrwellwasRight]

6. Wow -- who do you think runs the US policy machine?

Of course the global companies do not care if the US economy crashes and burns. They have already decided that Asia is the future. Read their public documents. It is not unlike the turn of the last century when global corporations abandoned the sinking British Empire and made the US the core economy. Now, China will be the core and the US will move into the semi-periphery, except that we do not have the democratic socialist safety nets created in Europe since the great revolutions of 1848, so there will be nothing to break our fall.

There is EVERY reason for US companies, who are no nationalists or patriots and have no loyalty to the US, to encourge the USG to write trade deal that in the interests of the companies but in the interest of US citizens. It is exactly the same reason the companies advocated for the repeal of the Glass-Steagall Act, and the exact same reason they oppose raising taxes to pay for our crumbling infrastructure, and why they do not care at all that millennials find themselves 10s of 1000s in student debt with no foreseeable way to pay it off. It is called the profit motive. That's all they care about. So they will ask for bad laws that help them and hurt the rest of us. And pro-business Democrats will buy it on the theory that is what is good for business is good for the rest of us. But that theory has proven to be expired . . .

And I am so sick and tired of people saying that we have no idea what is in the TPP. That is just hog wash. We know plenty, both through leaks and through official government statements. If you want to live in the dark, you can pretend "we don't know," or you can use your brain and your fingers and look up plenty on the interwebs.

The compete IP chapter was just leaked today: https://wikileaks.org/tpp-ip3/

The Canadian government admitted that cars and parts traded under the TPP need only be made of 45% TPP content. In a worst case scenario, if every part in the 45% TPP car was only 45% TPP, that means nearly 80% of the car could be Chinese. This will most assuredly send jobs overseas.

ISDS: The USG has admitted ISDS will be in the TPP. That is a fact. Look it up on the WH and USTR websites if you want to see all the defenses to providing a private legal forum solely to foreign investors that is not available to a country's own citizens. That is neither equitable, nor democratic, nor pro-development. If you doubt that ISDS is a problem, see this UN Conference on Trade and Development report, which describes a number of egregious legal ruling that CANNOT be appealed no matter how ridiculous they are: http://unctad.org/en/PublicationsLibrary/webdiaepcb2015d2_en.pdf See also this: http://www.thenation.com/article/right-and-us-trade-law-invalidating-20th-century#

Buy American: Again, we know that Buy American will be weakened because USTR tells us so. Now they also tell us that wil be good for us, but I assume we are all smart enough to determine for ourselves whether it is good to prevent governments from being able to choose whether they want to prefer their own suppliers or they do not depending upon the circumstances of the purchase and the unemployment rate at the time.

The TPP is not a mystery. It is an offshoring agreement that will benefit economic elites. And it is set in stone. That was the point of the Fast Track fight. Congress cannot change it now because it voted to tie its own hands.

[angrychair]

9. Again, don't see it

China, for that matter all of Asia combined, doesn't have the infrastructure or economic development to offset and absorb the lose of a 14+ trillion dollar economy (you know, the one you say could be destroyed). It would take decades and 100s of billions of dollars in targeted investment to make it any different.
Secondly, we have a very advanced legal system here, nothing is set in stone. Nothing.

[OrwellwasRight]

10. Show where I said

"Our economy would be destroyed"? Or is it your habit to attempt to win arguments by making stuff up?

I love that dangera that don't happen immediately aren't worth paying attention to. Climate change anyone?

And the comment "nothing is set in stone" is just plain ignorant. That is what fast track is. It means the TPP is 'set in stone.' Give me one example of a trade agreement that the US has fixed after it entered into force? Or abandoned for that matter...

[angrychair]

11. From your earlier post

Last edited Tue Oct 13, 2015, 10:43 AM - Edit history (1)

"global companies do not care if the US economy crashes and burns. They have already decided that Asia is the future." your words, not mine. Not sure how else to take that: "crash and burn" and "Asia is the future."

Don't get me wrong Orwell, I would love Bernie to win the election and push to get Glass-Steagall Act reinstated. I would love too see the student loan crisis resolved and college made free. I am just not resolved that TPP is the worst economic issue to face us in recent time. I may be proven wrong, you right. To be honest, for both of us, I hope your wrong.

[OrwellwasRight]

12. Yes "they do not care"

Right. Which is not the same thing as saying our economy will die the day after the TPP passes. And your evidence that MNEs care about the US is? Oh, right there is none. Because if they cared, they pay taxes so we could build roads and adequately educate children. If they cared, they'd pay enough so people could afford to shop elsewhere than Wal Mart. They'd produce here and not just sell here. They would stop saying "we are trying to become a Chinese company," which the head of Cisco actually said.

So try to keep up with the argument. MNEs do support the TPP which will give them extra legal powers. They are not people, citiEns or patriots. They don't give a rip about "America." Believing that TPP must be good for out economy because MNEs support it is the height of naïveté.

And yes, the TPP will continue the dismantling of the middle class and our manufacturing base.

And no, "oops" won't cut it when you find out you're wrong. Because trade deals are forever.

Try to read up on the provisions of the TPP before you continue down this path. You'll find TPP is about much more than tariffs. And that many leading economists say it won't work.