TPP Critics’ Nighttime Fears Fade by Light of Day - Jeff Frankel

[swag]

http://econbrowser.com/archives/2015/10/guest-contribution-tpp-critics-nighttime-fears-fade-by-light-of-day

. . .

"In this light, this month’s outcome is a pleasant surprise. In the first place, the agreement gives the pharmaceutical firms, tobacco companies, and other corporations substantially less than they had asked for — so much so that Senator Orrin Hatch (Utah) and some other Republicans now threaten to oppose ratification in the final up-or-down vote. In the second place, the agreement gives the environmentalists more than most of them had bothered to ask for. I don’t know the extent to which these outcomes were the result of hard bargaining by other trading partners such as Australia. Regardless, it is a good outcome. The domestic critics might consider now taking a fresh look with an open mind.

The issues that are the most controversial in the US are sometimes classified as “deep integration,” because they go beyond the traditional negotiated liberalization in trade tariffs and quotas. Two categories are of positive interest to the Left: labor and the environment. Two categories are of “negative interest” to the Left in the sense that it has feared excessive benefits for corporations: protection of the intellectual property of pharmaceutical and other corporations and mechanisms to settle disputes between investors and states.

Now that the long-delayed agreement is completed, what turns out to be in it? Two good things in the TPP’s environment chapter are especially noteworthy. First, it takes substantial steps to enforce prohibition of trade in endangered wildlife — under CITES (Convention on International Trade in Endangered Species) but insufficiently enforced. Second, it also takes substantial steps to limit subsidies for fishing fleets — which in many countries waste taxpayer money in pursuit of the overfishing of our oceans. For the first time, apparently, these environmental measures will be backed up by trade sanctions.

I wish that certain environmental groups had spent half as much time ascertaining the specific possibility of good outcomes like these as they spent in sweeping condemnations of the process. The agreement on fishing subsidies was reached in Maui in July; but critics were too busy to take notice. Fortunately it is not too late for them to climb on board now."

. . . more

[Larkspur]

1. When the corporate foxes are allowed to write the agreement and everyone else is shut out,

how can trust be expected?

TPP is still a disaster for working Americans, else the corporate foxes and President Obama would have proudly shown the text to the public before Fast Track was voted on.

[swag]

2. Please back this up with evidence.

"TPP is still a disaster for working Americans, else the corporate foxes and President Obama would have proudly shown the text to the public before Fast Track was voted on."

[emsimon33]

3. Agreed

[bettyellen]

4. dammit! too chicken to post this in GD? Come on!

[hollysmom]

5. like so many of the deals, as long as a court appointed by corporations

can set severe fines because of laws desired by the citizens for environmental reasons and force that country to reverse them - well, that is something I don't want to see. We have to get it retroactively out of past treaties, there should never be courts determined by corporations ever.

[Hoyt]

7. Tribunal arbiters -- one appointed by country, one by corporation, one by mutual agreement.

Often the arbiters are professors with expertise in the area of dispute.

These things have been in trade agreements worldwide since 1959. Countries continue to sign them because it attracts investment, jobs and increases tax collections for other public uses. But, suddenly the dispute mechanism is bad, bad, bad.

[hollysmom]

10. it is bad bad bad.

I worked for corporations enough to know how they think and it is head up the assworthy. It is always company now only, the future of the company can be damned as well as people, - they really think they don't need people to work and the last place I worked was a bank! These people can't think past the next business quarter, they really don't need this power over people, and 1959 is not a life time ago to me, I remember 1959 very well, thank you, just because some treaties have some deal does not mean they all need it, as a matter of fact I would love to see that exorcised from all old deals.

[Hoyt]

12. I agree with you on how they think. However, most of us work for corporations.

Most countries want to attract corporations. The ISDS helps attract corporations, and governments worldwide, even Denmark, sign these agreements to attract them.

Truthfully, I think the way the arbiters are selected is about as fair as it can get, unless you want corporations, their jobs and taxes to go elsewhere.

[hollysmom]

13. corporations will go to where their leaders want to live.

War torn countries are out, companies do not want to loose product before the market or have to rebuild factories. Yes worker bees will live in poorer nations. but most people want to attract corporate headquarters. Lower taxes is just not as important as a place the leaders want to live.
For example, if I had a business in Oklahoma and it was slightly possible to move it, I would consider it because - earthquakes are getting ridiculous there. If it accelerates much more, it puts a business in danger at the least end, additional costs or damage to product, at the high end, endangering officers of the company because after all these earth quakes how far behind are sink holes? I don't think low taxes will be enough to entice businesses.
I used to work for a dress manufacturer/ pension plan company - the owner had two investments and decided he needed one IT dept for both. The corporate was in NYC, he loved the city, and the plant was in the south. Well now the plant is over seas, but corporate is still in NYC. The problem with people cutting taxes is that they cut them so low, they reduce the quality of life around this area. Low taxes mean fewer parks, theater programs, school quality. Fewer regulations sound great for plants, but it increases more danger from other plants/companies, poor zoning for property values, etc.
For every great cut this to attract business, you have the negatives of what those cuts do, no company is an island (except maybe nestle) and the environment changes around it. I find very few company presidents want to live overseas. I don't think you have to give away the baby with the bath water. The companies will still move away the production facilities as long as gas is cheap. (one reason why I would not mind seeing gas prices rise, makes shipping more expensive and makes you want to bring the product closer to the buyer). As long as they are allowed to have over seas call centers they will, they don't care about quality anymore or apparently customer service (yes I had cablevision for a while).

[Hoyt]

14. Unfortunately, the quality of American goods -- like our cars -- slipped decades ago.

Fortunate for us, there are lots of foreign companies that have plants here and bring jobs and tax revenue. We live in a world economy and need to learn how to adapt.

[safeinOhio]

6. Trying to keep an open mind.

Hope you are right.

[Ford_Prefect]

8. Recent and past history have indicated otherwise. I have no reason at this point to trust

that there are not hidden clauses yet to be made public which will invalidate crucial legal rights and environmental protections.

We've been lead down this garden path before. If the deal was going to be so good why was it so vigorously hidden from public critique? You cannot get much less democratic than the process by which the deal was presented to congress and the people. It is one thing to protect specific proprietary information, and all together another to deny congressional debate over language that will alter or bypass the effect of national and regional laws. Which is to say nothing of denying constitutional rights.

[1StrongBlackMan]

9. Posted to for later. n/t

[That Guy 888]

11. Two of the comments to the article at the link are more informative

The most important: neither the public, nor the House of Representative have seen the full text of this agreement.


From the comment section:

James Harrigan
October 12, 2015 at 10:57 am

This is a very disappointing piece. I am pretty sure that Frankel has not seen the text (since it has not been released yet), and the only link he gives to what is in the agreement is a pro-TPP summary from USTR. I am teaching trade policy right (at the University of Virginia) now and would dearly love to be able to have a well-informed opinion about TPP, but I have had no luck finding objective information about what is, and is not, in the agreement. I have excellent contacts in the trade policy world, and NOBODY can tell me what is in the agreement...


Joseph
October 12, 2015 at 4:47 pm

...And regarding pharmaceuticals, the only limits they give up are a few years protection on biologics, a tiny (albeit growing) segment of the pharmaceutical industry. When Mr. Frankel trumpets the 8-year limit, he elides the fact that this applies only to the tiny biologic segment. All the other patent drugs get exactly what they wanted, 20 years of protection. Now some people would call this deceptive, while other might be inclined to call it outright lying. I’m inclined to the rule that good ideas don’t require lies to sell them.

...And what did environmentalists get? No more trade in rhino horns. Seriously, this is the argument Mr. Frankel makes. Billions of dollars of benefits for corporations and environmentalists get rhino horns, oh and ocelots, don’t forget the ocelots. It’s embarrassing he even made that argument.

And what of the actual tariff reductions? Well tariffs are already quite low in aggregate so even the most optimistic arguments for GDP growth are so tiny as to be nearly immeasurable. But most important are where the putative gains go. We learned from NAFTA that they go primarily to the 1%. And given all the intellectual property expansions, especially pharmaceuticals, the poor around the world will become poorer and sicker. The bottom line net is that a very few privileged people will become better off but the vast majority of the world’s population will be worse off.