Thursday, May 7, 2015

Let's TPP The Neighbors!


Friends, it's time to talk about the Trans-Pacific Partnership, or TPP. This is a free-trade treaty involving twelve nations around the Pacific Rim (and possibly more later). These are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, The United States, and Vietnam. Collectively these countries account for 40% of the world's GDP, making this one of the most significant trade deals ever brokered. Naturally, this has attracted staunch advocates as well as fierce opponents. Who's right and who's wrong here? What follows is my qualified analysis after doing some research, and I hope people find it helpful.

Elizabeth Warren is against it. So is Bernie Sanders. Hillary Clinton has tentatively said some things in opposition, but is (as always) holding her cards close to her well-tailored blazer. But Barack Obama is very much in favor of it, and many analysts see this as a legacy deal for him. Why the disparity? What has some Dems fighting to stop it, while others within the same party are so anxious to see it passed?

First, let's all acknowledge something here: we're all flying blind when it comes to the issue of this trade deal. Much of what's involved is being kept secret, and it's only through security breaches that we know anything about this treaty at all. Were it not for Julian Assange and Wikileaks, we wouldn't even be able to have this debate. (Something to bear in mind the next time someone attempts to argue that Wikileaks is tantamount to treason.) But if we don't know what's in the TPP, how can we truly evaluate it's merits or demerits? The sad answer is, we can't - not really. But we can take the information that's been leaked to the general public, analyze that, and at least come to some reasonable (if tentative) conclusions. We can also evaluate the actions of certain insiders (people who know what's going on) who champion or chide this deal, and draw some conclusions based on what they have to say and what we know about them, personally.

First, let's talk major impacts. What significant changes will this treaty bring, based on what we currently know? Well, primarily, it seems that the major beneficiaries will be businesses which rely heavily upon intellectual property rights. Copyright infringement will be more sternly enforced under this trade deal, allowing Hollywood to crack down on piracy of movies, and tech companies to better able to control unauthorized use of proprietary software. It would also better enforce trademarks, making knock-off brands less profitable for foreign manufacturers. Sadly, it would also make it easier for major pharmaceutical manufacturers to keep cheaper drugs out of the market. Given that the businesses which rely upon these kinds of laws are typically left-leaning in their political support, it's understandable why some Democrats might be in favor of such a deal.

What about jobs? Opponents say that this trade deal will be "NAFTA on steroids," and that more jobs will be lost overseas, labor unions will be weakened, and what jobs remain will have lower wages. This seems to be a legitimate concern. According to the Economic Policy Institute, such a treaty would have a negative impact on both number and quality of jobs unless it included a strong provision regulating currency manipulation. In other words, it should do something to prevent a country from deliberately devaluing its currency by over-printing its money, thus gaining a trade advantage by being able to export more and offer cheaper labor. If a strong currency control were present to prevent such actions, lower-valued currencies would quickly balance out, and American jobs would, in fact, be protected. But does the TPP include such a provision? Sadly, we are not sure. It could potentially protect jobs, but even if it did, it would not necessarily create them. A recent report has shown that nearly 80% of Americans already live below or near the poverty line. The last thing we need is something that will diminish or limit wage growth, even a tiny bit.

Will lower tariffs boost the economy? Proponents say that there will be a benefit in reduced tariffs and more open trade, but is that true? Economist Paul Krugman points out that tariffs are already so low in general that a further reduction really won't have a significant impact, and he's right. There may be a few more American cars in Japan, but aside from that, there will not be much of a change. Therefore, arguments about more open trade increasing business are unfounded. Unless this trade deal suddenly includes China and India, any increased business activity will be negligible.

What about the environment? Will this trade deal violate national sovereignty and allow mega-corporations to sue the government in order to circumvent mining, foresting and fossil-fuel rights? Critics say it will. They say that a corporation could call upon third-party arbitration to get around restrictions meant to protect the environment. But is this true? Possibly, but not necessarily. For starters, the arbitrator could potentially see the wisdom behind the environmental protections and rule against the corporation's lawsuit. Also, other environmental protections could be added through such a treaty. Yes, the 12 nations involved represent 40% of the world's economy, but they also represent 25% of the world's fishing consumption. A trade deal that opens up trade in fish - provided that fishing has been done within legal restrictions - could actually benefit everyone by allowing fish populations to recover, resulting in more food for everyone, to say nothing of a healthy ocean. Such a trade deal would also be able to clamp down on illegal trade of black-market natural resources, and not just illegally caught fish or whale-oil. Poached lumber, game or other ill-gotten goods could have a more difficult time getting to market, decreasing both supply and demand and actually helping the environment. There is risk, but there is also potential reward.

Finally, let's look at Obama and his endorsement of the TPP. He has flat-out called Elizabeth Warren wrong for opposing it, and this comes from a man who seldom has a harsh word for anyone, much less someone within his own party. What are we to make of this? Surely, Our Trophy President knows more about what's potentially in this treaty than we do. But are we simply supposed to put our faith in him on this one?

Critics of this trade deal are calling it crony capitalism. They say that Obama is paying back the big corporate donors who helped him get elected in 2008 and re-elected in 2012. But he's a lame duck now. Obama could simply decide to screw over Big Corporate in favor of what the people of America better need for a sustainable economy, right?

Ah, but there's the matter of his successor, isn't there? In order for Hillary to win, she'll need the backing of the same big corporate firms who backed Obama. It's no secret who those corporate firms are. Microsoft, Apple, IBM, Google, Hollywood, Music Firms, Big Pharma, Big Banking, Comcast and Time Warner. Maybe the TPP does make us lose ground somewhat, but it helps the firms just named quite a lot, and that could have major benefits for the Democratic Party.

Ultimately, it might boil down to one simple question: Do you trust Obama's judgement on this, or not?

So here is my cursory, and very tentative conclusion: Will this treaty hurt the American economy? My view is that it will, but not, I think, by very much. The benefits are not substantial, but neither are the costs. Yes, it will hurt unions, but they're all but dead, and the concept of unionizing needs to hit the reset button - possibly by unionizing the service sector. Yes, it could hurt the environment, but it could also help it in other ways. Yes it could cost jobs in the short run, but it could protect them in the long run.

The bottom line is this: We live in a post Citizens' United world of politics, and that means the big donors get to decide who can compete, and how well they are funded. We The People get the final say (if we actually bother to vote, that is), but the nominations and the popularity contest is directed by the money. If the TPP turns out to be a bad deal, but gets Hillary elected by making the Big Corporate Donors happy, it's worth the trade-off. Treaties can always be re-negotiated, especially if people get disgusted and show a significant amount of buyer's remorse. But we are probably only one more presidential term away from putting the Supreme Court out of reach of moon-bat conservatives, and thus ending the destructive culture war that has so torn our nation. The TPP might be the key to doing that. If so, I say fine - for now. I reserve the right to change my mind if new evidence comes to light.

But I also say this: We need to get more people involved in the debate! Go tell people to read up about this treaty. Get them interested! Get them motivated! Let's tell them how important it is to at least try to learn about just one complex piece of legislation before it happens. In other words...

Let's TPP the neighbors!


Eric

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