Wednesday, October 19, 2016

Stop the TPP

Initially, as a loyal member of President Obama’s administration, Hillary Clinton was for the TPP (Trans Pacific Partnership).  She changed her tune as a result of primary battles with Bernie Sanders, who strongly opposed it.  What will she do should she become President?  Who knows?  But here is one man’s views on this controversial treaty.

The issue is not trade.  Trade goes on, willy-nilly.  It is the lifeblood of the world’s economy.  Without trade, you will only have what you can produce yourself.  Trade is not the issue.

Free trade is not the issue either.  While free trade always benefits the business class – most particularly multinational corporations that can sell their goods anywhere and can manufacture them in the cheapest labor markets – it also benefits other groups.  Free trade typically benefits consumers when competition gives them the best goods at the lowest prices.  But free trade does have its cost too, and that cost is typically the loss of jobs in strong currency countries, like the United States.  For those who like to invoke history, Alexander Hamilton – our first Treasury Secretary – was not an advocate of unfettered free-trade; he felt that “infant” industries needed protection (tariffs) until they grew to some level of maturity.  It is a myth that economists have always advocated unfettered free-trade.  Not even Adam Smith advocated it.  “It depends.”

Play the Slide Show
President Obama defends his signature treaty with the argument that it is better that the US and its trading partners make the rules of the road than to let China do it.  Interestingly, most Democrats are against the agreement.  Obama’s only chance to pass the treaty is with the support of Republicans.  Republicans typically support free trade deals as they benefit the business class.  Without Republican votes, Bill Clinton would not have passed NAFTA.  But not all Republicans will vote for the TPP as it would give President Obama another signature achievement to add to his legacy, and there is nothing that empowers Republicans more than depriving Obama of what he wants, even if it is a Republican idea.

The problem with the TPP – beyond the fact that it will in all likelihood cost American jobs – is the fact that it was negotiated by the business class.  Workers were not invited, they did not sit at the table, the agreement was of, by, and for the business class.  So, in the end, President Obama and his Republican supporters are saying: “better that OUR business class wins than to let THEIR (read: Chinese) business class win.”  Democrats don’t like it.  But Bill Clinton did, and Hillary Clinton may too.

The other problem with the TPP is what is called Investor State Dispute Settlement (ISDS).  In a word, this mechanism gives corporations the right to sue sovereign nations for compensation of their loss of imagined profits due to that nation’s laws.  In a word, under the ISDS, corporate sovereignty will trump political (democratic or otherwise) sovereignty.  Or, corporations trump people.  To my ears, this smacks of treason.  And for my life I do not understand why President Obama supports it (“it’s the best deal we can expect from our corporate masters”).


Addendum: Saturday, 12/03/2016
Some misconceptions about NAFTA (North American Free Trade Agreement).  First, George H W Bush got it going here late in his one term of office.  But it was modified by Bill Clinton and passed by his 103rd Congress.  In the House, 132 out of 176 (75%) Republicans voted YEA, while 102 out of 258 (40%) Democrats voted YEA.  In the Senate, 34 out of 43 (79%) Republicans voted YEA, while 27 out of 57 (47%) Democrats voted YEA.  As you can see, Republicans were (and are) much more enthusiastic about free trade agreements than Democrats, and this goes for the TPP (an Obama-initiated agreement which could only have passed Congress with majority Republican support) as well.  But in both cases the real question is not about free-trade, the real question is who wins and who loses (look at who negotiated the deal and who supports its passage).