Trans-Pacific Partnership Thread

[PhillyGuy]

See:

Trans-Pacific Partnership: Do it for Vietnam

Personally, it is in my interest to see this fail if, as rumored, it increases Canada’s copyright term from Life + 50 to Life + 70. It would greatly harm this web site that I use when visiting Life + 50 countries (downloading many books from my next link is illegal in the US and EU):

http://gutenberg.ca/

However, I think that the US terribly mistreated Vietnam and we owe them compensation. This is by far the cheapest way to do it, besides being the only way that is remotely politically possible. That’s more important than what I can download.

[Linden_Arden]

@Deeg

Is it a given that NAFTA was bad? It doesn’t seem to have caused the American economy to go into a tail-spin.

No.

US manufacturing jobs increased after NAFTA passed until the dot-com recession and have fallen since but it is impossible to tell how many jobs were lost to automation.

Manufacturing output has increased 40% (in constant 2009 dollars) since 1994. Productivity has increased greatly.

https://research.stlouisfed.org/fred2/series/OUTMS

The anti-TPP argument is that free trade is directly linked to job losses but coincidence is not causation.

[foolsguinea]

@John_Mace

I was so focused on your first sentence that I didn’t full appreciate the second one. Are you really saying that if one country benefits from trade, the other country must necessarily lose? It seems like that’s what you’re saying, but it’s so outside the realm of what economists tell us that I’m going to assume I’m reading that incorrectly.

It’s a metaphor. I’m mocking Ronald Reagan’s line, “A rising tide lifts all boats.” A rising tide somewhere is a falling tide somewhere else.

Similarly, removing protectionist policies necessarily harms a constituency that benefited from those policies. Even if every person at the table comes out ahead, that means that whoever wasn’t at the table is an externality, and probably comes out behind. And, oh, yeah, that’s practically everybody in the world other than the thousand or so businessmen in on this partnership. Everyone in the world, in these countries and in other countries, can expect a typical dividend of less than zero benefit from this partnership in which we are not partners.

If trade negotiators are getting more sophisticated, as they claim, and they’re still not inviting labor representatives, it’s almost certain this will screw over labor.

[marshmallow]

@Stringbean

Thank goodness our elected officials are all so much wiser than us. They know what’s best, and, as always, that aligns perfectly with the interests of our corporate overlords.

The owners of a society ought to run it. John Jay would be proud.

[PhillyGuy]

@foolsguinea

If trade negotiators are getting more sophisticated, as they claim, and they’re still not inviting labor representatives, it’s almost certain this will screw over labor.

I’m curious what labor representatives you would invite from South Korea, Mexico, Malaysia, Vietnam, and whatever other countries on the Trans-Pacific Partnership list that don’t have much in the way of industrial democracy. Or are you just hoping to stop increases in free trade by raising impossible questions concerning the legitimacy of labor organizations in the various countries?

[John_Mace]

@foolsguinea

It’s a metaphor. I’m mocking Ronald Reagan’s line, “A rising tide lifts all boats.” A rising tide somewhere is a falling tide somewhere else.

OK.

Similarly, removing protectionist policies necessarily harms a constituency that benefited from those policies. Even if every person at the table comes out ahead, that means that whoever wasn’t at the table is an externality, and probably comes out behind. And, oh, yeah, that’s practically everybody in the world other than the thousand or so businessmen in on this partnership. Everyone in the world, in these countries and in other countries, can expect a typical dividend of less than zero benefit from this partnership in which we are not partners.

Have you considered publishing your ideas? Because if they are right, they would revolutionize the field of economics and you’d surely be in line for a Nobel Prize!

[foolsguinea]

:rolleyes: I’m making a political argument. I try never to forget my Machiavelli. “It is desirable to appear to be merciful and generous, but sometimes useful to be otherwise.”

As for economics, the Sveriges Riksbank Nobel Memorial Prize was invented to give “scientific” cachet to free-market liberalism. There’s some amount of imperialist bias inherent in the institution.

But hey, Paul Krugman is a liberal economist, not a populist crank like me, and has that prize, for what sub-field was it again? Oh yeah, trade. And he also thinks TPP fails to increase trade enough to be worth it.

So, hey, don’t listen to me. Listen to your own experts.

[foolsguinea]

Here, I will walk back from the cynical argument I made earlier. For the record, I am deeply suspicious of a private-sector initiated partnership which attempts to trump the normal system of laws and authority in the signatory countries. But I may have argued myself into a stance of, “All treaties are bad,” and that’s obvious nonsense.

Instead, I will quote a certain music blogger I read sometimes, who won a Sveriges Riksbank Prize in his younger days.

source (NYT): TPP at the NABE - The New York Times

@Paul Krugman - New York Times Blog

TPP at the NABE
MARCH 11, 2015 8:43 AM

I was in DC yesterday, giving a talk to the National Association of Business Economists. The subject was the Trans-Pacific Partnership; slides for my talk are here.

Not to keep you in suspense, I’m thumbs down. I don’t think the proposal is likely to be the terrible, worker-destroying pact some progressives assert, but it doesn’t look like a good thing either for the world or for the United States, and you have to wonder why the Obama administration, in particular, would consider devoting any political capital to getting this through.

Actually, I was glad to see Larry Summers weigh in on the same subject in yesterday’s FT. Reading that piece, you may wonder what just happened – did Larry come out for the deal or against it? The answer, I think (slide 1), is that he basically supported an idealized TPP that could have been, but came out against the TPP that actually seems to be on the table. And that means that he and I are in a similar place.

So, about the deal. The first thing you need to know is that almost everyone exaggerates the importance of trade policy. In part, I believe, this reflects globaloney: talking about international trade sounds glamorous and forward-thinking, so everyone wants to make that the centerpiece of their remarks. [snip]

Also, there’s an odd dynamic involving the role of international trade in the history of economics. Comparative advantage was an early, classic example of how economic reasoning can lead to results that are true but not obvious; naturally, economists have always wanted this intellectual victory to be important in the real world too. This leads to the odd dynamic: comparative advantage says “yay free trade”, but also suggests that once trade is already fairly open, the gains from opening it further are small. But because economists want to keep shouting yay free trade, they look for reasons why those gains might be larger – even though the stories they then end up telling are inconsistent with the competitive model that was the basis for free-trade advocacy in the first place.

One particular misuse of the yay-free-trade sentiment is the persistent effort to make protectionism a cause of economic slumps, and trade liberalization a route to recovery. How many times have you seen the Kindleberger “spiderweb” chart showing declining world trade in the early years of the Great Depression, which is then invoked as showing the evils of protectionism (slide 2)? In fact, it shows no such thing; you can draw a similar chart for the Great Recession (slide 3), when we know that there was no upsurge in protectionism.

*[I’m skipping a couple of paragraphs to the effect that gains from *all forms of globalization put together have only added around 5% to global incomes. Includes this link. -fg]

[…] I’d argue that it’s implausible to claim that TPP could add more than a fraction of one percent to the incomes of the nations involved; even the 0.5 percent suggested by Petri et al looks high to me.

These gains aren’t nothing, but we’re not talking about a world-shaking deal here.

So why do some parties want this deal so much? Because as with many “trade” deals in recent years, the intellectual property aspects are more important than the trade aspects. Leaked documents suggest that the US is trying to get radically enhanced protection for patents and copyrights; this is largely about Hollywood and pharma rather than conventional exporters. […]

And here’s the core, where PRK thinks this falls short on liberal[sup][/sup] premises:*

Well, we should never forget that in a direct sense, protecting intellectual property means creating a monopoly – letting the holders of a patent or copyright charge a price for something (the use of knowledge) that has a zero social marginal cost. In that direct sense this introduces a distortion that makes the world a bit poorer.

There is, of course, an offset in the form of an increased incentive to create knowledge, which is why we have patents and copyright in the first place. But do we really think that inadequate incentive to create new drugs or new movies is a major problem right now?

You might try to argue that there is a US interest in enhancing IP protection even if it’s not good for the world, because in many cases it’s US corporations with the property rights. But are they really US firms in any meaningful sense? If pharma gets to charge more for drugs in developing countries, do the benefits flow back to US workers? Probably not so much.

Which brings me to my last point: Why, exactly, should the Obama administration spend any political capital – alienating labor, disillusioning progressive activists – over such a deal?

[Stringbean]

@marshmallow

The owners of a society ought to run it. John Jay would be proud.

If we had a Washington, Hamilton, Jefferson, Madison, and Jay, then I’m totally down with it.

But it would seem our Cruzes, Pelosis, Reids, and McConnells fall just a few articles short.

[puddleglum]

@foolsguinea

Here, I will walk back from the cynical argument I made earlier. For the record, I am deeply suspicious of a private-sector initiated partnership which attempts to trump the normal system of laws and authority in the signatory countries. But I may have argued myself into a stance of, “All treaties are bad,” and that’s obvious nonsense.

Instead, I will quote a certain music blogger I read sometimes, who won a Sveriges Riksbank Prize in his younger days.

source (NYT): TPP at the NABE - The New York Times
And here’s the core, where PRK thinks this falls short on liberal[sup][/sup] premises:*

Thats alot of hand waiving and a political conclusion. Sad to see how far he has fallen.
If you take the numbers he uses, the best estimate is that this agreement will add .5% to gdp. He thinks that is a little high but provides no estimate of his own. If that estimate is true this agreement will be worth 87 billion dollars to the economy of Vietnam. Apparently Mr. Krugman thinks that Vietnam is such a rich country that 87 billion dollars is just not worth bothering about. All this in exchange for making it harder to pirate movies.

[Really_Not_All_That_Bright]

Sometimes Krugman is dead wrong. There is absolutely a lack of incentive to create many types of new drugs. We hadn’t created any new classes of antibiotic in 30 years until the discovery of teixobactin this year.

I am agnostic on the TPP, but the anti- crowd sounds a lot like the anti-NAFTA people. The sky didn’t fall.

[DrCube]

@puddleglum

All this in exchange for making it harder to pirate movies.

It will do no such thing.

[foolsguinea]

Well, I’m inclined to be against this sort of thing personally largely on these grounds: Poorer, developing countries shouldn’t be held hostage to wealthy interests in richer, developed countries. And leaving patent protections at the border is one way to lessen the economic imperialism of the more developed countries.

Now, if you want a unified world government, with absolutely open borders, full fiscal union and transfer payments to poor countries, then I suppose we can talk about global intellectual property law. But when they want unified laws for their specific thing but not other things, I gotta assume IP holders are trying to rig the game and get away with something.

One of the terrible things about NAFTA was that it got rid of Mexico’s protectionist policies on maize. A lot of poor corn farmers were thrown out of work. But when they went north for jobs, they were treated as criminals. NAFTA opened the border for one thing while allowing to be closed tighter for another. That’s dirty dealing. If I were, say, Chile’s government, I wouldn’t trust the USA not to cheat at canasta, let alone multi-billion-dollar deals. It’d be very dangerous to sign a trade treaty with the USA in which my own country’s membership is an afterthought.

[DinoR]

@foolsguinea

One of the terrible things about NAFTA was that it got rid of Mexico’s protectionist policies on maize. A lot of poor corn farmers were thrown out of work.

The overall agricultural sector is a little bit more complex than just one commodity. Small farmers have been under pressure in all three NAFTA countries in the period since NAFTA was implemented. That’s the general trend line; being a small farmer in the time period since NAFTA has been challenging no matter which of the three countries you lived in. Figuring out how much of that is NAFTA caused versus simply NAFTA correlated is likely impossible.

Overall the US trade surplus in agricultural products has greatly diminished since NAFTA. Mexican agriculture as a whole sells more in the US and is more competitive. Again there’s an issue trying to find how much causaton is NAFTA related.

There is an argument that by subsidizing corn farmers we’re effectively creating an unfair competition. I agree with that in general (and am more than willing to hack US farm subsidies to the bone). That argument still fails to parse out how big the effect of those subsidies is on price. Even without them the small Mexican corn farmers could have been uncompetitive and still be out of work. That one might be easier to parse out since tehre’s more data about the markets and we could at least compare production costs. I haven’t seen anybody who brings up teh issue present that information though.

[puddleglum]

@foolsguinea

One of the terrible things about NAFTA was that it got rid of Mexico’s protectionist policies on maize. A lot of poor corn farmers were thrown out of work. But when they went north for jobs, they were treated as criminals. NAFTA opened the border for one thing while allowing to be closed tighter for another. That’s dirty dealing. If I were, say, Chile’s government, I wouldn’t trust the USA not to cheat at canasta, let alone multi-billion-dollar deals. It’d be very dangerous to sign a trade treaty with the USA in which my own country’s membership is an afterthought.

The way NAFTA hurt mexican corn farmers was to let in lower priced corn from the US. This hurt the corn farmers since their corn is subsidized and not competitive on price. However, just as cheap corn hurt the farmers it helped the corn consumers of Mexico. Since corn is a large part of mexican cuisine, the numbers of people who are helped are many times the number of farmers who are hurt. Also since poor people spend more of their income on food, it help the poorest the most. Every policy has a downside, but overall I think a policy that helps the poorest people in poor countries is a good one.

[Aspidistra]

My thoughts on the TPP are pretty simple.

Did we see the text yet? No? Then GTFO till we do.

People can argue about economic benefits till they’re blue in the face - I don’t care. We live in a democracy. Democracies should be transparent. The principle of giving the population access to the decisions that are being made on their behalf ought to be fundamental. Even if I were in favour of (what has been leaked about) the TPP generally, which I see no particular reason to be, that alone is a dealbreaker.

Top thing I’ve seen reported about the TPP - it will unify copyright laws. Ok, fine, if you want to unify copyright laws how about unifying them DOWN. That would contribute to free trade. Lets take the lowest copyright time limit currently in force in any of the signing countries and make that the standard.

The TPP is supposed to give corporations more power to sue countries who engage in practises that restrict their business. Well here’s an example of the kind of thing we can expect more of:

Philip Morris suing the Australian Federal Government for introducing plain packaging for cigarettes. This is not the kind of thing we need any more of. Our governments can, frankly, do pretty fucked up things a lot of the time, but at least we get to toss the bastards out every so often. Predatory foreign corporations with operating budgets comparable to the budget of my own country’s government are a pretty threatening thing from my POV.

There’s also extending patent monopolies on medicine too.

Medecins Sans Frontiers has a pretty comprehensive look at why that’s a bad thing.

[puddleglum]

@Aspidistra

My thoughts on the TPP are pretty simple.

Did we see the text yet? No? Then GTFO till we do.

People can argue about economic benefits till they’re blue in the face - I don’t care. We live in a democracy. Democracies should be transparent. The principle of giving the population access to the decisions that are being made on their behalf ought to be fundamental. Even if I were in favour of (what has been leaked about) the TPP generally, which I see no particular reason to be, that alone is a dealbreaker.

Top thing I’ve seen reported about the TPP - it will unify copyright laws. Ok, fine, if you want to unify copyright laws how about unifying them DOWN. That would contribute to free trade. Lets take the lowest copyright time limit currently in force in any of the signing countries and make that the standard.

The TPP is supposed to give corporations more power to sue countries who engage in practises that restrict their business. Well here’s an example of the kind of thing we can expect more of:

Philip Morris suing the Australian Federal Government for introducing plain packaging for cigarettes. This is not the kind of thing we need any more of. Our governments can, frankly, do pretty fucked up things a lot of the time, but at least we get to toss the bastards out every so often. Predatory foreign corporations with operating budgets comparable to the budget of my own country’s government are a pretty threatening thing from my POV.

There’s also extending patent monopolies on medicine too.

Medecins Sans Frontiers has a pretty comprehensive look at why that’s a bad thing.

The reason it is secret is that it is not finished yet. The current proposed vote is for fast track authority. All that means is that the treaty does not get to be renegotiated by congress. Once fast track passes and the deal is finalized it will be made public in all its details and congress will be able to have an up and down vote on it. That is how all treaties work, the details are not released until it is finished in order to have all parties negotiate in good faith. As soon as it is finished it becomes public. The idea that it is or will be secret or undemocratic is just untrue.

[foolsguinea]

@puddleglum

The way NAFTA hurt mexican corn farmers was to let in lower priced corn from the US. This hurt the corn farmers since their corn is subsidized and not competitive on price. However, just as cheap corn hurt the farmers it helped the corn consumers of Mexico. Since corn is a large part of mexican cuisine, the numbers of people who are helped are many times the number of farmers who are hurt. Also since poor people spend more of their income on food, it help the poorest the most. Every policy has a downside, but overall I think a policy that helps the poorest people in poor countries is a good one.

Supply-side twaddle. What are consumers without incomes?

[foolsguinea]

Do you pro-NAFTA types support opening the US border to immigrants from Mexico?
Isn’t free trade in labor and services free trade as well?

Or would you rather engage in resource dumping while thinking you’re being generous?

[puddleglum]

@foolsguinea

Supply-side twaddle. What are consumers without incomes?

The law of comparative advantage precedes supply side economics by about 160 years. As predicted by that law since NAFTA while corn production has gone down in Mexico other crop production has gone up. Exports of agricultural products has gone up 11% a year since NAFTA benefiting all the Mexican farmers who grow things other than corn. Thus Mexican corn farmers were hurt but farmers as a group were helped and all consumers of corn in Mexico were helped as well.