[x-pubpol] Paul Krugman on TPP - No Big Deal

[Joly MacFie]

(Harold Feld writes on his fb: Krugman does something of a change of heart
about the Trans-Pacific Partnership. I think it finally got through to him
that this is not about trade and the traditional backlash against open
trade from when he was doing policy and defending open trade in the 1990s.
It's about the Intellectual Property Mafia hijacking these agreements for
their own ends that have nothing to do with trade.)

http://www.nytimes.com/2014/02/28/opinion/krugman-no-big-deal.html

Everyone knows that the Obama administration's domestic economic agenda is
stalled in the face of scorched-earth opposition from Republicans. And
that's a bad thing: The U.S. economy would be in much better shape if Obama
administration proposals like the American Jobs Acthad become law.

It's less well known that the administration's international economic
agenda is also stalled, for very different reasons. In particular, the
centerpiece of that agenda -- the proposed Trans-Pacific Partnership, or
T.P.P. -- doesn't seem to be making much progress, thanks to a combination
of negotiating difficulties abroad and bipartisan skepticism at home.

And you know what? That's O.K. It's far from clear that the T.P.P. is a
good idea. It's even less clear that it's something on which President
Obama should be spending political capital. I am in general a free trader,
but I'll be undismayed and even a bit relieved if the T.P.P. just fades
away.

The first thing you need to know about trade deals in general is that they
aren't what they used to be. The glory days of trade negotiations -- the
days of deals like the Kennedy Round of the 1960s, which sharply reduced
tariffs around the world -- are long behind us.

Why? Basically, old-fashioned trade deals are a victim of their own
success: there just isn't much more protectionism to eliminate. Average
U.S. tariff rates have fallen by two-thirds since 1960. The most recent
report on American import restraints by the International Trade Commission
puts their total cost at less than 0.01 percent of G.D.P.

Implicit protection of services -- rules and regulations that have the
effect of, say, blocking foreign competition in insurance -- surely impose
additional costs. But the fact remains that, these days, "trade agreements"
are mainly about other things. What they're really about, in particular, is
property rights -- things like the ability to enforce patents on drugs and
copyrights on movies. And so it is with T.P.P.

There's a lot of hype about T.P.P., from both supporters and opponents.
Supporters like to talk about the fact that the countries at the
negotiating table comprise around 40 percent of the world economy, which
they imply means that the agreement would be hugely significant. But trade
among these players is already fairly free, so the T.P.P. wouldn't make
that much difference.

Meanwhile, opponents portray the T.P.P. as a huge plot, suggesting that it
would destroy national sovereignty and transfer all the power to
corporations. This, too, is hugely overblown. Corporate interests would get
somewhat more ability to seek legal recourse against government actions,
but, no, the Obama administration isn't secretly bargaining away democracy.

What the T.P.P. would do, however, is increase the ability of certain
corporations to assert control over intellectual property. Again, think
drug patents and movie rights.

Is this a good thing from a global point of view? Doubtful. The kind of
property rights we're talking about here can alternatively be described as
legal monopolies. True, temporary monopolies are, in fact, how we reward
new ideas; but arguing that we need even more monopolization is very
dubious -- and has nothing at all to do with classical arguments for free
trade.Now, the corporations benefiting from enhanced control over
intellectual property would often be American. But this doesn't mean that
the T.P.P. is in our national interest. What's good for Big Pharma is by no
means always good for America.

In short, there isn't a compelling case for this deal, from either a global
or a national point of view. Nor does there seem to be anything like a
political consensus in favor, abroad or at home.

Abte majority leader, and Nancy Pelosi, the top Democrat in the House, have
come out against giving the president crucial "fast-track" authority,
meaning that any agreement can receive a clean, up-or-down vote.

So what I wonder is why the president is pushing the T.P.P. at all. The
economic case is weak, at best, and his own party doesn't like it. Why
waste time and political capital on this project?

My guess is that we're looking at a combination of Beltway conventional
wisdom -- Very Serious People always support entitlement cuts and trade
deals -- and officials caught in a 1990s time warp, still living in the days
when New Democrats tried to prove that they weren't old-style liberals by
going all in for globalization. Whatever the motivations, however, the push
for T.P.P. seems almost weirdly out of touch with both economic and
political reality.

So don't cry for T.P.P. If the big trade deal comes to nothing, as seems
likely, it will be, well, no big deal.road, the news from the latest
meeting of negotiators sounds like what you usually hear when trade talks
are going nowhere: assertions of forward movement but nothing substantive.
At home, both Harry Reid, the Sena


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