- - Monday, November 9, 2015

ANALYSIS/OPINION:

“When politicians can determine what can be bought and sold, the first thing to be bought and sold will be politicians.”

— Mark Twain

The Trans-Pacific Partnership (TPP) is just a continuation of what The Reagan-Bush administration started with the North American Free Trade Agreement (NAFTA) and the Uruguary Round of the General Agreement on Tariffs and Trade (GATT), now renamed the World Trade Organization (WTO).

All those arbitration panels are the enforcement process, and all the “protections” for pharmaceutical patents and recorded music and films are just an extension of U.S. domestic law. It is actually imperialism by the U.S. government in favor of enriching some powerful vested interests in the United States to require those other governments to arbitrate when the American Society of Composers, Authors and Publishers sues.

Those who favor it point out that it is “process” more than a thing. The vote in Congress to approve becomes a very technical and comprehensive amendment to existing U.S. laws. For example, some 1930s law regulating pork might have to be amended due to some change the Vietnam government demanded, to help Vietnamese pork exporters and make it easier to sell Vietnamese pork products in the U.S. market. The vote to accept the TPP cannot be “amended” just to give a reversal vote for the U.S. pork producers, who themselves have enjoyed protectionism since the 1930s, even if the pork producers have bought every congressman.

We all agree the “best of all possible worlds” would be universal free trade, no barriers, and every merchant and retail distribution system should honor “national treatment” of foreign goods’ imports and foreign service providers (e.g., doctors, lawyers, architects and financial services).

So, in a less than best of all worlds, the Trans-Pacific Partnership represents an increase in the rules of administrative law (a bureaucratic “cost”), in exchange for a more level and uniform playing field for international trade in services and intellectual property. Those, after all, are what the United States increasingly now exports to the rest of the world.

The true opponents of the TPP (they have also been against NAFTA, the WTO and the Colombia Free Trade Agreement) are labor union leaders. The rank and file probably don’t care about the issue, except to the extent their leaders sell them on a propaganda campaign about “cheap foreign labor.”

Labor union leaders depend on a revenue source to pay their own salaries, and to maintain big offices, private planes and publicity. They collect union dues. When a union’s members lose their union jobs due to imports, the workers might go on to do some different work. But the union leadership would lose their dues-paying members. More free trade tends to dry up union revenues, just as competition in schooling tends to dry up government-employee teachers unions’ revenue. (And we know what that means to the finances of the Democratic Party.)

The economic truth of any agreement like the TPP is that some Americans will lose, just as some Asian or other government-protected interests will be traded away by their own government. On both sides, there are losers as well as much more diffuse and greater winners over the years of future growth and division of labor.

This is good, because only protected vested interests can be “sacrificed” by governments that surrender the uneconomical and undeserved protections and sign a trade agreement as a “concession.”

More free trade is about larger, more extensive markets and greater division of labor. Restricted trade is about smaller markets and more special protections for political groups, crony capitalists, and payoffs for politicians. Without the payoffs, the smaller market could never be enforced.

Joe Cobb served as the chief economist for the U.S. Senate Republican Policy Committee, the staff director of the Congressional Joint Economic Committee and the deputy director in the White House Office of Policy Information.

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