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The Trade Deal Crusaders: Can They Never Learn?

Monday, December 19, 2016 By Dean Baker, Truthout | Op-Ed
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Protesters march against the proposed Trans-Pacific Partnership in Wellington, New Zealand, on March 30, 2014. (Photo: Peg Hunter)Protesters march against the proposed Trans-Pacific Partnership in Wellington, New Zealand, on March 30, 2014. (Photo: Peg Hunter)

The wealth disparity in the United States is astonishing, yet many have come to accept it as almost natural. In his new book, Dean Baker debunks the inevitability of such disparity, exposing the economics of a rigged system and offering hope to those who want a global economy that works for everyone. Get your copy of Rigged by making a tax-deductible donation to Truthout today!

One certain outcome of the 2016 election is that the Trans-Pacific Partnership (TPP) is dead, for the moment. The qualification is necessary because the proponents of the TPP and similar trade pacts refuse to accept that the country is not interested in further trade agreements along the same lines as past pacts.

Rather than accepting the reality that these trade deals really are unpopular, they seem to believe that they really just face a marketing problem. With a better jingle or a few witty phrases, the public will suddenly be anxious to buy the trade deals they are trying to sell.

Viewing the unpopularity of failed trade deals as being a problem of messaging is a denial of reality that deserves the name Trumpian. In the last 15 years, millions of workers have lost jobs due to imports and tens of millions have seen weaker wage growth -- this is not a problem that will go away with better messaging.  

Deals like the TPP are unlikely to substantially worsen the jobs situation, but this is only because most of the trade barriers with most potential trading partners are already low. For better or worse, there is not another China out there, which can potentially displace millions of manufacturing workers with low-cost exports. This doesn't mean that we may not still lose more jobs due to trade, but we are unlikely to ever again see anything like the mass displacement of the years 2000-2008.

Since trade barriers are already low, the TPP and other "trade" deals are not really about free trade, they are about setting up a business friendly structure of regulation. While a few representatives of labor unions and consumer groups got to sit on the working groups that provide input on drafts of the TPP, according to a Washington Post analysis, 85 percent of the members came from business groups.    

The TPP and other next generation trade deals are also about putting in place stronger and longer patent and copyright protections (yes, that is "protections" as in "protectionism," the opposite of free trade). The proponents of these trade deals continue to argue, almost as a holy cause, that we have to move forward with their agenda or something bad will happen.

If the issue is just that we need ever more trade deals, we can come up with directions that will increase the flows of goods and services between countries. How about a trade pact that reduces the barriers for the most highly paid professionals? Doctors are prohibited from practicing medicine in the United States unless they complete a US residency program. Dentists have to graduate from a US dental school (Canadian dental school graduates have been allowed in recent years.)

These and other barriers are classic protectionist measures. Yet, our "free traders" invariably look dumbfounded when asked how come these barriers persist in spite of their massive efforts at liberalizing trade over the last three decades.

Apparently protectionism is only a problem when it might benefit less-educated workers. The protectionism that benefits the friends and family members of the people who negotiate trade deals is just fine. (And for those concerned about brain drain from developing countries, we know how to compensate them for the loss of highly trained workers so that they can train two or three professionals for every one that comes to the United States.)

If we are interested in the wide sharing of knowledge to benefit the world economy and advance of civilization, we should be looking for ways around patents and copyrights. We should be looking at ways to dispense this information at the least possible cost.

This means, for example, that we would want all drugs to be sold at their free market price, with some mechanism for sharing the cost of the research needed to develop these drugs. This is 180 degrees at odds with the drive for ever stronger and longer patent and related protections in the TPP and other trade deals.

We should also be looking for ways to support creative and artistic work that don't depend on copyright monopolies. The internet is a fantastic tool for sharing this work instantaneously at new zero cost. Unfortunately, the protectionists who design our "free trade" agreements are focused on limiting its potential to ensure that Disney and other entertainment conglomerates can get every last penny out of any creative work to which they can lay claim.

The reality is that the "free traders" are hopeless hacks who have devoted a career to pushing trade agreements designed to redistribute upward. It is unreasonable to expect that they will change their tune; the rest of us have to learn to ignore them.

Copyright, Truthout. May not be reprinted without permission.

Dean Baker

Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.


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The Trade Deal Crusaders: Can They Never Learn?

Monday, December 19, 2016 By Dean Baker, Truthout | Op-Ed
  • font size decrease font size decrease font size increase font size increase font size
  • Print

Protesters march against the proposed Trans-Pacific Partnership in Wellington, New Zealand, on March 30, 2014. (Photo: Peg Hunter)Protesters march against the proposed Trans-Pacific Partnership in Wellington, New Zealand, on March 30, 2014. (Photo: Peg Hunter)

The wealth disparity in the United States is astonishing, yet many have come to accept it as almost natural. In his new book, Dean Baker debunks the inevitability of such disparity, exposing the economics of a rigged system and offering hope to those who want a global economy that works for everyone. Get your copy of Rigged by making a tax-deductible donation to Truthout today!

One certain outcome of the 2016 election is that the Trans-Pacific Partnership (TPP) is dead, for the moment. The qualification is necessary because the proponents of the TPP and similar trade pacts refuse to accept that the country is not interested in further trade agreements along the same lines as past pacts.

Rather than accepting the reality that these trade deals really are unpopular, they seem to believe that they really just face a marketing problem. With a better jingle or a few witty phrases, the public will suddenly be anxious to buy the trade deals they are trying to sell.

Viewing the unpopularity of failed trade deals as being a problem of messaging is a denial of reality that deserves the name Trumpian. In the last 15 years, millions of workers have lost jobs due to imports and tens of millions have seen weaker wage growth -- this is not a problem that will go away with better messaging.  

Deals like the TPP are unlikely to substantially worsen the jobs situation, but this is only because most of the trade barriers with most potential trading partners are already low. For better or worse, there is not another China out there, which can potentially displace millions of manufacturing workers with low-cost exports. This doesn't mean that we may not still lose more jobs due to trade, but we are unlikely to ever again see anything like the mass displacement of the years 2000-2008.

Since trade barriers are already low, the TPP and other "trade" deals are not really about free trade, they are about setting up a business friendly structure of regulation. While a few representatives of labor unions and consumer groups got to sit on the working groups that provide input on drafts of the TPP, according to a Washington Post analysis, 85 percent of the members came from business groups.    

The TPP and other next generation trade deals are also about putting in place stronger and longer patent and copyright protections (yes, that is "protections" as in "protectionism," the opposite of free trade). The proponents of these trade deals continue to argue, almost as a holy cause, that we have to move forward with their agenda or something bad will happen.

If the issue is just that we need ever more trade deals, we can come up with directions that will increase the flows of goods and services between countries. How about a trade pact that reduces the barriers for the most highly paid professionals? Doctors are prohibited from practicing medicine in the United States unless they complete a US residency program. Dentists have to graduate from a US dental school (Canadian dental school graduates have been allowed in recent years.)

These and other barriers are classic protectionist measures. Yet, our "free traders" invariably look dumbfounded when asked how come these barriers persist in spite of their massive efforts at liberalizing trade over the last three decades.

Apparently protectionism is only a problem when it might benefit less-educated workers. The protectionism that benefits the friends and family members of the people who negotiate trade deals is just fine. (And for those concerned about brain drain from developing countries, we know how to compensate them for the loss of highly trained workers so that they can train two or three professionals for every one that comes to the United States.)

If we are interested in the wide sharing of knowledge to benefit the world economy and advance of civilization, we should be looking for ways around patents and copyrights. We should be looking at ways to dispense this information at the least possible cost.

This means, for example, that we would want all drugs to be sold at their free market price, with some mechanism for sharing the cost of the research needed to develop these drugs. This is 180 degrees at odds with the drive for ever stronger and longer patent and related protections in the TPP and other trade deals.

We should also be looking for ways to support creative and artistic work that don't depend on copyright monopolies. The internet is a fantastic tool for sharing this work instantaneously at new zero cost. Unfortunately, the protectionists who design our "free trade" agreements are focused on limiting its potential to ensure that Disney and other entertainment conglomerates can get every last penny out of any creative work to which they can lay claim.

The reality is that the "free traders" are hopeless hacks who have devoted a career to pushing trade agreements designed to redistribute upward. It is unreasonable to expect that they will change their tune; the rest of us have to learn to ignore them.

Copyright, Truthout. May not be reprinted without permission.

Dean Baker

Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.


Hide Comments

blog comments powered by Disqus