Tuesday, November 22, 2016
Trumpocalypse, Day 1: Trump's simple take on a complex issue.
Today, Trump is threatening to withdraw from the "Trans-Pacific Partnership" free trade agreement. This agreement, which mirrors one we have with the European Union, is a free-trade agreement with 11 other countries. Drafts of the agreement (which hasn't been made fully public) mostly appear to be based on earlier US treaties.
Among the benefits for Americans: TPP would eliminate tariffs American manufacturers face now, entirely, and would eliminate almost all of them for American agricultural products -- so US goods would be able to be sold for less money overseas without losing profits. It expedites customs procedures in ways that experts say will be particularly beneficial to small businesses.
TPP also requires countries to have laws in place against child and forced labor, political corruption, and employment discrimination.
TPP has been criticized (by Paul Krugman, for example) for having too-strong patent protections, which might cause increases in drug prices.
What I expect most Trumpites hate about it is that it requires countries to allow collective bargaining, and puts in place environmental protections.
Trump is not the only person concerned about TPP; Elizabeth Warren, who I wish would run for president, is against it, as was Bernie Sanders. The controversial provision Warren seems most against is the provision that allows investors to sue countries for violations of the treaty. The International Bar Association says that countries win most of those cases and that very few are brought by multinational corporations.
A couple of key points: we are a member of the World Trade Organization, which in many ways is more powerful than TPP would be. The World Trade Organization can, for example, invalidate our laws if they conflict with trade agreements. And our trade agreements are byzantine, so much so that boiling them down to talking points is ludicrous. Consider, as one point, that for 10 years we had a trade dispute with Brazil over cotton, a dispute that developed after Brazil sued us in the WTO and won $830,000,000 in penalties. The dispute was over cotton subsidies we paid our farmers, and we settled it by paying $300,000,000 to Brazil -- a payment we made to win the right to continue paying our farmers to grow cotton.
I am in favor of free trade. Free commerce brings a better quality of life to everyone.