Cogito Ergo Non Serviam

Trans-Pacific Partnership Agreed

The nations negotiating the Trans-Pacific Partnership have reached an agreement after five years of discussion. The arrangement will affect 40% of world GDP, and it will boost trade among the participants. At the same time, it will increase competition in many fields, and that will cause a political backlash. In other words now that a deal is done, the hard part begins, winning ratification.

The final sticking point, the duration of patents on new drugs, was typical of the negotiation's impact. The US, where many drugs are developed, wanted a 12-year monopoly for the developer of new treatments and cures. Australia and New Zealand wanted 5 years because their national healthcare systems would benefit from being able to break monopolies sooner. The compromise, which hasn't been released, appears to satisfy both by splitting the difference somewhere.

President Obama is claiming this as his signature foreign policy accomplishment, and his White House was in full spin mode when the agreement was announced. The deal, the terms of which have yet to be released, "reflects America's values and gives our workers the fair shot at success they deserve. When more than 95 percent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy," he said. "We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment."

Vermont's socialist Senator Bernie Sanders, who is running for the presidency, took a different view. "I am disappointed but not surprised by the decision to move forward on the disastrous Trans-Pacific Partnership trade agreement that will hurt consumers and cost American jobs,"Mr. Sanders said in a statement. "Wall Street and other big corporations have won again. It is time for the rest of us to stop letting multi-national corporations rig the system to pad their profits at our expense." Mr. Sanders said he would do all he can to defeat the agreement. "This agreement follows failed trade deals with Mexico, China and other low-wage countries that have cost millions of jobs and shuttered tens of thousands of factories across the United States," he said. "We need trade policies that benefit American workers and consumers, not just the CEOs of large multi-national corporations."

This divide will likely arise in all the signatory states. Canada's trade minister Ed Fast said, "We don't anticipate that there will be job losses. Obviously there will be industries that have to adapt." The agreement was a "once in a lifetime to shape rules in the Asia Pacific region", Mr. Fast added. Meanwhile, Canada's New Democratic Leader Tom Mulcair has said if he wins this month's election, Canada won't implement the deal.

In the end, free trade deals do make all parties better off. The difficulty is managing the disruption that opening up trade entails. A comprehensive deal makes everyone a little better off, but it does do significant short-term harm to certain sectors of an economy.

In addition to the US and Canada, Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam are signatories. The more authoritarian members ought to ratify the agreement easily enough. In small democracies, there is little incentive to oppose the TPP as they get greater access to much bigger markets and are giving up very little.

The real challenge will be in the US, and to a lesser degree in Canada as noted above. The Republican Party is likely to back the deal despite the fact that it is an Obama win. The trick will be to get enough Democrats to back it for a Senate vote. In the end, resistance to the deal will falter, but the costs of buying off the opponents in the president's own party may prove high.

© Copyright 2015 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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