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The Case for the TPP
It’s a measure of the lunacy of this election that neither candidate is robustly defending the TPP, and the task of making the case for it has been offshored, so to speak, to Singaporean Prime Minister Lee Hsien Loong:
His comments about Japan are noteworthy. If the agreement fails, he argues, US credibility will be severely undermined:
I think in terms of America’s engagement of the region, you have put a reputation on the line. It is the big thing which America is doing in the Asia Pacific with the Obama administration, consistently over many, many years of hard work and pushing. And your partners, your friends who have come to the table, who have negotiated, each one of them has overcome some domestic political objection, some sensitivity, some political cost to come to the table and make this deal.
And if, at the end, waiting at the altar, the bride doesn’t arrive, I think there are people who are going to be very hurt, not just emotionally but really damaged for a long time to come. Mr. Abe, for example, several of his predecessors thought seriously about and decided not to participate in the TPP. They came very close. They prepared the ground, they walked away. But Mr. Abe came through and decided to commit. Why? Because he wants to help. He wants his country to benefit and to open up its markets, and this is one way to do it.
It hurts your relationship with Japan, your security agreements with Japan. And the Japanese living in an uncertain world, depending on an American nuclear umbrella, will have to say: on trade, the Americans could not follow through; if it’s life and death, whom do I have to depend upon? It’s an absolutely serious calculation, which will not be said openly, but I have no doubt will be thought.
This is the one thing Obama really got right — but now we have not one, but two candidates running against free trade.
Have I mentioned recently how dispiriting I find this election?
Published in General
I don’t think it is more complex, but it sure as heck is easier to add exclusions, carve outs, and preferences for certain donors in a 5k page agreement with 12 countries than it is in an agreement with a single country.
No, I will not spend time explaining to someone who has said he does not trust any elected official (your words) and wants the agreement in one simple sentence.
BTW, if you have been reading, tariffs are taxes. I mentioned this. And tariffs (like taxes) distort free markets protecting some and hurting others. This has been a conservative principle since the the Whigs first faced the Torries. Trade agreements serve to reduce or remove the taxes. Are they perfect? No. But ask yourself, what would Reagan do? Answer: get the best deal you can and improve upon it later.
As I wrote earlier, I am not going to change anyone’s mind about TPP or the supposed conspiracy of government elites if one does not trust elected officials or believes everything can be distilled to simple assertions of good and bad.
Any perceived red light is coming from recalcitrance to consider what tariffs are in the first place. To object to one form of favoritism because another might show favoritism is a position I will not tarry over for long.
Were you LOL in condescension? ?
I supported NAFTA back in the day. I trusted our leaders when they said “Everyone will benefit from this, trust us”, this despite my nagging doubts that something didn’t add up. Experience has since taught me to listen to those doubts. You’re right about ” free” in these deals. Its mostly about the freedom to close US factories. There are definitly winners in these deals. There are more losers. REAL free trade might or might not truly be a good. But its moot as real free trade doesn’t exist.
Good points about tariffs. Do you have any evidence of their reduction or elimination in this agreement?
I proposed true Free Trade, and you brushed that off.
But hey, clearly, you goal was to be offensive and you refuse to back down from that. Way to win converts. Not only am I less disposed to TPP than I was when I started the thread, I am less disposed to listen to you the next time, since you refuse to be civil.
Batting .000
The most “interesting” complaint I’ve seen about the TPP is that, because it excludes China, Russia, India, and Brazil, it’s an example of US imperialism trying to shut out any nation that might challenge US hegemony.
It’s silly for a US politician to oppose it, unless they’re in the bag for … China & Russia.
Assange and the Wikileaks folk are pushing this particular narrative that the whole point of TPP is to screw China, Russia, India, and Brazil.
It is. And that’s a good thing.
The first thing I would consider in any deal cooked up is that the globalists are ushering in the biggest currency race to the gutter in world history. Austerity is over , Japan has it’s problems as do we. What are the Harvard wunderkind economists going to do as citizens of the world?
James looks at a situation one way and hopes our elected folks did a good job. I always look for the con game and know they are doing a job on me.
For those of you who want a “simple explanation” of why TPP is good.
Tariffs = taxes.
Trade Agreements reduce tariffs (taxes).
TPP lowers taxes.
Trade Agreements rarely deliver 100% pure free trade. Not for us; not for them. The perfect is not the enemy of the good.
TPP cuts almost all tariffs levied by member nations on US exports manufactures and agricultural products. Government was corrupt before TPP, not because of it.
TPP has confidential provisions. Some protect foreign governments and politicians. Some protect our industries and interests. But again, TPP is a massive reduction of taxes on us over time. It will help those who can and are willing to compete. The carve-outs gradually go away.
The US enjoys an energy cost advantage against most TPP members. We enjoy economies of scale and a dynamic cutting edge market. We have efficient transportation systems. We possess better technology in most cases. We can compete.
TPP is good for farmers, chemicals, oil, steel, construction, and barbers. It reaches deep and wide. Will we lose some more jobs – perhaps. But not that many. Most of the low skilled or union protected jobs that were over priced are gone already. We will gain an enormous number of new jobs – some high paying in chemicals, petroleum, shipping and food processing. It will be great for Texans who make fertilizers, Lousiana chemical complexes that produce vinyl chloride monomer, Georgia peanut plants, Pennsylvannia frackers, Ohio specialty machinery companies, and maybe even West Virginia coal miners.
I am not the issue.
You are not the issue.
Read what you want and pretend as you wish. Tariffs are taxes. Taxes go down with Trade Agreements. TPP also provides a bulwark against China and to a lesser extent Russia. I have written all of this – and yet it is not enough – you are still caught up in personal offense.
Governments are to a greater or lesser degree corrupt. TPP did not cause this and won’t evade corruption.
You want a perfect trade agreement – they don’t exist. That is a Trumpian deal. Win-lose. No one will agree.
You want a one line agreement. Again, not practical. In the real world with different peoples, cultures and interests, democracies and dictatorships will not and cannot agree on all points. Thus, you want perfection and that cannot happen.
You already said you were against TPP. I am not going to change your mind, and I am never going to find one good reason acceptable to you to change your mind. Your issue now is me.
I respect this. I moved on and am happy. And I wish you the best as well. ?
Wouldn’t true Free Trade be “there will be no tariffs on any trade between the two countries”?
It would seem that every page beyond this statement in a deal, moves away from Free and toward Regulated trade.
It would seem that in 5k pages of regulation it there will be objections to the various regulations.
One can be pro-trade, against tariffs and against TPP.
If that is the case then that demonstrates that TPP is less about free trade and more some convoluted way of exercising international influence.
Hey Doc, you also forgot I am a non-recovering RINO squish….ha,ha,. I attend Apostate’s Anonymous every week.
I am naive – but not quite that naive. I just take a spoon of vinegar with my sugar and figure out what I think is best. You can wait for the best deal, and wait and wait and wait…..I get the best the deal I can and try again for something a bit better later. It requires a lot of clothes pins.
Here are my goals:
1. Freedom
2. Free markets, trade and contract
3. Smaller government
4. Lower taxes (tariffs, regulation) and
5. Strong security
Or any part of the these I can get at the time. Hopeless, aren’t I?
Which is why I try to take some Vitamin Doc Jay everyday, ….and stay away from doctors of course. They make you sick, you know.
If free trade REALLY promotes peace and prosperity for all involved, then why would you want to screw Russia, China, and Brazil? If the whole point is to hurt other countries, then can’t you see why people are suspicious of this deal?
It is about both.
As are most trade agreements and we tend to find out that we give up much more than we get in return on the trade portion.
The goal is geopolitical balance. Stability. Peace.
China and now Russia may have other interests. Brazil is more preoccupied at home.
China: regime preservation, popular support, economic growth, foreign investment, rewrite global rules, controlled resource imports, controlled export markets and access and control of sea lanes.
Russia: regime preservation, popular control, economic stability, rewrite global rules, export resources, food, technology, and massive border defense – incursion and control of neighbors.
Brazil: economic growth, popular support, energy independence, resource/agriculture/manufactured exports, foreign investment, poverty, influence in region.
I am sorry Claire, but, if you had read the PIIE (Peterson Institute for International Economics) report, you’d find more than a few reasons why the TPP needs to be tabled and revisited …….get past the gloss at thier headline site, here;
https://piie.com/publications/wp/wp16-2.pdf
They can even kill you through stupidity, ego, or accident. Try yoga, there’s cool routines online.
Then quit selling it as a TRADE deal.
Studies that show different results – which is why one is foolish to try to persuade someone else of the benefits of trade. If one does not read and study or live through it like I did, one cannot understand how trade impacts the economy. The Peterson Institute says we lose about 15,000 jobs per year due to NAFTA, but gain $450,000 in productivity and lower consumer prices for each lost job. The US gets richer while some people cannot find one of those 15,000 lost jobs.
The general consensus is our problems with competitiveness are less about trade and more about taxation, health care costs, retirement costs, currency, etc. NAFTA made my business and many others competitive and helped us stop the Chinese in their tracks when they tried to overrun us after 2001. No doubt competition from China harmed manufacturing and wages in certain sectors and cost millions of jobs after it joined the WTO (2001). But these businesses were in most cases already gasping for air.
Innovate or die. If your business produces labor intensive, fungible, indiscernible products that allow for a slightly longer pipeline of supply and can tolerate some transportation expense, then you are at risk.
We can insulate ourselves from competition, and pick winners or losers in a different way. Or compete. Or do both.
It is both.
Agreed.
And, let’s get real for a moment; EVERY State,Nation/State entity of its kind is, self interested first.
The search for ” geopolitical balance” is, well, a fools errand. Play the game?Sure….. But, with our eyes wide open, working for OUR self interest too.
Then you acknowledge there is a trade-off and that we could very well come out at the bottom of that trade-off, yes ?
Excuse me, but the Peterson Institute paper also says that we will have a regression in number of jobs and wages however the curve they describe Sees us is catching up ( Ina decade I believe) and ……..I think we’ve heard that before
“This Working Paper estimates the effects of the Trans-Pacific Partnership (TPP) using a comprehensive, quantitative trade model, updating results reported in Petri, Plummer, and Zhai (2012) with recent data and information from the agreement. e new estimates suggest that the TPP will increase annual real incomes in the United States by $131 billion, or 0.5 percent of GDP, and annual exports by $357 billion, or 9.1 percent of exports, over baseline projections by 2030, when the agreement is nearly fully implemented. Annual income gains by 2030 will be $492 billion for the world. While the United States will be the largest beneficiary of the TPP in absolute terms, the agreement will generate substantial gains for Japan, Malaysia, and Vietnam as well, and solid benefits for other members. The agreement will raise US wages but is not projected to change US employment levels; it will slightly increase “job churn” (movements of jobs between firms) and impose adjustment costs on some workers.”
I don’t believe one economics study supporting TPP will sell anyone. This is personal. And it depends upon whether you live in the Mohawk Valley or furniture belt in NC. This study clearly supports TPP.
Of course it supports it however I noticed that terms like job churn regression wages etc. usually get passed up in public discussion, of course the belief is things will always work itself out and we will benefit in the future and yes, of course it depends on where you sit in this country and how long your future is……..I guess I’d rather see the lower middle class here, benefit, than the lower middle class in say, Malaysia or China etc.
Oh and I do agree that we have a number of homegrown problems that are interconnected however I don’t see the TPP as something that’s going to remedy that and I don’t hear any discussions based on that either, though they are connected, one is not even being addressed and, frankly, won’t.
Oh and, I don’t see this as “personal”, I see it as ‘personnel’…..
Trade deals make all countries richer. They hurt some people. They make the rest better off. The difference is the pain is concentrated on a few and the pleasure is small, spread across millions of people.
But trade is good. Tariffs are a tax. They are a legacy of corruption whereby government favors a few industries. The TPP removes most tariffs and may open some industries up to competition – with some serious pain. I have felt this myself and it made us better. But tariffs are taxes and taxes feed a large government and the constitutiencies who are protected by the tariffs.
So, if we can remove tariffs on our products and get access to other markets, then that is good. But remember, all trade deals have carve-outs for periods of up to 10 years. My firm was a victim of a NAFTA carve out and it about killed us. In the end, we came out stronger, better and we beat back the Chinese when they showed up in the early 2000’s.
Our choice: continue to hand out favors with the tariffs we have or enter an imperfect agreement that reduces tariffs over time and hands out some favors for a short time.
This is what I miss when I don’t Ricochet on the weekends (well I try not to). The Singapore PM is one of my favorite world leaders today.
As for deeper knowledge of things like TPP, @jamesofengland is my go to source.