TPP supporters claim that over 10 years, the trade pact could increase US GDP by as much as half as much as it was decreased by last winter’s snowy weather. That’s probably overly optimistic.
Yes, folks, it’s desperation time for the supporters of the Trans-Pacific Partnership (TPP). To get this sucker through, they will say anything, because, hey, making stuff up for the cause always sells in official Washington.
In his Washington Post column (6/10/15), George Will argued for the TPP because we need it to increase growth. He pointed to the 0.7 percent drop in GDP in the first quarter as illustrating the problem. (This decline was, of course, mostly due to the weather, but whatever.)
If we view this reported drop in GDP as the problem, and the TPP as the solution, then according to the most optimistic estimates available, we will have eliminated roughly half the problem more than a decade from now, when the effects of the TPP are fully felt. According to projections from the Peterson Institute for International Economics, the TPP will eventually increase GDP by 0.38 percentage points.
This study shows gains that are more than twice as large as an earlier version. An analysis by the United States Department of Agriculture showed minimal gains.
All these analyses are likely to overstate the gains from the TPP, since none of them factor in the higher costs for drugs and other products as a result of the stronger and longer patent and copyright protections in the TPP. These protections are equivalent to massive tariffs barriers. In the case of prescription drugs, patents can raise the price a hundredfold, the equivalent of a tariff of 10,000 percent. And, as econ textbook fans everywhere know, tariff barriers lead to distortions and corruption.
It is quite likely that if these higher prices were factored into the analysis, the TPP would be shown to reduce growth. (We spend over $400 billion a year on pharmaceuticals alone, or 2.2 percent of GDP.) But no one would want the evidence to undermine a trade deal that will give more money to rich people.
Economist Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR’s blog Beat the Press (6/11/15).
Thank you, Dean Baker, for your constant shedding of light on the crap storm that gets labeled “free trade.”
I anxiously await the news of the hundreds of thousands of new jobs that will result from the passage of the TPP. They’ve used that canard to sell the Keystone XL pipeline and polls show that it works with the US public (60% or more in support); once Obama has finished postponing his XL decision, i.e., no more immediate political blowback to fear, we’ll see if it worked on the First Family, as well.
Can’t opponents simply state that abortions will be made mandatory if the TPP passes? True or not, it would be the issue that might get the churches interested, little else seems to do so. Neo-feudalism and environmental catastrophe seem to be issues that fly under the Judeo-Christian radar (cf Pope Francis). Perhaps, some sexier results would get some attention.
Some other possibilities:
It’s been said that homosexual marriage will be required if…
A ban on beef is expected if…
Immunizations of all children will be required by a pharmaceutical firm in Taiwan if…
The raising, selling and consumption of dog will be legal (required by a Korean slaughterhouse conglomerate) if…
MSG in everything if…
Homosexual babysitters will have a legal right to insist on caring for your children if…
Sharia Law is coming if…
Those in power are not the only ones entitled to their Reichstag Fire, Gulf of Tonkin, or Battleship Maine. Let’s get our thinking caps on!
I expect to hear some fast talking that says the Trans-Pacific Partnership is a free trade agreement when it is really a managed rent-seeking agreement . An example of the rent-seeking is the enhanced patent and copyright protections that only protects unearned profits.
Coverage of TTP is media groupthink at its worst. I have yet to hear a commentator on TV or radio call TPP anything but a trade agreement. They all equate failure to fast-track with killing the agreement. That’s not what fast-tracking means. It is intended to short-circuit any actual debate on the details of how the “trade” agreement will affect workers, communities, states, the environment, and national sovereignty. Why is the prospect of debating and modifying TPP cast as rejecting it? Must be because if everyone actually knew what a corporate giveaway it is politicians would never hear the end of it and we are in an election season.
Its the end of an era and a new beginning for supermonopolies.You think the TPP is a miracle,wait until takes over and start dictating on our goverment.
It says in the Constitution, that the Senate has the power to “advise and consent to any treaty between the US and other countries. Isn’t the TPP and TTIP a foreign treaty? If is so good for our economy and our workers, why is it top secret? Giving ‘fast track’ trade authority to the President would be unconstitutional. If these trade bills pass, why have government, taxes, laws and elections at all? A special corporate tribunial will nullify any law or regulation that interferes with any corporations seeking of maximum almighty profits. Any “burdensome regulation” or “burdensome tax” would be overturned by these secret proceedings. “Representation without regulation, laws and taxation is tyranny.” Representation by the 1% and only of the 1%, for the 1% over the 99% is tyranny.