Choos­ing con­ces­sion over pro­tec­tion

The Trans-Pa­cific Part­ner­ship prom­ises a net gain for Amer­i­cans

The Washington Times Weekly - - Commentary - By Joe Cobb

“When politi­cians can de­ter­mine what can be bought and sold, the first thing to be bought and sold will be


The Trans-Pa­cific Part­ner­ship (TPP) is just a con­tin­u­a­tion of what The Rea­gan-Bush ad­min­stra­tion started with the North Amer­i­can Free Trade Agree­ment (NAFTA) and the Uruguary Round of the Gen­eral Agree­ment on Tar­iffs and Trade (GATT), now re­named the World Trade Or­ga­ni­za­tion (WTO).

All those ar­bi­tra­tion pan­els are the en­force­ment process, and all the “pro­tec­tions” for phar­ma­ceu­ti­cal patents and recorded mu­sic and films are just an ex­ten­sion of U.S. do­mes­tic law. It is ac­tu­ally im­pe­ri­al­ism by the U.S. gov­ern­ment in fa­vor of en­rich­ing some pow­er­ful vested in­ter­ests in the United States to re­quire those other gov­ern­ments to ar­bi­trate when the Amer­i­can So­ci­ety of Com­posers, Au­thors and Pub­lish­ers sues.

Those who fa­vor it point out that it is “process” more than a thing. The vote in Congress to ap­prove be­comes a very tech­ni­cal and com­pre­hen­sive amend­ment to ex­ist­ing U.S. laws. For ex­am­ple, some 1930s law reg­u­lat­ing pork might have to be amended due to some change the Viet­nam gov­ern­ment de­manded, to help Viet­namese pork ex­porters and make it eas­ier to sell Viet­namese pork prod­ucts in the U.S. mar­ket. The vote to ac­cept the TPP can­not be “amended” just to give a re­ver­sal vote for the U.S. pork pro­duc­ers, who them­selves have en­joyed pro­tec­tion­ism since the 1930s, even if the pork pro­duc­ers have bought ev­ery con­gress­man.

We all agree the “best of all pos­si­ble worlds” would be univer­sal free trade, no bar­ri­ers, and ev­ery merchant and re­tail dis­tri­bu­tion sys­tem should honor “na­tional treat­ment” of for­eign goods’ im­ports and for­eign ser­vice providers (e.g., doc­tors, lawyers, ar­chi­tects and fi­nan­cial ser­vices).

So, in a less than best of all worlds, the Trans-Pa­cific Part­ner­ship rep­re­sents an in­crease in the rules of ad­min­is­tra­tive law (a bu­reau­cratic “cost”), in ex­change for a more level and uni­form play­ing field for in­ter­na­tional trade in ser­vices and in­tel­lec­tual property. Those, af­ter all, are what the United States in­creas­ingly now ex­ports to the rest of the world.

The true op­po­nents of the TPP (they have also been against NAFTA, the WTO and the Colom­bia Free Trade Agree­ment) are la­bor union lead­ers. The rank and file prob­a­bly don’t care about the is­sue, ex­cept to the ex­tent their lead­ers sell them on a pro­pa­ganda cam­paign about “cheap for­eign la­bor.”

La­bor union lead­ers de­pend on a rev­enue source to pay their own salaries, and to main­tain big of­fices, pri­vate planes and public­ity. They col­lect union dues. When a union’s mem­bers lose their union jobs due to im­ports, the work­ers might go on to do some dif­fer­ent work. But the union lead­er­ship would lose their dues-pay­ing mem­bers. More free trade tends to dry up union rev­enues, just as com­pe­ti­tion in school­ing tends to dry up gov­ern­ment-em­ployee teach­ers unions’ rev­enue. (And we know what that means to the fi­nances of the Demo­cratic Party.)

The eco­nomic truth of any agree­ment like the TPP is that some Amer­i­cans will lose, just as some Asian or other gov­ern­ment-pro­tected in­ter­ests will be traded away by their own gov­ern­ment. On both sides, there are losers as well as much more dif­fuse and greater win­ners over the years of fu­ture growth and di­vi­sion of la­bor.

This is good, be­cause only pro­tected vested in­ter­ests can be “sac­ri­ficed” by gov­ern­ments that sur­ren­der the un­eco­nom­i­cal and un­de­served pro­tec­tions and sign a trade agree­ment as a “con­ces­sion.”

More free trade is about larger, more ex­ten­sive mar­kets and greater di­vi­sion of la­bor. Re­stricted trade is about smaller mar­kets and more spe­cial pro­tec­tions for po­lit­i­cal groups, crony cap­i­tal­ists, and pay­offs for politi­cians. With­out the pay­offs, the smaller mar­ket could never be en­forced. Joe Cobb served as the chief econ­o­mist for the U.S. Se­nate Repub­li­can Pol­icy Com­mit­tee, the staff di­rec­tor of the Con­gres­sional Joint Eco­nomic Com­mit­tee and the deputy di­rec­tor in the White House Of­fice of Pol­icy In­for­ma­tion.

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