Gallagher, Nelson battle over trade


We've pointed out before how topsy turvy things have become with the Trans Pacific Partnership (TPP) agreement lately, and it seems to be getting even more weird, but not for any good reason. As we've pointed out dozens of times now, actual free trade is a good thing for the world -- but the TPP agreement has very, very little to do with free trade. There are certainly some good things in the TPP when it comes to trade, including some stuff on helping protect the free flow of information on the internet, but it is significantly outweighed by numerous problems with the agreement that seem to have little to do with actual free trade and plenty to do with certain industries putting in place protectionist/mercantilist programs that are, in many ways, the opposite of free trade. The two areas that we've discussed at great length are the intellectual property section, which will force countries to ratchet up their laws (which runs against free trade) and the problematic corporate sovereignty provisions, that allow foreign companies to effectively block regulations that may make perfect sense for certain countries. 

[Madeleine Behr | August 18, 2016 | Post Crecent]

Historically, the way political support for trade deals in the US works breaks down as follows: Republicans support the deals strongly, with a simplistic mantra of "free trade is good, any free trade agreement must be good." They don't care much about the details (other than if a big company in their region wants some protectionist nugget in the agreement). Meanwhile, the majority of Democrats oppose the agreements, but again, often for simplistic and protectionist reasons. But, there are always a few "moderate" Democrats (i.e., Democrats who recognize free trade is actually a good thing overall) who support free trade and that's enough to get the deals passed. That's mostly how the TPP situation played out for the past few years. 

Then the insanity of the 2016 Presidential election hit and everything went sideways. 

On the Republican side, you've got Donald Trump, who is opposed to the TPP, but mainly because he doesn't understand international trade at all, and ridiculously seems to believe that everything is a zero sum game, and any trade agreement that helps other countries means we're "losing." The TPP is bad, but not for the reasons Trump thinks. And then you have Hillary Clinton, who had always been in the Democratic clump that supported free trade agreements, and who has alwayssupported the TPP, despite now pretending not to. That's because Bernie Sanders was very much against it (also for mostly the wrong reasons!) and feeling pressure from the success of his campaign, she felt the need to come out against the TPP to avoid losing to Bernie. 

So, you have both candidates claiming to be against TPP, but for weird reasons, and no one believing the Dem candidate, while no one quite understanding the GOP candidate. Meanwhile, the sitting President continues to push for the TPP even as the only two people likely to have his job in a few months insist they won't support it. 

Now, throw into this mix the fact that Trump's railing against the TPP (again, for dumb reasons) is suddenly getting Republican voters to hate the TPP, and down ticket Republicans who have long supported the TPP are suddenly changing their tune. Senator Pat Toomey, a long time supporter of the TPP has now announced it's a bad deal and he's opposed to it. Of course, he actually spends most of his opinion piece (correctly!) lauding the benefits of free trade, but then says he's opposing it for a few reasons. His reasons are silly, though. It's mainly because the pharma industry has convinced him that the IP provisions in the TPP are too lax. Pharma pushed heavily for more ability to basically lock up their data and discoveries for a very long time, and thanks to Australia pushing back, there was a compromise here. So Toomey insists that's why he's now opposing:

About 46,000 Pennsylvanians have jobs in the life science and pharmaceutical sector, making it one of our state’s largest industries. TPP will make it too easy for other countries to steal innovations that we create in Pennsylvania and take the jobs tied to those innovations.

That's not true at all. What the TPP will do is actually mean that pharma will have an exclusive monopoly on certain things for not quite as long as they'd like. It won't make "stealing innovations" any easier. 

Of course, the real reason for Toomey's about-face may have more to do with his re-election campaign:

Toomey's remarks arrive as public polls show him falling behind Democratic challenger Katie McGinty in one of the country's most crucial Senate races. They also come after months of rage against international trade fueled support for Trump and Bernie Sanders, and forced Democratic nominee Hillary Clinton to reverse course on the pending deal. McGinty has opposed the TPP and blasted Toomey over his stand on it. 

"Pat Toomey has spent his entire career pushing bad trade deals and policies that ship Americans jobs overseas, so nobody is buying this ridiculous flip flop," McGinty said in a statement.

So, this topsy turvy election year, it's becoming increasingly clear that the TPP might not actually have the support it needs to get ratified in the US. If Republicans are bailing on it (and the top of the ticket screaming about how horrible it is), it's difficult to see how it can gain enough support. There is the popular theory that no matter what happens, in the lame duck session after the election, everyone will revert to their earlier positions and push the damn thing through, but if trade continues to be an issue in the election, doing so will create a huge amount of public anger. 

So, in the end, there are a lot of reasons why the TPP may die on the vine... even if all of the reasons for it doing so will be pretty bad.


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  • commented 2016-08-22 17:02:42 -0400
    Say. The link to the Post Crescent is a completely different article.
  • commented 2016-08-22 17:00:28 -0400
    Madeleine Behr – please slow down.

    Who gets the gains from trade? We’re pretty sure pharmaceutical companies will do well, because the rules in trade deals are written in their favor. Global manufacturers will do well, because they can ship work to low-wage countries, then bring finished products back into the US at low cost. Nike is happy to make shoes in Vietnam. A quarter of workers in Malaysia’s electronics industry work in debt bondage. Intel, Apple, AMD, and Motorola will do well. What I don’t see in TPP is anything of value for workers, the environment, public health or any other policy of value to regular people.

    Global companies would be thrilled to get similar rules through their national governments, but it’s so much easier to sweetheart deals at the global level.

    TPP would determine how life is organized in 2050. Forget about the tariff schedule. That is not the issue. No one I know, and no one I would vote for would write the rules in TPP.
  • commented 2016-08-22 10:58:57 -0400
    This shows the authors’ lack of knowledge or intentional lack thereof on why the electorate is opposed to free trade. The biggest issues have to do with global corporations having sovereignty over our constitutional system. We, and all countries should be able to have trade that is fair, not a system where big banks and investors get to decide the rules of the game. TPP, like other free trade deals includes no enforcement for currency cheats, one of the biggest means of jobs destruction in the US. It facilitates the destruction of even more of our manufacturing and wage base that will lead to more austerity and city and infrastructure decay and deficits. The TPP is a treaty designed by and for transnational corporate entities and investors. It is not really a trade deal unless you want to talk about trading people and a sustainable planet for profit.