TPP

“If this [TPP] collapses, Pacific Rim countries will be aghast,” said Shunpei Takemori, a professor at Keio University in Japan, the largest economy in the would-be trade zone after the United States. “China is pushing, and if the U.S. just stands aside, it would be a tragedy.”

And:

“If you don’t do this deal, what are your levers of power?” Singapore’s foreign minister, K. Shanmugam, said in Washington on Monday. “The choice is a very stark one: Do you want to be part of the region, or do you want to be out of the region?”

He argued that “trade is strategy” and that without economic leverage, the United States was left with only military clout in Asia “and that’s not the lever you want to use.”

“It’s absolutely vital to get it done,” he added, referring to the bill’s passage.

The full article is here.  I find the willingness of progressiveness to toss this bill into the wind, for the purposes of indulging the usual memes, to be one of the most depressing features of American political life in years.

You will find an alternative perspective from David Henderson here: “If the U.S. government is a “less reliable ally,” that could be a good thing.”  I don’t think they feel that way in Singapore, South Korea, or Taiwan.

By the way, the fourth edition of Doug Irwin’s trade book is coming out.

Comments

Speaking as a progressive, I oppose the TPP because I think it is bad policy. In particular, everything I've seen about the intellectual property provisions is terrible. They seem to be about doubling down on the worst aspects of US IP law, exporting that to a bunch of countries that currently have better laws and making the whole enchilada harder to roll back by entangling it in an international agreement. Why is that kind of opposition to the TPP depressing?

@Ravi- because other countries IP law is even worse than the US's, that's why. There's no IP protection to speak of in most countries outside of this group: the USA, Japan, Germany, the UK. When corporations patent stuff, and file for foreign patents, they typically select for the final stage only the countries I list above, none others (not even France, rest of EU, and China is a special case discussed below).

Here in the PH there's no IP protection whatsoever. Even in Greece a lot of IP was counterfeit. China's IP protection is useless, unless you want to harass a Chinese competitor.

I agree US IP ;aw is broken, but under the theory of second best it's the best bet for the rest of the world.

To be honest, having no IP protection whatsoever sounds better than the mess that is US IP law.

No it doesn't.

The next 100 years aren't going to about who can manufacture the most socks. They are going to be about who can create the most thoughtstuff.

IP laws lets the market generate price signals for what the desired thoughtstuff is.

That is, they create scarcity by government fiat. May be good, may be bad. I like the scarcity in occupancy rights created by the government's system of land titles. Others, like the right to emit CO2, I find more problematic.

As the details dribble out, it appears more and more this is all about using the US government to enable some already very rich people to get even richer. Socializing costs, privatizing profits.

If the anti-TPP goal is the ancap dream of no IP law, then I'm going to support TPA strictly to stop that meme.

What, are all the unemployed music industry lawyers involve in negotiating trade deals now? That should work.

@The Anti-Gnostic--I'm with Dan Weber on this one. Every worthy venture I've been involved in--including one that's now a fixture in every household--started with the founder saying: 'can we patent this?'. If not, then it's like penicillin, not produced because no patent protection (penicillin is a natural mold, hence not patentable, only the method of manufacture is, as I recall), until the government stepped in. You need government monopolies (patents) to reward innovation. Or a prize fund (same thing).

You say: "I like the scarcity in occupancy rights created by the government’s system of land titles" - but why? Henry George called Fee Simple Absolute (land titles) a needless rent (sic)--and he was right. My family got rich (1% in net worth, min. $8M +) from DC real estate, and we did nothing but buy some old slums that happened to be near Metro stations. Why should we be in the 1%, mocking the rest of you, when some IBM fellow is impoverished? Why should Oprah Winfrey be a billionaire when Nobelian Kary Mullis got $10k for inventing PCR? (He made a lot more money being an expert witness in patent litigation, and of course from the Nobel Prize, still, it's a shame he did not make money directly from his invention). Why should invention rights for pioneer patents vest automatically in a corporation and the inventor gets nothing? If it's against public policy to have indefinite 'non-compete' clauses in employment law (and it is, ask AlexT), it should be illegal to have automatic 100% assignment of all IP rights by an employee to the employer (as it is already in Japan and Germany). Lots of other reforms needed too. But the world needs to embrace US IP law, and reform it, not eliminate it as AlexT and the "Free" crowd wants.

The laws of other countries do not concern me. Don't like them, don't trade there. Or lobby them on your own dime. It's amazing how much government intervention "free trade" seems to require.

@ Ray Lopez If not, then it’s like penicillin, not produced because no patent protection (penicillin is a natural mold, hence not patentable, only the method of manufacture is, as I recall), until the government stepped in.

Apologies for doubting you if you can back this up, but this sounds like the story of an insane person.

No one produced a wonder drug that everyone would be willing to pay for without being they absolutely guaranteed monopoly protection from the most efficient and safe producers? They really didn't think they could cover the costs of development from First Mover Advantage? Is this really likely to have actually happened?

@M - on doubting how penicillin was not produced since off-patent -- there's no need to believe me, just research it. A while ago a historian wrote a definitive book on it. Conclusion: because penicillin was difficult to manufacture, and because the natural substance was not patented, the government had to step in and fund a big "Moon Shot" R&D effort to make it in bulk.

If the next 100 years are about who can create the most "thoughtstuff"... then why would IP law change that?

You must be in a business where the Chinese are not the low cost supplier and you don't rely on design innovation to survive.

Example from my real business: I can design a new jewelry organizer that is flat packed (something new for the market) and thus much cheaper to ship from Amazon.

China had an inferior copy for sale within 4 months.

They even sold it under our brand on Amazon. Finally, our lawyer got them to cease and desist.

But they still sell a copy under their brand name. Which is fine because we did not patent the design in any way. We are comfortable with that as the sales are not huge. As the innovator our Amazon listing has hundreds of reviews which also protects us.

But there is no way my company could be coming up with innovations every 4 months to constantly "beat" the knock-offs. We also compete on price and quality, but you get the idea.

Its even worse if you are starting out. Wal-Mart will have no qualms stealing your innovative product and farming it out to contract manufacturers...unless you have a patent.

Now, if the issue is 100 year copyright or software patents for "one-click" I can understand the problem.

Now you know how US workers feel in the immigration debate. Speaking of, what all is in the TISA part of this deal? Does it benefit US workers or undercut them?

As I'm told, China is not a signatory, so I guess you'll just have to keep competing. Sounds like the USG needs to up the tariffs on China and tell them to stay home at their own universities.

I thought the whole economic trump card for everything was lower prices for consumers. I guess even libertarians are coming around to mercantilism.

It should be plainly obvious why, if you were interested in getting China to respect America's IP, that you would want a lot of China's trading partners on the same page. Comparing Wiki's list of Chinese trading partners with the countries in or trying to get in to TPP, you have 4 of the top 5 and 6 of the top 10. (They consider Hong Kong separate on that first list, and Germany isn't in on TPP simply by geography.)

As for which position "real libertarians" ought to hold, well, that's a silly debate, but Ayn Rand is generally considered the mother of the movement and was heavy on IP rights.

First, you're skipping over lots of terrible copyright provisions (longer terms, restrictions on fair use, criminal noncommercial infringement, requiring restrictions on TPMs, ...).

Second, as a software developer, no patents at all sounds like a huge improvement over the current US mess.

The TPP is not before Congress, the TPA (and TAA) is. The TPA is the authority to negotiate the TPP and then send it to Congress for an up/down vote. TPP will be available before any up/down vote.

On that description alone, I oppose the whole damn thing. Very powerful, wealthy people clearly do not want to be bothered with the democratic process.

Congress voting up-or-down on a fully visible bill is fully part of the democratic process.

Was the Base Realignment and Closure Act a violation of the democratic process?

No it's not. The whole point of parliamentary/ congressional government was that discussion and openness meant that deals weren't worked out in cloakrooms. And it's certainly at odds with the American political system that insists on super majority support for treaties. There is no reason to have representatives if their only function is to vote yea or nay on bills that magically appear before them. Let's just go to a referendum system in which case this treaty gets rejected.

So, was BRAC a violation of the American political system?

"Here in the PH there’s no IP protection whatsoever."

Legally, there is, of course. In practice, not so much, because of corruption and lack of resources in the police, Customs and the courts. A trade agreement and more rules on paper are not going to magically fix the deep problems of institutional corruption and weak rule of law in a place like the Philippines.

And, to put a finer point on it, the police do, in fact, occasionally raid markets where counterfeit goods are being sold. At the same time, the streets where those same police operate are becoming horribly unsafe with unsolved murders, kidnappings and armed robberies. Why would or should an international agreement change enforcement priorities?

I'm with Arjun on that.

As Tyler pointed out, because it's opposing something that could lift lots of people out of poverty or increase the living standards of poor countries for a reason that, in the global scheme of things, is comparatively minor. That doesn't mean it's not important; the IP provisions are pretty bad, but it doesn't seem likely that if TPP fails we're going to get a new and improved trade deal with all the good stuff and without all the bad stuff.

This is an argument for removing the bad IP parts from TPP and THEN passing it. Why must there be only a single decision point when clearly TPP encompasses a lot of different things that have nothing to do with each other?

You can't have a trade deal if each country's congress gets to "remove the bad parts" because "the bad parts" for each country are the things that it gives up to make the trade deal happen.

Similar to military base closings, Congress is voting to restrict itself to an up-or-down vote.

considering that it is the US that injected Its own IP preferences into the proposal, if the US backs off of those demands at the request of its congress, then it seems we still have a trade deal.

The similar to military base closings argument has got to be one of the least compelling arguments I've ever heard. Especially since we are always told that trade isn't zero sum. Well military base closings are as zero sum as it gets so of course you'd need a different mechanism for passing that legislation. Surely it would be far easier to agree on the conditions by which everyone's boat get raised by the tide of trade.

Locke: The IP portions are the best portions.

Sam: This legislative method still ensures that each country is better off with the deal than without the deal. Assuming Congress approves the TPA, which is of course subject to the normal Congressional rules of legislation, then Congress will still see the bill as is, and if they don't think it is in America's interests, or simply can't understand it, a failure to vote yes means it doesn't become law. Fast-track stops two or three Congressmen from adding amendments to the bill to neuter it -- the other countries won't sign on if America tinkers with the fine print any more than America should sign on if other countries' legislatures decide to start tinkering.

Spot on.

Also, it isn't as if opportunities to negotiate new deals vanish if the TPP is gone. The administration (and future administrations) need to go back to the drawing board and write a much narrower treaty in a much more transparent way.

Can you confirm that one of the trade deals on the table, the Trade in Services Act (TiSA), also opens the door for more immigration to the US?

http://www.breitbart.com/big-government/2015/06/10/revealed-the-secret-immigration-chapter-in-obamas-trade-agreement/

A video starts playing as soon as the page opens, I'm sorry to say.

That's usually a strong indication you're on a kook website.

Kind of like when a site relentlessly hawks the blog author's books. Rush Limbaugh's site is more subtle than MR.

I'm not familiar with the website, it came up during google searches. Can't remember where I first read the assertion. The video thing is a pretty widespread mistake, so I associate it with poor online strategy. But the insinuation of kookiness as disqualifying everything they say does not really satisfy my question. Is there any truth to the fact that the trade deals would also imply modifications to guest worker programs and other avenues for immigration separating the participating countries from the general regime practiced currently by the US? Does this site get it right? If not, are its quotes at least accurate? I'm neither American nor a potential partner country in these, so I'm as disinterested as they come. I'm trying to understand how it works, given the general secrecy surrounding the talks and my own political positions are in favor of limiting migration to successful countries.

It can't be true if it doesn't have slick web design.

I'm quite surprised to find a seemingly pro-TPP stance on this site. Since when did any treaty or trade agreement, negotiated behind closed doors under a veil of secrecy, using corporate boilerplate, ever produce something good for the general public? This is nothing more than US corporate interests using their bought-and-paid-for politicians to extend US corporate policy throughout the entirety of the Pacific.

If this agreement is so important for international trade, why isn't it being negotiated in the open, with input from all interested parties?

I'm quite surprised that you think this web site has any interest in producing something good for the general public.

+1

prior_approval wins the thread!

Same idiocy from P_A. Unless you believe the general public is parasitic on average, then this makes sense.

As usual, your criticisms reveal more about you than your target.

Then stay away and don't waste our time with useless comments like that.

Since every treaty. Have you ever seen a treaty negotiated in front of the glare of the public? It never happens because every two-bit interest group would bleat and whine. As is already happening now.

I agree with Millian. Theres a reason negotiations are not done in public. Nothing would ever get done.

Ok, well then we might as well do it in the open. Good point.

Negotiations in private are fine, but 'Pass it to see what's in it' has not worked out well for us.
Once burned....

What's with this bait and switch routine. this isn't a treaty. The second TPA passes the constitutional obstacles to ratifying a treaty somehow magically disappear. It's almost like the Framers conceding the necessity for secrecy in treat negotiations create a means by which that secrecy was offset by a higher bar to congressional approval.

Since when is it progressive to support forcing poor countries to pay even more for already wealthy pharmaceutical companies?

I thought progressives didn't care about poor people in other countries? If they do then the bill is a huge winner

Progressives are all about extending government control. This bill is a huge win for them.

And thus that's why progressives are vehemently opposed to it. Or is Nancy Pelosi not progressive enough for you?

Tyler complains that TPP opposition has been nothing but empty rhetoric indulging in the usual memes and then gets a seemingly serious response that's nothing but empty rhetoric indulging in the usual memes.

Exactly. Process is always more important than results. This process is terrible.

Process is ALWAYS more important than results? Um, ok.

Indeed, how can the experts possibly estimate the benefits of a deal when they are not privy to the details?

http://economixcomix.com/home/tpp/

From the link: "Copyright 2014, Michael Goodwin. All rights reserved". Isn't it ironic? Sadly, coherence died in the making of this cartoon.

It's like the guy who says we can read about how bad IP is if we buy his $250 textbook.

You can download Goodwin's econ cartoon book for free using uTorrent, FWIW. I did. Hey, I'm idealistic about IP but not stupid.

Does that comic have an argument in there somewhere?

This is exceptionally awful. I'm particularly confused by the argument that it was negotiated by experts, not laypeople. Is that considered a negative now? And if the test is whether it's negotiated in public and comprehensible to laypeople, time to throw out the entire Code of Federal Regulations, the income tax code, and about 90% of the other laws.

And by "exceptionally awful" I'm not really referring to the argument. I'm referring to how incredibly unfunny it is. It's not really a comic (or "comix"), it's just an article that he drew some more or less unrelated pictures to slap on. I'm guessing this guy is a big fan of xckd

xckd is pretty good though. And by “exceptionally awful” you should have been referring to the argument.

"For the purpose of indulging the usual memes" is nothing more than a projection of bad faith.
The analysis here presents a false choice between the TPP and no economic relationship whatsoever.
This is a shallow post, reeking of presumption.
Delegating authority to a supranational entity has to be in the interest of the nation, not the elite of several nations who have ensconced themselves in a fraudulent cocoon of bad economics.
Sorry Tyler but your knee-jerkyness here is another new low for a blog that has unfortunately descended towards partisan irrelevance.

Yeah, I love that basic principles of public reason and government accountability are dismissed as "the usual memes".

The passage of the USA PATRIOT Act was also sold with hysterical false dichotomies like this: "Either sign this bill without reading it, or terrorists blow up the world!" The difference being that the USA PATRIOT Act was, at least in principle, available for public review before its passage.

I wish I could say that Cowen is an embarrassment to "libertarianism", but the truth is that this kind of double standards (government accountability is good when it benefits plutocrats, bad when it stands in their way) is par for the course among self-described "libertarians".

" is par for the course among self-described “libertarians”." And everyone else.

Obama is for the TPP so anyone who supports it is a raving partisan conservative zealot

Definitely this. There is a lot of disagreement about what the impact of TPP will be. This is a lot more complicated than just a matter of negotiating some lower tariffs. To profess that progressives could not oppose this out of anything but bad faith just makes you sound like an ignorant fool (or a cynical liar).

"If this [TPP] collapses, Pacific Rim countries will be aghast,” said Shunpei Takemori, a professor at Keio University in Japan,

Not that China is a Pacific Rim country. They are a minor player in global trade after all.

There has been an increase in production of smelling salts since TPP is likely to collapse to help all those Pacific Rim countries that will be aghast.

I find the willingness of anyone to promote a secret agreement as being good for those unable to read it incomprehensible. Well, unless one believes in the tenets of the Virginia School, that is, in which case it is easy to understand the sort of motivations which are proclaimed as being policy based, even when the policy is hidden from all public view, presumably including the view of its publicly proclaimed proponents.

But then, when has any GMU econ professor ever been bothered by having literally no chance to know what they are supporting? However, it is certainly possible that Prof. Cowen has provided such links as https://wikileaks.org/tpp-ip2/ or https://wikileaks.org/tpp-enviro/ to allow his readers a chance to peruse some of the treaty text.

On the other hand, America doesn't criminalise people for saying bad opinions they believe, unlike the recent entrant into the world of human rights, Germany. That counts for something.

I have a totally water-tight argument in favor of TPP which would certainly convince everyone. But I cannot reveal it until all people first agree that passing TPP is unequivocally the only possible way forward for the world.

"I find the willingness of anyone to promote a secret agreement as being good for those unable to read it incomprehensible"

Yep.

What surprises me is that Cowen supports this secrecy. A new twist on libertarianism.

So... the world is divided between libertarians who are privy to secret information and those of us who are not?

All government machinations at every level are secret.. At the same time there are no secrets from the government. "They" know all about you but you can't know anything about them.

This is the base dishonesty of many anti-TPP people.

They know, because they've been told a thousand times, that Congress will have weeks to have 100% of the full bill in front of them.

But for some reason "negotiated in secret" becomes a sticking point, when, of course, things have always been negotiated behind closed doors. When one Senator walks into another Senator's office and starts talking about a bill, the New York Times isn't there.

(There are good anti-TPP arguments. The fact that it's rumored to be 40K pages is one of them. But Congress can just vote no when they see it.)

So what's being voted on now? Why the truncation? And again, what is the precise problem with Asian trade (of which there seems to be plenty) that apparently requires a 40K page law/treaty/somethingsomething to overcome?

So what’s being voted on now?

You seriously don't know? Despite it being posted in the comments by many people many times?

It's the TPA. Congress is voting on whether to give TPP an up-or-down vote when it comes out. Similar to the way Congress handles military base closings -- they agree to have a group write a proposed law of which bases will be closed, still reserving for Congress the right to kill the whole thing by voting it down if something ugly comes out.

The president is a plenipotentiary. If he wants to negotiate treaties, he can have at it and present them to the Senate for its consent. Explain to me why there has to be a law to vote on a law.

It is a deal in advance that it is an up-down vote that nobody can change individual provisions or hang unacceptable amendments on it.

Thanks for confirming my suspicions--they want to ram a shit sandwich down everybody's throat.

Sorry representative government is so messy and unpredictable. Looks like they will just have to negotiate treaties with individual countries and present them to the Senate, as Constitutionally prescribed. Otherwise, importers can navigate as best they can the legal regimes of other sovereigns like everybody else.

Congress has restricted itself plenty of times before. I keep on talking about military base closing and it keeps on getting ignored but I'll keep on doing it. Was BRAC illegal?

A vote of "yes" on TPA still reserves the right for Congress to vote down the TPP bill if Congress wants to.

as Constitutionally prescribed

There is absolutely nothing unconstitutional about the TPA process. The Constitution says very little about the internal procedures of the Legislative Branch outside of needing a Majority to meet Quorum. Here, here's what you'll find in Article I:

Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members, and a Majority of each shall constitute a Quorum to do Business; but a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.

Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member.

I'm very critical of the TPP for many reasons, but no one would negotiate with the USA if Congress had the right to nitpick after negotiating the deal. It has to be all or nothing or who in their right mind would waste their time even speaking with the USA about trade?

There are also reports that certain provisions will NOT be public for several years after the treaty takes effect (I believe they are investment-related?), which is a much more serious argument re: secrecy.

There are also reports that certain provisions will NOT be public

There are also reports that people who post against TPP are child pornographers.

All this asinine stuff isn't moving any kind of Overton window; it just makes extremists looks like extremists. Congress cannot pass a secret law. There is no such thing.

If John Boehner decides to bring the treaty up for a vote the day after the agreement is made that is entirely within his prerogative. You have no idea how long there will be to read the treaty errrr I mean agreement.

If this chart had maintained the same trend in the last 40 years that was established in the first 40 , I'm certain there would be much less opposition to TPP , including among progressives :

https://ddoublep.files.wordpress.com/2014/09/cbpp-income-gains-chart.png

Fix that chart , and future trade deals will have smooth sailing. Ignore it and you should expect stormy seas - and not just for "free trade".

How does that chart have anything to do with TPP? Because if we did not trade with other countries everyone would be better off somehow?

When every single nail you see is "inequality," then there is only one kind of hammer that isn't evil.

Forget Obama's supposed foreign-policy failings; the stupidest American geopolitical decision since Iraq is coming from his erstwhile defenders.

Aren't all of the "Obama foreign-policy failings" just a consequence of the Bush heritage?

Depends if we think the Arab Spring was good or bad. If it's bad, it's Bush's fault.

" stupidest American geopolitical decision since Iraq "
Leaving in 2011 was significantly stupider than going in in 2003.

I assume that's what you meant.

Leaving in 2011 was significantly stupider than going in in 2003

How do you measure stupid? Blood? Treasure? Or how self-righteous you feel writing blog comments?

Why do you think it was a worse decision to leave in 2011 than to enter in 2003?

40,000 pages, that's why.

Yep. This isn't a trade agreement in the traditional sense. If all we were doing was eliminating tariffs, fine, lets do it. 40,000 pages is a lot more than just eliminating tariffs.

The rest of Shanmugam's response is equally interesting:

Where is the United States? It's been the guarantor of peace, it's been the guarantor of progress and property up until now. If you don't do this deal, what are your levers of power. How integrated are you in to the Asian economies?

And meanwhile there's a whole series of other trade deals that have happened, will happen and from which you will be excluded. So the choice is a very stark one. Do you want to be part of the region? Or do you want to be out of the region?

And if you are out of the region - which, as I said, is 40% of the world's GDP - not playing a useful role, your only lever to shape the architecture, to influence events is the Seventh Fleet and that's not the lever that you want to use, or that you can really use at every instance. Trade is strategy, and you are either in or out, and what does it mean for your jobs, for your investments, for your prosperity, from your perspective?

And for your credibility, let's be frank about it, the President wants it, everyone knows this is important and you can't get it through, how credible are you going to be? And then if you look at it from our perspective, you want to do deals with the United States, you want to bring in the US, you want to talk to the US, you will start having many more questions - about, look, can we get anything done? And the world doesn't wait, not even for the United States. ... That's how stark it is.

It seems plausible that Shanmugam himself doesn't seem to believe in the TPP as a strictly economically-mutually-beneficial trade deal; rather, it's to encourage economic integration amongst a US bloc, so that in the future there will be shared geopolitical interests in peace within the bloc, in particular American interests. It's taken as given that the non-US countries in that bloc would cheerfully encourage US 'levers' in return for US protection of peace, progress, and property, and this is a country's minister of foreign affairs saying this, not a pundit.

Singaporean here.

I don't get what you are saying. Isn't it obvious that it is not just strictly trade, but also about building a relationship that is mutually beneficial in strategic terms? Clearly, having more influence will be one of the benefits for US.

Why are you surprised? Or am I just not getting you? Singapore is a bastion of political realism, after all.

""""Clearly, having more influence will be one of the benefits for US. -"""

This is said for every trade treaty that is proposed, yet for all the interest the US has supposedly gained it loses jobs, goes deeper into debt and gets bigger trade deficits.

Please tell me the benefits?

I’ll take door number two this time, get no worthless influence and instead take the cash and jobs

If you're going to blame international trade for the US budget deficit I'm not sure you can be reasoned with.

yet for all the interest the US has supposedly gained it loses jobs

What jobs do you think that are currently protected are going to be lost?

I'm going to repeat my question because I've never seen an attempt to engage it:

What US industry currently benefits from protectionism that the anti-TPP people are worried about the US losing?

For this question, I will let the anti-TPP people pretend the TPP says whatever they want it to say. Assume the worst case.

I guess TPP could demand open borders. What else?

If I understand you correctly, you hold the belief that political influence is literally worthless and you disagree with the notion of free trade as a contributor of economic development, correct?

If so, I choose not to engage you. You may have the last word if you wish.

I can write you a free trade agreement in one sentence: "Tariffs on goods exchanged between our countries are 0.0%." We appear already to have plenty of trade with Asia. I can tell you that just by going to Walmart or Best Buy or walking on the Georgia Tech campus. Again, what is the supposedly dire problem we need 40,000 pages of legalese to tackle?

So the choice is TPP/peace or no TPP/war? It seems to me that there's all sorts of clothes in my closet with tags that indicate that they were made in Viet Nam, Cambodia, etc. Plenty of things scattered through the house with "China" stamped on them. Looking up from the depths of existence there doesn't seem to be any lack whatsoever of trade with Southeast Asia. In fact, how could there be more?

If the TPP fails to come to fruition will the new Mongol horde make everyone buy Mao suits at gunpoint? Or will Hollywood movie and television distributors be forced to defend their profitable enterprises with their own money? Will smokers in Shanghai unwittingly purchase phony Marlboros? Furthermore, what's the enforcement mechanism that makes the godless Commies follow the new rules? Do indecipherable signatures of unelected apparatchiks on incredibly complex trade agreements guarantee that no force will be used in international affairs for the foreseeable future?

Maybe I'm all wrong about this. Are the Chinese completely excluded from the negotiations? If so, wouldn't they be a little miffed?

Yes, the chinese are not part of the TPP. Part of that is because in the past, since achieving MFN status, they've been obstructionist to further trade deals. Reportedly, the TPP was structured to enable the Chinese to "come in from the cold" should they choose to do so in the future. That doesn't mean China hasn't been negotiating their own trade deals with other pacific rim countries though, like RCEP
https://www.eff.org/deeplinks/2015/06/just-when-you-thought-no-trade-agreement-could-be-worse-tpp-meet-rcep

"Where is the United States? It’s been the guarantor of peace, it’s been the guarantor of progress and property up until now. "

What about 40 or so civil wars and coups instigated by the USA, or the fact that reputable international polls find the USA to be the greatest threat to world peace (I can look them up if you can't find them ...)

As I've commented several times, rejection of TPP leaves the U.S. with only a military option to resolve disputes in the region. Cowen faults "progressives" (sp), but there are lots of (neo)conservatives who prefer the military option over the compromise approach inherent in a trade agreement such as TPP - the approach of dictating rather than negotiating. The analogy isn't perfect by any means, but the approach preferred by the (neo)conservatives is essentially the same approach that was taken with respect to Japan in the early part of the 20th century - an approach that included military dominance over the Philippines - the Philippine American War - which established the Philippines as an American colony to secure our sphere of influence but came at the cost of a million casualties. And what was the end result of that approach?

The only thing backing any treaty is the threat of violence. Are you just now finding out how the world works?

Businesses and people trade; governments don't trade. It is up to US and Asian businesses how to navigate the laws of various sovereigns, not to rig the game with supra-national deals. What is the problem here that takes a 40,000 page double-top-super-secret law to solve? And if this thing is actually progressive instead of, as you strangely insist, neo-conservative, why are most Democrats opposing it and most Republicans (I think) favoring it?

So lets pull US troops and ships out of Asia. If there are disputes in the region then let the region deal with it. The US will sit on the sidelines and sell to both sides.

There is plenty of non-military dispute resolution in the world today (and the countries covered by the TPP are really a coherent region in any meaningful sense of the word). The TPP is not the only treaty on the books and not the only treaty that can be negotiated in the future. As others have noted, there is already abundant trade with these countries, and this treaty is not obviously a step in the right direction.

"rejection of TPP leaves the U.S. with only a military option to resolve disputes in the region"

Please, pulllease keep this man far away from any influence of any sort whatsoever with regard to any thing.

Are we about to go to war in the Pacific unless this "trade deal" gets inked--with whom? Are electronic devices rotting in the factories for lack of access to US markets? Are Apple and Microsoft unable to turn a profit because they're bleeding IP to the perfidious slant-eyes? Are container ship crews bobbing in rafts in the Pacific because heartless Americans won't let them dock in LA?

I was under the impression that trade and investment with Asia was going along just fine. The number of Asian students and businesspeople I see in my town, American millionaires writing back from Asia telling us how gangbusters it is, goods at Best Buy, etc. seems to bear that out. Unless somebody can demonstrate for me an actual problem that takes a 40,000 page law to solve, I'll assume this monstrosity is in the special interests, not the national interest.

Just think of the money the US can save if it no longer worried about having influence in Asia and instead pulled US troops out and just worried about making money.

The US has been trading jobs and money for influence in Asia for more then a hundred years and the influence we gain seems to be worth nothing.

a couple of examples:

- airplanes need one certification and then they can fly and land everywhere. Cars need to be certified by every nation's safety regulator. The European Union does now have a single regulatory authority which saves a lot of money for crash tests, safety studies and changes in the manufacturing process. If you wanted to buy a car from another country in the past, you had to pay for an individual safety assessment. If we had a treaty in which every country would recognize each other safety certificates, it would lower production cost and spur the used car market (currently, importing a used US car can cost you thousands in fees and possible modification cost).
- the same goes for drugs. Why shouldn't pharmaceuticals that are good for the US patients not be also good for Europeans or Asians and vice versa? Common recognition of licencse would not only also save cost but speed up time-to-market.
- when the Pebble smartwatch was introduced in the US, exports to Germany were routinely seized by customs there because ... well, I have no idea on what grounds, but some obscure regulation it was. Again the same thing: products get more expensive because of all the legal fees involved and time-to-market is increased. Here, trade barriers mostly hurt small companies because they don't have the army of lawyers Apple or Pfizer employ.

in the end, it's mostly the consumer that pays for all these non-tariff trade barriers. sure things still work out most of the time somehow. I have smuggled tons of stuff into this country by either hiding it in my luggage or giving false declarations to customs but it's all just unnecessary cost and hassle.

"airplanes need one certification and then they can fly and land everywhere."

That may be true for individual airplanes flying exclusively international routes [for practical reasons] but non-U.S. airlines can be and have been banned from U.S. airspace by the FAA if the FAA feels they are not up to U.S. safety standards. There are cases in other countries, too, where safety inspectors will ground a foreign airplane and prevent it from taking off if they have doubts about the airplane's air worthiness. This is recognized as a legitimate exercise of national sovereignty.

OK. But why can't we deal with them one at a time where we can see them? If international standards on automobiles would be so useful, then why hide it away in a 40,000 page monstrosity?

You are under an impression while others have real world experience.

18 months to get an American made bird food approved for import to Taiwan.

It took so long that some rules change during the process.

Again...its bird food. Not nuclear weapons parts.

Oh dear God.

Taiwan is telling an American company what it can do in Taiwan. This injustice cannot be allowed to stand.

No man is free so long as American bird food exporters have to wait 18 months before they can sell bird food in Taiwan. "We shall over-co-o-ome..."

Without necessarily approving of the vote of those House Democrats who voted against the trade adjustment legislation, could I point out that some Republicans also voted against it? Sweeten the deal and try again. Or if Republicans are really that set against trade adjustment, they can pass fast track without it. I don't see how "progressives" get all the blame.

I can't even understand the claim being made here. If trade is a lever, then surely you want to use it cautiously and in a targeted way to achieve your political aims? Why would a big bang all-in-one deal be useful in the application of power?

This is my question too. Can anyone elaborate this notion of relations under a trader agreement as a lever of influence? Doesn't the agreement take away the power to apply pressure to trade partners?

When you negotiate a trade deal with the USA, the USA gets to include things we want.

When China sets up their trade deals without the USA, our interests are not considered.

This is really simple.

So let's make a series of bilateral trade deals with other nations. Your argument boils down to complex, unread treaty or nothing and that's a childish argument.

Trade areas make it easier to come away with even better deals. You've hear of GATT and the WTO I presume.

I'm also not for this deal or against it. I'm just saying what the rationale is

"for the purposes of indulging the usual memes" is a shitty and disingenuous strawman. in general i'm happy to read your posts even when i strongly disagree with your opinion, but with TPP and grexit you've been smug and contemptuous.

Don't we still have significant trade with those countries? Is it not possible to engage them in economic negotiations through other avenues or to pursue an alternative agreement? Jumping to the conclusion that not passing the TPP is tantamount to eliminating economic activity as a negotiating lever with all of East Asia seems extreme. The article is saying that we will lack economic negotiating power without the TPP...well, compared with what? Do we not have economic negotiating power now? Has our economic negotiating power historically grown over those countries with whom we've signed trade agreements? What about the effect of driving a hard-bargain? The U.S. rejects this trade deal because the American people don't believe the terms are in their interest - if a Trade deal with the United States is still a good deal for East Asian countries would rejection of this deal not set the U.S. up in a stronger bargaining position to get a better deal on behalf of the American people? In the past I've gotten the impression that many negotiators recommend starting with "No", or at least being well prepared to.

No, the disappointing part of the American Political System is we have a Congress is trying to kill a peace deal in the Middle East. TPP is nothing compared to how much another ground war in the MIddle East will cost this country.

In my view, TPP was too big and ambitious and these East Asian were not just going to willingly sign. And nobody explains how the Chinese would simply mandate this with trading partners. The Beef producers in Korea or India retail, etc. are not going to simply go away here because the Chinese negotiate.

And why are we jumping that the chances of War! are going to significantly increase? Why does it bother the average American that Korea signs trade deals with China? Our National Security is not at risk with Chinese Investment banking. And considering China blowing billions building islands to nowhere and ramming boats in the South Pacific, I don't see how China is winning Allies here.

Actually, America likes central planning and big government abroad with its grandiose global policing and regime changing ambitions, domino theories, etc.. Americans would rather fight in Donetsk than address any of the tough law and order problems in Baltimore or the trillions in infrastructure costs at home.

The world wants to be the US in many Americans eyes since the rest of the world is poor and have to squat for their toilets.

Resentment of TPP in the US does not conflict with the notion that the US is not really a free trade nation. Americans pride themselves on their insular, though large domestic market. They don't need the inferior competition of the world.

America is the best to Americans. It almost borders on xenophobia. Hence the need to police the outsiders into civilized, military worshipping Americans. Americans are scared of globalization but do not mind molding the world to fit itself, as long as its an inferior version. US corporations are not fearful of globalization of course.

"If you speak two languages, you are bilingual. If you speak only one language, you are American. And if you speak only one language, have never studied geography, and do not have a passport, you are probably a member of Congress."

I count the comments so far as running about 68-2 in favor of "TC's lazy mood affiliation dogma is massively self-discrediting".

Commentators may be interested in this hill article suggesting that China is actually quite happy with this agreement.
http://thehill.com/blogs/congress-blog/economy-budget/244611-why-congress-should-vote-no-on-the-pending-pacific-trade

The upshot is this:

-Chinese companies are pouring FDI into local Asian economies.
-Chinese labor has already gotten a lot more expensive and will continue to get more expensive.
-Chinese companies would like to flee China, into poorer Asian countries, while continuing to get sweetheart access into America.

So the basic premise of the argument being sold would be worthless bullshit even if my argument above wasn't true - "influence" and "leadership" are mindless, meaningless buzzwords along the lines of "Please give us stuff for free and we promise we really love you bae lol", a statement directly negatively correlated with truth and totally lacking in empirical metrics and falsifiability anyway. But throw in this angle and, and the argument goes all the way to literally false.

They just make up any fairy-tale bullshit they feel like spouting to sell you on this agenda, because they think you're stupid and not listening. The best thing about the modern era is the widespread disinterest in believing anything they say.

Tariffs are already very low. Labor arbitrage has already been done. I don't see much more damage could occur. It would be Chinese workers losing jobs to Vietnamese.

Ah, so that's why we simply must pass TPA/TAA/TPP.

Nobody is making a positive case for this law. Trade with Asian countries is enormous and they are happy to lap up our bonds and derivatives. The fact that Apple and Microsoft want more IP protection on the other side of the globe is not my problem. They can negotiate that on their own.

Shocked by Tyler's mood affiliation over the last few weeks in re TPP (e.g., even praising Summers' hysterically overwrought column comparing TPP to the League of Nations).

Haven't really seen any engagement with the arguments against free trade (e.g., the predictive validity of any model that has shown significant benefits to it is questionable given the NAFTA experience; the Cleveland Fed's study showing the dis-employment effects for American citizens) in general or the TPP in particular (e.g., no one knows whats in it which makes any positive / negative case weak, IP regulations, etc.). Instead we get simplistic boilerplate that ignores real-world effects like redistribution

I find it fascinating that people who love them some government technocracy and love Obama are getting cold feet on this.

Whatever happened to the blind trust of "we have to pass it to find out what's in it?"

/Snark off

Free trade is already very free, in terms of tariffs.

The main sticking points now are regulatory. For example, getting the certification to import American bird food to Taiwan took more than 18 months. Then when it arrives they can find very ticky tack reasons to make you destroy your product. (A competitor's product from a major US brand was found to have one marijuana related plants seed in his mix. Everything had to be destroyed, and he faced drug charges.

Another example is that since the US requires foreign vitamin exporters to occasionally fly USDA inspectors to overseas plants, Taiwan is trying to do the same thing for US vitamin makers. Except Taiwan is a tiny market for pet vitamins, and you cannot afford to pay their plane ticket and hotel for semi-annual $10,000 order. (This story is not firsthand so take with grain of salt...anyways you get the idea: if a country wants to stop imports via hassling rules and regs, they can do so.)

Next we have phyto-sanitary certificates which always cause delay and apparently are done by eyeballing a shipment by a government employee. Its not

So, if you think about how you would make this more "free" to trade, you start getting into harmonization of regulations or reciprocal acceptance.

This is probably why the agreement is so long and detailed. Imagine getting 10 countries to change their agricultural inspection process. It also offers up areas of legit worry.

Its also why it has to be negotiated in secret. Any opening of rice markets for example causes Asian voters to go ballistic - its not just Americans who lose jobs to trade.

Also, I know many people go to Wal-Mart and assume everything is made in China there, so by the transitive property, everything in America is made in China, but its simply not true. And, again, tariffs are already at zero, so how much more damage can be done?

Finally, despite my snark at the beginning, is the progressive worry about this deal a sign that even the people who like government the best are starting to have some fatigue of trust?

I'm thinking of the VA, where every attempt to reform flounders. No one gets fired. Or the tax code which is so riddled with crony deals. Or the ACA spending a billion on failed websites? Or the OPM hacking.

Is this finally rubbing off, and the main avenue of acceptable dissent is trade deals?

I also think the government was far too stealthy in setting up this deal. It feels like it just popped into existence. Maybe Obama wanted it that way to avoid these fights. Or maybe it just happened while big news elsewhere overshadowed it. It feels very "oh, by the way, we have this new trade deal ready." Keep in mind other countries media may have been discussing this far more - and their citizens more ready for this.

as a progressive, i get tired of the insinuation that i must by definition love big government and the more the better. i want efficient and transparent government, where decision-making is done in the light of day. i'm as sick and tired of bad back-alley dealing and opacity and corruption as anyone on the small-government right, i just don't believe we have to throw the baby out with the bathwater we drowned it in.

OK, good. I actually was hoping for a response like this.

I'd suggest progressives stop demanding more and more programs then, and instead, work on that efficient and transparent government. Fix the VA. Fire incompetents at OPM, VA, ATF. Fire people at IRS who break rules and targeted people. Fire people and shame them at the EPA when they use secret pseudonymous emails for government work.

Your guy is in charge. Your media is sitting there with a headline a day to use. Use it to force results.

Instead nothing ever happens. And a new program is proposed as a shiny object. And these guys all end up rich.

the center-right hack in the White House? the fact he's identified in any way with progressive values has set the movement back decades.

"Another example is that since the US requires foreign vitamin exporters to occasionally fly USDA inspectors to overseas plants, Taiwan is trying to do the same thing for US vitamin makers. Except Taiwan is a tiny market for pet vitamins, and you cannot afford to pay their plane ticket and hotel for semi-annual $10,000 order."

So we need to pass TPP for $20,000 annually? That's probably 10% of the cost of the lobbyists hired to shove TPP down American throats.

Again, this is an example. You can apply it to whatever scale you would like.

And you cannot expect every country to be a massive market. And if they are, they usually have their own manufacturers in the field.

The long tail also works here.

Again, I really don't care about the TPP. I'm just saying what it might be trying to achieve and why that would be complex.

In addition to exporting to Taiwan, I import even more to the USA. I'm fine with current tariff levels.

I'm just suggesting the barriers to American products are not import duties so much anymore as foreign rules designed to make it a pain to export.

I'm flatly opposed to global regulatory harmonization via treaty on any topic related to commerce (and most other places), It's been a massively harmful influence in drug policy, and it will do the same everywhere else. Treaties are insanely difficult to revise. The limits of prohibited conduct in commerce - and in personal affairs - should be revisable. Passing laws are a huge barrier already.

That doesn't mean I'm against regulatory harmonization where it makes sense. I'm just against doing it by treaty.

The TPP is about making regulations permanent. They can't go up, which progressives hate. They also can't go down, which conservatives should hate. You would hold that both sides would agree that they should *never* be effectively beyond revision.

I could see agreeing with that. Ideally, really, these governments would wake up and realize importing some products is not the end of the world. Imports add to growth, and you want a healthy balance of trade.

Taiwan is slowly improving this way, but it takes time.

As a rallying cry, "Free the bird food trade with Taiwan" doesn't quite recall Paul Revere. I think that might be one reason for the lukewarm receipt TPP has gotten - the important, low hanging fruit is gone. Now we're bickering about seeds.

Man, the commentariat is really showing off their brainpower now.

Its called an example. A concrete example that I personally have experienced, so I know its real.

And, of course, the American workers on the line in PA who make the bird food appreciate you cavalier attitude about their work.

Its not like America is a major food processor that could export pet food to Taiwan, a major consumer of foodstuffs and ship back iPhones.

No, we can't have that! Because its not important enough. It doesn't sound dignified enough. Harrumph.

Islands are particularly vulnerable to invasive pests that can be brought in through imported food so there are pretty legitimate reasons for a country like Taiwan to want to regulate imported food items. Is it reasonable to expect a single trade treaty to strike the perfect balance in all countries between mitigating public health or ecological problems and allowing a freer flow of goods across borders?

I wouldn't think so. What some people call "non-tariff" barriers could, in some cases, be perfectly valid regulations that certain democratic societies recognize the need for even if the need isn't immediately obvious to foreign businesses or trade negotiators.

Tyler, you have a neocon majority in Congress. Who are these progressives you speak of?

This debate reveals another funny wrinkle in libertarian economics:

Government enforcement of IP to support higher prices = good. Government enforcement of borders to support higher wages = bad.

Higher Prices = more corporate profits
Higher Wages = less corporate profits

Which libertarians have supported the IP provisions? Tyler has said they aren't good, although worries are overblown. That's hardly a resounding endorsement.

Well, if one considers self-professed libertarian Prof. Cowen an example, then he has written things like this - 'It is less commonly recognized by the critics, however, that tougher IP protection may induce more foreign direct investment. Why for instance invest in a country which might subject your patents and copyrights to an undesired form of compulsory licensing?' or this 'I think the benefits of this IP extension may well outweigh the costs, when it comes to the developing nations involved in TPP. At the very least it seems to me up for grabs.'

From a post called 'Why TPP on IP law is better than you think' - but then, being a disloyal reader, it is a lot easier to remember all the times NYT columnist Cowen is shilling for the same thing as his employer. Though it is fair to say his support is at least couched in conditionals, though firmly based on the idea that TPP is critical to pass. Even though it is reasonable to assume he is utterly ignorant about what the actual treaty text says, seeing as how it is officially unavailable to read.

http://marginalrevolution.com/marginalrevolution/2015/04/why-tpp-on-ip-law-is-better-than-you-think.html

I guess Tyler is for the TPP just like Nancy Pelosi was for the Affordable Care Act when she said "But we have to pass the bill so that you can find out what is in it"

Tyler Cowen = Nancy Pelosi !!!!

Who knew?

It could enable foreign corporations to take a jurisdiction to court for wage or environmental protections.

That is not democracy.

We should seek trade deals that stoke a race to the top, not a race to the bottom.

How is it that forcing protection of US pharma IP onto other nations can be considered as "free trade"? If it were "free trade" it would be easier, not more difficult, for IP, knowledge and abilities to flow across borders.

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