The Trans-pacific Free Trade Charade

The Trans-pacific Free Trade Charade

Joseph Stiglitz @ Project Syndicate

The reality is that this is an agreement to manage its members’ trade and investment relations – and to do so on behalf of each country’s most powerful business lobbies. Make no mistake: It is evident from the main outstanding issues, over which negotiators are still haggling, that the  TPP is not about “free” trade.

New Zealand has threatened to walk away from the agreement over the way Canada and the US manage trade in dairy products. Australia is not happy with how the US and Mexico manage trade in sugar. And the US is not happy with how Japan manages trade in rice. These industries are backed by significant voting blocs in their respective countries. And they represent just the tip of the iceberg in terms of how the TPP would advance an agenda that actually runs counter to free trade.

International corporate interests tout ISDS as necessary to protect property rights where the rule of law and credible courts are lacking. But that argument is nonsense. The US is seeking the same mechanism in a similar mega-deal with the European Union, the Transatlantic Trade and Investment Partnership, even though there is little question about the quality of Europe’s legal and judicial systems.

Read more…  The Trans-pacific Free Trade Charade

The U.S. Trade Agenda and the Trans-Pacific Partnership

@ – Discussion by Michael Froman, US Trade Representative

Read here

Trade agreements should be evaluated on their economic benefits, but the area I want to focus on today are really its strategic—its strategic merits. You know, traditionally, people looked at economics .. as a foundation of support for strategic issues in terms of how it allows a country to exert military strengths. But over recent decades, it’s been clear that economics and economic influence itself is a tool of influence and power around the world.

And as we entered into TPP, the goal and the challenge was really whether we could meet the ultimate strategic test of our time, which is whether the U.S. could revitalize the rules-based trading system that has led since World War II. For seventy years that trading system has greatly benefited the U.S. economic as well as economies all over the world. But in recent years, there have been a series of significant shifts—globalization, technological change, the rise of emerging economies—that have combined to put threats on the global trading system. And we can see that stress around the world where we see alternative models, more mercantilist models, presenting a challenge. So our overarching strategic aim of the—of our trade policy was to help revitalize that order, both for the benefit of the U.S. and for the global system itself.

And we believe TPP does that really in three major ways: first, by establishing rules of the road to ensure that tomorrow’s global trading system is consistent with American values and American interests; secondly, by strengthening partnerships with our trading partners around the world, laying a foundation for pursuing broader mutual interests; and thirdly, by promoting inclusive development so that the benefits of global trade are both greater and more widely shared. And that helps—both by encouraging good governance, transparency, anti-corruption measures, sustainable growth, all of that can help contribute to the alleviation of poverty and hence the promotion of stability around the world.

For all these reasons, TPP has been a centerpiece of our rebalancing strategy towards Asia and perhaps as the most concrete manifestation of that strategy and underscores that the U.S. is a Pacific power—we always have been, we always will be—and that our partners in the region want us to be deeply embedded with them, both on economic issues and on broader issues.

But the strategic stakes of the—extend actually beyond the Asia-Pacific because fundamentally, it presents—TPP presents a choice between two futures, one in which the U.S. is helping to lead on trade and starting a race to the top in terms of global standards, and the other where we take a backseat or sit on the sidelines and allow a race to the bottom that would undermine U.S. influence around the world and result in a lower standard, less open global trading system….