Voters of all stripes have recognized the Trans-Pacific Partnership (TPP) as another betrayal of working people, and they have resoundingly rejected it. Despite that, President Obama continues to push it, to the extent of possibly seeking passage in a \u201clame duck\u201d session of Congress.<\/p>\n
President Obama\u2019s pushing of the TPP is recklessly irresponsible politics that benefits Donald Trump who is the outsider candidate. Hillary Clinton is the insider who has touted her links to President Obama, and she still lacks credibility regarding her TPP opposition because of her past endorsement.<\/p>\n
In the current dangerous political climate there is no room for error. Yet, that is what we have. Clinton has refused to condemn the TPP in the Democratic Party platform, setting herself up for Trump. Not only does she risk handing the issue to Trump, giving him the economic high-ground, she also sets herself up as \u201ccrooked Hillary\u201d. She was for the TPP, then she was against it, and now she is for it again? That plays into voters\u2019 worst assessment of her character.<\/p>\n
As for President Obama, he must be made to realize that every time he pushes the TPP, he might as well be campaigning for Donald Trump.<\/p>\n
Unconvincing economic arguments<\/strong><\/p>\n The TPP\u2019s economic arguments are unconvincing. Past agreements stand discredited, having resulted in lost manufacturing jobs; worsened trade deficits; and wage stagnation.<\/p>\n Economic models show trivially small estimated gains, despite the fact these models are rigged by assumption to show gains. The models assume full employment; deny negative demand effects of trade deficits; and deny costs from closing and offshoring factories. The trivial gains are tantamount to dis-proof.<\/p>\n Worse yet, the TPP\u2019s extended drug patent and software copyright provisions will be like a massive tax on ordinary Americans and others, and will ultimately kill millions who cannot afford medications. These provisions are the opposite of removing barriers. They create barriers via government sponsored monopoly, lobbied for by corporations.<\/p>\n Lastly, the TPP fails to address the glaring problem of currency manipulation that has so injured American workers. Currency manipulation gives countries an unfair exchange rate subsidy. Even the world\u2019s most efficient producers cannot compete when rivals get a 30 percent currency subsidy.<\/p>\n Unconvincing national security arguments<\/strong><\/p>\n Unable to win the economic argument, the Obama administration is cynically pushing unconvincing national security arguments that the TPP is needed to hem in China.<\/p>\n Past agreements have already done great national security damage by hollowing the industrial base needed for military provisioning; by transferring that base plus technology to China, giving it industrial might and high-tech weaponry; and by creating a global supply-chain that runs through China, giving it power to choke off supply and also making countries further down the supply-chain beholden to China.<\/p>\n Worst of all, by eroding the US manufacturing base and making China the world\u2019s factory, past agreements have massively increased China\u2019s geopolitical power. In today\u2019s world, commerce is the currency of power. China can now provide manufactured goods and investment capital in return for oil and commodities. That explains China\u2019s power in Africa, Latin America, and Australasia. The US was preeminent, but it unilaterally deindustrialized at the request of multinational corporations which wanted cheap production platforms in China.<\/p>\n American workers have already paid massively for past agreements. Now, they are being asked to pay again to fix national security breaches those agreements created. However, there is zero evidence the TPP works as a fix and it could even backfire. Simultaneously, there is clear evidence of hypocrisy in the TPP\u2019s lax \u201crules of origin\u201d which will allow corporations to smuggle in Chinese products as \u201cmade in America\u201d.<\/p>\n A final spurious argument is our allies expect the TPP to pass because they have negotiated in good faith, putting US credibility and face on the line. The world knows, or should know, that the US does not sign agreements of massive economic and possible national security import on the basis of saving-face.<\/p>\n Dangerous to democracy<\/strong><\/p>\n Perhaps the most powerful argument against the TPP is its danger to democracy. Its investor \u2013 state dispute settlement gives foreign investors, including US-owned foreign corporations, rights to sue the US government in private courts under privately appointed arbitrators. Companies can sue for lost profits resulting from changes in regulation, non-exempted by the TPP, that voters want or governments deem needed.<\/p>\n That grants corporations a private judicial system which can over-rule US law and the will of the people. It is a colossal and terrifying surrender of sovereignty that promises to castrate democratic governance as we know it.<\/p>\n TPP is about global governance, not free trade<\/strong><\/p>\n The TPP masquerades as a \u201ctrade agreement\u201d, when it is in fact a \u201cglobal governance agreement\u201d that empowers and enriches corporations at the expense of voters and workers.<\/p>\n Corporations and establishment economists call it a trade agreement as that is favorable verbal terrain for business because the public is steeped in the loaded language of \u201cfree trade\u201d. If the TPP were described as a \u201cglobal governance agreement\u201d that would immediately surface the enormity of the issues and the irresponsible undemocratic process pushing it.<\/p>\n A new world order is being smuggled in using the rhetoric of \u201cfree trade\u201d and the economic zombie of comparative advantage. Today, trade is not driven by comparative advantage: it is driven by \u201cBarge economics\u201d. It is as if companies float their factories and offices around the world to get access to the cheapest most exploitable labor, to take advantage of under-valued currencies, and to take advantage of unregulated economies without standards. That is not comparative advantage: it is exploitation by global arbitrage.<\/p>\n TPP cannot be saved and must be stopped<\/strong><\/p>\n The TPP cannot be saved because it is fundamentally flawed. It is not a matter of adding more generous trade adjustment assistance to compensate job losers. Nor is it a matter of sweetening the legislative pot by adding a large infrastructure package to the bill. Though both are desirable, that would be political bribery aimed at greasing a tragically bad bargain.<\/p>\n The TPP rests on faulty economics and leads in the wrong direction. Rather than fostering shared prosperity, it further locks-in the corporate globalization model that has already created grotesque income inequality and undermined our future.<\/p>\n It must be stopped. That is the only way to clear the political stage for a worker-friendly approach to global governance. Remaining \u201cmarket access\u201d negotiating leverage must not be squandered on the TPP. It must be used to reverse existing dire arrangements and shape a future global race to the top.<\/p>\n The TPP reflects the flawed economics and arrogant politics of Wall Street and the national security establishment that has betrayed working people. It must be rendered the economics and politics of the past, or else it could hand the future to Donald Trump. Mr. President, wake up and smell the coffee.<\/p>\n","protected":false},"excerpt":{"rendered":" Voters of all stripes have recognized the Trans-Pacific Partnership (TPP) as another betrayal of working people, and they have resoundingly rejected it. Despite that, President Obama continues to push it, to the extent of possibly seeking passage in a \u201clame duck\u201d session of Congress. President Obama\u2019s pushing of the TPP is recklessly irresponsible politics that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,5,2,7,3,1],"tags":[],"class_list":["post-923","post","type-post","status-publish","format-standard","hentry","category-china","category-economics","category-globalization","category-political-economy","category-us-policy","category-1"],"_links":{"self":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/923","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=923"}],"version-history":[{"count":13,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/923\/revisions"}],"predecessor-version":[{"id":1540,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/923\/revisions\/1540"}],"wp:attachment":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}