On the face of it, the TPP—which, to be absolutely clear did not suddenly go into effect just because Congress granted Obama this new authority—is a measure meant to bring about more trade between 12 countries around the Pacific Ocean, whose leaders all shook hands on a basic version of the agreement in March of this year. The biggest players in the deal are the US and Japan, but the deal also includes Canada, Mexico, Australia, New Zealand, Peru, Chile, Malaysia, Singapore, Vietnam, and Brunei.
If the TPP deal goes through, it will unite 40 percent of the global economy in mysterious ways, and mark the crowning achievement for his administration's " Pivot to Asia," a term the president and his team have coined for the Asia-centric foreign policy strategy that they've been trying to implement for much of his second term.Popular wisdom held that America's drawn-out 2016 election would have dominated all political discussion and kept the TPP off the table until a new president is in office. After all, the Trade Promotion Authority bill involved the unholy union of Obama with Senate Republicans, who normally get along like cats and velociraptors. Democrats in the House have fought Obama hard on this deal, despite being in his own party, and Senate Democrats at best grudgingly capitulated.
The Trans Pacific Partnership is in that category of trade deals that tend to spark episodes of unrest, like the explosive 1999 protests in Seattle during a World Trade Organization meeting. It's safe to say globalization is something that benefits major corporations, and the poor, well, aren't typically consulted about these deals.
The buzzword that shows up again and again in defenses of the TPP is " comparative advantage." Comparative advantage is one of those Economics 101 concepts that economists can only describe using elaborate metaphors as illustrations. Suffice it to say, comparative advantage explains why a country might want to import goods it can easily produce, or produce goods it can easily import, even when that seems counterintuitive. In order to facilitate this cleverness at every turn, trade barriers have to be torn down and replaced with ever more freedom, glorious freedom.To create that nominal freedom, trade deals must paradoxically include a list of rules. The World Trade Organization's rules provide a basic foundation, but with each new treaty, in order to get to the other side of the free trade velvet rope again, countries set a stringent set of criteria, which often include enacting domestic reforms.
Labor activists are having flashbacks to the the North American Free Trade Agreement, or NAFTA, a deal between the US, Canada, and Mexico, which went into effect back in 1994. The AFL-CIO says the US lost 700,000 jobs after NAFTA went into effect.Trade deals are traditionally negotiated behind closed doors. While that conjures an image of world leaders gathering in smoke-filled rooms plotting ways to screw over their respective populaces—and that could definitely be the case—there are also perfectly valid reasons to negotiate in total secrecy. It keeps lobbyists and other crony capitalists from sniffing around, which is nice for everyone. There are also complicated, game-theory type reasons for what's called "noncooperative bargaining."
The White House has taken unusual measures to keep the details not just secret, but extra, super secret. Legal researcher Margot Kaminski wrote in the New York Times that since 2013, the US Trade Representative has been giving the relevant documents classified status, as if the agreement is a new stealth bomber.Senators who wanted to read the TPP deal while the TPA was being negotiated this spring, had to do so in a soundproof chamber below the US Capitol building. To get in, they had to surrender their phones, and instead of being allowed to consult their own staff or counsel about the confusing language of the deal, they were only able to ask a member of the US Trade Representative—which is to say: They could only ask a White House official.
Intellectual property concerns might be what caused some of the more over-the-top reactions online.
If you're looking for information about the TPP on Reddit, for instance, you might check the "TTP" subreddit, where you'll find the following somewhat incomplete description of the agreement:TPP PASSES: OBAMA NOW A DICTATOR - Foundation of global government cemented with passage of secretive bill — minimalhome (@minimalhome)June 25, 2015
This might be tunnel vision on the part of internet activists, but intellectual property is still a big part of the agreement. The Electronic Frontier Foundation fact sheet on the TPP points out measures included in the leaked draft would force countries like New Zealand to jump through annoying hoops to conform to American copyright standards.The Trans-Pacific Partnership (TPP) is a secretive, multinational trade agreement that threatens to extend restrictive intellectual property (IP) laws across the globe and rewrite international rules on its enforcement.
According to the Sierra Club's analysis of the leaked draft, the deal doesn't so much guarantee new pollution as it does possibly roll back previously negotiated environmental preservation measures, although the Sierra Club does make an argument for a possible increase in fracking.The scarier part for environmentalists is a section on " investor-state dispute settlements" that gives corporations, such as oil companies, the right to sue signatory countries for enacting restrictions that hurt their businesses.A little more about that whole "investor-state dispute settlements" bit.
This part could have a much bigger effect than just boosting oil companies' ability to fend off regulations. Investor-state dispute settlements are in that category of terms like "net neutrality" and "campaign finance reform" that activists scream in the streets trying to get the public to give a shit, but are just too boring for anyone to care.
Back in April, Obama said Warren was "wrong," adding, "I would not be doing this trade deal if I did not think it was good for the middle class." However, his argument comes down to "trust Uncle Barry," because remember: what's actually going to be in the final version of the deal is a secret, and even what's been leaked might all be erased in the final version.Again, Obama is really into this.Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn't be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions—and even billions—of dollars in damages.
To make their case that the TPP is great, without tipping their hand about what's in it, the White House published what it called the "outlines" of a 2011 version of the TPP. Much of that document is written in public relations lingo (the administration wants to "effectively implement" and "strengthen" a lot of things), but the document paints a pleasant picture of a Pacific trade region where efficiency is increased thanks to coherent and consistent regulations, and even the smallest businesses in developing countries will be able to benefit from international trade.
During the Trade Promotion Authority debate, the opinion pages of newspapers featured dozens of predictions for the future.For instance, according to a team of economists who wrote a pro-TPP op-ed in the Washington Post on March 12, while NAFTA may have burned US manufacturing, much to the benefit of countries like Mexico, the TPP might actually turn things around. So even though China's not in on this deal, and probably won't be, some of the signatory countries are among its key trading partners. Their participation will supposedly force the juggernaut that is China to play the trade game according to American rules, which the authors argue would benefit trade.Paul Krugman's agnostic take on the TPP offers a clearer picture than most. Krugman won the Nobel Memorial Prize in Economics for his discoveries in how geography shapes economies, so he approached the TPP differently than all the other pundits. Krugman compared the Pacific region to Europe, which benefits more easily from such trade pacts by being clustered together. He forecasts that by contrast, the TPP may not be a job-devouring nightmare, but that the gains will be minuscule compared to the uglier aspects, like the intellectual property advantages for Big Pharma:
You'll be hearing a lot about this during the election next year.If pharma gets to charge more for drugs in developing countries, do the benefits flow back to US workers? Probably not so much. Which brings me to my last point: Why, exactly, should the Obama administration spend any political capital—alienating labor, disillusioning progressive activists—over such a deal?
Most Republicans are pretty friendly toward the TPP, according to a rundown by The Washington Examiner's David Drucker. Notable exceptions include Kentucky Senator Rand Paul who voted against the TPA bill, and Texas Senator Ted Cruz, who also voted against TPA, despite otherwise supporting free trade. In any case, frontrunners for the GOP nomination most likely won't make the TPP an issue in 2016.But Democrats are a different story. After being rebuked by labor groups like the AFL-CIO during the TPA debates, Obama went to Wisconsin last week to tout a new trade proposal that labor likes. This is, according to Jim Kuhnhenn of the Associated Press, an attempt to repair the rift. The Democrats are, after all, going to need the unions on their side during the 2016 election.The non-Hillary candidates—particularly Sanders—are vehemently opposed to the TPP deal. The Vermont senator wrote a piece about it for the Huffington Post saying it will "undermine democracy." Former Maryland Governor Martin O'Malley said recently the deal will "hollow out our middle class and middle class wages," although he has been somewhat supportive of the TPP in the past.Meanwhile, Hillary Clinton is in a tough spot over the TPP. When she was Secretary of State, she called it "the gold standard in trade agreements." And let's not forget that her husband signed NAFTA into law.But Candidate Clinton has been vague about the TPP. She criticized investor-state dispute settlements in her book, Hard Choices, and has said that any trade deal has to increase prosperity and create jobs. But the closest she's gotten to a clear opinion was in June when she said "the President should listen to and work with his allies in Congress," to come to some kind of agreement, and that "if we don't get it, there should be no deal."Here's when the deal might potentially be finalized.
According to The Japan Times, trade talks between the two heaviest hitters in the deal might resume on July 9, and another meeting between all 12 countries is expected to be scheduled for July 23.Follow Mike Pearl on Twitter.NOTE: A previous version of this post attributed a claim that NAFTA had directly caused jobs to be lost to Mexico to the AFL-CIO. That statement, and the evidence we cited in support of it, have been revised. We regret the error.