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Pro-TPP arguments show desperation

If trade agreement supporters are going with their best sell, there’s clearly little to be said in its favor

May 27, 2015 2:00AM ET

The push for the Trans-Pacific Partnership (TPP) is reaching its final stages, with the House of Representatives soon voting on granting the president fast-track trade authority, which will almost certainly determine the pact’s outcome. The proponents of the TPP are clearly feeling the pressure as they make every conceivable argument for the deal, no matter how specious.

In the last few weeks, TPP advocates have repeatedly tripped up, getting their facts wrong and their logic twisted. This hit parade of failed arguments should be sufficient to convince any fence sitters that this deal is not worth doing. After all, if you have a good product, you don’t have to make up nonsense to sell it.

Leading the list of failed arguments was a condescending editorial from USA Today directed at unions that oppose the TPP because they worry it would cost manufacturing jobs. The editorial summarily dismissed this idea. It cited Commerce Department data showing that manufacturing output has nearly doubled since 1997 and argued that the job loss was due to productivity growth, not imports.

It turned out that the table used in the editorial did not actually measure manufacturing output. The correct table showed a gain of only 40 percent over 17 years. By comparison, in the prior 10 years, when our trade deficit was not expanding, manufacturing output increased by roughly 50 percent.

USA Today eventually acknowledged the error but left the text and the criticisms in the editorial unchanged. Remarkably, the headline of the editorial referred to the opposition to the TPP as a “fact-free uproar.”

Another big swing and miss came from Bill Daley, a former commerce secretary under President Bill Clinton and a former executive at JPMorgan Chase who briefly served as chief of staff in Barack Obama’s administration. Daley published a New York Times column pushing the TPP by arguing for the virtues of trade. The piece was chock-full of errors and misleading comments, with the best line being the claim that the United States ranks near the bottom in the ratio of exports to GDP because of the barriers put up to our exports.

As fans of trade economics everywhere know, the main reason the United States has a low ratio of exports to GDP is that the United States is a big country. This means that Illinois and Ohio provide a large market for items produced in Indiana. On the other hand, if the Netherlands or Luxembourg wants to have a large market for its products, it must export. (Paul Krugman added a chart to illustrate this point.)

Then there was the issue over whether the TPP is secret. Obama and other TPP supporters ridiculed this notion, pointing out that members of Congress can see the draft text anytime they like. But the critics’ point is that it is impossible to have a public debate on the TPP because the members are not allowed to take staffers with them or discuss the text with others. 

The TPP has little to do with trade. It is a deal crafted by business for business.

As Sen. Sherrod Brown pointed out in this context, President George W. Bush made the draft text for the Free Trade Area of the Americas (FTAA) public before asking Congress to vote for fast-track authority. Apparently Obama is not willing to have the same degree of openness as Bush and is attacking TPP critics for suggesting that he should.

Washington Post columnist Ruth Marcus tried to save the day for Obama by arguing that our partners in the FTAA gave permission to make the deal public but our TPP partners have not done so. We’re really supposed to believe that Obama could not get similar consent from the TPP partners if he wanted it?

Then there was the issue of whether the TPP and other trade agreements that could be passed under fast-track authority (this power will extend well into the term of the next president) could jeopardize the ability of the United States to regulate the financial sector. When Sen. Elizabeth Warren raised this issue, Obama on May 9 dismissed her views as the hypothetical musings of a former law professor.

Then on May 13, Canada’s finance minister gave a speech in which he argued the Volcker rule, which limits the extent to which government-insured banks may hold risky assets, violates the North American Free Trade Agreement (NAFTA). It turned out that the Canadian financial industry raised these concerns with the Treasury Department as far back as 2011. In other words, Warren’s concerns were far from hypothetical; they reflected issues that came up with prior trade deals.

With the economic arguments for the TPP falling flat, some commentators have turned to the geopolitical argument. Fareed Zakaria went this route in a column last week. After implying that opponents of the TPP favored a return to autarky, he argued that we should be less concerned about what the TPP would do for the United States and think more about what it would do for our trading partners. He held up NAFTA and what it did for Mexico as a model.

This should leave readers more than a bit baffled. On the economic side, Mexico has lagged badly in the years since NAFTA went into effect. According to International Monetary Fund data, the country went from having a per capita GDP that was 34.9 percent of the United States’ in 1993 to 32.7 percent last year. Developing countries are supposed to catch up to rich countries economically, not fall further behind.

In reality, the TPP has little to do with trade. It is a deal crafted by business for business. The goal is to put in place a business-friendly structure of regulation in the United States and elsewhere. No amount of lipstick is going to make this pig pretty, and the folks who keep trying are making themselves look very foolish in the process.

Dean Baker is co-director of the Center for Economic and Policy Research and author, most recently, of The End of Loser Liberalism: Making Markets Progressive.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.

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