TPP – Yesterday, the Negatives – Today, the Positives

Trade agreements, and in particular the TPP have not
been topics that I have researched in any great detail. But I am an American
citizen and I feel that I really should investigate the topic before deciding
whether to favor the TPP or not. So I will take you along with me into the
surprisingly unanswerable question of whether globalization or trade agreements
or both caused the flight of our factories and the loss of valuable American
jobs.
It seems as difficult to tell if globalization or
trade agreements or both caused manufacturers to leave us in the 80’s and the
90’s as it is to answer that old question of which came first, the chicken or
the egg. The two things were kind of concurrent events which makes it hard to
separate and assign causality. The flight of our factories to nations with
large supplies of workers who were happy to work for very low wages may have
started with just a few companies, experts say, and then snowballed as
companies learned they could not stay in America and compete  with low cost production values and cheap
imports. Most sources I looked at agreed that trade agreements played a role in
factory flight, but were not necessarily advantageous to the nations on the
other side of the agreements either. CAFTA and NAFTA definitely did not prove
efficacious for American and our trade imbalances increased.
Sources make the point, however, that factory flight
has already happened and that most of those manufacturers will not be returning
to the US. Even though there has been some movement in certain sectors (like
textiles) to return to America, machines do most of the work on the factory
floor and factories will probably never again employ Americans in the numbers
they once did. So the TPP is not likely to hurt our manufacturing employment
numbers in the 21st century the way trade agreements added to our
woes in the 20th century.
Some of the most recent articles mention several
positive reasons to make this trade agreement with the Pacific Rim nations (so
far, excluding China). One reason they mention is that we already have very low
tariffs for some of these nations and no tariffs for about half of the twelve nations.
When our factories left our intellectual properties
went with them. Nations sometimes have legal access to technical specifications
and sometimes they steal or hack them. We have not developed an effective
strategy for either keeping our patented information secret, for charging fees
to those who use our patented information, or for prosecuting those who break
our patents. TPP is supposed to address this intellectual sinkhole and allow us
to retain the profits that should accrue to us from our innovations. There was
one article that I found especially cogent. Here are the authors of this very
informative article speaking for themselves:
Opponents of giving President Obama fast-track authority to negotiate the Trans-Pacific Partnership (TPP) — the pending trade pact between the United
States and 11 countries in Asia and the Americas — cite the job-killing impacts
of globalization as a prime reason for their objection. The free-trade
agreement would lower tariffs and remove other barriers to imports from member
countries, which opponents fear would create steep competition for U.S. industries
domestically.
Still, we believe
blocking the TPP on fears of globalization would be a mistake.
There are several
reasons to support the TPP despite globalization concerns. First, the TPP —
which seeks to govern exchange of not only traditional goods and services, but
also intellectual property and foreign investment — would promote trade in
knowledge-intensive services in which U.S. companies exert a strong comparative
advantage. Second, killing the TPP would do little to bring factory work back
to America. Third, and perhaps most important, although China is not part of
the TPP, enacting the agreement would raise regulatory rules and standards for several of China’s key trading partners. That would pressure China to meet some of
those standards and cease its attempts to game global trade to impede foreign multinational
companies.
Our research indicates that rising import competition
from China accounted for 21 percent of the overall decline in U.S. employment
in manufacturing industries during the 1990s and 2000s. The wave of automation
that replaced middle-class jobs available to workers without a college
education added to those losses. We sympathize with the regions and families
that suffered, but halting TPP would not assist U.S. manufacturing or benefit
U.S. workers. The reality is that the globalization of manufacturing is a fait
accompli. Those manufacturing jobs are not coming back.
But if the TPP has
little downside for the U.S., what’s the upside? Why bother with the deal at
all? The reason is that the TPP is about much more than manufacturing. Most
notably, it promises to liberalize trade in services and in agriculture, sectors in which the United States runs
large trade surpluses, but which the World Trade Organization, despite 20 years
of trying, has failed to pry open internationally.
It also requires
protecting patents against infringement and safeguarding business assets and
revenues against expropriation by foreign governments. To the extent that Obama
succeeds in enshrining these guarantees in the TPP, the agreement would give a
substantial boost to U.S. trade.
Expanding global
trade has remade manufacturing, forcing workers, businesses, and entire regions
to endure often painful adjustments. However, much as we might like to return
to 1970 when manufacturing comprised a quarter of U.S. nonfarm employment, that’s impossible without massive protectionist barriers that would
isolate the U.S. economy and lower U.S. living standards. Blocking the TPP because of justified unhappiness over
manufacturing’s lost glory

would amount to refighting the last trade war — beggaring the future as
retribution for the past. A responsible trade agenda should instead seek to
provide the supporting policy structure – protections for intellectual property
and freedom from confiscatory regulations – that allows U.S. companies to excel
in the sectors where they are strong.
This article had the clearest and most complete
analysis, but the author is obviously for the TPP. I did not find many articles
that are against it given our current economic climate. Here is a list of other
sources I looked at:
If you really want to form your own opinion do some
reading. The truth is that there are times when it is difficult to foresee all
the future effects of current decisions. The big problem that I was left with
after reading these articles is that almost no matter what America did our
trade deficits increased. Perhaps right now it is impossible to reverse our
trade losses and only by helping trade equalize worldwide will we eventually see
the situation improve. I might be starting to favor the TPP, just because it is
a small agreement and most of the damage has already been done, and the
possibility of protecting our intellectual properties is appealing. Elizabeth
Warren has found a rather glaring omission from the agreement which has to do
with protections from the courts which needs to be taken into account, but
perhaps that can be dealt with by an addition to the agreement. People mention
that it will raise the cost of our medications, will affect the internet badly,
and will cause massive genetic modification of food making our food supplies
insecure. These problems also need to be addressed. I have not made my final
decision on this issue and what I think about it has no real import in the
grand scheme of things, but knowing something feels far better than knowing
nothing.

By Nancy Brisson