It's not a rhetorical question. I feel like those who oppose the deal have been very vocal-they say it will kill jobs and lead us to another race to the bottom in regulations and wages. I share these concerns.
What's more critics charge that the deal is being done in secret-even some who supported NAFTA claim that there has been unprecedented secrecy regarding TPP.
This is something as most liberals regard NAFTA as an albatross. That's what my intuition tells me too-though I guess the point of economists is that intuition can be a bad gauge. What I do believe is that we've seen a sharp degradation in the labor market over the last 16 years. While we have seen some job creation since 2001-though pretty meager job creation during the Bush years; while there has been some pretty good job creation in the Obama years these jobs have mostly been crummy.
It certainly seems to me and many Americans that we have indeed become as Ross Perot warned, 'a nation of burger flippers.'
Still this is our sense of things-what does the data say? There is the complaint that TPP opponents present no evidence that it will be as harmful as they say.
"Senate leaders appear to have reached an agreement to revive fast-track authority. It deserves another chance. And Iowans should press presidential candidates for evidence when they argue that trade deals are a bad deal."
http://www.desmoinesregister.com/story/opinion/editorials/2015/05/13/trade-fast-track-trans-pacific-obama/27265413/
That's the problem: there isn't much evidence about recent trade deals either way: I mean what does the evidence say about the last 16 years? I'd be happy to be corrected. No one-either proponent or critic-has given us much evidence of the effect of NAFTA as far as I'm aware. If you know of any I'm happy to see it.
Regarding TPP it's opponents argue that they can't provide any evidence-as the whole thing is being done in secret. .Krugman cites this as a reason he is a-rather mild-opponent.
http://www.nytimes.com/2015/05/22/opinion/paul-krugman-trade-and-trust.html?rref=collection%2Fcolumn%2Fpaul-krugman&contentCollection=opinion&action=click&module=NextInCollection®ion=Footer&pgtype=article
Yet the Des Moines Register piece I link to above claims that this is normal-most international treaties are drafted initially in secret.
The TPP is a classified document while it is being negotiated (as most international treaties are). But members of Congress have been able to see the text of the negotiations since 2012, according to the Office of the U.S. Trade Representative. In addition, the trade representative consults with labor unions, environmental groups and others on details of the deal.
Once the deal is concluded, the full text is made public. All Americans will have months to analyze the details before a president could sign a trade deal or Congress could vote on it."
This is something that critics seem to ignore-they don't seem to think it's legitimate to allow the President to negotiate the deal and then put it up to an up or down vote later. It's as if they see the deal as a genie and by then it will already be out of its bottle.
As I noted above, while Krugman is an opponent, he's hardly a fiery one:
I was in DC yesterday, giving a talk to the National Association of Business Economists. The subject was the Trans-Pacific Partnership; slides for my talk are here.
http://krugman.blogs.nytimes.com/2015/03/11/tpp-at-the-nabe/?_r=0
So he disagrees that this is a 'terrible, worker-destroying pact.'
As to why Obama is devoting such capital to it-I tried to answer that yesterday. A large part of it, I believe, is less simply about the specifics of TPP but a more general desire for fast track authority that all Presidents, Democrat or Republican, want.
http://diaryofarepublicanhater.blogspot.com/2015/05/why-tpp-matters-so-much-to-obama.html
American Presidents are already at a disadvantage vis a vis foreign leaders as they need Congress' permission to even pursue trade treaties; Democratic Presidents have the further disadvantage that their party is more skeptical of trade and their is always a decent slice of the GOP that will vote against giving a Democratic President FTA for simple partisanship.
Ok, so that's at least a big part of why the President is for it-he's a President. Is their a positive case for the deal on its own merits?
There have been lots of bad arguments for it-like the generic 'trade is good' arguments that Krugman says aren't really applicable today-for the most part there is open trade today; tariffs aren't a significant headwind.
Again, though Krugman doesn''t think that the deal will do terrible harm to the labor market; overall he doesn't expect it to have much impact on GDP either way.
"What about TPP? There are still important barriers in agriculture, but advocates are pinning most of their case on services, where we’re talking about more diffuse issues of access. How much could that be worth? I try to put some upper bounds on the gains (slide 6).
"I’ve estimated that “hyperglobalization” – the expansion of world trade to unprecedented levels since 1990 – has added about 5 percent to world incomes; but that’s the combination of everything: containerization, drastic trade liberalization in developing countries, the internet. A better model might be Europe’s Single Market Act, which the European Commission now estimates added 1.8 percent to real incomes; but Eichengreen and Boltho suggest that about half of that reflects policy changes that would have happened anyway."
"And Europe, which has a compact geography and the kind of shared institutions and culture (and transparency) that make access doable, is surely a better case than the diverse, sprawling group of countries involved in TPP. I’d argue that it’s implausible to claim that TPP could add more than a fraction of one percent to the incomes of the nations involved; even the 0.5 percent suggested by Petri et al looks high to me."
What's more critics charge that the deal is being done in secret-even some who supported NAFTA claim that there has been unprecedented secrecy regarding TPP.
This is something as most liberals regard NAFTA as an albatross. That's what my intuition tells me too-though I guess the point of economists is that intuition can be a bad gauge. What I do believe is that we've seen a sharp degradation in the labor market over the last 16 years. While we have seen some job creation since 2001-though pretty meager job creation during the Bush years; while there has been some pretty good job creation in the Obama years these jobs have mostly been crummy.
It certainly seems to me and many Americans that we have indeed become as Ross Perot warned, 'a nation of burger flippers.'
Still this is our sense of things-what does the data say? There is the complaint that TPP opponents present no evidence that it will be as harmful as they say.
"Senate leaders appear to have reached an agreement to revive fast-track authority. It deserves another chance. And Iowans should press presidential candidates for evidence when they argue that trade deals are a bad deal."
http://www.desmoinesregister.com/story/opinion/editorials/2015/05/13/trade-fast-track-trans-pacific-obama/27265413/
That's the problem: there isn't much evidence about recent trade deals either way: I mean what does the evidence say about the last 16 years? I'd be happy to be corrected. No one-either proponent or critic-has given us much evidence of the effect of NAFTA as far as I'm aware. If you know of any I'm happy to see it.
Regarding TPP it's opponents argue that they can't provide any evidence-as the whole thing is being done in secret. .Krugman cites this as a reason he is a-rather mild-opponent.
http://www.nytimes.com/2015/05/22/opinion/paul-krugman-trade-and-trust.html?rref=collection%2Fcolumn%2Fpaul-krugman&contentCollection=opinion&action=click&module=NextInCollection®ion=Footer&pgtype=article
Yet the Des Moines Register piece I link to above claims that this is normal-most international treaties are drafted initially in secret.
The TPP is a classified document while it is being negotiated (as most international treaties are). But members of Congress have been able to see the text of the negotiations since 2012, according to the Office of the U.S. Trade Representative. In addition, the trade representative consults with labor unions, environmental groups and others on details of the deal.
Once the deal is concluded, the full text is made public. All Americans will have months to analyze the details before a president could sign a trade deal or Congress could vote on it."
This is something that critics seem to ignore-they don't seem to think it's legitimate to allow the President to negotiate the deal and then put it up to an up or down vote later. It's as if they see the deal as a genie and by then it will already be out of its bottle.
As I noted above, while Krugman is an opponent, he's hardly a fiery one:
I was in DC yesterday, giving a talk to the National Association of Business Economists. The subject was the Trans-Pacific Partnership; slides for my talk are here.
Not to keep you in suspense, I’m thumbs down. I don’t think the proposal is likely to be the terrible, worker-destroying pact some progressives assert, but it doesn’t look like a good thing either for the world or for the United States, and you have to wonder why the Obama administration, in particular, would consider devoting any political capital to getting this through.
http://krugman.blogs.nytimes.com/2015/03/11/tpp-at-the-nabe/?_r=0
So he disagrees that this is a 'terrible, worker-destroying pact.'
As to why Obama is devoting such capital to it-I tried to answer that yesterday. A large part of it, I believe, is less simply about the specifics of TPP but a more general desire for fast track authority that all Presidents, Democrat or Republican, want.
http://diaryofarepublicanhater.blogspot.com/2015/05/why-tpp-matters-so-much-to-obama.html
American Presidents are already at a disadvantage vis a vis foreign leaders as they need Congress' permission to even pursue trade treaties; Democratic Presidents have the further disadvantage that their party is more skeptical of trade and their is always a decent slice of the GOP that will vote against giving a Democratic President FTA for simple partisanship.
Ok, so that's at least a big part of why the President is for it-he's a President. Is their a positive case for the deal on its own merits?
There have been lots of bad arguments for it-like the generic 'trade is good' arguments that Krugman says aren't really applicable today-for the most part there is open trade today; tariffs aren't a significant headwind.
Again, though Krugman doesn''t think that the deal will do terrible harm to the labor market; overall he doesn't expect it to have much impact on GDP either way.
"What about TPP? There are still important barriers in agriculture, but advocates are pinning most of their case on services, where we’re talking about more diffuse issues of access. How much could that be worth? I try to put some upper bounds on the gains (slide 6).
"I’ve estimated that “hyperglobalization” – the expansion of world trade to unprecedented levels since 1990 – has added about 5 percent to world incomes; but that’s the combination of everything: containerization, drastic trade liberalization in developing countries, the internet. A better model might be Europe’s Single Market Act, which the European Commission now estimates added 1.8 percent to real incomes; but Eichengreen and Boltho suggest that about half of that reflects policy changes that would have happened anyway."
"And Europe, which has a compact geography and the kind of shared institutions and culture (and transparency) that make access doable, is surely a better case than the diverse, sprawling group of countries involved in TPP. I’d argue that it’s implausible to claim that TPP could add more than a fraction of one percent to the incomes of the nations involved; even the 0.5 percent suggested by Petri et al looks high to me."
"These gains aren’t nothing, but we’re not talking about a world-shaking deal here."
"o Krugman is 'midly against' it but doesn't see it as having a major impact either way. Ezra Klein presents Adam Posen's arguments who is for the deal. Posen is a reliable liberal-as is Krugman:
"Adam Posen is president of the Peterson Institute for International Economics, and a leading economist. In recent years, he's been a bit of a wonky liberal hero; as a member of the Bank of England's rate-setting Monetary Policy Committee, he fought hard against the austerity economics that took over much of Europe and seemed, at times, near to taking over the US, as well."
"People should be reading Adam Posen," Paul Krugman wrote in 2008.
"Now Posen is on the other side of a debate splitting liberals from many in the economics community. He's a strong supporter of the Trans-Pacific Partnership trade deal — the one that Elizabeth Warren and the AFL-CIO are going to war with President Obama over, and that Paul Krugman has come out as a lukewarm opponent of. Recently, I reached Posen at his office, and asked him to make the case for TPP to me, and to explain what he thinks the critics are getting wrong."
http://www.vox.com/2015/5/14/8606853/adam-posen-tpp
Yet his estimates of what the benefits of deal will be aren't so different from what Krugman thinks it will be
"The impact on US workers, in terms of the number of jobs, will be small," Posen says. He argues that the big benefits to America will come in the form of lower prices for American consumers, a stronger foundation for American foreign policy in Asia, and increases in productivity for American businesses.
"That last bit is particularly important, Posen says, both to America and to the other countries in the TPP. "We have increasing evidence in recent years that the real gains from trade aren’t actually market access, they’re from putting pressure on individual businesses to be more productive," he says. "If you ask Chinese businessmen and officials what was behind their growth, they’ll tell you a lot of it was being exposed to foreign competition and international markets. The competition, the pressure for efficiency, is a really big deal here."
"Posen estimates the benefit to America at a few tenths of a percentage point of GDP growth each year. "It adds up," he says.
This estimate is in line with Krugman's estimate. Neither think the impact will be huge-though it will be something.
As to lower prices, I wonder how strong this effect will be.
Productivity gains on the other hand make me wonder if this is short hand for wage cuts-what easier way to improve productivity than through lower wages?
Overall, in neither the mild case against it or the mild case for it is there a belief that this will be an earth shattering deal.
Based on what we've looked at in this post I think that there have been some wildly overstated talk about the benefits of the deal by many who speak in purely theoretical tetms 'trade is good, protectionism is bad...'
http://diaryofarepublicanhater.blogspot.com/2015/05/on-tpp-investors-business-daily-not.html
However, opponents may be putting up a red herring with all the talk of it being done in secret-this is how these kinds of negotiations are done:
"First, even if it’s secret now, there’s not going to be any hidden codicils or agreements," Posen says, referring to the fact that Congress will be presented with a final copy of the TPP trade deal to vote up or down. "Everything will be revealed. When the US Congress and counterparts in other countries get to look at the deal, there will be nothing hidden. And even now, people pretty much know what’s in this deal, if they want to."
"The other thing is, just like in congressional negotiations or labor negotiations, you don’t do all the negotiating in public because you want people to be able to hold their opinions, try ideas out, speculate. That’s how negotiations get done in the real world. If you make them transparent from day one there can be no deal, for the most part, because people can’t have every position flying through the press."
So the deal will not be earth shattering in either direction but the talk of secrecy is misconstrued. And Obama wants the deal because he's the President and any President of either party is going to want the ability to negotiate trade deals.
On balance-though this is hardly a position I'm solid on-I would tent to support this deal-though I'm willing to listen to the other side of the argument.
I still have some reservations and I wonder where the productivity gains Posen mentioned come from.
But if there are mild benefits and the President wants the deal then on balance I say give it to him.
Again, it's easy to lose sight that the current vote is not for the TPP itself, just to give him his TA. If after the negotiations are done and the deal is finished-then is the time to get into the weeds of the deal; and if necessary vote it down then.
Right now, the House Dems may be about to kill it now; why not at least give the President some respect-not leaving him with egg on his face-and give him his TA and then once the deal is made completely public, vote it down then if upon reading it you find it's as bad as you assume it will be?
What is the argument for not allowing the process to go forward and holding an up or down vote then?
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