The Trans-Pacific Partmership (TPP) trade agreement moved one step closer to conclusion on Friday, with the US Senate passing so-called “Fast Track Authority”, which would allow the President to negotiate an agreement and have Congress pass it without amendment.
The Fast Track bill will now move to the House of Representatives for approval, with insiders expecting a vote in the first week of June. While the bill still faces opposition from members concerned about currency manipulation, the US Trade Representative (USTR) is highly optimistic that Fast Track will be approved, paving the way for the signing of the agreement by the 12 member countries (including Australia).
With the TPP entering it’s “end game” – as described by the USTR – nobel prize winning economist for his contributions to New Trade Theory, Paul Krugman, penned yet another criticism of the TPP over the weekend (others can be viewed here), questioning the integrity of the Obama Administration in striking a deal that would leave consumers worse-off. From the New York Times:
…the Pacific trade deal isn’t really about trade… [T]he main thrust of the proposed deal involves strengthening intellectual property rights — things like drug patents and movie copyrights — and changing the way companies and countries settle disputes. And it’s by no means clear that either of those changes is good for America…
But do we need to increase those rewards at consumers’ expense? Big Pharma and Hollywood think so, but you can also see why, for example, Doctors Without Borders is worried that the deal would make medicines unaffordable in developing countries. That’s a serious concern, and it’s one that the pact’s supporters haven’t addressed in any satisfying way…
On dispute settlement: a leaked draft chapter shows that the deal would create a system under which multinational corporations could sue governments over alleged violations of the agreement, and have the cases judged by partially privatized tribunals…
Instead of addressing real concerns, however, the Obama administration has been dismissive, trying to portray skeptics as uninformed hacks who don’t understand the virtues of trade. But they’re not: the skeptics have on balance been more right than wrong about issues like dispute settlement, and the only really hackish economics I’ve seen in this debate is coming from supporters of the trade pact.
Krugman’s concerns about the Obama Administration’s handling of the TPP could just as easily be extended to the Abbott Government, whose Trade Minister, Andrew Robb, has frequently derided any legitimate opposition to the TPP as ‘protectionist’ or ‘dishonest’.
Yet, it is clear as day that the TPP agreement has absolutely nothing to do with advancing the cause of free trade.
Instead, it is about significantly strengthening the pricing power of the powerful US pharmaceutical and digital industries, in turn lessening competition, and worsening outcomes for consumers and taxpayers alike.
