06 July 2017

Politico Magazine: “The Trade Deal we just Threw Overboard”

Similarly, in the original NAFTA talks, Canada had refused to even consider opening up its heavily protected dairy, poultry and egg markets to U.S. competition. But when Canada inquired about TPP, Obama and his aides insisted that everything had to be on the table. That included Mexico’s limits on foreign participation in its energy services sector, Canada’s cultural laws limiting American TV programming, and the weak protections for drug patents, copyrights, software and other intellectual property in both countries. The consistent U.S. message was: No more sacred cows.

The politics of trade haunted Democrats in 2016. Trump figured out a way to tie their traditional themes about families getting left behind to his campaign of cultural resentment, nationalism and suspicion of foreigners. It’s hard to know how much Obama’s push for TPP eroded confidence that the Democratic Party cares about working people, but it certainly didn’t boost that confidence in key Rust Belt states. And U.S. labor leaders resented the way the Obama team seemed to treat them like insolent brats who didn’t appreciate how hard Daddy was working to put food on their plates.

We kept telling them: You’re supposed to be Democrats! Why won’t you listen to us? says Thea Lee, the deputy chief of staff at the AFL-CIO. But they thought they knew best. And here we are.

Michael Grunwald

Brilliant insight into the massive effort required to negotiate international trade deals between multiple parties, such as the now defunct Trans-Pacific Partnership. I haven’t really followed the details of TPP, but from this text alone it seems to me that withdrawing from this agreement is one of the few good things attributable to the Trump presidency – not necessarily good for America, but for the participants in the deal.

My main concern (shared by many opinions, from Nobel-prize winner Paul Krugman to former presidential candidate Bernie Sanders) is the paragraph mentioning protections for drug patents and intellectual property: drug prices in the United States are much higher than elsewhere in the world precisely because their strict patent protections. Do we really want to make health care more expensive in several countries through these trade deals? This makes the agreement less about free trade and more about protecting key industries in the United States, that would enjoy less competition from the signatory countries under the new rules.

Global Trade illustration

The most egregious parts of the agreement are the exorbitant investor powers implicit in the Investor-State Dispute Settlement system as well as the unjustified expansion of copyright and patent coverage. We’ve seen this show before. Corporations are already using ISDS provisions in existing trade and investment agreements to harass governments in order to frustrate regulations and judicial decisions that negatively impact the companies’ interests. The system proposed in the TPP is a dangerous and unnecessary grant of power to investors and a blow to the judicial systems of all the signatory countries. And, as in earlier trade agreements, the United States has pushed through overly strong intellectual property rights that strengthen the aggressive pricing practices of big pharma and unnecessarily extend the copyright protections far beyond their social usefulness.

Jeffrey D. Sachs

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