April 29, 2015
Yes folks, hold on to your hats, Thomas Friedman supports the Trans-Pacific Partnership (TPP). Friedman fans will recall his famous comment:
“I was speaking out in Minnesota — my hometown, in fact — and a guy stood up in the audience, said, ‘Mr. Friedman, is there any free trade agreement you’d oppose?’ I said, ‘No, absolutely not.’ I said, ‘You know what, sir? I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.'”
Actually, Friedman does provide useful insight into the issue when he cites President Obama referring to the TPP as a “effort to expand trade on our terms.” The key question is who is “our.” In these remarks President Obama made a point of mentioning the effort to increase the prices U.S. drug companies get for their drugs. That’s great news for people who own lots of stock in Merck or Pfizer, but not good news for anyone else. In addition to paying more for drugs, workers in the United States are likely to see their exports crowded out by higher royalty payments to Merck and Pfizer. This form of protectionism is likely to be a drag on growth and jobs.
In addition, the Obama administration decided not to include rules on currency values. This could have helped to address the problem of an over-valued dollar. This is the main cause of the U.S. trade deficit which remains an enormous drag on growth and obstacle to full employment. If the “our” referred to workers in the United States, currency rules likely would have been at the top of the list of items to be included.
And the investor-state dispute settlement tribunals, which will allow corporations to sue governments in the U.S. and elsewhere, is also a big triumph for corporate interests. These extra-judicial tribunals could penalize any level of government for consumer, safety, labor, or environmental regulations that are deemed harmful to foreign investors.
So Friedman may be right about “our terms,” but his “our” is likely not the “our” that includes most people in this country or the world.
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