Lesson for Bill Daley, TPP Promoter, the United States is a Big Country

May 19, 2015

There is much that is wrong with former Clinton and Obama aide (and J.P. Morgan executive) Bill Daley’s NYT column arguing for the Trans-Pacific Partnership (TPP). First, there is the obvious that he is equating the TPP and past trade deals with “free trade.”

Of course they are not the same, these deals have been about putting manufacturing workers in competition with low-paid workers in the developing world, while protecting doctors and other highly paid professionals from the same sort of competition. They also impose a business friendly regulatory structure. And, they increase protectionism in the form of stronger and longer copyright and patent protection.

But this is not new. What stands out in Daley’s piece is the ungodly silly assertion that:

“today, of the 40 largest economies, the United States ranks 39th in the share of our gross domestic product that comes from exports. This is because our products face very high barriers to entry overseas in the form of tariffs, quotas and outright discrimination.”

Can you see the problem with this one? Think about how much the U.S. might export compared to a country like France. How much would it export compared to a country like Belgium or Luxembourg?

Yes, smaller countries are likely to have a larger share of their economy go to exports because they are smaller. To take advantage of economies of scale, countries like Luxembourg, Belgium, and even France have to integrate their economies with other countries. Because the much larger size of the United States, many economies of scale can be captured entirely by serving the domestic market. That is the main reason that we rank 39th out of Daley’s 40 countries in the export share of GDP, not barriers to our products.

You have to wonder if these folks don’t ever get tired of these sorts of cheap tricks. Do they really think the TPP is such a bad deal that they can’t sell it with honest arguments?


 Note: Spelling of “aide” was corrected.


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