Obama Trade Deals Are in Trouble, and They Deserve to Be
They're outrageously favorable toward US corporate interests
Dean Baker is no fan of the trade deals currently being negotiated by the Obama administration. They aren't being negotiated for the benefit of consumers, he says. "In reality these deals were being negotiated by corporate interests from day one":
Of course it is possible to craft a trade deal that would promote real economic gains. Doctors in the United States earn salaries that are hugely out of line with those in other wealthy countries. The same is true for other highly paid professions. If a trade deal focused on reducing the barriers that prevent these professionals from providing their services in the United States the gains would be substantial. The savings on doctors alone could be close to $100 billion a year (0.6 percent of GDP).
The agreements could also focus on reducing the value of the dollar, which would make our goods and services more competitive internationally. This would lower our trade deficit and potentially create millions of jobs. And, we could reduce patent and copyright barriers, lowering prices and making markets more competitive.
But these items don't come up at trade negotiations because the folks at the table would lose from these growth enhancing measures. Instead we get silly stories about trade pacts being negotiated by disinterested parties who are only looking out for the good of the country. Come on folks, you've got to do better than this.
It's pretty hard to get excited about either the TPP (Pacific partners) or the TTIP (Atlantic partners). And it looks like it's pretty hard for Congress to get excited too. Ironically, the reason for this is largely due to provisions in these deals that the United States itself has been responsible for foisting on everyone else. If we had stuck to a deal that our trade partners liked better, we'd also have a deal that Congress liked better.
For once, it looks like corporate interests in the United States have outsmarted themselves. Instead of settling for a merely lucrative deal, they demanded outrageously favorable treatment. By doing so, they've pissed off everyone: our trade partners and Congress and a large swath of even the neoliberal community that would normally be sympathetic to treaties like these.
Who knows. Maybe they'll learn a lesson from this.1