Paul Krugman and Ryan Avent on the TPP (and TTIP)

[Recursion]

First, Krugman, who basically has my view that this is a huge "meh" that's not worth all the effort that's going into supporting or opposing it:

No Big Deal

There’s a lot of hype about T.P.P., from both supporters and opponents. Supporters like to talk about the fact that the countries at the negotiating table comprise around 40 percent of the world economy, which they imply means that the agreement would be hugely significant. But trade among these players is already fairly free, so the T.P.P. wouldn’t make that much difference.

Meanwhile, opponents portray the T.P.P. as a huge plot, suggesting that it would destroy national sovereignty and transfer all the power to corporations. This, too, is hugely overblown. Corporate interests would get somewhat more ability to seek legal recourse against government actions, but, no, the Obama administration isn’t secretly bargaining away democracy.

What the T.P.P. would do, however, is increase the ability of certain corporations to assert control over intellectual property. Again, think drug patents and movie rights.

Is this a good thing from a global point of view? Doubtful. The kind of property rights we’re talking about here can alternatively be described as legal monopolies. True, temporary monopolies are, in fact, how we reward new ideas; but arguing that we need even more monopolization is very dubious — and has nothing at all to do with classical arguments for free trade.

Avent then responds and disagrees on the smallness (the bold is mine, because I take issue with it down the page):

More Homework, Please

It is true that tariff rates on goods have come down enormously over the past half century. In macroeconomic terms, there is very little left to be gained from further reductions (though little is not nothing, of course). But tariff rates are not universally low. On some categories of goods they remain quite high, and while those categories might be too small to make liberalisation macroeconomically important, tariff-reduction might nonetheless be microeconomically desirable. Slashing tariffs on equipment used in wind-power installations or solar-energy facilities will not make a dent in GDP growth. But it would still be a really good thing to do. And trade in environmental goods and services is part of the TPP agenda.

Second, one of the stated ambitions of both TPP and the Trans-Atlantic Trade and Investment Partnership is reduction in non-tariff barriers, which in most cases add substantially more to goods costs than tariff barriers. According to estimates by the World Bank, for instance, American tariff restrictions on agricultural imports are relatively low on the whole, at just 2.2%. But the tariff equivalent of an all-in measure of restrictiveness, which takes into account non-tariff barriers, jumps to 17.0%. The all-in rates for many of the partners in TPP negotiations are substantially higher; Japan's all-in tariff equivalent on agricultural imports is 38.3%. South Korea's is 48.9%. Australia's is 29.5%.

Third, "implicit protection of services" does indeed impose additional costs. For instance, the cost to foreign providers of some crucial transport and shipping services within the American market is basically infinite. Services account for four times as much economic output as goods production in America but only around one-fifth of American trade. Many services aren't tradable, of course; haircut tariffs will not be on the TPP agenda. But a growing array are. And rules on service trade have barely changed at all in two decades. TTIP and TPP (as well as the Trade in Services Agreement) are aimed at updating rules on services trade to make it easier to sell insurance, or financial and consulting services, or IT and environmental services, and so on, across borders. Now maybe these deals are "really about" intellectual property, and all-powerful Hollywood has convinced the government to expend a lot of time and effort setting standards for services trade, the better to provide a smokescreen for its own nefarious activities. But I doubt it.

...

The list goes on. Both TTIP and TPP are taking steps toward regulatory harmonisation. It's a huge problem for firms when they need to get products separately approved by multiple governments. If the governments can all agree to a similar set of standards and then to honour each others' approvals, then costs to firms and consumers for everything from food products to light bulbs to medical equipment could fall substantially. It's also important to recognise that a lot of this stuff simply hasn't been done at scale before, and TPP and TTIP aren't intended to sweep away whole categories of barriers at a stroke, anymore than goods tariffs were slashed to almost nothing in one round of talks.

I think the bolded statement is kind of silly. Hollywood and RIAA certainly are part of the push but pharma is a much bigger part of the push. That said, I don't think it's a bad thing that US trade policy is trying to keep Chinese vendors from bootlegging American DVDs, personally, as far as that goes.

Anyways, having a large one-treaty Pacific trading bloc that's an alternative to China on the whole is a more or less decent idea. Harmonizing the various rules so that things are simpler and more predictable (and so we don't wind up stranding 40,000 tons of rock salt in Maine) is a good idea. But they aren't great ideas in the sense of being worth pissing off most of the party for, so I guess at this point my hope is that the talks continue to not actually get anywhere.

My final point, which I feel the need to keep making about trade:

American manufacturing employment has been declining for sixty years and will continue to do so forever, period. This isn't the fault of any policy, it's the fact that as we get better and better at making things we need fewer and fewer people to do it. It happened to agriculture 200 years ago or so and it's happening to manufacturing now. The answer is not to suddenly become conservatives and say "stop all this technological progress"; the answer is to strengthen the safety net and organize the service sector like the manufacturing sector did 100 years ago. Stopping a trade deal will in no way keep China, India, Indonesia, Bangladesh, etc. from seeing job growth in their manufacturing sectors while America still sees job loss. (The language "shipping jobs overseas" is kind of misleading; you can't actually "ship a job", to start with, and they aren't somehow existentially "our" jobs to begin with.) To the extent that the opposition to the TPP has been an organizing win for us, awesome. It's always good to get people moving. But stopping a trade deal doesn't address the actual problems you're trying to address.

[Hoyt]

1. Much the way I feel. TPP is not some great Obama conspiracy.

Obviously, any unfinished agreement needs to be monitored closely. I don't think it will be "fast tracked." Congress probably won't approve it at this point, anyway.